- Fourth quarter GAAP net income was $4.63 per share,
including net negative adjustment items of $0.51 per share.
Adjusted net income was $5.14* per share.
- Full year GAAP net income was $24.73 per share, including
net negative adjustment items of $1.25 per share. Adjusted
net income was $25.98* per share.
- Fourth quarter operating revenue grew by 14.2% over the
prior year quarter to $36.0 billion. Full year operating
revenue grew 13.4% year-over-year to $136.9 billion.
- Medical enrollment increased by 2.4 million members
year-over-year and 303 thousand members in the fourth quarter to
45.4 million members.
- Full year 2022 GAAP net income is expected to be greater
than $26.75 per share. Adjusted net income is expected to be
greater than $28.25* per share.
- Quarterly dividend increased by greater than 13% to $1.28
per share.
Anthem, Inc. (NYSE: ANTM) reported fourth quarter and full year
2021 results reflecting strong financial performance, including
double-digit top and bottom line growth.
"2021 was another year of strong growth for Anthem as we
continued our transformation from a health benefits company to a
lifetime trusted partner in health," said Gail K. Boudreaux,
President and CEO. "We begin 2022 with ongoing momentum across all
our businesses, and we're confident in our ability to deliver
earnings growth consistent with our long-term targeted range as we
innovate for consumers and advance our digital platform for health.
Anthem is uniquely positioned to achieve our purpose of improving
the Health of Humanity thanks to our 98,000 dedicated employees and
their unwavering commitment to the customers and communities we
serve."
*Refer to GAAP reconciliation tables.
CONSOLIDATED HIGHLIGHTS
Earnings Per Share: GAAP net income was $4.63 per share
in the fourth quarter, including net negative adjustment items of
$0.51 per share. Adjusted net income was $5.14* per share. Full
year GAAP net income was $24.73 per share, including net negative
adjustment items of $1.25 per share. Adjusted net income was
$25.98* per share. Adjusted net income per share for 2021 grew by
15.6% compared to 2020.
*Please refer to the GAAP reconciliation tables.
Membership: Medical enrollment totaled approximately 45.4
million members as of December 31, 2021, an increase of 2.4
million, or 5.7 percent from the prior year quarter. Government
Business enrollment increased by 2.2 million lives compared to the
prior year quarter, primarily driven by organic growth in the
Medicaid business, aided by the 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 249 thousand year over year primarily
driven by strong risk-based membership growth, partially offset by
in-group attrition in the group fee-based business.
During the fourth quarter of 2021, medical enrollment increased
sequentially by 303 thousand driven by organic growth in the
Medicaid business, and growth in Commercial risk-based and
fee-based membership.
Operating Revenue: Operating revenue was $36.0 billion in
the fourth quarter of 2021, an increase of $4.5 billion, or 14.2
percent, from the prior year quarter and 15.9 percent after
adjusting for the repeal of the health insurance tax in 2021.
Operating revenue for 2021 was $136.9 billion, representing 13.4
percent growth over 2020, and 15.0 percent growth after adjusting
for the repeal of the health insurance tax in 2021. The increase
for both the quarter and the full year was driven by higher premium
revenue due to growth in Medicaid, Medicare and Commercial
risk-based membership, and growth in pharmacy product revenue
within IngenioRx, partially offset by the repeal of the health
insurance tax.
Benefit Expense Ratio: The benefit expense ratio was 89.5
percent in the fourth quarter of 2021, an increase of 60 basis
points versus the prior year quarter and a decrease of 90 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 the timing of Medicaid
rate actions and reduced costs associated with COVID-related care.
The benefit expense ratio was 87.5 percent for the full year of
2021, an increase of 290 basis points year-over-year and an
increase of 140 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 increase was primarily driven by a
smaller reduction in non-COVID healthcare utilization as compared
to the prior year and an increase in costs associated with
COVID-related care.
Medical claims reserves established at December 31, 2020
developed better than the Company’s expectations as of December 31,
2021, with the majority offset by rebates, risk-corridors and other
related mechanisms.
Days in Claims Payable: Days in Claims Payable was 45.2
days as of December 31, 2021, a decrease of 1.6 days from September
30, 2021 and an increase of 1.8 days as compared to December 31,
2020.
SG&A Expense Ratio: The SG&A expense ratio was
11.7 percent in the fourth quarter of 2021, a decrease of 200 basis
points from 13.7 percent in the fourth quarter of 2020. The
decrease was 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 and business optimization charges
taken in the fourth quarter of 2021. For the full year of 2021, the
SG&A expense ratio was 11.6 percent, a decrease of 280 basis
points from 14.4 percent in 2020. The decrease was primarily driven
by growth in operating revenue, the repeal of the health insurance
tax in 2021, and the absence of charges in 2021 for the BCBSA
litigation accrual recognized in 2020 and reduced business
optimization charges in 2021, partially offset by increased spend
to support growth.
Operating Cash Flow: Operating cash flow was $1.7
billion, or 1.5 times net income in the fourth quarter of 2021, a
decrease of $2.1 billion as compared to the prior year quarter. The
year-on-year decrease was primarily driven by an increase in
medical claims payable in the fourth quarter of 2020 compared with
a slight decrease in the fourth quarter of 2021, and an increase in
receivables. For the full year 2021, operating cash flow was $8.4
billion, or 1.4 times net income.
Share Repurchase Program: During the fourth quarter of
2021, the Company repurchased 1.3 million shares of its common
stock for $522 million, at a weighted average price of $417.92. As
of December 31, 2021, the Company had approximately $4.2 billion of
Board-approved share repurchase authorization remaining.
Cash Dividend: During the fourth quarter of 2021, the
Company paid a quarterly dividend of $1.13 per share, representing
a distribution of cash totaling $274 million.
On January 25, 2022, the Audit Committee of the Company's Board
of Directors declared a first quarter 2022 dividend to shareholders
of $1.28 per share, an increase of over 13 percent from the
quarterly dividend payment in the fourth quarter. On an annualized
basis, the new quarterly dividend equates to $5.12 per share. The
first quarter dividend is payable on March 25, 2022, to
shareholders of record at the close of business on March 10,
2022.
Investment Portfolio & Capital Position: During the
fourth quarter of 2021, the Company recorded net gains of $211
million. During the fourth quarter of 2020, the Company recorded
net gains of $5 million. These amounts are excluded from adjusted
earnings per share.
As of December 31, 2021, the Company’s net unrealized gain
position in the investment portfolio was $648 million, consisting
primarily of fixed maturity securities. As of December 31, 2021
cash and investments at the parent company totaled approximately
$1.2 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 December
31
Twelve Months Ended December
31
2021
2020
Change
2021
2020
Change
Operating Revenue
Commercial & Specialty Business
$9,905
$9,223
7.4 %
$38,809
$36,699
5.7 %
Government Business
21,912
18,763
16.8 %
82,919
71,572
15.9 %
IngenioRx
6,801
5,863
16.0 %
25,431
21,911
16.1 %
Other
2,693
1,780
51.3 %
10,250
6,057
69.2 %
Eliminations
(5,293)
(4,096)
29.2 %
(20,466)
(15,431)
32.6 %
Total Operating Revenue1
$36,018
$31,533
14.2 %
$136,943
$120,808
13.4 %
Operating Gain (Loss)3
Commercial & Specialty Business
$74
$123
(39.8) %
$2,753
$2,681
2.7 %
Government Business
748
169
342.6 %
3,061
2,444
25.2 %
IngenioRx
427
363
17.6 %
1,684
1,361
23.7 %
Other
(61)
(50)
NM2
(9)
(126)
NM2
Total Operating Gain1
$1,188
$605
96.4 %
$7,489
$6,360
17.8 %
Operating Margin
Commercial & Specialty Business
0.7 %
1.3 %
(60) bp
7.1 %
7.3 %
(20) bp
Government Business
3.4 %
0.9 %
250 bp
3.7 %
3.4 %
30 bp
IngenioRx
6.3 %
6.2 %
10 bp
6.6 %
6.2 %
40 bp
Total Operating Margin1
3.3 %
1.9 %
140 bp
5.5 %
5.3 %
20 bp
1.
See “Basis of Presentation.”
2.
"NM" = calculation not meaningful.
3.
Operating gain for the three and twelve
months ended December 31, 2021 included $187 of charges related to
business optimization plans; including $106 for Commercial &
Specialty Business; $47 for the Government Business; $2 for
IngenioRx; and $32 for the Other segment. Operating gain for the
three months ended December 31, 2020 included $46 of charges
related to business optimization; including $12 for Commercial
& Specialty Business; $22 for the Government Business; $1 for
IngenioRx; and $11 for the Other segment. Operating gain for the
twelve months ended December 31, 2020 included $653 of charges
related to business optimization; including $311 for Commercial
& Specialty Business; $205 for the Government Business; $4 for
IngenioRx; and $133 for the Other segment. Operating gain for the
three months ended December 31, 2020 included a ($46) benefit
related to the adjustment of a prior accrual for the BCBSA
litigation settlement; including ($42) for Commercial and Specialty
Business; and ($4) for the Government Business Division. Operating
Gain for the twelve months ended December 31, 2020 included a $548
charge related to the BCBSA litigation settlement accrual; $524 for
Commercial & Specialty Business; and $24 for the Government
Business.
Commercial & Specialty Business: Operating gain in
the Commercial & Specialty Business segment totaled $74 million
in the fourth quarter of 2021, a decrease of $49 million from $123
million in the fourth quarter of 2020. The decrease was driven by
higher business optimization expenses in the fourth quarter of
2021, and the impact of the BCBSA litigation settlement accrual
adjustment in the fourth quarter of 2020. Absent these items, which
are excluded from our adjusted earnings, operating gain increased
$87 million due to reduced net costs associated with COVID.
Government Business: Operating gain in the Government
Business segment was $748 million in the fourth quarter of 2021, an
increase of $579 million from $169 million in the fourth quarter of
2020. The increase was primarily attributable to the timing of
Medicaid rate actions and membership growth in the Medicaid and
Medicare businesses, including growth resulting from the
acquisition of MMM.
IngenioRx: Operating gain was $427 million in the fourth
quarter of 2021, an increase of $64 million, or 17.6 percent, from
$363 million in the fourth quarter of 2020. The increase was driven
by growth in members served by IngenioRx.
Other: The Company reported an operating loss of $61
million in the Other segment for the fourth quarter of 2021,
compared with an operating loss of $50 million in the prior year
quarter.
OUTLOOK
Full Year 2022:
- GAAP net income is expected to be greater than $26.75 per
share, including approximately $1.50 per share of net unfavorable
items. Excluding these items, adjusted net income is expected to be
greater than $28.25* per share.
- Medical membership is expected to be in the range of 45.6 -
46.2 million. Risk-based membership is expected to be in the range
of 19.5 - 19.9 million. Fee-based membership is expected to be in
the range of 26.1 - 26.3 million.
- Operating revenue is expected to be approximately $152 billion,
including premium revenue of approximately $130 billion.
- Benefit expense ratio is expected to be in the range of 88.0%
plus or minus 50 basis points.
- SG&A ratio is expected to be 10.8% plus or minus 50 basis
points.
- Operating cash flow is expected to be greater than $6.9
billion.
- Investment income is expected to be $1.1 billion.
- Interest expense is expected to be $840 million.
- Effective tax rate is expected to be between 22.0 - 24.0%.
- Share count is expected to be between 243 - 244 million.
* 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 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 Standard Time (“EST”) to discuss the company’s fourth
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)
800-570-8796 (Domestic Replay)
312-470-0178 (International)
203-369-3293 (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 February 25, 2022. 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 company dedicated to improving lives
and communities, and making healthcare simpler. Through its
affiliated companies, Anthem serves more than 118 million people,
including more than 45 million within its family of health plans.
Delivering health beyond healthcare, Anthem is expanding from being
a partner in health benefits to a lifetime, trusted health 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
December 31, 2021
December 31, 2020
September 30, 2021
December 31,2020
September 30, 2021
Commercial & Specialty
Business
Individual
759
680
769
11.6 %
(1.3) %
Group Risk-Based
4,006
3,799
3,946
5.4 %
1.5 %
Commercial Risk-Based
4,765
4,479
4,715
6.4 %
1.1 %
BlueCard®
6,178
6,059
6,166
2.0 %
0.2 %
Group Fee-Based
19,395
19,551
19,370
(0.8) %
0.1 %
Commercial Fee-Based
25,573
25,610
25,536
(0.1) %
0.1 %
Total Commercial & Specialty
Business
30,338
30,089
30,251
0.8 %
0.3 %
Government Business
Medicare Advantage
1,859
1,428
1,853
30.2 %
0.3 %
Medicare Supplement
952
933
947
2.0 %
0.5 %
Total Medicare
2,811
2,361
2,800
19.1 %
0.4 %
Medicaid
10,600
8,852
10,391
19.7 %
2.0 %
Federal Employees Health Benefits
1,625
1,623
1,629
0.1 %
(0.2) %
Total Government Business
15,036
12,836
14,820
17.1 %
1.5 %
Total Medical Membership
45,374
42,925
45,071
5.7 %
0.7 %
Other
Membership
Life and Disability Members
4,782
5,064
4,695
(5.6) %
1.9 %
Dental Members
6,674
6,385
6,637
4.5 %
0.6 %
Dental Administration Members
1,491
1,316
1,486
13.3 %
0.3 %
Vision Members
8,031
7,536
7,974
6.6 %
0.7 %
Medicare Part D Standalone Members
438
413
438
6.1 %
— %
Anthem, Inc.
Consolidated Statements of
Income
(Unaudited)
(In millions, except per share data)
Three Months Ended
December 31
2021
2020
Change
Revenues
Premiums
$ 30,769
$ 27,108
13.5 %
Product revenue
3,525
2,899
21.6 %
Administrative fees and other revenue
1,724
1,526
13.0 %
Total operating revenue
36,018
31,533
14.2 %
Net investment income
352
286
23.1 %
Net gains on financial instruments
211
5
NM
Total revenues
36,581
31,824
14.9 %
Expenses
Benefit expense
27,538
24,088
14.3 %
Cost of products sold
3,070
2,522
21.7 %
Selling, general and administrative
expense
4,222
4,318
(2.2) %
Interest expense
200
191
4.7 %
Amortization of other intangible
assets
135
92
46.7 %
Loss on extinguishment of debt
16
2
NM
Total expenses
35,181
31,213
12.7 %
Income before income tax expense
1,400
611
129.1 %
Income tax expense
275
60
358.3 %
Net income
1,125
551
104.2 %
Net loss attributable to noncontrolling
interests
12
—
NM
Shareholders' net income
$ 1,137
$ 551
106.4 %
Shareholders' net income per diluted
share
$ 4.63
$ 2.19
111.4 %
Diluted shares
245.5
251.1
(2.2) %
Benefit expense as a percentage of
premiums
89.5 %
88.9 %
60 bp
Selling, general and administrative
expense as a percentage of total operating revenue
11.7 %
13.7 %
(200) bp
Income before income tax expense as a
percentage of total revenue
3.8 %
1.9 %
190 bp
"NM" = calculation not meaningful
Anthem, Inc.
Consolidated Statements of
Income
(Unaudited)
(In millions, except per share data)
Twelve Months Ended
December 31
2021
2020
Change
Revenues
Premiums
$ 117,373
$ 104,109
12.7 %
Product revenue
12,657
10,384
21.9 %
Administrative fees and other revenue
6,913
6,315
9.5 %
Total operating revenue
136,943
120,808
13.4 %
Net investment income
1,378
877
57.1 %
Net gains on financial instruments
318
182
74.7 %
Total revenues
138,639
121,867
13.8 %
Expenses
Benefit expense
102,645
88,045
16.6 %
Cost of products sold
10,895
8,953
21.7 %
Selling, general and administrative
expense
15,914
17,450
(8.8) %
Interest expense
798
784
1.8 %
Amortization of other intangible
assets
441
361
22.2 %
Loss on extinguishment of debt
21
36
(41.7) %
Total expenses
130,714
115,629
13.0 %
Income before income tax expense
7,925
6,238
27.0 %
Income tax expense
1,830
1,666
9.8 %
Net income
6,095
4,572
33.3 %
Net loss attributable to noncontrolling
interests
9
—
NM
Shareholders' net income
$ 6,104
$ 4,572
33.5 %
Shareholders' net income per diluted
share
$ 24.73
$ 17.98
37.5 %
Diluted shares
246.8
254.3
(2.9) %
Benefit expense as a percentage of
premiums
87.5 %
84.6 %
290 bp
Selling, general and administrative
expense as a percentage of total operating revenue
11.6 %
14.4 %
(280) bp
Income before income tax expense as a
percentage of total revenue
5.7 %
5.1 %
60 bp
"NM" = calculation not meaningful
Anthem, Inc.
Consolidated Balance
Sheets
(In millions)
December 31,
2021
December 31,
2020
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$ 4,880
$ 5,741
Fixed maturity securities
26,267
23,433
Equity securities, current
1,881
1,559
Premium receivables
5,681
5,279
Self-funded receivables
4,010
2,849
Other receivables
3,749
2,830
Other current assets
4,603
4,060
Total current assets
51,071
45,751
Long-term investments:
Fixed maturity securities
632
562
Other invested assets
5,225
4,285
Property and equipment, net
3,919
3,483
Goodwill
24,228
21,691
Other intangible assets
10,615
9,405
Other noncurrent assets
1,617
1,438
Total assets
$ 97,307
$ 86,615
Liabilities and equity
Liabilities
Current liabilities:
Medical claims payable
$ 13,518
$ 11,359
Other policyholder liabilities
5,521
4,590
Unearned income
1,153
1,259
Accounts payable and accrued expenses
4,970
5,493
Short-term borrowings
275
—
Current portion of long-term debt
1,599
700
Other current liabilities
7,849
6,052
Total current liabilities
34,885
29,453
Long-term debt, less current portion
21,157
19,335
Reserves for future policy benefits
802
794
Deferred tax liabilities, net
2,652
2,019
Other noncurrent liabilities
1,683
1,815
Total liabilities
61,179
53,416
Shareholders’ equity
Common stock
2
3
Additional paid-in capital
9,148
9,244
Retained earnings
27,088
23,802
Accumulated other comprehensive (loss)
income
(178)
150
Total shareholders’ equity
36,060
33,199
Noncontrolling interests
68
—
Total equity
36,128
33,199
Total liabilities and equity
$ 97,307
$ 86,615
Anthem, Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
(In millions)
Twelve Months Ended
December 31
2021
2020
Operating activities
Net income
$6,095
$4,572
Adjustments to reconcile net income to net
cash provided by operating activities:
Net gains on financial instruments
(318)
(182)
Depreciation and amortization
1,302
1,154
Deferred income taxes
173
(540)
Impairment of property and equipment
73
198
Share-based compensation
255
283
Changes in operating assets and
liabilities:
Receivables, net
(2,138)
(256)
Other invested assets
(70)
(32)
Other assets
190
(283)
Policy liabilities
2,597
3,528
Unearned income
(113)
202
Accounts payable and other liabilities
719
1,978
Income taxes
140
72
Other, net
(541)
(6)
Net cash provided by operating
activities
8,364
10,688
Investing activities
Purchases of investments
(18,669)
(19,492)
Proceeds from sale of investments
10,269
11,318
Maturities, calls and redemptions from
investments
4,344
4,741
Changes in securities lending
collateral
(956)
(849)
Purchases of subsidiaries, net of cash
acquired
(3,476)
(1,976)
Purchases of property and equipment
(1,087)
(1,021)
Other, net
(63)
(45)
Net cash used in investing activities
(9,638)
(7,324)
Financing activities
Net proceeds from (repayments of)
commercial paper borrowings
50
(150)
Net proceeds from (repayments of)
short-term borrowings
275
(700)
Net proceeds from long-term borrowings
2,394
552
Changes in securities lending payable
956
849
Repurchase and retirement of common
stock
(1,900)
(2,700)
Cash dividends
(1,104)
(954)
Proceeds from issuance of common stock
under employee stock plans
203
176
Taxes paid through withholding of common
stock under employee stock plans
(102)
(128)
Other, net
(349)
488
Net cash provided by (used in) financing
activities
423
(2,567)
Effect of foreign exchange rates on cash
and cash equivalents
(10)
7
Change in cash and cash equivalents
(861)
804
Cash and cash equivalents at beginning of
period
5,741
4,937
Cash and cash equivalents at end of
period
$4,880
$5,741
Anthem, Inc.
Reconciliation of Medical
Claims Payable
Years Ended December 31
2021
2020
2019
(In millions)
(Unaudited)
Gross medical claims payable, beginning of
year
$ 11,135
$ 8,647
$ 7,266
Ceded medical claims payable, beginning of
year
(46)
(33)
(34)
Net medical claims payable, beginning of
year
11,089
8,614
7,232
Business combinations and purchase
adjustments
420
339
—
Net incurred medical claims:
Current year
100,440
85,094
78,695
Prior years redundancies(1)
(1,703)
(637)
(500)
Total net incurred medical claims
98,737
84,457
78,195
Net payments attributable to:
Current year medical claims
88,156
74,629
70,294
Prior years medical claims
8,829
7,692
6,519
Total net payments
96,985
82,321
76,813
Net medical claims payable, end of
year
13,261
11,089
8,614
Ceded medical claims payable, end of
year
21
46
33
Gross medical claims payable, end of
year*
$ 13,282
$ 11,135
$ 8,647
Current year medical claims paid as a
percentage of current year net incurred medical claims
87.8 %
87.7 %
89.3 %
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
18.1 %
8.0 %
7.4 %
Prior year redundancies in the current
year as a percentage of prior year net incurred medical claims
2.0 %
0.8 %
0.7 %
(1) Negative amounts reported for net
incurred medical claims related to prior years result from claims
being settled for amounts less than originally estimated.
* Excludes insurance lines other than
short duration.
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
December 31
Twelve Months Ended December
31
(In millions, except per share data)
2021
2020
Change
2021
2020
Change
Shareholders' net income
$ 1,137
$ 551
106.4 %
$ 6,104
$ 4,572
33.5 %
Add / (Subtract):
Net gains on financial instruments
(211)
(5)
(318)
(182)
Amortization of other intangible
assets
135
92
441
361
Loss on extinguishment of debt
16
2
21
36
Business optimization charges
187
46
187
653
BCBSA litigation settlement
—
(46)
—
548
Transaction and integration related
costs
19
22
54
49
Litigation expenses
27
6
42
40
Tax impact of non-GAAP adjustments
(49)
(31)
(120)
(360)
Net adjustment items
124
86
307
1,145
Adjusted shareholders' net income
$ 1,261
$ 637
98.0 %
$ 6,411
$ 5,717
12.1 %
Shareholders' net income per diluted
share
$ 4.63
$ 2.19
111.4 %
$ 24.73
$ 17.98
37.5 %
Add / (Subtract):
Net gains on financial instruments
(0.86)
(0.02)
(1.29)
(0.72)
Amortization of other intangible
assets
0.55
0.37
1.79
1.42
Loss on extinguishment of debt
0.07
0.01
0.09
0.14
Business optimization charges
0.76
0.18
0.76
2.57
BCBSA litigation settlement
—
(0.18)
—
2.15
Transaction and integration related
costs
0.08
0.09
0.22
0.19
Litigation expenses
0.11
0.02
0.17
0.16
Tax impact of non-GAAP adjustments
(0.20)
(0.12)
(0.49)
(1.42)
Rounding impact
—
—
—
0.01
Net adjustment items
0.51
0.35
1.25
4.50
Adjusted shareholders' net income per
diluted share
$ 5.14
$ 2.54
102.4 %
$ 25.98
$ 22.48
15.6 %
Full Year 2022 Outlook
Shareholders' net income per diluted
share
Greater than $26.75
Add / (Subtract):
Amortization of other intangible
assets
Approximately $2.15
Tax impact of non-GAAP adjustments
Approximately $(0.65)
Net adjustment items
Approximately $1.50
Adjusted shareholders' net income per
diluted share
Greater than $28.25
Three Months Ended
December 31
Twelve Months Ended December
31
(In millions)
2021
2020
Change
2021
2020
Change
Reportable segments operating gain
$ 1,188
$ 605
96.4 %
$ 7,489
$ 6,360
17.8 %
Net investment income
352
286
1,378
877
Net gains on financial instruments
211
5
318
182
Interest expense
(200)
(191)
(798)
(784)
Amortization of other intangible
assets
(135)
(92)
(441)
(361)
Loss on extinguishment of debt
(16)
(2)
(21)
(36)
Income before income tax expense
$ 1,400
$ 611
129.1 %
$ 7,925
$ 6,238
27.0 %
Anthem, Inc.
Financial Guidance
Summary
(Unaudited)
Full Year 2021 Actual
Full Year 2022 Outlook
Approximate Change
Year-End Medical Enrollment
Fee-Based
25,586
26,100 - 26,300
514k -714k
Risk-Based
19,788
19,500 - 19,900
(288k)-112k
Total
45,374
45,600 - 46,200
226k - 826k
Operating Revenue
$136.9 billion
$152 billion
Approximately $15.1 billion or
11.0%
Premium Revenue
$117.4 billion
$130 billion
Approximately $12.6 billion or
10.7%
Benefit Expense Ratio
87.5%
88.0% +/- 50 bps
50 bps +/- 50 bps
SG&A Expense Ratio
11.6%
10.8% +/- 50 bps
(80) bps +/- 50 bps
Operating Gain
$7.5 billion
Greater than $8.4 billion
Greater than $900 million or
12.0%
Other Pre-Tax Items:
Net Investment income
$1,378 million
$1,100 million
($278) million
Interest Expense
($798) million
($840) million
($42) million
Amortization of Intangible Assets
($441) million
($522) million
($81) million
Net Pre-Tax Expense
$139 million
($262) million
($401) million
Effective Tax Rate
23.1%
22.0% - 24.0%
(1.1%) - 0.9%
GAAP EPS
$24.73
Greater than $26.75
8.2% or better
Adjusted EPS
$25.98
Greater than $28.25
8.8% or better
Diluted Shares
246.8 million
243 - 244 million
(1.5%) - (1.1%)
Operating Cash Flow
$8.4 billion
Greater than $6.9 billion
($1.5) billion or better
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, state and international law and
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; the impact of a cyber-attack or other cyber
security breach resulting in 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 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; intense competition to
attract and retain employees; risks associated with our
international operations; 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/20220125006247/en/
Anthem Contacts: Investor
Relations Stephen Tanal
Stephen.Tanal@anthem.com Media
Michelle Vanstory Michelle.Vanstory@anthem.com
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