Against the backdrop of the national healthcare crisis, Anthem,
Inc. (NYSE: ANTM) has been deeply committed to supporting its
health plan members, customers, care providers, associates and
local communities through affordable care and lasting recovery.
“Anthem recognizes the important role we play as part of the
national response to the COVID-19 pandemic,” said President and CEO
Gail K. Boudreaux. “Guided by our mission and values, Anthem is
engaging across the country and in our local communities to support
our members, customers and partners with relief and care during
this challenging time. We are grateful to all those fighting on the
front lines of this healthcare crisis, and will continue to stand
with them as we work through this pandemic together.”
Anthem’s deep roots in the community combined with its legacy
and commitment to leadership, innovation and agility, have enabled
the company to quickly and seamlessly work with local, state and
federal officials, care providers, customers and community partners
in the face of the pandemic.
As part of Anthem’s coordinated response, the company has been
focused on increasing access and coverage, adapting tools and
policies, leveraging its expertise in data and advanced analytics
to provide innovative solutions, and delivering outreach and relief
to those in need. Details regarding the company’s actions include
the following:
Care for our Anthem associates
- Deployed business continuity plans and
transitioned nearly all of our associates to work from home while
maintaining service operations.
- Expanded associate benefits to provide
additional support, including providing up to 80 hours of paid
leave, reimbursement of installation and monthly internet service
fees for hourly associates, and offering virtual wellbeing
resources.
- Ensuring our frontline medical staff are
following CDC guidelines and are equipped with the proper equipment
and supplies to minimize risk to themselves and patients.
Care for our consumers, customers, and
providers
- Waived all cost-sharing for COVID
diagnostic tests as well as treatment.
- Increased access to virtual care and
waived cost-sharing for telehealth and phone visits, including
those for mental health.
- Relaxed early prescription refill
policies for maintenance and specialty medications - proactively
encouraging the use of home delivery services ensuring continuous
access to necessary medications.
- Developed a Coronavirus Assessment tool
within our Sydney Care app to help people quickly and safely
evaluate symptoms, assess their risk of having COVID-19, and
connect directly to a board-certified doctor via text or video.
Doctors can recommend treatment options, and if needed, members can
locate the nearest testing site using our site locator tool within
the Sydney Care app.
- Suspended select prior authorization
requirements.
- Recruiting and expediting the onboarding
of care providers interested in providing telehealth services to
members via Anthem's telehealth service, Live Health Online.
- Providing post-discharge support to
Medicare members with complex care needs who may need additional
assistance as they transition back home following
hospitalization.
- Providing no-cost access to Employee
Assistance Program (EAP) informational resources for 90 days to
those members who do not already have access.
- Providing resources to support the whole
health needs of members, including resources to manage social
isolation, job loss, food insecurity and stress.
- Offering enhanced flexibility with regard
to premium payments to eligible employer groups.
Care for our communities
- Committed $50 million from the Anthem
Foundation for COVID-19 response and recovery efforts to help areas
of greatest need, including care provider safety, food insecurity,
and mental and behavioral health resources.
- The Anthem Foundation is matching 200
percent of associate donations to certain charities.
- Launched the Anthem Medical Associate
Volunteer Program, allowing associates with professional medical
training to take paid leave and volunteer to serve on the frontline
in communities in need.
- Partnering with NYC-based Coalition of
Asian-American IPA, an independent practice association with over
1,000 private practice providers, to provide free mobile testing
across NYC while increasing access to testing in many other markets
across the U.S.
- CEO contributed two month's salary to
Anthem Foundation to support associate emergency relief fund, food
banks, and protective equipment for healthcare workers in
Indiana.
- Partnered with ConvenientMD to provide
drive-up testing services in Maine and New Hampshire.
- With our Association of 35 other
independent Blue Cross and Blue Shield companies, we have committed
nearly $3 billion to ensure that more than 100 million Americans,
along with care providers and hospitals, have access to necessary
resources and support.
- Providing virtual volunteer
opportunities, like remote teaching or mailing cards to seniors
faced with loneliness, to help associates safely give back to their
communities.
- Provided 20,000 hospital gowns Trinitas
Regional Health Center in New Jersey.
- Contributing $1 million to the newly
created Rapid Response Loan Fund established by the Indianapolis
Chamber of Commerce to provide critical funding for the nearly 43
thousand small businesses in Central Indiana.
- Partnering with X Prize and other
industry leaders to form a Global Pandemic Alliance to combat
COVID-19 as well as prepare for future pandemics.
- Engaging with our key industry partners,
such as Blue Cross Blue Shield Association and America's Health
Insurance Plans, as well as state and federal lawmakers and
regulators to help shape and guide policy decisions to support our
members, customers, and care providers.
- Serving on the Great American Economic
Revival Industry Group led by President Trump designed to bring
together business leaders from various industries and geographies
to discuss the pragmatic and thoughtful path forward to re-starting
the economy.
CONSOLIDATED HIGHLIGHTS
Earnings Per Share: GAAP net income was $5.94 per share
in the quarter, including net negative adjustment items of $0.54
per share. Adjusted net income was $6.48* per share.
*Please refer to the GAAP reconciliation tables.
Membership: Medical enrollment totaled 42.1 million
members at March 31, 2020, an increase of 1.3 million, or 3.2
percent, from March 31, 2019. Risk enrollment grew by 676 thousand
lives, or 4.4 percent, and fee-based enrollment grew by 625
thousand lives, or 2.5 percent. Government Business enrollment
increased by 849 thousand lives over the prior year quarter, driven
by Medicaid, reflecting the acquisition of Medicaid members in
Missouri and Nebraska and organic growth in our markets, and
Medicare Advantage. Commercial & Specialty Business enrollment
grew by 452 thousand lives driven by growth in the fee-based
businesses, including the acquisition of AmeriBen, a third-party
administrator (TPA).
During the first quarter of 2020, medical enrollment increased
sequentially by 1.1 million lives, or 2.8 percent, reflecting
growth in the National and Medicaid businesses, in part due to the
aforementioned acquisitions.
Operating Revenue: Operating revenue was $29.4 billion in
the first quarter of 2020, an increase of $5.1 billion, or 20.7
percent, versus the prior year quarter, driven by pharmacy product
revenue related to the launch of IngenioRx. The increase was
further attributable to higher premium revenue from rate increases
to cover overall cost trends, including the return of the health
insurance tax in 2020, and membership growth.
Benefit Expense Ratio: The benefit expense ratio was 84.2
percent in the first quarter of 2020, a decrease of 20 basis points
from 84.4 percent in the prior year quarter. The decrease, as
expected, was primarily driven by the return of the health
insurance tax in 2020, partially offset by the extra calendar day
in the first quarter of 2020 and margin normalization in the
Individual business.
Medical claims reserves established at December 31, 2019
developed in line with the Company’s expectations during the first
quarter of 2020.
Days in Claims Payable: Days in Claims Payable was 41.9
days as of March 31, 2020, an increase of 3.9 days from December
31, 2019.
SG&A Expense Ratio: The SG&A expense ratio was
12.8 percent in the first quarter of 2020, a decrease of 20 basis
points from 13.0 percent in the first quarter of 2019, primarily
driven by growth in operating revenue. The decrease was partially
offset by the return of the health insurance tax in 2020 and
increased spend to support growth initiatives.
Operating Cash Flow: Operating cash flow was $2.5
billion, or 1.7 times net income in the first quarter of 2020, an
increase of $885 million compared to the prior year quarter,
primarily driven by growth in premium revenue due to the return of
the health insurance tax in 2020 and changes in working
capital.
Share Repurchase Program: During the first quarter
of 2020, the Company repurchased 1.9 million shares of its common
stock for $529 million, or a weighted average price of $275.38. In
response to circumstances arising from the COVID-19 pandemic, the
Company has temporarily suspended share repurchase activity to
enhance liquidity and financial flexibility. As of March 31, 2020,
the Company had approximately $3.3 billion of Board-approved share
repurchase authorization remaining.
Cash Dividend: During the first quarter of 2020, the
Company paid a quarterly dividend of $0.95 per share, representing
a distribution of cash totaling $240 million.
On April 28, 2020, the Audit Committee declared a second quarter
2020 dividend to shareholders of $0.95 per share. On an annualized
basis, this equates to a dividend of $3.80 per share. The second
quarter dividend is payable on June 25, 2020 to shareholders of
record at the close of business on June 10, 2020.
Investment Portfolio & Capital Position: During the
first quarter of 2020, the Company recorded net realized losses of
$24 million and impairment losses totaling $57 million. During the
first quarter of 2019, the Company recorded net realized gains of
$78 million and impairment losses totaling $10 million.
As of March 31, 2020, the Company’s net unrealized loss position
in the investment portfolio was $263 million, consisting of fixed
maturity securities. As of March 31, 2020 cash and investments at
the parent company totaled approximately $1.7 billion.
REPORTABLE SEGMENTS
Effective January 1, 2020, Anthem, Inc. has four reportable
segments: Commercial & Specialty Business (comprised of the
Local Group, National Accounts, Individual and Specialty
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 March 31
2020
2019
Change
Operating Revenue
Commercial & Specialty Business
$9,361
$9,392
(0.3
)%
Government Business
17,466
14,925
17.0
%
IngenioRx
5,197
—
NM2
Other
1,027
548
87.4
%
Eliminations
(3,603)
(477)
NM2
Total Operating Revenue1
$29,448
$24,388
20.7
%
Operating Gain / (Loss)
Commercial & Specialty Business
$1,420
$1,598
(11.1
)%
Government Business
411
374
9.9
%
IngenioRx
349
—
NM2
Other
14
(32)
NM2
Total Operating Gain1
$2,194
$1,940
13.1
%
Operating Margin
Commercial & Specialty
Business
15.2
%
17.0
%
(180) bp
Government Business
2.4
%
2.5
%
(10) bp
IngenioRx
6.7
%
—
NM2
Total Operating Margin1
7.5
%
8.0
%
(50) bp
(1) See “Basis of Presentation.”
(2) "NM" = calculation not meaningful.
Commercial & Specialty Business: Operating gain in
the Commercial & Specialty Business segment totaled $1,420
million in the first quarter of 2020, a decrease of $178 million,
or 11.1 percent, from $1,598 million in the first quarter of 2019.
The decrease is primarily attributable to margin normalization in
the Individual business and the shift of pharmacy earnings to the
IngenioRx segment. The decrease is further due to the impact of one
extra calendar day compared to the prior year quarter, partially
offset by growth in value-added services.
Government Business: Operating gain in the Government
Business segment was $411 million in the first quarter of 2020, an
increase of $37 million, or 9.9 percent, from $374 million in the
first quarter of 2019. The increase is primarily due to higher
premiums from rate adjustments and membership growth in the
Medicaid business as well as the return of the health insurance tax
in 2020, partially offset by higher selling, general, and
administrative spend to support growth as well as the impact of one
extra calendar day compared to the prior year quarter.
IngenioRx: IngenioRx commenced operations in the second
quarter of 2019. Operating gain was $349 million in the first
quarter of 2020.
Other: The Company reported an operating gain of $14
million in the Other segment for the first quarter of 2020,
compared with an operating loss of $32 million in the prior year
quarter.
OUTLOOK
Full Year 2020:
- GAAP net income is expected to be greater than $21.00 per
share, including approximately $1.30 per share of net unfavorable
items. Excluding these items, adjusted net income is expected to be
greater than $22.30* per share.
Due to unprecedented uncertainty around the COVID-19 pandemic
and its impact, the Company is withdrawing all other previously
issued financial guidance metrics for 2020 until visibility
improves.
* Refer to the GAAP reconciliation tables.
Basis of Presentation
- Operating revenue and operating gain 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 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, other-than-temporary impairment losses
recognized in income, 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 the GAAP reconciliation tables.
- 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 first
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:
877-692-8955 (Domestic)
866-207-1041 (Domestic Replay)
234-720-6979 (International)
402-970-0847 (International Replay)
The access code for today's conference call is 1722374.
The access code for the replay is 3836663. The replay will
be available from 11:30 a.m. EDT today, until the end of the day on
May 13, 2020. 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.
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 108
million people, including more than 42 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.
Anthem, Inc.
Membership Summary
(Unaudited and in Thousands)
Change from
Medical
Membership
March 31, 2020
March 31, 2019
December 31, 2019
March 31, 2019
December 31, 2019
Customer Type
Local Group
15,848
15,697
15,682
1.0
%
1.1
%
Individual
717
773
684
(7.2
)%
4.8
%
National:
National Accounts
7,898
7,757
7,596
1.8
%
4.0
%
BlueCard®
6,197
5,981
6,060
3.6
%
2.3
%
Total National
14,095
13,738
13,656
2.6
%
3.2
%
Medicare:
Medicare Advantage
1,341
1,144
1,214
17.2
%
10.5
%
Medicare Supplement
914
867
905
5.4
%
1.0
%
Total Medicare
2,255
2,011
2,119
12.1
%
6.4
%
Medicaid
7,615
7,033
7,265
8.3
%
4.8
%
Federal Employees Health Benefits
1,614
1,591
1,594
1.4
%
1.3
%
Total Medical Membership
42,144
40,843
41,000
3.2
%
2.8
%
Funding Arrangement
Self-Funded
26,120
25,495
25,418
2.5
%
2.8
%
Fully-Insured
16,024
15,348
15,582
4.4
%
2.8
%
Total Medical Membership
42,144
40,843
41,000
3.2
%
2.8
%
Reportable Segment
Commercial & Specialty Business
30,660
30,208
30,022
1.5
%
2.1
%
Government Business
11,484
10,635
10,978
8.0
%
4.6
%
Total Medical Membership
42,144
40,843
41,000
3.2
%
2.8
%
Other
Membership
Life and Disability Members
5,158
4,849
5,259
6.4
%
(1.9
)%
Dental Members
6,172
5,955
5,962
3.6
%
3.5
%
Dental Administration Members
1,311
5,491
5,516
(76.1
)%
(76.2
)%
Vision Members
7,510
7,169
7,261
4.8
%
3.4
%
Medicare Part D Standalone Members
383
289
283
32.5
%
35.3
%
Anthem, Inc.
Consolidated Statements of
Income
(Unaudited)
(In millions, except per share data)
Three Months Ended March 31
2020
2019
Change
Revenues
Premiums
$
25,517
$
22,843
11.7
%
Product revenue
2,344
—
NM
Administrative fees and other revenue
1,587
1,545
2.7
%
Total operating revenue
29,448
24,388
20.7
%
Net investment income
254
210
21.0
%
Net realized (losses)/gains on financial
instruments
(24
)
78
NM
Impairment losses on investments:
Total impairment losses on investments
(101
)
(13
)
NM
Portion of impairment losses recognized in
other comprehensive income
44
3
NM
Impairment losses recognized in income
(57
)
(10
)
NM
Total revenues
29,621
24,666
20.1
%
Expenses
Benefit expense
21,489
19,282
11.4
%
Cost of products sold
1,984
—
NM
Selling, general and administrative
expense
3,781
3,166
19.4
%
Interest expense
194
187
3.7
%
Amortization of other intangible
assets
83
87
(4.6
)%
Loss/(gain) on extinguishment of debt
1
(1
)
NM
Total expenses
27,532
22,721
21.2
%
Income before income tax expense
2,089
1,945
7.4
%
Income tax expense
566
394
43.7
%
Net income
$
1,523
$
1,551
(1.8
)%
Net income per diluted share
$
5.94
$
5.91
0.5
%
Diluted shares
256.4
262.3
(2.2
)%
Benefit expense as a percentage of
premiums
84.2
%
84.4
%
(20
)bp
Selling, general and administrative
expense as a percentage of total operating revenue
12.8
%
13.0
%
(20
)bp
Income before income taxes as a percentage
of total revenue
7.1
%
7.9
%
(80
)bp
"NM" = calculation not meaningful
Anthem, Inc.
Consolidated Balance
Sheets
(In millions)
March 31, 2020
December 31, 2019
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
5,345
$
4,937
Fixed maturity securities, current
19,881
19,676
Equity securities, current
570
1,009
Premium receivables
5,786
5,014
Self-funded receivables
2,613
2,570
Other receivables
2,926
2,807
Other current assets
4,135
3,020
Total current assets
41,256
39,033
Long-term investments:
Fixed maturity securities
505
505
Other invested assets
4,181
4,258
Property and equipment, net
3,350
3,133
Goodwill
21,661
20,500
Other intangible assets
9,613
8,674
Other noncurrent assets
1,833
1,350
Total assets
$
82,399
$
77,453
Liabilities and shareholders’
equity
Liabilities
Current liabilities:
Medical claims payable
$
9,902
$
8,842
Other policyholder liabilities
3,252
3,050
Unearned income
947
1,017
Accounts payable and accrued expenses
5,058
4,198
Short-term borrowings
1,075
700
Current portion of long-term debt
1,603
1,598
Other current liabilities
5,202
4,127
Total current liabilities
27,039
23,532
Long-term debt, less current portion
19,005
17,787
Reserves for future policy benefits
754
759
Deferred tax liabilities, net
2,213
2,227
Other noncurrent liabilities
1,695
1,420
Total liabilities
50,706
45,725
Shareholders’ equity
Common stock
3
3
Additional paid-in capital
9,338
9,448
Retained earnings
23,360
22,573
Accumulated other comprehensive loss
(1,008
)
(296
)
Total shareholders’ equity
31,693
31,728
Total liabilities and shareholders’
equity
$
82,399
$
77,453
Anthem, Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
(In millions)
Three Months Ended March 31
2020
2019
Operating activities
Net income
$
1,523
$
1,551
Adjustments to reconcile net income to net
cash provided by operating activities:
Net realized losses (gains) on financial
instruments
24
(78
)
Depreciation and amortization
270
289
Deferred income taxes
57
55
Share-based compensation
67
70
Changes in operating assets and
liabilities:
Receivables, net
(639
)
(753
)
Other invested assets
63
(21
)
Other assets
(525
)
(125
)
Policy liabilities
692
791
Unearned income
(109
)
96
Accounts payable and other liabilities
588
(354
)
Income taxes
491
115
Other, net
13
(6
)
Net cash provided by operating
activities
2,515
1,630
Investing activities
Purchases of investments
(3,896
)
(6,069
)
Proceeds from sale of investments
2,728
5,236
Maturities, calls and redemptions from
investments
597
393
Purchases of subsidiaries, net of cash
acquired
(1,908
)
—
Purchases of property and equipment
(204
)
(234
)
Other, net
(101
)
22
Net cash used in investing activities
(2,784
)
(652
)
Financing activities
Net proceeds from commercial paper
borrowings
905
178
Net proceeds from (repayments of)
short-term borrowings
375
(50
)
Net proceeds from (repayments of)
long-term borrowings
248
(61
)
Repurchase and retirement of common
stock
(529
)
(294
)
Cash dividends
(240
)
(206
)
Proceeds from issuance of common stock
under employee stock plans
44
76
Taxes paid through withholding of common
stock under employee stock plans
(107
)
(78
)
Other, net
(17
)
6
Net cash provided by (used in) financing
activities
679
(429
)
Effect of foreign exchange rates on cash
and cash equivalents
(2
)
(1
)
Change in cash and cash equivalents
408
548
Cash and cash equivalents at beginning of
year
4,937
3,934
Cash and cash equivalents at end of
period
$
5,345
$
4,482
Anthem, Inc.
Reconciliation of Medical
Claims Payable
Three Months Ended March 31
Years Ended December 31
2020
2019
2019
2018
2017
(In millions)
(Unaudited)
(Unaudited)
Gross medical claims payable, beginning of
period
$
8,647
$
7,266
$
7,266
$
7,814
$
7,656
Ceded medical claims payable, beginning of
period
(33
)
(34
)
(34
)
(105
)
(539
)
Net medical claims payable, beginning of
period
8,614
7,232
7,232
7,709
7,117
Business combinations and purchase
adjustments
339
—
—
199
76
Net incurred medical claims:
Current year
21,230
18,794
78,695
69,581
70,377
Prior years redundancies(1)
(700
)
(455
)
(500
)
(930
)
(1,133
)
Total net incurred medical claims
20,530
18,339
78,195
68,651
69,244
Net payments attributable to:
Current year medical claims
13,744
12,163
70,294
62,748
62,923
Prior years medical claims
6,109
5,414
6,519
6,579
5,805
Total net payments
19,853
17,577
76,813
69,327
68,728
Net medical claims payable, end of
period
9,630
7,994
8,614
7,232
7,709
Ceded medical claims payable, end of
period
60
34
33
34
105
Gross medical claims payable, end of
period
$
9,690
$
8,028
$
8,647
$
7,266
$
7,814
Current year medical claims paid as a
percentage of current year net incurred medical claims
64.7
%
64.7
%
89.3
%
90.2
%
89.4
%
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
8.8
%
6.7
%
7.4
%
13.7
%
18.9
%
Prior year redundancies in the current
year as a percentage of prior year net incurred medical claims
0.9
%
0.7
%
0.7
%
1.3
%
1.8
%
(1) Negative amounts reported for net
incurred medical claims related to prior years result from claims
being settled for amounts less than originally estimated.
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.
Three Months Ended March 31
(In millions, except per share data)
2020
2019
Change
Net income
$
1,523
$
1,551
(1.8
)%
Add / (Subtract):
Net realized losses (gains) on financial
instruments
24
(78
)
Amortization of other intangible
assets
83
87
Impairment losses recognized in income
57
10
Loss (gain) on extinguishment of debt
1
(1
)
Transaction and integration related
costs
12
—
Litigation expenses
8
26
Tax impact of non-GAAP adjustments
(46
)
(14
)
Net adjustment items
139
30
Adjusted net income
$
1,662
$
1,581
5.1
%
Net income per diluted share
$
5.94
$
5.91
0.5
%
Add / (Subtract):
Net realized losses (gains) on financial
instruments
0.09
(0.30
)
Amortization of other intangible
assets
0.32
0.33
Impairment losses recognized in income
0.22
0.04
Loss (gain) on extinguishment of debt
—
—
Transaction and integration related
costs
0.05
—
Litigation expenses
0.03
0.10
Tax impact of non-GAAP adjustments
(0.18
)
(0.05
)
Rounding impact
0.01
—
Net adjustment items
0.54
0.12
Adjusted net income per diluted share
$
6.48
$
6.03
7.5
%
Full Year 2020 Outlook
Net income per diluted share
Greater than $21.00
Add / (Subtract):
Net realized losses (gains) on financial
instruments
0.09
Impairment losses recognized in income
0.22
Transaction and integration related
costs
0.05
Litigation expenses
0.03
Amortization of other intangible
assets
Approximately $1.32
Tax impact of non-GAAP adjustments
Approximately ($0.41)
Net adjustment items
Approximately $1.30
Adjusted net income per diluted share
Greater than $22.30
Three Months Ended March 31
(In millions)
2020
2019
Change
Reportable segments operating gain
$
2,194
$
1,940
13.1
%
Net investment income
254
210
Net realized (losses)/gains on financial
instruments
(24
)
78
Impairment losses recognized in income
(57
)
(10
)
Interest expense
(194
)
(187
)
Amortization of other intangible
assets
(83
)
(87
)
(Loss)/gain on extinguishment of debt
(1
)
1
Income before income tax expense
$
2,089
$
1,945
7.4
%
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, or collectively, the ACA, and the ultimate outcome of
legal challenges to the ACA; 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,
or CMS, 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; the ultimate outcome of litigation between Cigna
Corporation and us related to the merger agreement between the
parties and the potential for such litigation to cause us to incur
substantial additional costs, including potential settlement and
judgment costs; risks and uncertainties related to our pharmacy
benefit management, or 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;
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;
changes in U.S. tax laws; 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200429005241/en/
Investor Relations Chris
Rigg Chris.Rigg@anthem.com
Media Jill Becher,
414-234-1573 Jill.Becher@anthem.com
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