- 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.
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.
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.
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.
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.
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
8.3
%
15.6
%
(730) bp
10.8
%
15.4
%
(460) bp
4.3
%
9.4
%
(510) bp
3.4
%
5.8
%
(240) bp
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.”
(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.
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.
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.
Basis of Presentation
- 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 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 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.
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.
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)
%
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
%
890
bp
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
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
%
510
bp
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
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
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
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.
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)
%
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210721005316/en/
Anthem Contacts: Investor
Relations Stephen Tanal
Stephen.Tanal@anthem.com
Media Leslie Porras
Leslie.Porras@anthem.com
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