Anthem reports Q1 operating gain of US$2.4B, up 13.2% from a year ago, with operating revenue up 18% year-over-year to US$37.9B; benefit expense ratio up 50 basis points to 86.1%, as enrollment increases by 3.3 million to 46.8 million members

Sample article from our Health Care Sector

INDIANAPOLIS, Indiana , April 22, 2022 (press release) –

  • First quarter GAAP net income was $7.39 per share, including net negative adjustment items of $0.86 per share. Adjusted net income was $8.25* per share.
  • Operating revenue grew by 18.0% over the prior year quarter to $37.9 billion.
  • Operating gain grew by 13.2% over the prior year quarter to $2.4 billion.
  • Medical enrollment increased by 3.3 million members year-over-year and 1.4 million members sequentially to 46.8 million members.
  • Second quarter 2022 dividend of $1.28 per share declared to shareholders.

Anthem, Inc. (NYSE: ANTM) reported first quarter 2022 results reflecting strong financial performance, including double-digit top and bottom line growth.

"Our strong momentum across all our businesses is evidence that our transformation to become a lifetime, trusted health partner continues to drive our growth and accelerate our capabilities focused on whole person health," said Gail K. Boudreaux, President and CEO. "The shared commitment of our more than 98,000 associates to our purpose to improve the health of humanity, is both profound and powerful, and inspires a culture of performance that remains focused on customers and communities we serve."

The Company now expects GAAP net income to be greater than $26.43 per share, including approximately $1.97 per share of net unfavorable items. The Company now expects full-year adjusted net income to be greater than $28.40 per share, based on stronger than expected first quarter results.

*Refer to GAAP reconciliation tables.

CONSOLIDATED HIGHLIGHTS

Earnings Per Share: GAAP net income was $7.39 per share in the first quarter, including net negative adjustment items of $0.86 per share. Adjusted net income was $8.25* per share, up 17.7% from $7.01 in the same period a year ago.

*Please refer to the GAAP reconciliation tables.

Membership: Medical enrollment totaled approximately 46.8 million members as of March 31, 2022, an increase of 3.3 million, or 7.5 percent from the prior year quarter. Government Business enrollment increased by 2.1 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 acquisitions of MMM and Paramount Advantage, the launch of HealthyBlue in North Carolina, and organic growth in Medicare Advantage. Commercial & Specialty Business enrollment increased by 1.1 million year over year primarily driven by strong sales in both fee-based and risk-based businesses.

During the first quarter of 2022, medical enrollment increased by 1.4 million lives driven by organic growth in our Commercial fee-based business, the acquisition of Paramount Advantage's Medicaid members in Ohio, and growth in Individual Medicare Advantage enrollment.

Operating Revenue: Operating revenue was $37.9 billion in the first quarter of 2022, an increase of $5.8 billion, or 18.0 percent, from the prior year quarter. The increase was driven by higher premium revenue due to membership growth in Medicaid, the acquisitions of MMM and Paramount, growth in Medicare Advantage and Commercial risk-based membership, and premium rate increases to cover overall cost trends. The increase was further attributable to growth in pharmacy product revenue within IngenioRx.

Benefit Expense Ratio: The benefit expense ratio was 86.1 percent in the first quarter of 2022, an increase of 50 basis points versus the prior year quarter. The increase was primarily driven by the continued shift in mix of business, as Anthem has grown Government Business, which has a higher benefit expense ratio, faster than the Commercial & Specialty risk business.

Medical claims reserves established at December 31, 2021, developed in line with the Company’s expectations as of the first quarter of 2022.

Days in Claims Payable: Days in Claims Payable was 46.9 days as of March 31, 2022, an increase of 1.7 days from December 31, 2021 and unchanged compared to March 31, 2021.

SG&A Expense Ratio: The SG&A expense ratio was 11.5 percent in the first quarter of 2022, a decrease of 70 basis points from 12.2 percent in the first quarter of 2021. The decrease was primarily driven by operating expense leverage associated with growth in operating revenue, partially offset by increased spend to support growth.

Operating Cash Flow: Operating cash flow was approximately $2.5 billion, or 1.4 times net income in the first quarter of 2022, an increase of $36 million as compared to the prior year quarter. The year-on-year increase was driven by an increase in net income, partially offset by the impact of working capital changes.

Share Repurchase Program: During the first quarter of 2022, the Company repurchased 1.2 million shares of its common stock for $545 million, at a weighted average price of $453.32. As of March 31, 2022, the Company had approximately $3.6 billion of Board-approved share repurchase authorization remaining.

Cash Dividend: During the first quarter of 2022, the Company paid a quarterly dividend of $1.28 per share, representing a distribution of cash totaling $309 million.

On April 19, 2022, the Audit Committee of the Company's Board of Directors declared a second quarter 2022 dividend to shareholders of $1.28 per share. The second quarter dividend is payable on June 24, 2022, to shareholders of record at the close of business on June 10, 2022.

Investment Portfolio & Capital Position: During the first quarter of 2022, the Company recorded net losses of $151 million. During the first quarter of 2021, the Company recorded net losses of $4 million. These amounts are excluded from adjusted earnings per share.

As of March 31, 2022, the Company’s net unrealized loss position in the investment portfolio was $755 million, consisting primarily of fixed maturity securities. As of March 31, 2022 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).

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 March 31

 

 

 

 

 

2022

 

2021

 

Change

 

 

 

Operating Revenue

 

 

 

 

 

 

 

 

 

Commercial & Specialty Business

 

$10,269

 

$9,491

 

8.2 %

 

 

 

Government Business

 

23,758

 

19,283

 

23.2 %

 

 

 

IngenioRx

 

6,683

 

5,862

 

14.0 %

 

 

 

Other

 

3,221

 

2,370

 

35.9 %

 

 

 

Eliminations

 

(6,045)

 

(4,908)

 

23.2 %

 

 

 

Total Operating Revenue1

 

$37,886

 

$32,098

 

18.0 %

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Gain

 

 

 

 

 

 

 

 

 

Commercial & Specialty Business

 

$1,082

 

$1,268

 

(14.7) %

 

 

 

Government Business

 

789

 

478

 

65.1 %

 

 

 

IngenioRx

 

398

 

407

 

(2.2) %

 

 

 

Other

 

178

 

8

 

NM

 

 

 

Total Operating Gain1

 

$2,447

 

$2,161

 

13.2 %

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

 

 

 

 

 

 

 

 

Commercial & Specialty Business

 

10.5 %

 

13.4 %

 

(290) bp

 

 

 

Government Business

 

3.3 %

 

2.5 %

 

80 bp

 

 

 

IngenioRx

 

6.0 %

 

6.9 %

 

(90) bp

 

 

 

Total Operating Margin1

 

6.5 %

 

6.7 %

 

(20) bp

 

 

 

 

 

 

 

 

 

 

 

 

1.

See “Basis of Presentation.”

2.

"NM" = calculation not meaningful.

 

Commercial & Specialty Business: Operating gain in the Commercial & Specialty Business segment totaled $1,082 million in the first quarter of 2022, a decrease of $186 million from $1,268 million in the first quarter of 2021. The decrease was primarily driven by the net unfavorable effect of COVID and increased spend to support growth and innovation. These impacts were partially offset by the positive contribution from growth in risk-based and fee-based membership.

Government Business: Operating gain in the Government Business segment was $789 million in the first quarter of 2022, an increase of $311 million from $478 million in the first quarter of 2021. The increase was primarily attributable to the acquisition of MMM, membership growth in Medicaid, improved risk revenue in Medicare, and out-of-period items in Medicaid. These impacts were partially offset by increased spend in support of growth.

IngenioRx: Operating gain was $398 million in the first quarter of 2022, a decrease of $9 million from $407 million in the first quarter of 2021. The decrease was primarily driven by the non-recurrence of a favorable out-of-period adjustment in the first quarter of 2021, partially offset by the impact of higher prescription volume resulting from growth in integrated medical and pharmacy members.

Other: The Company reported an operating gain of $178 million in the Other segment for the first quarter of 2022, an increase of $170 million from $8 million in the prior year quarter. The increase was driven by improved performance in the Diversified Business Group's Affiliated and Unaffiliated earnings and the acquisition of myNEXUS in April 2021. This increase in operating gain was further driven by changes in unallocated corporate costs year-over-year.

Basis of Presentation

1. Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reporting segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and selling, general and administrative expense. It does not include net investment income, net 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.

2. Operating margin is defined as operating gain divided by operating revenue.

Conference Call and Webcast

Management will host a conference call and webcast today at 8:30 a.m. Eastern Daylight Time (“EDT”) to discuss the company’s first quarter results and outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers:

888-947-9963 (Domestic)

800-813-5525 (Domestic Replay)

312-470-0178 (International)

203-369-3346 (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 May 20, 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 approximately 118 million people, including nearly 47 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

 

March 31,

2022

 

March 31,

2021

 

December 31,

2021

 

March 31,
2021

 

December 31,

2021

Commercial & Specialty Business

 

 

 

 

 

 

 

 

 

 

Individual

 

818

 

731

 

759

 

11.9

%

 

7.8

%

Group Risk-Based

 

4,028

 

3,837

 

4,006

 

5.0

%

 

0.5

%

Commercial Risk-Based

 

4,846

 

4,568

 

4,765

 

6.1

%

 

1.7

%

BlueCard®

 

6,370

 

6,166

 

6,178

 

3.3

%

 

3.1

%

Group Fee-Based

 

20,148

 

19,515

 

19,395

 

3.2

%

 

3.9

%

Commercial Fee-Based

 

26,518

 

25,681

 

25,573

 

3.3

%

 

3.7

%

Total Commercial & Specialty Business

 

31,364

 

30,249

 

30,338

 

3.7

%

 

3.4

%

Government Business

 

 

 

 

 

 

 

 

 

 

Medicare Advantage

 

1,921

 

1,538

 

1,859

 

24.9

%

 

3.3

%

Medicare Supplement

 

939

 

930

 

952

 

1.0

%

 

(1.4

) %

Total Medicare

 

2,860

 

2,468

 

2,811

 

15.9

%

 

1.7

%

Medicaid

 

10,919

 

9,172

 

10,600

 

19.0

%

 

3.0

%

Federal Employees Health Benefits

 

1,632

 

1,632

 

1,625

 

%

 

0.4

%

Total Government Business

 

15,411

 

13,272

 

15,036

 

16.1

%

 

2.5

%

Total Medical Membership

 

46,775

 

43,521

 

45,374

 

7.5

%

 

3.1

%

Other Membership

 

 

 

 

 

 

 

 

 

 

Life and Disability Members

 

4,679

 

4,766

 

4,782

 

(1.8

) %

 

(2.2

) %

Dental Members

 

6,649

 

6,599

 

6,674

 

0.8

%

 

(0.4

) %

Dental Administration Members

 

1,588

 

1,488

 

1,491

 

6.7

%

 

6.5

%

Vision Members

 

9,211

 

7,798

 

8,031

 

18.1

%

 

14.7

%

Medicare Part D Standalone Members

 

279

 

450

 

438

 

(38.0

) %

 

(36.3

) %

Anthem, Inc.

Consolidated Statements of Income

(Unaudited)

 

 

 

 

 

 

 

(In millions, except per share data)

 

Three Months Ended

March 31

 

 

 

 

 

2022

 

 

 

2021

 

 

Change

Revenues

 

 

 

 

 

 

Premiums

 

$

32,785

 

 

$

27,676

 

 

18.5

%

Product revenue

 

 

3,301

 

 

 

2,737

 

 

20.6

%

Administrative fees and other revenue

 

 

1,800

 

 

 

1,685

 

 

6.8

%

Total operating revenue

 

 

37,886

 

 

 

32,098

 

 

18.0

%

Net investment income

 

 

360

 

 

 

291

 

 

23.7

%

Net losses on financial instruments

 

 

(151

)

 

 

(4

)

 

NM

 

 

 

 

 

 

 

 

Total revenues

 

 

38,095

 

 

 

32,385

 

 

17.6

%

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

Benefit expense

 

 

28,215

 

 

 

23,699

 

 

19.1

%

Cost of products sold

 

 

2,883

 

 

 

2,313

 

 

24.6

%

Selling, general and administrative expense

 

 

4,341

 

 

 

3,925

 

 

10.6

%

Interest expense

 

 

201

 

 

 

192

 

 

4.7

%

Amortization of other intangible assets

 

 

129

 

 

 

80

 

 

61.3

%

 

 

 

 

 

 

 

Total expenses

 

 

35,769

 

 

 

30,209

 

 

18.4

%

 

 

 

 

 

 

 

Income before income tax expense

 

 

2,326

 

 

 

2,176

 

 

6.9

%

 

 

 

 

 

 

 

Income tax expense

 

 

531

 

 

 

509

 

 

4.3

%

 

 

 

 

 

 

 

Net income

 

 

1,795

 

 

 

1,667

 

 

7.7

%

 

 

 

 

 

 

 

Net loss/(income) attributable to noncontrolling interests

 

 

10

 

 

 

(2

)

 

NM

 

 

 

 

 

 

 

 

Shareholders' net income

 

$

1,805

 

 

$

1,665

 

 

8.4

%

 

 

 

 

 

 

 

Shareholders' net income per diluted share

 

$

7.39

 

 

$

6.71

 

 

10.1

%

 

 

 

 

 

 

 

Diluted shares

 

 

244.4

 

 

 

248.2

 

 

(1.5

) %

 

 

 

 

 

 

 

Benefit expense as a percentage of premiums

 

 

86.1

%

 

 

85.6

%

 

50 bp

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

 

 

11.5

%

 

 

12.2

%

 

(70) bp

Income before income tax expense as a percentage of total revenue

 

 

6.1

%

 

 

6.7

%

 

(60) bp

                     

"NM" = calculation not meaningful

 

Anthem, Inc.

Consolidated Balance Sheets

"NM" = calculation not meaningful

Anthem, Inc.

Consolidated Balance Sheets

 

(In millions)

 

March 31,
2022

 

 

 

December 31,
2021

Assets

 

(Unaudited)

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,161

 

 

 

 

$

4,880

 

Fixed maturity securities

 

 

26,219

 

 

 

 

 

26,267

 

Equity securities, current

 

 

1,662

 

 

 

 

 

1,881

 

Premium receivables

 

 

7,349

 

 

 

 

 

5,681

 

Self-funded receivables

 

 

3,979

 

 

 

 

 

4,010

 

Other receivables

 

 

3,334

 

 

 

 

 

3,749

 

Other current assets

 

 

5,193

 

 

 

 

 

4,654

 

Total current assets

 

 

53,897

 

 

 

 

 

51,122

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

Fixed maturity securities

 

 

596

 

 

 

 

 

632

 

Other invested assets

 

 

5,365

 

 

 

 

 

5,225

 

Property and equipment, net

 

 

3,986

 

 

 

 

 

3,919

 

Goodwill

 

 

24,251

 

 

 

 

 

24,228

 

Other intangible assets

 

 

10,588

 

 

 

 

 

10,615

 

Other noncurrent assets

 

 

1,803

 

 

 

 

 

1,719

 

Total assets

 

$

100,486

 

 

 

 

$

97,460

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Medical claims payable

 

$

14,713

 

 

 

 

$

13,518

 

Other policyholder liabilities

 

 

5,396

 

 

 

 

 

5,521

 

Unearned income

 

 

1,210

 

 

 

 

 

1,153

 

Accounts payable and accrued expenses

 

 

5,493

 

 

 

 

 

4,970

 

Short-term borrowings

 

 

275

 

 

 

 

 

275

 

Current portion of long-term debt

 

 

3,097

 

 

 

 

 

1,599

 

Other current liabilities

 

 

9,549

 

 

 

 

 

7,849

 

Total current liabilities

 

 

39,733

 

 

 

 

 

34,885

 

 

 

 

 

 

 

 

Long-term debt, less current portion

 

 

19,883

 

 

 

 

 

21,157

 

Reserves for future policy benefits

 

 

811

 

 

 

 

 

802

 

Deferred tax liabilities, net

 

 

2,349

 

 

 

 

 

2,805

 

Other noncurrent liabilities

 

 

1,679

 

 

 

 

 

1,683

 

Total liabilities

 

 

64,455

 

 

 

 

 

61,332

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

Common stock

 

 

2

 

 

 

 

 

2

 

Additional paid-in capital

 

 

9,151

 

 

 

 

 

9,148

 

Retained earnings

 

 

28,058

 

 

 

 

 

27,088

 

Accumulated other comprehensive loss

 

 

(1,236

)

 

 

 

 

(178

)

Total shareholders’ equity

 

 

35,975

 

 

 

 

 

36,060

 

Noncontrolling interests

 

 

56

 

 

 

 

 

68

 

Total equity

 

 

36,031

 

 

 

 

 

36,128

 

Total liabilities and equity

 

$

100,486

 

 

 

 

$

97,460

 

 

Anthem, Inc.

Consolidated Statements of Cash Flows

Anthem, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

 

 

(In millions)

 

Three Months Ended March 31

 

 

 

2022

 

 

 

2021

 

Operating activities

 

 

 

 

Net income

 

$

1,795

 

 

$

1,667

 

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

 

 

 

 

Net losses on financial instruments

 

 

151

 

 

 

4

 

Equity in net earnings of other invested assets

 

 

(153

)

 

 

(108

)

Depreciation and amortization

 

 

358

 

 

 

282

 

Deferred income taxes

 

 

(92

)

 

 

31

 

Share-based compensation

 

 

50

 

 

 

64

 

Changes in operating assets and liabilities:

 

 

 

 

Receivables, net

 

 

(1,348

)

 

 

(1,258

)

Other invested assets

 

 

7

 

 

 

(20

)

Other assets

 

 

(353

)

 

 

(288

)

Policy liabilities

 

 

1,075

 

 

 

1,455

 

Unearned income

 

 

57

 

 

 

(119

)

Accounts payable and other liabilities

 

 

428

 

 

 

358

 

Income taxes

 

 

568

 

 

 

438

 

Other, net

 

 

(2

)

 

 

(1

)

Net cash provided by operating activities

 

 

2,541

 

 

 

2,505

 

 

 

 

 

 

Investing activities

 

 

 

 

Purchases of investments

 

 

(5,050

)

 

 

(6,978

)

Proceeds from sale of investments

 

 

3,047

 

 

 

4,650

 

Maturities, calls and redemptions from investments

 

 

1,209

 

 

 

998

 

Changes in securities lending collateral

 

 

(441

)

 

 

(731

)

Purchases of subsidiaries, net of cash acquired

 

 

(61

)

 

 

(27

)

Purchases of property and equipment

 

 

(254

)

 

 

(204

)

Other, net

 

 

(28

)

 

 

(15

)

Net cash used in investing activities

 

 

(1,578

)

 

 

(2,307

)

 

 

 

 

 

Financing activities

 

 

 

 

Net proceeds from (repayments of) commercial paper borrowings

 

 

225

 

 

 

(250

)

Net (repayments of) proceeds from long-term borrowings

 

 

(14

)

 

 

3,462

 

Changes in securities lending payable

 

 

441

 

 

 

731

 

Repurchase and retirement of common stock

 

 

(545

)

 

 

(447

)

Cash dividends

 

 

(309

)

 

 

(277

)

Proceeds from issuance of common stock under employee stock plans

 

 

76

 

 

 

89

 

Taxes paid through withholding of common stock under employee stock plans

 

 

(86

)

 

 

(91

)

Other, net

 

 

534

 

 

 

171

 

Net cash provided by financing activities

 

 

322

 

 

 

3,388

 

 

 

 

 

 

Effect of foreign exchange rates on cash and cash equivalents

 

 

(4

)

 

 

(1

)

 

 

 

 

 

Change in cash and cash equivalents

 

 

1,281

 

 

 

3,585

 

Cash and cash equivalents at beginning of period

 

 

4,880

 

 

 

5,741

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

$

6,161

 

 

$

9,326

 

 

Anthem, Inc.

Reconciliation of Medical Claims Payable

Anthem, Inc.

Reconciliation of Medical Claims Payable

 

 

Three Months Ended

March 31

 

Years Ended December 31

 

 

2022

 

 

 

2021

 

 

 

2021

 

 

 

2020

 

 

 

2019

 

(In millions)

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross medical claims payable, beginning of period

$

13,282

 

 

$

11,135

 

 

$

11,135

 

 

$

8,647

 

 

$

7,266

 

Ceded medical claims payable, beginning of period

 

(21

)

 

 

(46

)

 

 

(46

)

 

 

(33

)

 

 

(34

)

Net medical claims payable, beginning of period

 

13,261

 

 

 

11,089

 

 

 

11,089

 

 

 

8,614

 

 

 

7,232

 

 

 

 

 

 

 

 

 

 

 

Business combinations and purchase adjustments

 

3

 

 

 

 

 

 

420

 

 

 

339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net incurred medical claims:

 

 

 

 

 

 

 

 

 

Current year

 

28,064

 

 

 

24,215

 

 

 

100,440

 

 

 

85,094

 

 

 

78,695

 

Prior years redundancies(1)

 

(933

)

 

 

(1,488

)

 

 

(1,703

)

 

 

(637

)

 

 

(500

)

Total net incurred medical claims

 

27,131

 

 

 

22,727

 

 

 

98,737

 

 

 

84,457

 

 

 

78,195

 

 

 

 

 

 

 

 

 

 

 

Net payments attributable to:

 

 

 

 

 

 

 

 

 

Current year medical claims

 

17,116

 

 

 

15,031

 

 

 

88,156

 

 

 

74,629

 

 

 

70,294

 

Prior years medical claims

 

8,826

 

 

 

6,748

 

 

 

8,829

 

 

 

7,692

 

 

 

6,519

 

Total net payments

 

25,942

 

 

 

21,779

 

 

 

96,985

 

 

 

82,321

 

 

 

76,813

 

 

 

 

 

 

 

 

 

 

 

Net medical claims payable, end of period

 

14,453

 

 

 

12,037

 

 

 

13,261

 

 

 

11,089

 

 

 

8,614

 

Ceded medical claims payable, end of period

 

17

 

 

 

39

 

 

 

21

 

 

 

46

 

 

 

33

 

Gross medical claims payable, end of period

$

14,470

 

 

$

12,076

 

 

$

13,282

 

 

$

11,135

 

 

$

8,647

 

 

 

 

 

 

 

 

 

 

 

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

 

61.0

%

 

 

62.1

%

 

 

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

 

7.6

%

 

 

15.5

%

 

 

18.1

%

 

 

8.0

%

 

 

7.4

%

 

 

 

 

 

 

 

 

 

 

Prior year redundancies in the current year as a percentage of prior year net incurred medical claims

 

0.9

%

 

 

1.8

%

 

 

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.

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

March 31

 

 

(In millions, except per share data)

 

 

2022

 

 

 

2021

 

 

Change

Shareholders' net income

 

$

1,805

 

 

$

1,665

 

 

8.4

%

Add / (Subtract):

 

 

 

 

 

 

Net losses on financial instruments

 

 

151

 

 

 

4

 

 

 

Amortization of other intangible assets

 

 

129

 

 

 

80

 

 

 

Transaction and integration related costs

 

 

9

 

 

 

9

 

 

 

Litigation expenses

 

 

1

 

 

 

6

 

 

 

Tax impact of non-GAAP adjustments

 

 

(78

)

 

 

(25

)

 

 

Net adjustment items

 

 

212

 

 

 

74

 

 

 

Adjusted shareholders' net income

 

$

2,017

 

 

$

1,739

 

 

16.0

%

 

 

 

 

 

 

 

Shareholders' net income per diluted share

 

$

7.39

 

 

$

6.71

 

 

10.1

%

Add / (Subtract):

 

 

 

 

 

 

Net losses on financial instruments

 

 

0.62

 

 

 

0.02

 

 

 

Amortization of other intangible assets

 

 

0.53

 

 

 

0.32

 

 

 

Transaction and integration related costs

 

 

0.04

 

 

 

0.04

 

 

 

Litigation expenses

 

 

 

 

 

0.02

 

 

 

Tax impact of non-GAAP adjustments

 

 

(0.32

)

 

 

(0.10

)

 

 

Rounding impact

 

 

(0.01

)

 

 

 

 

 

Net adjustment items

 

 

0.86

 

 

 

0.30

 

 

 

Adjusted shareholders' net income per diluted share

 

$

8.25

 

 

$

7.01

 

 

17.7

%

 

 

 

 

 

 

 

 

 

Full Year 2022 Outlook

 

 

Shareholders' net income per diluted share

 

Greater than $26.43

 

 

Add / (Subtract):

 

 

 

 

Net losses on financial instruments

 

$

0.61

 

 

 

Transaction and integration related costs

 

$

0.04

 

 

 

Amortization of other intangible assets

 

Approximately $2.11

 

 

Tax impact of non-GAAP adjustments

 

Approximately $(0.79)

 

 

Net adjustment items

 

Approximately $1.97

 

 

Adjusted shareholders' net income per diluted share

 

Greater than $28.40

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

March 31

 

 

(In millions)

 

 

2022

 

 

 

2021

 

 

Change

Income before income tax expense

 

$

2,326

 

 

$

2,176

 

 

6.9

%

Net investment income

 

 

(360

)

 

 

(291

)

 

 

Net losses on financial instruments

 

 

151

 

 

 

4

 

 

 

Interest expense

 

 

201

 

 

 

192

 

 

 

Amortization of other intangible assets

 

 

129

 

 

 

80

 

 

 

Reportable segments operating gain

 

$

2,447

 

 

$

2,161

 

 

13.2

%

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.

Investor Relations
Stephen Tanal
Stephen.Tanal@anthem.com

Media
Leslie Porras
Leslie.Porras@anthem.com

Source: Anthem, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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