Reporting

Financials

Financial and Membership Highlights

Total Revenue

(in billions)

Total Medical Membership

(in millions)

Selling, General and Administrative Expense Ratio

Net Income Per Diluted Share

(in whole dollars)

Adjusted Net Income Per Diluted Share*

(in whole dollars)

Benefit Expense Ratio

 

Operating Cash Flow

(in billions)

Customer Base

 

* Refer to the GAAP reconciliation table below

Financial and Membership Highlights

(dollars in millions, except per share data) 2019 2018 2017
Operating Results      
Total operating revenue $103,141 $91,341 $89,061
Total revenue 104,213 92,105 90,040
Net income 4,807 3,750 3,843
       
Net Income Per Share      
Basic $18.81 $14.53 $14.70
Diluted 18.47 14.19 14.35
Dividends per share 3.20 3.00 2.70
       
Balance Sheet Information      
Total assets $77,453 $71,571 $70,540
Total liabilities 45,725 43,030 44,037
Total shareholders’ equity 31,728 28,541 26,503
       
Medical Membership (000s)      
Commercial & Specialty Business 30,022 29,814 30,672
Government Business 10,978 10,124 9,627
Total medical membership 41,000 39,938 40,299
       
Customer Type      
Local Group 15,682 15,733 15,888
Individual 684 655 1,588
National:      
National Accounts 7,596 7,588 7,463
BlueCard® 6,060 5,838 5,733
Total National 13,656 13,426 13,196
       
Medicare 2,119 1,852 1,569
Medicaid 7,265 6,716 6,496
FEP® 1,594 1,556 1,562
Total medical membership 41,000 39,938 40,299
       
Funding Arrangement      
Self-Funded 25,418 25,287 24,862
Fully-Insured 15,582 14,651 15,437
Total medical membership 41,000 39,938 40,299
       
Other Membership      
Life and Disability Members 5,259 4,795 4,700
Dental Members 5,962 5,807 5,864
Dental Administration Members 5,516 5,327 5,342
Vision Members 7,261 6,946 6,867

The information presented above should be read in conjunction with the audited consolidated financial statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Anthem’s 2019 Annual Report on Form 10-K.

Consolidated Balance Sheets

(in millions, except share data) Dec. 31, 2019 Dec. 31, 2018
Assets    
Current assets:    
Cash and cash equivalents $4,937 $3,934
Fixed maturity securities, current (amortized cost of $19,021 and $16,894) 19,676 16,692
Equity securities, current 1,009 1,493
Other invested assets, current 13 21
Accrued investment income 173 162
Premium receivables 5,173 4,465
Self-funded receivables 2,411 2,278
Other receivables 2,634 2,558
Income taxes receivables 335 10
Securities lending collateral 353 604
Other current assets 2,319 2,104
Total current assets 39,033 34,321
Long-term investments:    
Fixed maturity securities (amortized cost of $487 and $486) 505 487
Equity securities 30 33
Other invested assets 4,228 3,726
Property and equipment, net 3,133 2,735
Goodwill 20,500 20,504
Other intangible assets 8,674 9,007
Other noncurrent assets 1,350 758
Total assets $77,453 $71,571
     
Liabilities and shareholders’ equity    
Liabilities    
Current liabilities:    
Policy liabilities:    
Medical claims payable $8,842 $7,454
Reserves for future policy benefits 85 75
Other policyholder liabilities 3,050 2,590
Total policy liabilities 11,977 10,119
Unearned income 1,017 902
Accounts payable and accrued expenses 4,198 4,959
Security trades pending payable 84 197
Securities lending payable 351 604
Short-term borrowings 700 1,145
Current portion of long-term debt 1,598 849
Other current liabilities 3,692 3,190
Total current liabilities 23,617 21,965
Long-term debt, less current portion 17,787 17,217
Reserves for future policy benefits, noncurrent 674 706
Deferred tax liabilities, net 2,227 1,960
Other noncurrent liabilities 1,420 1,182
Total liabilities 45,725 43,030
Commitments and contingencies – Note 13    
Shareholders’ equity    
Preferred stock, without par value, shares authorized – 100,000,000; shares issued and outstanding – none — —
Common stock, par value $0.01, shares authorized – 900,000,000; shares issued and outstanding – 252,922,161 and 256,395,577 3 3
Additional paid-in capital 9,448 9,536
Retained earnings 22,573 19,988
Accumulated other comprehensive loss (296) (986)
Total shareholders’ equity 31,728 28,541
Total liabilities and shareholders’ equity $77,453 $71,571

The information presented above should be read in conjunction with the audited consolidated financial statements and accompanying notes included in Anthem’s 2019 Annual Report on Form 10-K.

Consolidated Statements of Income

  Years Ended December 31
(in millions, except per share data) 2019 2018 2017
Revenues      
Premiums $94,173 $85,421 $83,648
Administrative fees and other revenue 8,968 5,920 5,413
Total operating revenue 103,141 91,341 89,061
Net investment income 1,005 970 867
Net realized gains (losses) on financial instruments 114 (180) 145
Other-than-temporary impairment losses on investments:      
Total other-than-temporary impairment losses on investments (53) (29) (35)
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) 6 3 2
Other-than-temporary impairment losses recognized in income (47) (26) (33)
Total revenues 104,213 92,105 90,040
Expenses      
Benefit expense 81,786 71,895 72,236
Cost of products sold 1,992 — —
Selling, general and administrative expense 13,364 14,020 12,650
Interest expense 746 753 739
Amortization of other intangible assets 338 358 169
Loss on extinguishment of debt 2 11 282
Total expenses 98,228 87,037 86,076
Income before income tax expense 5,985 5,068 3,964
Income tax expense 1,178 1,318 121
Net income $4,807 $3,750 $3,843
Net income per share      
Basic $18.81 $14.53 $14.70
Diluted $18.47 $14.19 $14.35
Dividends per share $3.20 $3.00 $2.70

The information presented above should be read in conjunction with the audited financial statements and accompanying notes included in Anthem’s 2019 Annual Report on Form 10-K.

Consolidated Statements of Comprehensive Income

  Years Ended December 31
(in millions) 2019 2018 2017
Net income $4,807 $3,750 $3,843
Other comprehensive income (loss), net of tax:      
Change in net unrealized gains/losses on investments 680 (418) 173
Change in non-credit component of other-than-temporary impairment losses on investments — (2) 4
Change in net unrealized gains/losses on cash flow hedges (16) 37 (65)
Change in net periodic pension and postretirement costs 26 (90) 51
Foreign currency translation adjustments — (1) 3
Other comprehensive income (loss) 690 (474) 166
Total comprehensive income $5,497 $3,276 $4,009

The information presented above should be read in conjunction with the audited financial statements and accompanying notes included in Anthem’s 2019 Annual Report on Form 10-K.

Consolidated Statements of Cash Flows

  Years Ended December 31
(in millions) 2019 2018 2017
Operating activities      
Net income $4,807 $3,750 $3,843
Adjustments to reconcile net income to net cash provided by operating activities:      
Net realized (gains) losses on financial instruments (114) 180 (145)
Other-than-temporary impairment losses recognized in income 47 26 33
Loss on extinguishment of debt 2 11 282
Loss on disposal of assets 3 13 15
Deferred income taxes 81 91 (1,272)
Amortization, net of accretion 986 1,008 780
Depreciation expense 147 124 111
Share-based compensation 294 226 170
Changes in operating assets and liabilities:      
Receivables, net (1,053) (695) (22)
Other invested assets (48) (1) (36)
Other assets (170) (26) (629)
Policy liabilities 1,826 (1,059) 732
Unearned income 115 (36) (120)
Accounts payable and accrued expenses (593) 122 922
Other liabilities 148 (25) (120)
Income taxes (325) 323 (194)
Other, net (92) (205) (165)
Net cash provided by operating activities 6,061 3,827 4,185
Investing activities      
Purchases of fixed maturity securities (10,487) (8,244) (9,795)
Proceeds from fixed maturity securities:      
Sales 5,914 6,442 7,932
Maturities, calls and redemptions 2,437 1,938 1,848
Purchases of equity securities (11,825) (896) (5,416)
Proceeds from sales of equity securities 12,364 2,809 3,463
Purchases of other invested assets (642) (531) (1,164)
Proceeds from sales of other invested assets 320 411 219
Changes in collateral and settlement of non-hedging derivatives — — 65
Changes in securities lending collateral 254 (149) 625
Purchases of subsidiaries, net of cash acquired — (1,760) (2,080)
Purchases of property and equipment (1,077) (1,208) (791)
Other, net (50) (71) 12
Net cash used in investing activities (2,792) (1,259) (5,082)
Financing activities      
Net (repayments of) proceeds from commercial paper borrowings (297) (107) 175
Proceeds from long-term borrowings 2,473 835 5,458
Repayments of long-term borrowings (1,123) (1,684) (2,815)
Proceeds from short-term borrowings 7,590 9,120 5,835
Repayments of short-term borrowings (8,035) (9,250) (5,000)
Changes in securities lending payable (254) 150 (625)
Changes in bank overdrafts (169) (210) 71
Premiums paid on equity call options (1) — —
Proceeds from sale of put options — 1 1
Proceeds from issuance of common stock under Equity Units stock purchase contracts — 1,250 —
Repurchase and retirement of common stock (1,701) (1,685) (1,998)
Change in collateral and settlements of debt-related derivatives (34) 23 (149)
Cash dividends (818) (776) (705)
Proceeds from issuance of common stock under employee stock plans 187 173 225
Taxes paid through withholding of common stock under employee stock plans (84) (81) (46)
Net cash (used in) provided by financing activities (2,266) (2,241) 427
Effect of foreign exchange rates on cash and cash equivalents — (2) 4
Change in cash and cash equivalents 1,003 325 (466)
Cash and cash equivalents at beginning of year 3,934 3,609 4,075
Cash and cash equivalents at end of year $4,937 $3,934 $3,609

The information presented above should be read in conjunction with the audited financial statements and accompanying notes included in Anthem’s 2019 Annual Report on Form 10-K.

GAAP Reconciliation (Unaudited)

We have referenced “Adjusted Net Income Per Diluted Share”, which is a non-GAAP measure, in this document. This non-GAAP measure is not intended to be an alternative to any measure calculated in accordance with GAAP. Rather, this non-GAAP measure is intended to aid investors in understanding and analyzing our core operating results and comparing our financial results. A reconciliation of this measure to the most directly comparable measure calculated in accordance with GAAP is presented below.

  Years Ended December 31
2019 2018 2017
Net income per diluted share $18.47 $14.19 $14.35
Add / (Subtract):      
Net realized (gains) losses on financial instruments (0.44) 0.68 (0.54)
Other-than-temporary impairment losses recognized in income 0.18 0.10 0.12
Amortization of intangibles 1.30 1.36 0.63
Transaction and integration related costs 0.04 0.03 0.62
Loss on extinguishment of debt 0.01 0.04 1.05
Litigation expenses 0.20 — —
Deferred tax benefit from tax reform — — (4.14)
Penn Treaty assessment costs — — 0.95
2015 cyber attack litigation — — 0.43
Income tax true up of prior transaction costs — — (0.26)
Tax impact of non GAAP adjustments (0.32) (0.51) (1.18)
Rounding impact — — 0.01
Net adjusted items 0.97 1.70 (2.31)
Adjusted net income per diluted share or Adjusted EPS $19.44 $15.89 $12.04