- 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.
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.
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.
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.
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.
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 Business
$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)
NM2
(15,173)
(11,335)
NM2
Total Operating Revenue1
$35,548
$30,649
16.0
%
$100,925
$89,275
13.0
%
Operating Gain (Loss)3
Commercial & Specialty Business
$620
($234)
NM2
$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)
NM2
52
(76)
NM2
Total Operating Gain1
$2,059
$201
924.4
%
$6,301
$5,755
9.5
%
Operating Margin
Commercial & Specialty Business
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.”
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.
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.
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.
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 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.
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.
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
%
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
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
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
Anthem, Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
(In millions)
Nine Months Ended September
30
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
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
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
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.
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
%
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/20211020005263/en/
Anthem Contacts: Investor
Relations Stephen Tanal
Stephen.Tanal@anthem.com
Media Michelle
Vanstory Michelle.Vanstory@anthem.com
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