Last10K.com

Anthem, Inc. (ANTM) SEC Filing 8-K Material Event for the period ending Wednesday, October 20, 2021

Anthem, Inc.

CIK: 1156039 Ticker: ANTM

Exhibit 99.1

PRESS RELEASE

 

LOGO

ANTHEM REPORTS THIRD QUARTER 2021 RESULTS,

RAISES FULL YEAR OUTLOOK

 

   

Third quarter GAAP net income was $6.13 per share, including net negative adjustment items of $0.66 per share. Adjusted net income was $6.79* per share.

 

   

Operating revenue grew by 16.0% over the prior year quarter to $35.5 billion, or 17.5% adjusted for the repeal of the health insurance tax.

 

   

Medical enrollment increased by 2.4 million members year over year and 730 thousand members in the third quarter to 45.1 million members.

 

   

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

 

   

Raising full year adjusted net income outlook from greater than $25.50* per share to greater than $25.85* per share.

Indianapolis, Ind. - October 20, 2021—Anthem, Inc. (NYSE: ANTM) reported third quarter 2021 results reflecting strong financial performance.

“Our deep connection to the communities we serve, commitment to advancing a digital platform for health and our differentiated approach to addressing the whole health of the people we serve has underpinned our strong performance despite the challenging environment due to COVID,” said Gail Boudreaux, President and CEO. “The strong growth we saw across all of our benefits business in the third quarter demonstrates that our core offerings, as well as additional innovative products and services continue to resonate in the market. We believe the momentum we are seeing and our ability to deliver on our strategy will be further accelerated by recent changes in our leadership.

 

*

Refer to GAAP reconciliation tables on page 15.

 

1


CONSOLIDATED HIGHLIGHTS

Earnings Per Share: GAAP net income was $6.13 per share in the third quarter, including net negative adjustment items of $0.66 per share. Adjusted net income was $6.79* per share.

*Please refer to the GAAP reconciliation tables on page 15.

Membership: Medical enrollment totaled approximately 45.1 million members at September 30, 2021, an increase of 2.4 million lives, or 5.7 percent from the prior year quarter. Government Business enrollment increased by 2.3 million lives compared to the prior year quarter, primarily driven by organic growth in the Medicaid business, aided by the temporary suspension of eligibility recertification efforts in our markets, the acquisition of MMM, the launch of HealthyBlue in North Carolina, and organic growth in our Medicare Advantage business. Commercial & Specialty Business enrollment increased by 162 thousand lives compared to the prior year quarter primarily driven by strong risk-based membership growth, partially offset by in-group attrition in the group fee-based business as a result of the economic environment.

During the third quarter of 2021, medical enrollment increased sequentially by 730 thousand lives, driven by the launch of HealthyBlue in North Carolina, incremental growth in the Medicaid business, and sales in excess of lapses in our Commercial risk-based businesses, partially offset by in-group attrition in the group fee-based business.

Operating Revenue: Operating revenue was $35.5 billion in the third quarter of 2021, an increase of $4.9 billion, or 16.0 percent, from the prior year quarter and 17.5 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 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 87.7 percent in the third quarter of 2021, an increase of 90 basis points versus the prior year quarter and a decrease of 50 basis points after adjusting for the repeal of the health insurance tax in 2021. Excluding the impact of the repeal of the health insurance tax, the decrease was primarily driven by unfavorable rate adjustments in our Medicaid business in the third quarter of 2020.

Medical claims reserves established at December 31, 2020 developed better than the Company’s expectations during the third quarter of 2021, with the majority offset by rebates, risk-corridors and other related mechanisms.

Days in Claims Payable: Days in Claims Payable was 46.8 days as of September 30, 2021, a decrease of 1.3 days from June 30, 2021 and an increase of 5.7 days as compared to September 30, 2020. The timing of the acquisitions of MMM and myNEXUS increased Days in Claims Payable at June 30, 2021. Normalizing for timing impacts associated with these acquisitions, Days in Claims payable would have increased by 0.2 days sequentially.

 

 

2


SG&A Expense Ratio: The SG&A expense ratio was 11.1 percent in the third quarter of 2021, a decrease of 620 basis points from 17.3 percent in the third quarter of 2020, primarily driven by the absence of charges related to business optimization and the BCBSA litigation settlement taken in the third quarter of 2020, growth in operating revenue, and the repeal of the health insurance tax in 2021, partially offset by increased spend to support growth.

Operating Cash Flow: Operating cash flow was $2.5 billion, or 1.7 times net income in the third quarter of 2021, an increase of $3.7 billion as compared to the prior year quarter. The year-on-year increase was primarily driven by outflows in the third quarter of 2020 which did not repeat in 2021, principally the payment of the health insurance tax as well as estimated Federal income tax payments which were deferred from the second quarter of 2020, as was permitted by the IRS.

Share Repurchase Program: During the third quarter of 2021, the Company repurchased 1.2 million shares of its common stock for $450 million, at a weighted average price of $378.85. As of September 30, 2021, the Company had approximately $4.7 billion of Board-approved share repurchase authorization remaining.

Cash Dividend: During the third quarter of 2021, the Company paid a quarterly dividend of $1.13 per share, representing a distribution of cash totaling $276 million.

On October 19, 2021, the Audit Committee declared a fourth 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 fourth quarter dividend is payable on December 21, 2021 to shareholders of record at the close of business on December 3, 2021.

Investment Portfolio & Capital Position: During the third quarter of 2021, the Company recorded net realized losses of $61 million. During the third quarter of 2020, the Company recorded net realized gains of $229 million. These amounts are excluded from adjusted earnings per share.

As of September 30, 2021, the Company’s net unrealized gain position in the investment portfolio was $878 million, consisting primarily of fixed maturity securities. As of September 30, 2021 cash and investments at the parent company totaled approximately $1.4 billion.

 

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 September 30     Nine Months Ended September 30  
     2021     2020     Change     2021     2020     Change  

Operating Revenue

            

Commercial & Specialty

   $ 9,863     $ 9,326       5.8   $ 28,904     $ 27,476       5.2

Government Business

     21,658       18,101       19.7     61,007       52,809       15.5

IngenioRx

     6,549       5,582       17.3     18,630       16,048       16.1

Other

     2,670       1,798       48.5     7,557       4,277       76.7

Eliminations

     (5,192     (4,158     NM 2      (15,173     (11,335     NM 2 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Revenue1

   $ 35,548     $ 30,649       16.0   $ 100,925     $ 89,275       13.0

Operating Gain (Loss)3

            

Commercial & Specialty

   $ 620     ($ 234     NM 2    $ 2,679     $ 2,558       4.7

Government Business

     967       246       293.1     2,313       2,275       1.7

IngenioRx

     445       345       29.0     1,257       998       26.0

Other

     27       (156     NM 2      52       (76     NM 2 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Gain1

   $ 2,059     $ 201       924.4   $ 6,301     $ 5,755       9.5

Operating Margin

            

Commercial & Specialty

     6.3     (2.5 )%      880 bp       9.3     9.3     —  bp 

Government Business

     4.5     1.4     310 bp       3.8     4.3     (50 ) bp 

IngenioRx

     6.8     6.2     60 bp       6.7     6.2     50  bp 

Total Operating Margin1

     5.8     0.7     510 bp       6.2     6.4     (20 ) bp 

 

  1.

See “Basis of Presentation” on page 7 herein.

  2.

“NM” = calculation not meaningful.

  3.

Operating gain for the three months ended September 30, 2020 included $607 related to business optimization charges; $299 for Commercial & Specialty Business; $183 for the Government Business; $3 for IngenioRx; and $122 for the Other segment. Operating gain for the three months ended September 30, 2020 included $594 related to the BCBSA litigation settlement accrual; $566 for the Commercial & Specialty Business and $28 for the Government Business.

Commercial & Specialty Business: Operating gain in the Commercial & Specialty Business segment totaled $620 million in the third quarter of 2021, an increase of $854 million from an operating loss of $234 million in the third quarter of 2020. The increase was primarily attributable to BCBSA litigation settlement and business optimization charges taken in the third quarter of 2020.

Government Business: Operating gain in the Government Business segment was $967 million in the third quarter of 2021, an increase of $721 million from $246 million in the third quarter of 2020. The increase was primarily attributable to the impact of negative rate adjustments in the Medicaid business in the third quarter of 2020 associated with COVID-19, BCBSA litigation settlement and business optimization charges taken in the third quarter of 2020, and membership growth in the Medicaid and Medicare businesses, including growth resulting from the acquisition of MMM.

 

4


IngenioRx: Operating gain was $445 million in the third quarter of 2021, an increase of $100 million, or 29.0 percent, from $345 million in the third quarter of 2020. The increase was driven by growth in integrated medical and pharmacy membership.

Other: The Company reported an operating gain of $27 million in the Other segment for the third quarter of 2021, compared with an operating loss of $156 million in the prior year quarter. The increase was primarily driven by business optimization charges taken in the third quarter of 2020 and a decline in unallocated corporate expenses.

 

5


OUTLOOK

Full Year 2021:

 

   

GAAP net income is now expected to be greater than $24.70 per share, including approximately $1.15 per share of net unfavorable items. Excluding these items, adjusted net income is now expected to be greater than $25.85* per share.

 

   

Operating cash flow is now expected to be greater than $6.0 billion.

 

   

Investment income is now expected to be approximately $1.2 billion.

 

*

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 third 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)    800-945-7761 (Domestic Replay)
312-470-0178 (International)    203-369-3954 (International Replay)

The access code for today’s conference call is 3972058. The replay will be available from 11:30 a.m. EDT today, until the end of the day on November 19, 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    Michelle Vanstory
Stephen.Tanal@anthem.com    Michelle.Vanstory@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 45 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

   September 30,
2021
     September 30,
2020
     June 30,
2021
     September 30,
2020
    June 30, 2021  

Commercial & Specialty Business

             

Individual

     769        701        738        9.7     4.2

Group Risk-Based

     3,946        3,774        3,851        4.6     2.5
  

 

 

    

 

 

    

 

 

      

Commercial Risk-Based

     4,715        4,475        4,589        5.4     2.7

BlueCard®

     6,166        6,106        6,235        1.0     (1.1 )% 

Group Fee-Based

     19,370        19,508        19,372        (0.7 )%     
  

 

 

    

 

 

    

 

 

      

Commercial Fee-Based

     25,536        25,614        25,607        (0.3 )%      (0.3 )% 
  

 

 

    

 

 

    

 

 

      

Total Commercial & Specialty Business

     30,251        30,089        30,196        0.5     0.2

Government Business

             

Medicare Advantage

     1,853        1,416        1,824        30.9     1.6

Medicare Supplement

     947        933        936        1.5     1.2
  

 

 

    

 

 

    

 

 

      

Total Medicare

     2,800        2,349        2,760        19.2     1.4

Medicaid

     10,391        8,569        9,754        21.3     6.5

Federal Employees Health Benefits

     1,629        1,618        1,631        0.7     (0.1 )% 
  

 

 

    

 

 

    

 

 

      

Total Government Business

     14,820        12,536        14,145        18.2     4.8
  

 

 

    

 

 

    

 

 

      

Total Medical Membership

     45,071        42,625        44,341        5.7     1.6
  

 

 

    

 

 

    

 

 

      

Other Membership

             

Life and Disability Members

     4,695        5,029        4,732        (6.6 )%      (0.8 )% 

Dental Members

     6,637        6,356        6,606        4.4     0.5

Dental Administration Members

     1,486        1,315        1,497        13.0     (0.7 )% 

Vision Members

     7,974        7,487        7,819        6.5     2.0

Medicare Part D Standalone Members

     438        405        433        8.1     1.2

 

9


Anthem, Inc.

Consolidated Statements of Income

(Unaudited)

 

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

Revenues

      

Premiums

   $ 30,395     $ 26,392       15.2

Product revenue

     3,353       2,598       29.1

Administrative fees and other revenue

     1,800       1,659       8.5
  

 

 

   

 

 

   

Total operating revenue

     35,548       30,649       16.0

Net investment income

     335       280       19.6

Net realized (losses) gains on financial instruments

     (61     229       NM  
  

 

 

   

 

 

   

Total revenues

     35,822       31,158       15.0

Expenses

      

Benefit expense

     26,645       22,921       16.2

Cost of products sold

     2,898       2,222       30.4

Selling, general and administrative expense

     3,946       5,305       (25.6 )% 

Interest expense

     201       198       1.5

Amortization of other intangible assets

     136       93       46.2

Loss on extinguishment of debt

           30       NM  
  

 

 

   

 

 

   

Total expenses

     33,826       30,769       9.9
  

 

 

   

 

 

   

Income before income tax expense

     1,996       389       413.1

Income tax expense

     494       167       195.8
  

 

 

   

 

 

   

Net income

     1,502       222       576.6

Net loss attributable to noncontrolling interests

     7             NM  
  

 

 

   

 

 

   

Shareholders’ net income

   $ 1,509     $ 222       579.7
  

 

 

   

 

 

   

Shareholders’ net income per diluted share

   $ 6.13     $ 0.87       604.6
  

 

 

   

 

 

   

Diluted shares

     246.0       254.2       (3.2 )% 

Benefit expense as a percentage of premiums

     87.7     86.8     90 bp 

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

     11.1     17.3     (620 )bp 

Income before income tax expense as a percentage of total revenue

     5.6     1.2     440 bp 

“NM” = calculation not meaningful

 

10


Anthem, Inc.

Consolidated Statements of Income

(Unaudited)

 

(In millions, except per share data)    Nine Months Ended
September 30
       
     2021     2020     Change  

Revenues

      

Premiums

   $ 86,604     $ 77,001       12.5

Product revenue

     9,132       7,485       22.0

Administrative fees and other revenue

     5,189       4,789       8.4
  

 

 

   

 

 

   

Total operating revenue

     100,925       89,275       13.0

Net investment income

     1,026       591       73.6

Net realized gains on financial instruments

     107       177       (39.5 )% 
  

 

 

   

 

 

   

Total revenues

     102,058       90,043       13.3

Expenses

      

Benefit expense

     75,107       63,957       17.4

Cost of products sold

     7,825       6,431       21.7

Selling, general and administrative expense

     11,692       13,132       (11.0 )% 

Interest expense

     598       593       0.8

Amortization of other intangible assets

     306       269       13.8

Loss on extinguishment of debt

     5       34       (85.3 )% 
  

 

 

   

 

 

   

Total expenses

     95,533       84,416       13.2
  

 

 

   

 

 

   

Income before income tax expense

     6,525       5,627       16.0

Income tax expense

     1,555       1,606       (3.2 )% 
  

 

 

   

 

 

   

Net income

     4,970       4,021       23.6

Net income attributable to noncontrolling interests

     (3           NM  
  

 

 

   

 

 

   

Shareholders’ net income

   $ 4,967     $ 4,021       23.5
  

 

 

   

 

 

   

Shareholders’ net income per diluted share

   $ 20.09     $ 15.75       27.6
  

 

 

   

 

 

   

Diluted shares

     247.2       255.3       (3.2 )% 

Benefit expense as a percentage of premiums

     86.7     83.1     360 bp 

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

     11.6     14.7     (310 )bp 

Income before income tax expense as a percentage of total revenue

     6.4     6.2     20 bp 

“NM” = calculation not meaningful

 

11


Anthem, Inc.  

Consolidated Balance Sheets

 

 
(In millions)    September 30,
2021
    December 31,
2020
 

Assets

     (Unaudited  

Current assets:

    

Cash and cash equivalents

   $ 5,490     $ 5,741  

Fixed maturity securities

     26,348       23,433  

Equity securities, current

     2,119       1,559  

Premium receivables

     6,008       5,279  

Self-funded receivables

     3,349       2,849  

Other receivables

     3,450       2,830  

Other current assets

     5,140       4,060  
  

 

 

   

 

 

 

Total current assets

     51,904       45,751  

Long-term investments:

    

Fixed maturity securities

     625       562  

Other invested assets

     4,959       4,285  

Property and equipment, net

     3,835       3,483  

Goodwill

     24,184       21,691  

Other intangible assets

     10,749       9,405  

Other noncurrent assets

     1,804       1,438  
  

 

 

   

 

 

 

Total assets

   $ 98,060     $ 86,615  
  

 

 

   

 

 

 

Liabilities and equity

    

Liabilities

    

Current liabilities:

    

Medical claims payable

   $ 13,562     $ 11,359  

Other policyholder liabilities

     5,201       4,590  

Unearned income

     954       1,259  

Accounts payable and accrued expenses

     5,960       5,493  

Short-term borrowings

     175       —    

Current portion of long-term debt

     849       700  

Other current liabilities

     8,461       6,052  
  

 

 

   

 

 

 

Total current liabilities

     35,162       29,453  

Long-term debt, less current portion

     21,761       19,335  

Reserves for future policy benefits

     788       794  

Deferred tax liabilities, net

     2,629       2,019  

Other noncurrent liabilities

     1,912       1,815  
  

 

 

   

 

 

 

Total liabilities

     62,252       53,416  
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock

     2       3  

Additional paid-in capital

     9,138       9,244  

Retained earnings

     26,700       23,802  

Accumulated other comprehensive (loss) income

     (103     150  
  

 

 

   

 

 

 

Total shareholders’ equity

     35,737       33,199  

Noncontrolling interests

     71       —    
  

 

 

   

 

 

 

Total equity

     35,808       33,199  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 98,060     $ 86,615  
  

 

 

   

 

 

 

 

12


Anthem, Inc.

 

Consolidated Statements of Cash Flows

 

(Unaudited)

 

     Nine Months Ended September 30  
(In millions)    2021     2020  

Operating activities

    

Net income

   $ 4,970     $ 4,021  

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

    

Net realized gains on financial instruments

     (107     (177

Depreciation and amortization

     942       864  

Deferred income taxes

     114       (102

Impairment of property and equipment

     —         195  

Share-based compensation

     196       214  

Changes in operating assets and liabilities:

    

Receivables, net

     (1,751     (845

Other invested assets

     (56     6  

Other assets

     (470     (988

Policy liabilities

     2,328       1,624  

Unearned income

     (308     (95

Accounts payable and other liabilities

     1,093       1,953  

Income taxes

     168       104  

Other, net

     (427     101  
  

 

 

   

 

 

 

Net cash provided by operating activities

     6,692       6,875  

Investing activities

    

Purchases of investments

     (15,130     (16,708

Proceeds from sale of investments

     8,339       8,739  

Maturities, calls and redemptions from investments

     3,388       3,763  

Changes in securities lending collateral

     (1,030     (668

Purchases of subsidiaries, net of cash acquired

     (3,442     (1,973

Purchases of property and equipment

     (747     (743

Other, net

     (50     (39
  

 

 

   

 

 

 

Net cash used in investing activities

     (8,672     (7,629

Financing activities

    

Net (repayments of) commercial paper borrowings

     (150     (400

Net proceeds from (repayments of) short-term borrowings

     175       (550

Net proceeds from long-term borrowings

     2,508       1,521  

Changes in securities lending payable

     1,030       668  

Repurchase and retirement of common stock

     (1,378     (1,342

Cash dividends

     (831     (720

Proceeds from issuance of common stock under employee stock plans

     161       112  

Taxes paid through withholding of common stock under employee stock plans

     (101     (112

Other, net

     324       623  
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     1,738       (200

Effect of foreign exchange rates on cash and cash equivalents

     (9     1  
  

 

 

   

 

 

 

Change in cash and cash equivalents

     (251     (953

Cash and cash equivalents at beginning of period

     5,741       4,937  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 5,490     $ 3,984  
  

 

 

   

 

 

 

 

13


Anthem, Inc.

Reconciliation of Medical Claims Payable

 

     Nine Months Ended
September 30
    Years Ended December 31  
     2021     2020     2020     2019     2018  
(In millions)    (Unaudited)     (Unaudited)                    

Gross medical claims payable, beginning of

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

Ceded medical claims payable, beginning of

     (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

     74,097       61,977       85,094       78,695       69,581  

Prior years redundancies(1)

     (1,822     (700     (637     (500     (930
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net incurred medical claims

     72,275       61,277       84,457       78,195       68,651  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net payments attributable to:

          

Current year medical claims

     62,123       52,879       74,629       70,294       62,748  

Prior years medical claims

     8,400       7,489       7,692       6,519       6,579  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net payments

     70,523       60,368       82,321       76,813       69,327  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net medical claims payable, end of period

     13,261       9,862       11,089       8,614       7,232  

Ceded medical claims payable, end of period

     38       129       46       33       34  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross medical claims payable, end of period

   $ 13,299     $ 9,991     $ 11,135     $ 8,647     $ 7,266  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     83.8     85.3     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

     19.7     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

     2.2     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
September 30
          Nine Months Ended
September 30
       
(In millions, except per share data)    2021     2020     Change     2021     2020     Change  

Shareholders’ net income

   $ 1,509     $ 222       579.7   $ 4,967     $ 4,021       23.5

Add / (Subtract):

            

Net realized losses (gains) on financial instruments

     61       (229       (107     (177  

Amortization of other intangible assets

     136       93         306       269    

Loss on extinguishment of debt

     —         30         5       34    

Business optimization charges

     —         607         —         607    

BCBSA litigation settlement

     —         594         —         594    

Transaction and integration related costs

     14       4         35       27    

Litigation expenses

     3       5         15       34    

Tax impact of non-GAAP adjustments

     (52     (258       (71     (329  
  

 

 

   

 

 

     

 

 

   

 

 

   

Net adjustment items

     162       846         183       1,059    
  

 

 

   

 

 

     

 

 

   

 

 

   

Adjusted shareholders’ net income

   $ 1,671     $ 1,068       56.5   $ 5,150     $ 5,080       1.4
  

 

 

   

 

 

     

 

 

   

 

 

   

Shareholders’ net income per diluted share

   $ 6.13     $ 0.87       604.6   $ 20.09     $ 15.75       27.6

Add / (Subtract):

            

Net realized losses (gains) on financial instruments

     0.25       (0.90       (0.43     (0.69  

Amortization of other intangible assets

     0.55       0.37         1.24       1.05    

Loss on extinguishment of debt

     —         0.12         0.02       0.13    

Business optimization charges

     —         2.39         —         2.38    

BCBSA litigation settlement

     —         2.34         —         2.33    

Transaction and integration related costs

     0.06       0.02         0.14       0.11    

Litigation expenses

     0.01       0.02         0.06       0.13    

Tax impact of non-GAAP adjustments

     (0.21     (1.01       (0.29     (1.29  

Rounding impact

     —         (0.02       —         —      
  

 

 

   

 

 

     

 

 

   

 

 

   

Net adjustment items

     0.66       3.33         0.74       4.15    
  

 

 

   

 

 

     

 

 

   

 

 

   

Adjusted shareholders’ net income per diluted share

   $ 6.79     $ 4.20       61.7   $ 20.83     $ 19.90       4.7
  

 

 

   

 

 

     

 

 

   

 

 

   
     Full Year 2021 Outlook                          

Shareholders’ net income per diluted share

     Greater than $24.70          

Add / (Subtract):

            

Net realized gains on financial instruments

     ($  0.43)          

Loss on extinguishment of debt

       $   0.02          

Transaction and integration related costs

       $   0.14          

Litigation expenses

       $   0.06          

Amortization of other intangible assets

     Approximately $   1.79          

Tax impact of non-GAAP adjustments

     Approximately $(0.43)          
  

 

 

         

Net adjustment items

     Approximately $   1.15          
  

 

 

         

Adjusted shareholders’ net income per diluted share

     Greater than $ 25.85          
  

 

 

         
     Three Months Ended
September 30
          Nine Months Ended
September 30
       
(In millions)    2021     2020     Change     2021     2020     Change  

Reportable segments operating gain

   $ 2,059     $ 201       924.4   $ 6,301     $ 5,755       9.5

Net investment income

     335       280         1,026       591    

Net realized (losses) gains on financial instruments

     (61     229         107       177    

Interest expense

     (201     (198       (598     (593  

Amortization of other intangible assets

     (136     (93       (306     (269  

Loss on extinguishment of debt

     —         (30       (5     (34  
  

 

 

   

 

 

     

 

 

   

 

 

   

Income before income tax expense

   $ 1,996     $ 389       413.1   $ 6,525     $ 5,627       16.0
  

 

 

   

 

 

     

 

 

   

 

 

   

 

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

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

SEC Filing 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: 0001193125-21-302489
Submitted to the SEC: Wed Oct 20 2021 6:06:07 AM EST
Accepted by the SEC: Wed Oct 20 2021
Period: Wednesday, October 20, 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/0001193125-21-302489.htm