[January 28, 2015] |
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Anthem Reports Fourth Quarter 2014 Results
Anthem, Inc. (NYSE: ANTM) today announced that fourth quarter 2014 net
income was $506.7 million, or $1.80 per share. These results included
net gains of approximately $0.07 per share. Net income in the fourth
quarter of 2013 was $148.2 million, or $0.49 per share, which included
net losses of approximately $0.38 per share.
Excluding the items noted in each period, adjusted net income was $1.73
per share in the fourth quarter of 2014, an increase of 98.9 percent
compared with adjusted net income of $0.87 per share in the prior year
quarter (refer to GAAP reconciliation table for the most directly
comparable measure calculated in accordance with U.S. generally accepted
accounting principles, or "GAAP").
Full year 2014 net income totaled approximately $2.6 billion, or $8.99
per share, including net gains of $0.14 per share from certain items.
Full year 2013 net income was approximately $2.5 billion, or $8.20 per
share, including net losses of $0.32 per share from certain items.
Excluding the items noted in each period, adjusted net income was $8.85
per share for the full year of 2014, an increase of 3.9 percent from
$8.52 per share in 2013 (refer to GAAP reconciliation table).
"We are pleased with the solid finish to 2014, which leaves us
well-positioned for growth in 2015. Our membership growth in 2014 is
encouraging and we remain focused on improving healthcare affordability
and quality," said Joseph Swedish, president and chief executive officer.
"Our fourth quarter results reflect solid underlying performance. Our
increased dividend and continued share buybacks demonstrate our strong
cash flow outlook and our continued commitment to appropriate capital
deployment," said Wayne DeVeydt, executive vice president and chief
financial officer.
CONSOLIDATED HIGHLIGHTS
Membership: Medical enrollment totaled approximately 37.5 million
members at December 31, 2014, an increase of approximately 1.8 million
members, or 5.2 percent, from 35.7 million at December 31, 2013.
Commercial & Specialty Business enrollment increased by 1.1 million
medical members as the Company experienced growth in the National, Local
Group, and Individual markets. Enrollment also grew in the Medicaid and
Federal Employee Program business by 815,000 and 11,000, respectively,
partially offset by a decline in the Medicare business of 37,000.
Medical enrollment decreased by 32,000 members, or 0.1 percent,
sequentially during the fourth quarter of 2014, primarily due to
enrollment losses in the Individual and Local Group businesses,
partially offset by an increase in enrollment in the Medicaid business.
Operating Revenue: Operating revenue was nearly $18.8 billion in
the fourth quarter of 2014, an increase of approximately $1.1 billion,
or 6.4 percent, compared with approximately $17.6 billion in the prior
year quarter. The growth in revenue reflected premium increases to cover
overall cost trends and new fees associated with Health Care Reform, as
well as higher enrollment in the Medicaid, Individual and Commercial
self-funded businesses. These increases were partially offset by a
decline in revenues due to the previously disclosed State of New York
contract conversion to a self-funded arrangement and a decline in Small
Group and Medicare enrollment.
Benefit Expense Ratio: The benefit expense ratio was 84.5
percent in the fourth quarter of 2014, a decrease of 330 basis points
from 87.8 percent in the prior year quarter. The decline was largely
driven by an improvement in the Commercial & Specialty Business
predominantly due to the impact of additional premium revenue which
helps cover new Health Care Reform fees and improvement in the Medicaid
business primarily due to retro rate adjustments recorded during the
current year quarter.
Medical claims reserves established at December 31, 2013, developed
modestly better than the Company's expectation during 2014.
Medical Cost Trend: For the full year 2014, underlying
Local Group medical cost trend was approximately 6.5 percent. The
Company anticipates that medical cost trends will increase by
approximately 50 basis points in 2015.
Days in Claims Payable: Days in Claims Payable ("DCP") was
42.5 days as of December 31, 2014, a decrease of 1.5 days from 44.0 days
as of September 30, 2014. The decline was primarily due to changes in
the timing of claims payments between periods.
SG&A Expense Ratio: The SG&A expense ratio was 16.2 percent
in the fourth quarter of 2014, an increase of 120 basis points from 15.0
percent in the fourth quarter of 2013. The increase was driven by new
fees related to Health Care Reform effective January 1, 2014.
Operating Cash Flow: Operating cash flow for the fourth quarter
2014 totaled $305 million, or 0.6 times net income. For the full year
2014, operating cash flow totaled nearly $3.4 billion, or 1.3 times net
income.
Share Repurchase Program: During the fourth quarter of 2014, the
Company repurchased more than 2.8 million shares of its common stock for
$343 million, or a weighted-average price of $121.17. For the full year
2014, the Company repurchased more than 30.4 million shares of its
common stock, or 10.4 percent of the shares outstanding as of December
31, 2013, for nearly $3.0 billion, or a weighted-average price of
$98.52. As of December 31, 2014, the Company had approximately $5.7
billion of Board-approved share repurchase authorization remaining.
Cash Dividend: During the fourth quarter of 2014, the Company
paid a quarterly dividend of $0.4375 per share, representing a
distribution of cash totaling $117.6 million.
On January 27, 2015, the Board of Directors declared a first quarter
2015 dividend to shareholders of $0.625 per share. On an annualized
basis, this equates to a dividend of $2.50 per share. The first quarter
dividend is payable on March 25, 2015, to shareholders of record at the
close of business on March 10, 2015.
Investment Portfolio & Capital Position: During the fourth
quarter of 2014, the Company recorded net realized gains on investments
totaling $43.8 million, partially offset by other-than-temporary
impairment losses totaling $13.5 million. During the fourth quarter of
2013, the Company recorded net realized gains of $105.5 million,
partially offset by other-than-temporary impairment losses totaling
$25.8 million.
As of December 31, 2014, the Company's net unrealized gain position in
the investment portfolio was $958.1 million, consisting of net
unrealized gains on equity and fixed maturity securities totaling $607.4
million and $350.7 million, respectively. As of December 31, 2014, cash
and investments at the parent company totaled approximately $2.7 billion.
Discontinued Operations: In late December 2013, the Company
entered into agreements to divest its 1-800 CONTACTS subsidiary and
related assets. The sales were completed on January 31, 2014. As a
result, the current and prior period operating results of 1-800 CONTACTS
have been classified as discontinued operations, net of the related tax
effects.
REPORTABLE SEGMENTS
Anthem, Inc. has three reportable segments: Commercial & Specialty
Business (comprised of the Local Group, National Accounts, Individual
and Specialty businesses); Government Business (comprised of the
Medicaid and Medicare businesses, National Government Services, and the
Federal Employee Program); and Other (comprised of unallocated corporate
expenses and certain other businesses that do not meet the quantitative
thresholds for separate reportable segment disclosure).
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Anthem, Inc.
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Reportable Segment Highlights
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(Unaudited)
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(In millions)
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|
|
Three Months Ended December 31
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Twelve Months Ended December 31
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2014
|
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2013
|
|
Change
|
|
|
|
2014
|
|
2013
|
|
Change
|
Operating Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
Commercial & Specialty Business
|
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|
$9,728.0
|
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|
$9,911.7
|
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|
(1.9
|
%)
|
|
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|
$39,199.6
|
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|
$39,404.2
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(0.5
|
%)
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Government Business
|
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|
9,040.4
|
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|
7,723.7
|
|
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17.0
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%
|
|
|
|
33,796.4
|
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|
30,752.6
|
|
|
9.9
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%
|
|
Other
|
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7.8
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|
|
10.3
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|
(24.3
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%)
|
|
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|
25.7
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|
34.6
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|
(25.7
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%)
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Total Operating Revenue1
|
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|
18,776.2
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|
17,645.7
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|
|
6.4
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%
|
|
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|
73,021.7
|
|
|
70,191.4
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|
4.0
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%
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Operating Gain / (Loss)
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Commercial & Specialty Business
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$539.5
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$254.1
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112.3
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%
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|
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$3,260.9
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$3,176.4
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2.7
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%
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|
Government Business
|
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|
354.9
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|
|
165.5
|
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|
114.4
|
%
|
|
|
|
1,191.9
|
|
|
844.0
|
|
|
41.2
|
%
|
|
Other
|
|
|
(8.9
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)
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(0.2
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)
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NM2
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(34.4
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)
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(19.0
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)
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NM2
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Total Operating Gain1
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|
885.5
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419.4
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111.1
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%
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|
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|
4,418.4
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|
|
4,001.4
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|
10.4
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%
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Operating Margin
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Commercial & Specialty Business
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5.5
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%
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|
2.6
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%
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|
290 bp
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|
|
|
8.3
|
%
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|
8.1
|
%
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|
20 bp
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|
Government Business
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|
3.9
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%
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|
2.1
|
%
|
|
180 bp
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|
|
|
3.5
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%
|
|
2.7
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%
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|
80 bp
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Total Operating Margin1
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|
4.7
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%
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|
2.4
|
%
|
|
230 bp
|
|
|
|
6.1
|
%
|
|
5.7
|
%
|
|
40 bp
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|
|
|
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(1) Non-GAAP measures. See "Basis of Presentation" on
page 6 herein.
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(2) "NM" = calculation not meaningful.
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Commercial & Specialty Business: Operating gain in the
Commercial & Specialty Business segment totaled $539.5 million in the
fourth quarter of 2014, an increase of $285.4 million, or 112.3 percent,
from $254.1 million in the fourth quarter of 2013. The increase reflects
the overall growth in profitability in this segment, along with the
change in the mix and seasonality of the product portfolio,
predominantly due to the implementation of Health Care Reform product
offerings.
Government Business: Operating gain in the Government Business
segment was $354.9 million in the fourth quarter of 2014, an increase of
$189.4 million, or 114.4 percent, from $165.5 million in the fourth
quarter of 2013. The increase was driven primarily by retro rate
adjustments recorded during the current year quarter and earnings
contributions from enrollment growth throughout the year.
Other: The Company reported an operating loss of $8.9 million in
the Other segment for the fourth quarter of 2014, compared with an
operating loss of $0.2 million in the prior year quarter.
OUTLOOK
Full Year 2015 (refer to the Financial Guidance Summary for full
details):
-
Net income is expected to be greater than $9.30 per share, including
greater than $0.40 per share of amortization of other intangible
assets. Excluding this item, adjusted net income is expected to be
greater than $9.70 per share (refer to the GAAP reconciliation table).
-
Medical membership is expected to be in the range of 38,000,000 -
38,200,000. Fully insured membership is expected to be in the range of
14,750,000 - 14,850,000 and self-funded membership is expected to be
in the range of 23,250,000 - 23,350,000.
-
Operating revenue is expected to be within the range of $78.0 - $78.5
billion.
-
Benefit expense ratio is expected to be in the range of 83.0% plus or
minus 30 basis points.
-
SG&A ratio is expected to be in the range of 16.1% plus or minus 30
basis points.
-
Operating cash flow is expected to be greater than $3.5 billion.
Basis of Presentation
1. Operating revenue and operating gain, both non-GAAP measures, are the
key measures used by management to evaluate performance in each of its
reporting segments, allocate resources, set incentive compensation
targets and to forecast future operating performance. Operating gain, is
calculated as total operating revenue less benefit expense and selling,
general and administrative expense. It does not include net investment
income, net realized gains/losses on investments, other-than-temporary
impairment losses recognized in income, interest expense, amortization
of other intangible assets, loss 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. Consolidated operating margin is a non-GAAP measure.
3. In late December 2013, Anthem, Inc. entered into agreements to divest
its 1-800 CONTACTS subsidiary and related assets. As a result, the
Company reclassified the current and prior period results of 1-800
CONTACTS as discontinued operations, net of the related tax effects. The
1-800 CONTACTS subsidiary and related assets sale was completed on
January 31, 2014.
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:
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800-230-1074 (Domestic)
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800-475-6701 (Domestic Replay)
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612-288-0329 (International)
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320-365-3844 (International Replay)
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An access code is not required for today's conference call. The access
code for the replay is 341160. The replay will be available from 11:00
a.m. EDT today, until the end of the day on February 11, 2015. The call
will also be available through a live webcast at www.antheminc.com
under "Investors." A webcast replay will be available following the call.
About Anthem, Inc.
Anthem is working to transform health care with trusted and caring
solutions. Our health plan companies deliver quality products and
services that give their members access to the care they need. With more
than 68 million people served by its affiliated companies, including
more than 37 million enrolled in its family of health plans, Anthem is
one of the nation's leading health benefits companies. For more
information about Anthem's family of companies, please visit www.antheminc.com/companies.
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Anthem, Inc.
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Membership Summary
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(Unaudited and in Thousands)
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|
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|
|
|
|
|
|
|
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|
Change from
|
|
|
|
December 31,
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|
December 31,
|
|
September 30,
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|
|
December 31,
|
|
September 30,
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Medical Membership
|
|
|
2014
|
|
2013
|
|
2014
|
|
|
2013
|
|
2014
|
Customer Type
|
|
|
|
|
|
|
|
|
|
|
|
|
Local Group
|
|
|
15,137
|
|
14,725
|
|
15,163
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|
|
2.8%
|
|
(0.2%)
|
|
|
|
|
|
|
|
|
|
|
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|
National Accounts
|
|
|
7,155
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|
6,777
|
|
7,169
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|
5.6%
|
|
(0.2%)
|
BlueCard
|
|
|
5,279
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|
5,050
|
|
5,268
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|
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4.5%
|
|
0.2%
|
Total National
|
|
|
12,434
|
|
11,827
|
|
12,437
|
|
|
5.1%
|
|
(0.0%)
|
|
|
|
|
|
|
|
|
|
|
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|
Individual
|
|
|
1,793
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|
1,755
|
|
1,914
|
|
|
2.2%
|
|
(6.3%)
|
Medicaid
|
|
|
5,193
|
|
4,378
|
|
5,077
|
|
|
18.6%
|
|
2.3%
|
Medicare
|
|
|
1,404
|
|
1,441
|
|
1,402
|
|
|
(2.6%)
|
|
0.1%
|
FEP
|
|
|
1,538
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|
1,527
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|
1,538
|
|
|
0.7%
|
|
0.0%
|
Total Medical Membership
|
|
|
37,499
|
|
35,653
|
|
37,531
|
|
|
5.2%
|
|
(0.1%)
|
|
|
|
|
|
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Funding Arrangement
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|
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Self-Funded
|
|
|
22,800
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|
20,294
|
|
22,767
|
|
|
12.3%
|
|
0.1%
|
Fully-Insured
|
|
|
14,699
|
|
15,359
|
|
14,764
|
|
|
(4.3%)
|
|
(0.4%)
|
Total Medical Membership
|
|
|
37,499
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|
35,653
|
|
37,531
|
|
|
5.2%
|
|
(0.1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable Segment
|
|
|
|
|
|
|
|
|
|
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|
Commercial & Specialty Business
|
|
|
29,364
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|
28,307
|
|
29,514
|
|
|
3.7%
|
|
(0.5%)
|
Government Business
|
|
|
8,135
|
|
7,346
|
|
8,017
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|
|
10.7%
|
|
1.5%
|
Total Medical Membership
|
|
|
37,499
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|
35,653
|
|
37,531
|
|
|
5.2%
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|
(0.1%)
|
|
|
|
|
|
|
|
|
|
|
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Other Membership & Customers
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|
|
|
|
|
|
|
|
|
|
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|
Life and Disability Membership
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|
|
4,762
|
|
4,819
|
|
4,783
|
|
|
(1.2%)
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|
(0.4%)
|
Dental Membership
|
|
|
4,995
|
|
4,895
|
|
4,973
|
|
|
2.0%
|
|
0.4%
|
Managed Dental Membership
|
|
|
4,918
|
|
4,886
|
|
4,898
|
|
|
0.7%
|
|
0.4%
|
Vision Membership
|
|
|
5,096
|
|
4,743
|
|
5,101
|
|
|
7.4%
|
|
(0.1%)
|
Medicare Advantage Part D Membership
|
|
|
690
|
|
628
|
|
682
|
|
|
9.9%
|
|
1.2%
|
Medicare Part D Stand-Alone Membership
|
|
|
467
|
|
474
|
|
475
|
|
|
(1.5%)
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|
(1.7%)
|
|
|
|
|
|
|
|
|
|
|
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Anthem, Inc.
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Consolidated Statements of Income
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(Unaudited)
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Three Months Ended
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(In millions, except per share data)
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|
|
December 31
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|
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|
2014
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|
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2013
|
|
|
Change
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Revenues
|
|
|
|
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|
Premiums
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|
$17,577.9
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$16,609.6
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5.8
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%
|
Administrative fees
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|
|
1,186.3
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|
1,025.5
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|
15.7
|
%
|
Other revenue
|
|
|
12.0
|
|
|
|
10.6
|
|
|
|
13.2
|
%
|
|
Total operating revenue
|
|
|
18,776.2
|
|
|
|
17,645.7
|
|
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
177.8
|
|
|
|
176.3
|
|
|
|
0.9
|
%
|
Net realized gains on investments
|
|
|
43.8
|
|
|
|
105.5
|
|
|
|
(58.5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Other-than-temporary impairment losses on investments:
|
|
|
|
|
|
|
|
|
|
|
Total other-than-temporary impairment losses on investments
|
|
|
(14.3
|
)
|
|
|
(26.6
|
)
|
|
|
46.2
|
%
|
|
Portion of other-than-temporary impairment losses recognized in
|
|
|
|
|
|
|
|
|
|
|
other comprehensive income
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
0.0
|
%
|
|
Other-than-temporary impairment losses recognized in income
|
|
|
(13.5
|
)
|
|
|
(25.8
|
)
|
|
|
47.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
18,984.3
|
|
|
|
17,901.7
|
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Benefit expense
|
|
|
14,857.9
|
|
|
|
14,580.8
|
|
|
|
1.9
|
%
|
Selling, general and administrative expense
|
|
|
|
|
|
|
|
|
|
|
Selling expense
|
|
|
356.3
|
|
|
|
387.0
|
|
|
|
(7.9
|
%)
|
|
General and administrative expense
|
|
|
2,676.5
|
|
|
|
2,258.5
|
|
|
|
18.5
|
%
|
|
Total selling, general and administrative expense
|
|
|
3,032.8
|
|
|
|
2,645.5
|
|
|
|
14.6
|
%
|
Interest expense
|
|
|
153.6
|
|
|
|
145.8
|
|
|
|
5.3
|
%
|
Loss on extinguishment of debt
|
|
|
0.3
|
|
|
|
-
|
|
|
|
NM(2)
|
Amortization of other intangible assets
|
|
|
52.6
|
|
|
|
59.7
|
|
|
|
(11.9
|
%)
|
Total expenses
|
|
|
18,097.2
|
|
|
|
17,431.8
|
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income tax expense
|
|
|
887.1
|
|
|
|
469.9
|
|
|
|
88.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
380.4
|
|
|
|
161.0
|
|
|
|
136.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
506.7
|
|
|
|
308.9
|
|
|
|
64.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax (1)
|
|
|
-
|
|
|
|
(160.7
|
)
|
|
|
NM(2)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$506.7
|
|
|
|
$148.2
|
|
|
|
241.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted share
|
|
|
$1.80
|
|
|
|
$0.49
|
|
|
|
267.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
|
|
|
281.0
|
|
|
|
301.7
|
|
|
|
(6.9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Benefit expense as a percentage of premiums
|
|
|
84.5
|
%
|
|
|
87.8
|
%
|
|
|
(330) bp
|
Selling, general and administrative expense as a
|
|
|
|
|
|
|
|
|
|
|
percentage of total operating revenue
|
|
|
16.2
|
%
|
|
|
15.0
|
%
|
|
|
120 bp
|
Income from continuing operations before income tax expense
|
|
|
|
|
|
|
|
|
|
|
as a percentage of total revenues
|
|
|
4.7
|
%
|
|
|
2.6
|
%
|
|
|
210 bp
|
|
|
|
|
|
|
|
|
|
|
|
(1) Results for 1-800 CONTACTS have been reclassified
as discontinued operations under GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
(2) "NM" = calculation not meaningful
|
|
Anthem, Inc.
|
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
(In millions, except per share data)
|
|
|
December 31
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
Revenues
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Premiums
|
|
|
$68,389.8
|
|
|
|
$66,119.1
|
|
|
|
3.4
|
%
|
Administrative fees
|
|
|
4,590.6
|
|
|
|
4,031.9
|
|
|
|
13.9
|
%
|
Other revenue
|
|
|
41.3
|
|
|
|
40.4
|
|
|
|
2.2
|
%
|
|
Total operating revenue
|
|
|
73,021.7
|
|
|
|
70,191.4
|
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
724.4
|
|
|
|
659.1
|
|
|
|
9.9
|
%
|
Net realized gains on investments
|
|
|
177.0
|
|
|
|
271.9
|
|
|
|
(34.9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Other-than-temporary impairment losses on investments:
|
|
|
|
|
|
|
|
|
|
|
Total other-than-temporary impairment losses on investments
|
|
|
(56.2
|
)
|
|
|
(100.6
|
)
|
|
|
44.1
|
%
|
|
Portion of other-than-temporary impairment losses recognized in
|
|
|
|
|
|
|
|
|
|
|
other comprehensive income
|
|
|
7.2
|
|
|
|
1.7
|
|
|
|
NM(2)
|
|
Other-than-temporary impairment losses recognized in income
|
|
|
(49.0
|
)
|
|
|
(98.9
|
)
|
|
|
50.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
73,874.1
|
|
|
|
71,023.5
|
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Benefit expense
|
|
|
56,854.9
|
|
|
|
56,237.1
|
|
|
|
1.1
|
%
|
Selling, general and administrative expense
|
|
|
|
|
|
|
|
|
|
|
Selling expense
|
|
|
1,490.1
|
|
|
|
1,526.9
|
|
|
|
(2.4
|
%)
|
|
General and administrative expense
|
|
|
10,258.3
|
|
|
|
8,426.0
|
|
|
|
21.7
|
%
|
|
Total selling, general and administrative expense
|
|
|
11,748.4
|
|
|
|
9,952.9
|
|
|
|
18.0
|
%
|
Interest expense
|
|
|
600.7
|
|
|
|
602.7
|
|
|
|
(0.3
|
%)
|
Loss on extinguishment of debt
|
|
|
81.1
|
|
|
|
145.3
|
|
|
|
(44.2
|
%)
|
Amortization of other intangible assets
|
|
|
220.9
|
|
|
|
245.3
|
|
|
|
(9.9
|
%)
|
Total expenses
|
|
|
69,506.0
|
|
|
|
67,183.3
|
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income tax expense
|
|
|
4,368.1
|
|
|
|
3,840.2
|
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
1,808.0
|
|
|
|
1,205.9
|
|
|
|
49.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
2,560.1
|
|
|
|
2,634.3
|
|
|
|
(2.8
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations, net of tax (1)
|
|
|
9.6
|
|
|
|
(144.6
|
)
|
|
|
NM(2)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$2,569.7
|
|
|
|
$2,489.7
|
|
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted share
|
|
|
$8.99
|
|
|
|
$8.20
|
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
|
|
|
285.9
|
|
|
|
303.8
|
|
|
|
(5.9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Benefit expense as a percentage of premiums
|
|
|
83.1
|
%
|
|
|
85.1
|
%
|
|
|
(200) bp
|
Selling, general and administrative expense as a
|
|
|
|
|
|
|
|
|
|
|
percentage of total operating revenue
|
|
|
16.1
|
%
|
|
|
14.2
|
%
|
|
|
190 bp
|
Income from continuing operations before income tax expense
|
|
|
|
|
|
|
|
|
|
|
as a percentage of total revenues
|
|
|
5.9
|
%
|
|
|
5.4
|
%
|
|
|
50 bp
|
|
|
|
|
|
|
|
|
|
|
|
(1) Results for 1-800 CONTACTS have been reclassified
as discontinued operations under GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
(2) "NM" = calculation not meaningful
|
|
Anthem, Inc.
|
Consolidated Balance Sheets
|
|
|
|
|
December 31,
|
|
|
December 31,
|
(In millions)
|
|
|
2014
|
|
|
2013
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$2,151.7
|
|
|
$1,582.1
|
Investments available-for-sale, at fair value:
|
|
|
|
|
|
|
Fixed maturity securities
|
|
|
17,467.4
|
|
|
17,038.2
|
Equity securities
|
|
|
1,906.6
|
|
|
1,735.5
|
Other invested assets, current
|
|
|
20.2
|
|
|
16.3
|
Accrued investment income
|
|
|
161.4
|
|
|
168.8
|
Premium and self-funded receivables
|
|
|
4,825.5
|
|
|
3,968.7
|
Other receivables
|
|
|
2,117.0
|
|
|
1,063.3
|
Income taxes receivable
|
|
|
308.9
|
|
|
235.7
|
Securities lending collateral
|
|
|
1,515.2
|
|
|
969.8
|
Deferred tax assets, net
|
|
|
280.4
|
|
|
383.0
|
Other current assets
|
|
|
1,474.6
|
|
|
1,677.5
|
Assets held for sale
|
|
|
-
|
|
|
906.9
|
Total current assets
|
|
|
32,228.9
|
|
|
29,745.8
|
|
|
|
|
|
|
|
Long-term investments available-for-sale, at fair value:
|
|
|
|
|
Fixed maturity securities
|
|
|
504.4
|
|
|
449.9
|
Equity securities
|
|
|
31.5
|
|
|
31.3
|
Other invested assets, long-term
|
|
|
1,695.9
|
|
|
1,542.6
|
Property and equipment, net
|
|
|
1,944.3
|
|
|
1,801.5
|
Goodwill
|
|
|
17,082.0
|
|
|
16,917.2
|
Other intangible assets
|
|
|
7,958.1
|
|
|
8,441.0
|
Other noncurrent assets
|
|
|
619.9
|
|
|
645.2
|
Total assets
|
|
|
$62,065.0
|
|
|
$59,574.5
|
Liabilities and shareholders' equity
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Policy liabilities:
|
|
|
|
|
|
|
Medical claims payable
|
|
|
$6,861.2
|
|
|
$6,127.2
|
Reserves for future policy benefits
|
|
|
68.1
|
|
|
63.1
|
Other policyholder liabilities
|
|
|
2,626.5
|
|
|
2,073.2
|
Total policy liabilities
|
|
|
9,555.8
|
|
|
8,263.5
|
Unearned income
|
|
|
1,078.1
|
|
|
822.7
|
Accounts payable and accrued expenses
|
|
|
3,651.8
|
|
|
3,426.3
|
Security trades pending payable
|
|
|
66.2
|
|
|
95.2
|
Securities lending payable
|
|
|
1,515.3
|
|
|
969.7
|
Short-term borrowings
|
|
|
400.0
|
|
|
400.0
|
Current portion of long-term debt
|
|
|
625.0
|
|
|
518.0
|
Other current liabilities
|
|
|
1,861.2
|
|
|
1,674.7
|
Liabilities held for sale
|
|
|
-
|
|
|
181.4
|
Total current liabilities
|
|
|
18,753.4
|
|
|
16,351.5
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
14,127.2
|
|
|
13,573.6
|
Reserves for future policy benefits, noncurrent
|
|
|
671.3
|
|
|
723.0
|
Deferred tax liabilities, net
|
|
|
3,226.0
|
|
|
3,325.2
|
Other noncurrent liabilities
|
|
|
1,035.8
|
|
|
836.0
|
Total liabilities
|
|
|
37,813.7
|
|
|
34,809.3
|
Shareholders' equity
|
|
|
|
|
|
|
Common stock
|
|
|
2.7
|
|
|
2.9
|
Additional paid-in capital
|
|
|
10,062.3
|
|
|
10,765.2
|
Retained earnings
|
|
|
14,014.4
|
|
|
13,813.9
|
Accumulated other comprehensive income
|
|
|
171.9
|
|
|
183.2
|
Total shareholders' equity
|
|
|
24,251.3
|
|
|
24,765.2
|
Total liabilities and shareholders' equity
|
|
|
$62,065.0
|
|
|
$59,574.5
|
|
|
|
|
|
|
|
Anthem, Inc.
|
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
Twelve Months Ended December 31
|
(In millions)
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
Net income
|
|
|
$2,569.7
|
|
|
|
$2,489.7
|
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
Net realized gains on investments
|
|
|
(177.0
|
)
|
|
|
(271.9
|
)
|
Other-than-temporary impairment losses recognized in income
|
|
|
49.0
|
|
|
|
98.9
|
|
Loss on extinguishment of debt
|
|
|
81.1
|
|
|
|
145.3
|
|
(Gain)/loss on disposal of discontinued operations
|
|
|
(3.2
|
)
|
|
|
221.8
|
|
(Gain)/loss on disposal of assets
|
|
|
(1.7
|
)
|
|
|
3.9
|
|
Deferred income taxes
|
|
|
30.7
|
|
|
|
59.1
|
|
Amortization, net of accretion
|
|
|
744.5
|
|
|
|
800.9
|
|
Depreciation expense
|
|
|
106.5
|
|
|
|
107.9
|
|
Impairment of property and equipment
|
|
|
7.9
|
|
|
|
47.7
|
|
Share-based compensation
|
|
|
168.9
|
|
|
|
146.0
|
|
Excess tax benefits from share-based compensation
|
|
|
(46.4
|
)
|
|
|
(30.1
|
)
|
Changes in operating assets and liabilities, net of
|
|
|
|
|
|
|
effect of business combinations:
|
|
|
|
|
|
|
Receivables, net
|
|
|
(1,899.7
|
)
|
|
|
(418.3
|
)
|
Other invested assets
|
|
|
(21.7
|
)
|
|
|
(15.1
|
)
|
Other assets
|
|
|
405.5
|
|
|
|
(33.6
|
)
|
Policy liabilities
|
|
|
1,240.6
|
|
|
|
(345.8
|
)
|
Unearned income
|
|
|
255.1
|
|
|
|
(73.8
|
)
|
Accounts payable and accrued expenses
|
|
|
(14.4
|
)
|
|
|
303.6
|
|
Other liabilities
|
|
|
(7.9
|
)
|
|
|
(154.6
|
)
|
Income taxes
|
|
|
(34.0
|
)
|
|
|
9.3
|
|
Other, net
|
|
|
(84.2
|
)
|
|
|
(38.6
|
)
|
Net cash provided by operating activities
|
|
|
3,369.3
|
|
|
|
3,052.3
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
Purchases of fixed maturity securities
|
|
|
(9,613.4
|
)
|
|
|
(13,704.5
|
)
|
Proceeds from sales and maturities of fixed maturity securities
|
|
|
9,384.7
|
|
|
|
12,814.7
|
|
Purchases of equity securities
|
|
|
(912.0
|
)
|
|
|
(820.3
|
)
|
Proceeds from sales of equity securities
|
|
|
746.5
|
|
|
|
721.0
|
|
Purchases of other invested assets
|
|
|
(205.7
|
)
|
|
|
(251.5
|
)
|
Proceeds from sales of other invested assets
|
|
|
124.7
|
|
|
|
127.1
|
|
Settlement of non-hedging derivatives
|
|
|
(67.4
|
)
|
|
|
(109.8
|
)
|
Changes in securities lending collateral
|
|
|
(545.6
|
)
|
|
|
(405.1
|
)
|
Proceeds from the sale of subsidiary, net of cash sold
|
|
|
740.0
|
|
|
|
-
|
|
Net purchases of property and equipment
|
|
|
(626.6
|
)
|
|
|
(607.3
|
)
|
Other, net
|
|
|
(0.1
|
)
|
|
|
1.3
|
|
Net cash used in investing activities
|
|
|
(974.9
|
)
|
|
|
(2,234.4
|
)
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
Net repayments of commercial paper borrowings
|
|
|
(379.2
|
)
|
|
|
(191.7
|
)
|
Net proceeds from short-term borrowings
|
|
|
-
|
|
|
|
150.0
|
|
Net proceeds from (repayments of) long-term borrowings
|
|
|
969.9
|
|
|
|
(551.9
|
)
|
Changes in securities lending payable
|
|
|
545.6
|
|
|
|
405.0
|
|
Changes in bank overdrafts
|
|
|
173.0
|
|
|
|
9.9
|
|
Premiums paid on equity options
|
|
|
-
|
|
|
|
(25.8
|
)
|
Repurchase and retirement of common stock
|
|
|
(2,998.8
|
)
|
|
|
(1,620.1
|
)
|
Cash dividends
|
|
|
(480.7
|
)
|
|
|
(448.0
|
)
|
Proceeds from issuance of common stock under employee stock plans
|
|
|
301.3
|
|
|
|
524.7
|
|
Excess tax benefits from share-based compensation
|
|
|
46.4
|
|
|
|
30.1
|
|
Net cash used in financing activities
|
|
|
(1,822.5
|
)
|
|
|
(1,717.8
|
)
|
|
|
|
|
|
|
|
Effects of foreign currency exchange rate changes on cash
|
|
|
|
|
|
|
and cash equivalents
|
|
|
(7.1
|
)
|
|
|
2.2
|
|
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
|
|
564.8
|
|
|
|
(897.7
|
)
|
Cash and cash equivalents at beginning of year
|
|
|
1,586.9
|
|
|
|
2,484.6
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
2,151.7
|
|
|
|
1,586.9
|
|
|
|
|
|
|
|
|
Less: cash and cash equivalents of discontinued operations at end of
period
|
|
|
-
|
|
|
|
(4.8
|
)
|
Cash and cash equivalents of continuing operations at end of period
|
|
|
$2,151.7
|
|
|
|
$1,582.1
|
|
|
|
|
|
|
|
|
Anthem, Inc.
|
Reconciliation of Medical Claims Payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
(In millions)
|
|
|
2014
|
|
2013
|
|
2012
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross medical claims payable, beginning of year
|
|
|
$6,127.2
|
|
|
$6,174.5
|
|
|
$5,489.0
|
|
Ceded medical claims payable, beginning of year
|
|
|
(23.4
|
)
|
|
(27.2
|
)
|
|
(16.4
|
)
|
Net medical claims payable, beginning of year
|
|
|
6,103.8
|
|
|
6,147.3
|
|
|
5,472.6
|
|
|
|
|
|
|
|
|
|
Business combinations and purchase adjustments
|
|
|
-
|
|
|
-
|
|
|
804.4
|
|
|
|
|
|
|
|
|
|
Net incurred medical claims:
|
|
|
|
|
|
|
|
Current year
|
|
|
56,305.8
|
|
|
55,894.3
|
|
|
48,080.1
|
|
Prior years (redundancies) 1
|
|
|
(541.9
|
)
|
|
(599.1
|
)
|
|
(513.6
|
)
|
Total net incurred medical claims
|
|
|
55,763.9
|
|
|
55,295.2
|
|
|
47,566.5
|
|
|
|
|
|
|
|
|
|
Net payments attributable to:
|
|
|
|
|
|
|
|
Current year medical claims
|
|
|
50,353.9
|
|
|
49,887.2
|
|
|
42,832.4
|
|
Prior years medical claims
|
|
|
5,420.0
|
|
|
5,451.5
|
|
|
4,863.8
|
|
Total net payments
|
|
|
55,773.9
|
|
|
55,338.7
|
|
|
47,696.2
|
|
|
|
|
|
|
|
|
|
Net medical claims payable, end of year
|
|
|
6,093.8
|
|
|
6,103.8
|
|
|
6,147.3
|
|
Ceded medical claims, end of year
|
|
|
767.4
|
|
|
23.4
|
|
|
27.2
|
|
Gross medical claims payable, end of year
|
|
|
$6,861.2
|
|
|
$6,127.2
|
|
|
$6,174.5
|
|
|
|
|
|
|
|
|
|
Current year medical claims paid as a percentage of
|
|
|
|
|
|
|
|
current year net incurred medical claims
|
|
|
89.4
|
%
|
|
89.3
|
%
|
|
89.1
|
%
|
|
|
|
|
|
|
|
|
Prior year redundancies in the current year as a
|
|
|
|
|
|
|
|
percentage of prior year net medical claims payables less
|
|
|
|
|
|
|
|
prior year redundancies in the current year
|
|
|
9.7
|
%
|
|
10.8
|
%
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
Prior year redundancies in the current year as a
|
|
|
|
|
|
|
|
percentage of prior year net incurred medical claims
|
|
|
1.0
|
%
|
|
1.3
|
%
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
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.
|
Financial Guidance Summary
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2014 Actual
|
|
|
Full Year 2015 Outlook
|
|
|
Approximate Change
|
Year-End Medical Enrollment
|
|
|
|
|
|
|
|
|
|
Self-funded
|
|
|
22,800
|
|
|
23,250 - 23,350
|
|
|
450k - 550k
|
Fully-Insured
|
|
|
14,699
|
|
|
14,750 - 14,850
|
|
|
50k - 150k
|
Total
|
|
|
37,499
|
|
|
38,000 - 38,200
|
|
|
500k - 700k
|
|
|
|
|
|
|
|
|
|
|
Operating Revenue
|
|
|
$73.0 billion
|
|
|
$78.0 - $78.5 billion
|
|
|
$5.0-$5.5 billion or 7%-8%
|
|
|
|
|
|
|
|
|
|
|
Benefit Expense Ratio
|
|
|
83.1%
|
|
|
83.0% +/- 30 bps
|
|
|
(10) bps
|
|
|
|
|
|
|
|
|
|
|
SG&A Expense Ratio
|
|
|
16.1%
|
|
|
16.1% +/- 30 bps
|
|
|
Flat
|
|
|
|
|
|
|
|
|
|
|
Operating Gain
|
|
|
$4.4 billion
|
|
|
Greater than $4.75 billion
|
|
|
Greater than $350 million or 8%
|
|
|
|
|
|
|
|
|
|
|
Other Pre-Tax Items:
|
|
|
|
|
|
|
|
|
|
Net Investment income
|
|
|
$724 million
|
|
|
$660 million
|
|
|
($64) million
|
Interest Expense
|
|
|
($601) million
|
|
|
($635) million
|
|
|
($34) million
|
Amortization of Intangible Assets
|
|
|
($221) million
|
|
|
($180) million
|
|
|
$41 million
|
Net Pre-Tax Expense
|
|
|
($98) million
|
|
|
($155) million
|
|
|
($57) million
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
41.4%
|
|
|
43.5% - 45.5%
|
|
|
2.1% - 4.1%
|
|
|
|
|
|
|
|
|
|
|
GAAP EPS
|
|
|
$8.99
|
|
|
Greater than $9.30
|
|
|
3% or better
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS1
|
|
|
$8.85
|
|
|
Greater than $9.70
|
|
|
9% or better
|
|
|
|
|
|
|
|
|
|
|
Diluted Shares
|
|
|
285.9
|
|
|
270-274 million
|
|
|
(4%) - (6%)
|
|
|
|
|
|
|
|
|
|
|
Operating Cash Flow
|
|
|
$3.4 billion
|
|
|
Greater than $3.5 billion
|
|
|
$100 million or better
|
|
|
|
|
|
|
|
|
|
|
(1) Starting in 2015, the adjusted earnings per share
calculation will exclude the after-tax impact of the amortization
of other intangible assets expense. 2014 adjusted earnings per
share on a comparable basis would have been $9.35 and the
Approximate Change from 2015 to 2014 would be "4% or better".
|
|
Anthem, Inc.
|
GAAP Reconciliation
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anthem, Inc. has referenced "Adjusted Net Income," "Adjusted Net
Income Per Share," "Operating Revenue," and "Operating Gain" 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. Rather, these non-GAAP measures are 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 other non-GAAP measures to the most
directly comparable measures calculated in accordance with GAAP is
presented below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31
|
|
|
Twelve Months Ended December 31
|
(In millions, except per share data)
|
|
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$506.7
|
|
|
$148.2
|
|
|
241.9
|
%
|
|
|
$2,569.7
|
|
|
$2,489.7
|
|
|
3.2
|
%
|
|
Add / (Subtract) - net of related tax effects:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains on investments
|
|
|
(28.5
|
)
|
|
(68.6
|
)
|
|
|
|
|
(115.1
|
)
|
|
(176.7
|
)
|
|
|
|
|
Other-than-temporary impairment losses on investments
|
|
|
8.8
|
|
|
16.9
|
|
|
|
|
|
31.9
|
|
|
64.3
|
|
|
|
|
|
Loss on extinguishment of debt
|
|
|
0.2
|
|
|
-
|
|
|
|
|
|
52.7
|
|
|
94.4
|
|
|
|
|
|
Impairment of intangible assets
|
|
|
-
|
|
|
164.5
|
|
|
|
|
|
-
|
|
|
164.5
|
|
|
|
|
|
Tax benefit from favorable tax election
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
(65.0
|
)
|
|
|
|
|
Acquisition and integration related costs
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
16.3
|
|
|
|
|
|
1-800 CONTACTS 2014 income
|
|
|
-
|
|
|
-
|
|
|
|
|
|
(9.6
|
)
|
|
-
|
|
|
|
|
Net adjustment items
|
|
|
(19.5
|
)
|
|
112.8
|
|
|
|
|
|
(40.1
|
)
|
|
97.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
|
$487.2
|
|
|
$261.0
|
|
|
86.7
|
%
|
|
|
$2,529.6
|
|
|
$2,587.5
|
|
|
(2.2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted share
|
|
|
$1.80
|
|
|
$0.49
|
|
|
267.3
|
%
|
|
|
$8.99
|
|
|
$8.20
|
|
|
9.6
|
%
|
|
Add / (Subtract) - net of related tax effects:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains on investments
|
|
|
(0.10
|
)
|
|
(0.23
|
)
|
|
|
|
|
(0.40
|
)
|
|
(0.58
|
)
|
|
|
|
|
Other-than-temporary impairment losses on investments
|
|
|
0.03
|
|
|
0.06
|
|
|
|
|
|
0.11
|
|
|
0.21
|
|
|
|
|
|
Loss on extinguishment of debt
|
|
|
0.00
|
|
|
-
|
|
|
|
|
|
0.18
|
|
|
0.31
|
|
|
|
|
|
Impairment of intangible assets
|
|
|
-
|
|
|
0.55
|
|
|
|
|
|
-
|
|
|
0.54
|
|
|
|
|
|
Tax benefit from favorable tax election
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
(0.21
|
)
|
|
|
|
|
Acquisition and integration related costs
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
0.05
|
|
|
|
|
|
1-800 CONTACTS 2014 income
|
|
|
-
|
|
|
-
|
|
|
|
|
|
(0.03
|
)
|
|
-
|
|
|
|
|
Net adjustment items
|
|
|
(0.07
|
)
|
|
0.38
|
|
|
|
|
|
(0.14
|
)
|
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per diluted share
|
|
|
$1.73
|
|
|
$0.87
|
|
|
98.9
|
%
|
|
|
$8.85
|
|
|
$8.52
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outlook
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted share
|
|
|
Greater than $9.30
|
|
|
|
|
|
|
|
|
|
|
Add / (Subtract) - net of related tax effects:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of other intangible assets
|
|
|
Greater than $0.40
|
|
|
|
|
|
|
|
|
|
|
Net adjustment items
|
|
|
Greater than $0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per diluted share - 2015 basis1
|
|
|
Greater than $9.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Starting in 2015, the adjusted earnings per share calculation
will exclude the after-tax impact of the amortization of other
intangible assets expense.
|
|
|
|
|
|
|
|
|
Three Months Ended December 31
|
|
|
Twelve Months Ended December 31
|
(In millions)
|
|
|
2014
|
|
2013
|
|
Change
|
|
|
2014
|
|
2013
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segments operating gain
|
|
|
$885.5
|
|
|
$419.4
|
|
|
111.1
|
%
|
|
|
$4,418.4
|
|
|
$4,001.4
|
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
177.8
|
|
|
176.3
|
|
|
|
|
|
724.4
|
|
|
659.1
|
|
|
|
Net realized gains on investments
|
|
|
43.8
|
|
|
105.5
|
|
|
|
|
|
177.0
|
|
|
271.9
|
|
|
|
Other-than-temporary impairment losses recognized in income
|
|
|
(13.5
|
)
|
|
(25.8
|
)
|
|
|
|
|
(49.0
|
)
|
|
(98.9
|
)
|
|
|
Interest expense
|
|
|
(153.6
|
)
|
|
(145.8
|
)
|
|
|
|
|
(600.7
|
)
|
|
(602.7
|
)
|
|
|
Amortization of other intangible assets
|
|
|
(52.6
|
)
|
|
(59.7
|
)
|
|
|
|
|
(220.9
|
)
|
|
(245.3
|
)
|
|
|
Loss on extinguishment of debt
|
|
|
(0.3
|
)
|
|
-
|
|
|
|
|
|
(81.1
|
)
|
|
(145.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income tax expense
|
|
|
$887.1
|
|
|
$469.9
|
|
|
88.8
|
%
|
|
|
$4,368.1
|
|
|
$3,840.2
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
Anthem and its representatives may from time to time make written and
oral forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (PSLRA), including statements
in this press release, in presentations, filings with the Securities and
Exchange Commission, or SEC, reports to shareholders and in meetings
with analysts and investors. The projections referenced in this press
release are forward-looking and they are intended to be covered by the
safe harbor for "forward-looking statements" provided by PSLRA. Words
such as "expect(s)", "feel(s)", "believe(s)", "will", "may",
"anticipate(s)", "intend", "estimate", "project" and similar expressions
are intended to identify forward-looking statements, which generally are
not historical in nature. 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 information and statements. These risks and
uncertainties include: those discussed and identified in our public
filings with the SEC; increased government participation in, or
regulation or taxation of, health benefits and managed care operations,
including, but not limited to, the impact of the Patient Protection and
Affordable Care Act and the Health Care and Education Reconciliation Act
of 2010 (Health Care Reform); trends in health care costs and
utilization rates; our ability to secure sufficient premium rates
including regulatory approval for and implementation of such rates; our
participation in the federal and state health insurance exchanges under
Health Care Reform, which have experienced technical difficulties in
implementation and which entail uncertainties associated with the mix
and volume of business, particularly in our individual and small group
markets, that could negatively impact the adequacy of our premium rates
and which may not be sufficiently offset by the risk apportionment
provisions of Health Care Reform; our ability to contract with providers
consistent with past practice; competitor pricing below market trends of
increasing costs; reduced enrollment, as well as a negative change in
our health care product mix; risks and uncertainties regarding Medicare
and Medicaid programs, including those related to non-compliance with
the complex regulations imposed thereon and funding risks with respect
to revenue received from participation therein; a downgrade in our
financial strength ratings; litigation and investigations targeted at
our industry and our ability to resolve litigation and investigations
within estimates; medical malpractice or professional liability claims
or other risks related to health care services provided by our
subsidiaries; 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; non-compliance by any party with
the Express Scripts, Inc. pharmacy benefit management services
agreement, which could result in financial penalties, our inability to
meet customer demands, and sanctions imposed by governmental entities,
including the Centers for Medicare and Medicaid Services; events that
result in negative publicity for us or the health benefits industry;
failure to effectively maintain and modernize our information systems
and e-business organization and to maintain good relationships
with third party vendors for information system resources; events that
may negatively affect our licenses with the Blue Cross and Blue Shield
Association; possible impairment of the value of our intangible assets
if future results do not adequately support goodwill and other
intangible assets; intense competition to attract and retain employees;
unauthorized disclosure of member sensitive or confidential information;
changes in the economic and market conditions, as well as regulations
that may negatively affect our investment portfolios and liquidity;
possible restrictions in the payment of dividends by our subsidiaries
and increases in required minimum levels of capital and the potential
negative effect from our substantial amount of outstanding indebtedness;
general risks associated with mergers and acquisitions; various laws and
provisions in our governing documents that may prevent or discourage
takeovers and business combinations; future public health epidemics and
catastrophes; and general economic downturns. Readers are cautioned not
to place undue reliance on these forward-looking statements that speak
only as of the date hereof. Except to the extent otherwise required by
federal securities law, we do not undertake any obligation to republish
revised forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events. Readers are also urged to carefully review and consider the
various disclosures in our SEC reports.
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