Anthem Reports Second Quarter 2015 Results
- Net income was
$3.13 per share, including net gains of$0.03 per share. Adjusted net income was$3.10 per share (refer to the GAAP reconciliation table). - Medical enrollment totaled 38.5 million members as of
June 30, 2015 . - Company now expects medical enrollment to grow by 750,000 – 950,000 members for the full year 2015.
- Full year 2015 GAAP net income is expected to be greater than
$9.55 per share. Full year adjusted net income is expected to be greater than$10.00 per share (refer to the GAAP reconciliation table). - Third quarter 2015 dividend of
$0.625 per share declared to shareholders.
Excluding the items noted in each period, adjusted net income was
“We are pleased to report solid second quarter 2015 results as we make progress towards driving greater health care access, affordability and choice. Second quarter results reflect contributions from both our Commercial and Government businesses and we believe the growing diversity of our business model better serves our customers," said
“Second quarter results reflect continued execution across our businesses. During the quarter, we repurchased 4.0 million shares and distributed
CONSOLIDATED HIGHLIGHTS
Membership: Medical enrollment totaled approximately 38.5 million members at
Medical enrollment was relatively flat sequentially, decreasing by 10,000 members during the second quarter of 2015. The slight decline reflected enrollment losses in Local Group, Individual and National markets being mostly offset by enrollment gains in the
Operating Revenue: Operating revenue was nearly
Benefit Expense Ratio: The benefit expense ratio was 82.1 percent in the second quarter of 2015, a decrease of 60 basis points from 82.7 percent in the prior year quarter. The decline was largely driven by an improvement in the Local Group business predominantly due to the timing of medical cost experience, improved medical cost performance in certain markets in the
Medical claims reserves established at
Medical Cost Trend: For the full year 2015, the Company continues to expect that underlying Local Group medical cost trend will be in the range of 7.0% plus or minus 50 basis points.
Days in Claims Payable: Days in Claims Payable (“DCP”) was 43.0 days as of
SG&A Expense Ratio: The SG&A expense ratio was 15.4 percent in the second quarter of 2015, a decrease of 40 basis points from 15.8 percent in the second quarter of 2014. The decrease was primarily driven by the impact of higher enrollment in the
Operating Cash Flow: Operating cash flow was nearly
Share Repurchase Program: During the second quarter of 2015, the Company repurchased approximately 4.0 million shares of its common stock for nearly
Cash Dividend: During the second quarter of 2015, the Company paid a quarterly dividend of
On
Investment Portfolio & Capital Position: During the second quarter of 2015, the Company recorded net realized gains on investments totaling
As of
Discontinued Operations: In late
REPORTABLE SEGMENTS
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Reportable Segment Highlights | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In millions) | Three Months Ended |
Six Months Ended |
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2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||
Operating Revenue | ||||||||||||||||||||||||
Commercial & Specialty Business | |
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(6.0 | %) | |
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(4.7 | %) | ||||||||||||||||
Government Business | 10,385.0 | 8,259.3 | 25.7 | % | 19,865.1 | 16,200.6 | 22.6 | % | ||||||||||||||||
Other | 5.1 | 5.7 | (10.5 | %) | 9.5 | 11.7 | (18.8 | %) | ||||||||||||||||
Total Operating Revenue1 | 19,758.3 | 18,230.0 | 8.4 | % | 38,609.7 | 35,874.8 | 7.6 | % | ||||||||||||||||
Operating Gain / (Loss) | ||||||||||||||||||||||||
Commercial & Specialty Business | |
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(0.8 | %) | |
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20.7 | % | ||||||||||||||||
Government Business | 609.7 | 313.5 | 94.5 | % | 934.1 | 553.1 | 68.9 | % | ||||||||||||||||
Other | (9.6 | ) | (10.2 | ) | NM2 | (21.7 | ) | (17.2 | ) | NM2 | ||||||||||||||
Total Operating Gain1 | 1,512.1 | 1,222.9 | 23.6 | % | 3,091.4 | 2,341.6 | 32.0 | % | ||||||||||||||||
Operating Margin | ||||||||||||||||||||||||
Commercial & Specialty Business | 9.7 | % | 9.2 | % | 50 bp | 11.6 | % | 9.2 | % | 240 bp | ||||||||||||||
Government Business | 5.9 | % | 3.8 | % | 210 bp | 4.7 | % | 3.4 | % | 130 bp | ||||||||||||||
Total Operating Margin1 | 7.7 | % | 6.7 | % | 100 bp | 8.0 | % | 6.5 | % | 150 bp | ||||||||||||||
(1) |
Non-GAAP measures. See “Basis of Presentation” on page 6 herein. | |||||||||||||||||||||||
(2) |
"NM" = calculation not meaningful. | |||||||||||||||||||||||
Commercial & Specialty Business: Operating gain in the Commercial & Specialty Business segment totaled
Government Business: Operating gain in the Government Business segment was
Other: The Company reported an operating loss of
OUTLOOK
Full Year 2015:
- Net income is now expected to be greater than
$9.55 per share, including greater than$0.45 per share of net unfavorable items. Excluding these items, adjusted net income is expected to be greater than$10.00 per share (refer to the GAAP reconciliation table). - Medical membership is now expected to be in the range of 38,250,000 – 38,450,000. Fully insured membership is now expected to be in the range of 14,800,000 – 14,900,000 and self-funded membership is expected to be in the range of 23,450,000 – 23,550,000.
- Operating revenue is now expected to be approximately
$78.0 billion . - Benefit expense ratio is expected to be in the range of 82.9% 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
- 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).
- Operating margin is defined as operating gain divided by operating revenue. Consolidated operating margin is a non-GAAP measure.
- 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 onJanuary 31, 2014 .
Conference Call and Webcast
Management will host a conference call and webcast today at
800-230-1059 (Domestic) | 800-475-6701 (Domestic Replay) | |||||||
612-234-9960 (International) | 320-365-3844 (International Replay) |
An access code is not required for today’s conference call. The access code for the replay is 341163. The replay will be available from
About
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 nearly 70 million people served by its affiliated companies, including more than 38 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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Membership Summary | ||||||||||||||||
(Unaudited and in Thousands) | ||||||||||||||||
Change from | ||||||||||||||||
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Medical Membership |
2015 | 2014 | 2014 | 2014 | 2014 | |||||||||||
Customer Type | ||||||||||||||||
Local Group | 15,153 | 15,108 | 15,137 | 0.3% | 0.1% | |||||||||||
National Accounts | 7,328 | 7,214 | 7,155 | 1.6% | 2.4% | |||||||||||
BlueCard | 5,437 | 5,181 | 5,279 | 4.9% | 3.0% | |||||||||||
Total National | 12,765 | 12,395 | 12,434 | 3.0% | 2.7% | |||||||||||
Individual | 1,844 | 2,022 | 1,793 | (8.8%) | 2.8% | |||||||||||
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5,764 | 4,824 | 5,193 | 19.5% | 11.0% | |||||||||||
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1,432 | 1,382 | 1,404 | 3.6% | 2.0% | |||||||||||
FEP | 1,569 | 1,541 | 1,538 | 1.8% | 2.0% | |||||||||||
Total Medical Membership | 38,527 | 37,272 | 37,499 | 3.4% | 2.7% | |||||||||||
Funding Arrangement | ||||||||||||||||
Self-Funded | 23,510 | 22,572 | 22,800 | 4.2% | 3.1% | |||||||||||
Fully-Insured | 15,017 | 14,700 | 14,699 | 2.2% | 2.2% | |||||||||||
Total Medical Membership | 38,527 | 37,272 | 37,499 | 3.4% | 2.7% | |||||||||||
Reportable Segment | ||||||||||||||||
Commercial & Specialty Business | 29,762 | 29,525 | 29,364 | 0.8% | 1.4% | |||||||||||
Government Business | 8,765 | 7,747 | 8,135 | 13.1% | 7.7% | |||||||||||
Total Medical Membership | 38,527 | 37,272 | 37,499 | 3.4% | 2.7% | |||||||||||
Other Membership & Customers |
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Life and Disability Membership | 4,803 | 4,835 | 4,762 | (0.7%) | 0.9% | |||||||||||
Dental Membership | 5,159 | 4,990 | 4,995 | 3.4% | 3.3% | |||||||||||
Managed Dental Membership | 5,296 | 4,866 | 4,918 | 8.8% | 7.7% | |||||||||||
Vision Membership | 5,494 | 5,026 | 5,096 | 9.3% | 7.8% | |||||||||||
Medicare Advantage Part D Membership | 609 | 664 | 690 | (8.3%) | (11.7%) | |||||||||||
Medicare Part D Stand-Alone Membership | 372 | 471 | 467 | (21.0%) | (20.3%) |
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Consolidated Statements of Income | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
(In millions, except per share data) | |
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2015 | 2014 | Change | |||||||||
Revenues | |||||||||||
Premiums | |
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8.5% | ||||||||
Administrative fees | 1,229.5 | 1,151.6 | 6.8% | ||||||||
Other revenue | 12.5 | 9.5 | 31.6% | ||||||||
Total operating revenue | 19,758.3 | 18,230.0 | 8.4% | ||||||||
Net investment income | 186.7 | 188.5 | (1.0%) | ||||||||
Net realized gains on investments | 92.3 | 65.8 | 40.3% | ||||||||
Other-than-temporary impairment losses on investments: | |||||||||||
Total other-than-temporary impairment losses on investments | (26.2) | (11.7) | NM(2) | ||||||||
Portion of other-than-temporary impairment losses recognized in | |||||||||||
other comprehensive income | 4.4 | 0.8 | NM(2) | ||||||||
Other-than-temporary impairment losses recognized in income | (21.8) | (10.9) | NM(2) | ||||||||
Total revenues | 20,015.5 | 18,473.4 | 8.3% | ||||||||
Expenses | |||||||||||
Benefit expense | 15,205.4 | 14,121.3 | 7.7% | ||||||||
Selling, general and administrative expense | |||||||||||
Selling expense | 363.8 | 388.7 | (6.4%) | ||||||||
General and administrative expense | 2,677.0 | 2,497.1 | 7.2% | ||||||||
Total selling, general and administrative expense | 3,040.8 | 2,885.8 | 5.4% | ||||||||
Interest expense | 154.1 | 145.6 | 5.8% | ||||||||
(Gain)/Loss on extinguishment of debt | (2.9) | 3.0 | NM(2) | ||||||||
Amortization of other intangible assets | 60.1 | 54.0 | 11.3% | ||||||||
Total expenses | 18,457.5 | 17,209.7 | 7.3% | ||||||||
Income from continuing operations before income tax expense | 1,558.0 | 1,263.7 | 23.3% | ||||||||
Income tax expense | 698.9 | 532.6 | 31.2% | ||||||||
Net income | |
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17.5% | ||||||||
Net income per diluted share | |
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22.3% | ||||||||
Diluted shares | 274.3 | 286.0 | (4.1%) | ||||||||
Benefit expense as a percentage of premiums | 82.1% | 82.7% | (60) bp | ||||||||
Selling, general and administrative expense as a | |||||||||||
percentage of total operating revenue | 15.4% | 15.8% | (40) bp | ||||||||
Income from continuing operations before income tax expense | |||||||||||
as a percentage of total revenues | 7.8% | 6.8% | 100 bp | ||||||||
(1) |
Results for 1-800 CONTACTS have been reclassified as discontinued operations under GAAP. |
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(2) |
"NM" = calculation not meaningful |
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Consolidated Statements of Income | |||||||||||
Six Months Ended | |||||||||||
(In millions, except per share data) | |
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2015 | 2014 | Change | |||||||||
Revenues | (Unaudited) | ||||||||||
Premiums | |
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7.6% | ||||||||
Administrative fees | 2,456.6 | 2,269.9 | 8.2% | ||||||||
Other revenue | 26.3 | 19.0 | 38.4% | ||||||||
Total operating revenue | 38,609.7 | 35,874.8 | 7.6% | ||||||||
Net investment income | 354.3 | 372.2 | (4.8%) | ||||||||
Net realized gains on investments | 138.8 | 107.5 | 29.1% | ||||||||
Other-than-temporary impairment losses on investments: | |||||||||||
Total other-than-temporary impairment losses on investments | (41.6) | (22.5) | NM(2) | ||||||||
Portion of other-than-temporary impairment losses recognized in | |||||||||||
other comprehensive income | 5.8 | 0.8 | NM(2) | ||||||||
Other-than-temporary impairment losses recognized in income | (35.8) | (21.7) | NM(2) | ||||||||
Total revenues | 39,067.0 | 36,332.8 | 7.5% | ||||||||
Expenses | |||||||||||
Benefit expense | 29,332.3 | 27,785.9 | 5.6% | ||||||||
Selling, general and administrative expense | |||||||||||
Selling expense | 732.0 | 759.5 | (3.6%) | ||||||||
General and administrative expense | 5,454.0 | 4,987.8 | 9.3% | ||||||||
Total selling, general and administrative expense | 6,186.0 | 5,747.3 | 7.6% | ||||||||
Interest expense | 308.5 | 291.8 | 5.7% | ||||||||
Loss on extinguishment of debt | 0.5 | 6.0 | (91.7%) | ||||||||
Amortization of other intangible assets | 112.6 | 108.0 | 4.3% | ||||||||
Total expenses | 35,939.9 | 33,939.0 | 5.9% | ||||||||
Income from continuing operations before income tax expense | 3,127.1 | 2,393.8 | 30.6% | ||||||||
Income tax expense | 1,402.8 | 971.3 | 44.4% | ||||||||
Income from continuing operations | 1,724.3 | 1,422.5 | 21.2% | ||||||||
Income from discontinued operations, net of tax (1) | - | 9.6 | NM(2) | ||||||||
Net income | |
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20.4% | ||||||||
Net income per diluted share | |
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25.7% | ||||||||
Diluted shares | 277.3 | 289.3 | (4.1%) | ||||||||
Benefit expense as a percentage of premiums | 81.2% | 82.7% | (150) bp | ||||||||
Selling, general and administrative expense as a | |||||||||||
percentage of total operating revenue | 16.0% | 16.0% | 0 bp | ||||||||
Income from continuing operations before income tax expense | |||||||||||
as a percentage of total revenues | 8.0% | 6.6% | 140 bp | ||||||||
(1) |
Results for 1-800 CONTACTS have been reclassified as discontinued operations under GAAP. |
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(2) |
"NM" = calculation not meaningful |
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Consolidated Balance Sheets | ||||||||
(In millions) | |
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(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | |
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Investments available-for-sale, at fair value: | ||||||||
Fixed maturity securities | 18,236.5 | 17,467.4 | ||||||
Equity securities | 1,705.4 | 1,906.6 | ||||||
Other invested assets, current | 23.4 | 20.2 | ||||||
Accrued investment income | 168.6 | 161.4 | ||||||
Premium and self-funded receivables | 4,940.8 | 4,825.5 | ||||||
Other receivables | 2,368.0 | 2,117.0 | ||||||
Income taxes receivable | 13.8 | 308.9 | ||||||
Securities lending collateral | 1,718.3 | 1,515.2 | ||||||
Deferred tax assets, net | 295.6 | 280.4 | ||||||
Other current assets | 2,178.8 | 1,473.9 | ||||||
Total current assets | 33,202.2 | 32,228.2 | ||||||
Long-term investments available-for-sale, at fair value: | ||||||||
Fixed maturity securities | 613.7 | 504.4 | ||||||
Equity securities | 31.7 | 31.5 | ||||||
Other invested assets, long-term | 1,803.3 | 1,695.9 | ||||||
Property and equipment, net | 1,931.4 | 1,944.3 | ||||||
Goodwill | 17,541.7 | 17,082.0 | ||||||
Other intangible assets | 8,275.5 | 7,958.1 | ||||||
Other noncurrent assets | 864.3 | 512.3 | ||||||
Total assets | |
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Liabilities and shareholders’ equity | ||||||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Policy liabilities: | ||||||||
Medical claims payable | |
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Reserves for future policy benefits | 67.7 | 68.1 | ||||||
Other policyholder liabilities | 2,741.4 | 2,626.5 | ||||||
Total policy liabilities | 9,987.0 | 9,555.8 | ||||||
Unearned income | 950.5 | 1,078.1 | ||||||
Accounts payable and accrued expenses | 4,433.8 | 3,651.8 | ||||||
Security trades pending payable | 172.5 | 66.2 | ||||||
Securities lending payable | 1,718.2 | 1,515.3 | ||||||
Short-term borrowings | 540.0 | 400.0 | ||||||
Current portion of long-term debt | 624.9 | 624.3 | ||||||
Other current liabilities | 2,246.3 | 1,861.2 | ||||||
Total current liabilities | 20,673.2 | 18,752.7 | ||||||
Long-term debt, less current portion | 15,468.4 | 14,019.6 | ||||||
Reserves for future policy benefits, noncurrent | 607.6 | 671.3 | ||||||
Deferred tax liabilities, net | 3,226.2 | 3,226.0 | ||||||
Other noncurrent liabilities | 1,225.8 | 1,035.8 | ||||||
Total liabilities | 41,201.2 | 37,705.4 | ||||||
Shareholders’ equity | ||||||||
Common stock | 2.6 | 2.7 | ||||||
Additional paid-in capital | 8,707.4 | 10,062.3 | ||||||
Retained earnings | 14,352.2 | 14,014.4 | ||||||
Accumulated other comprehensive income | 0.4 | 171.9 | ||||||
Total shareholders’ equity | 23,062.6 | 24,251.3 | ||||||
Total liabilities and shareholders’ equity | |
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Consolidated Statements of Cash Flows | ||||||||||
(Unaudited) | ||||||||||
Six Months Ended |
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(In millions) | 2015 | 2014 | ||||||||
Operating activities | ||||||||||
Net income | |
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Adjustments to reconcile net income to net cash | ||||||||||
provided by operating activities: | ||||||||||
Net realized gains on investments | (138.8 | ) | (107.5 | ) | ||||||
Other-than-temporary impairment losses recognized in income | 35.8 | 21.7 | ||||||||
Loss on extinguishment of debt | 0.5 | 6.0 | ||||||||
Gain on disposal of discontinued operations | – | (3.2 | ) | |||||||
Loss on disposal of assets | 1.2 | 0.7 | ||||||||
Deferred income taxes | 47.5 | 48.7 | ||||||||
Amortization, net of accretion | 655.5 | 381.4 | ||||||||
Depreciation expense | 50.3 | 53.4 | ||||||||
Impairment of property and equipment | – | 2.2 | ||||||||
Share-based compensation | 68.6 | 88.9 | ||||||||
Excess tax benefits from share-based compensation | (89.0 | ) | (29.3 | ) | ||||||
Changes in operating assets and liabilities, net of | ||||||||||
effect of business combinations: | ||||||||||
Receivables, net | (318.5 | ) | (839.0 | ) | ||||||
Other invested assets | (4.0 | ) | (23.6 | ) | ||||||
Other assets | (388.9 | ) | (108.3 | ) | ||||||
Policy liabilities | 278.8 | 853.2 | ||||||||
Unearned income | (161.1 | ) | 130.5 | |||||||
Accounts payable and accrued expenses | 231.1 | 213.0 | ||||||||
Other liabilities | 488.1 | 211.5 | ||||||||
Income taxes | 347.9 | 179.8 | ||||||||
Other, net | (5.8 | ) | (53.7 | ) | ||||||
Net cash provided by operating activities | 2,823.5 | 2,458.5 | ||||||||
Investing activities | ||||||||||
Purchases of fixed maturity securities | (5,530.6 | ) | (5,493.1 | ) | ||||||
Proceeds from sales and maturities of fixed maturity securities | 5,036.5 | 4,670.4 | ||||||||
Purchases of equity securities | (1,389.5 | ) | (359.3 | ) | ||||||
Proceeds from sales of equity securities | 1,085.9 | 255.2 | ||||||||
Purchases of other invested assets | (161.1 | ) | (81.9 | ) | ||||||
Proceeds from sales of other invested assets | 38.3 | 35.8 | ||||||||
Settlement of non-hedging derivatives | (32.0 | ) | (46.2 | ) | ||||||
Changes in securities lending collateral | (202.9 | ) | (976.9 | ) | ||||||
(Purchases)/Proceeds from the sale of subsidiary, net of cash acquired/sold | (641.6 | ) | 740.0 | |||||||
Net purchases of property and equipment | (229.7 | ) | (271.2 | ) | ||||||
Other, net | – | (0.1 | ) | |||||||
Net cash used in investing activities | (2,026.7 | ) | (1,527.3 | ) | ||||||
Financing activities | ||||||||||
Net proceeds from commercial paper borrowings | 697.4 | 487.9 | ||||||||
Net proceeds from short-term borrowings | 140.0 | (150.0 | ) | |||||||
Net Repayments of long-term borrowings | (701.3 | ) | (45.1 | ) | ||||||
Changes in securities lending payable | 202.9 | 977.0 | ||||||||
Changes in bank overdrafts | (233.1 | ) | 106.8 | |||||||
Net payments on call/put options | (0.1 | ) | – | |||||||
Repurchase and retirement of common stock | (1,410.6 | ) | (2,077.2 | ) | ||||||
Cash dividends | (330.5 | ) | (243.9 | ) | ||||||
Proceeds from issuance of common stock under employee stock plans | 155.2 | 182.5 | ||||||||
Excess tax benefits from share-based compensation | 89.0 | 29.3 | ||||||||
Net cash used in financing activities | (1,391.1 | ) | (732.7 | ) | ||||||
Effects of foreign currency exchange rate changes on cash | ||||||||||
and cash equivalents | (4.4 | ) | (0.8 | ) | ||||||
Change in cash and cash equivalents | (598.7 | ) | 197.7 | |||||||
Cash and cash equivalents at beginning of year | 2,151.7 | 1,586.9 | ||||||||
Cash and cash equivalents at end of period | 1,553.0 | 1,784.6 |
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Reconciliation of Medical Claims Payable | ||||||||||||||||||||
Six Months Ended |
Years Ended |
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(In millions) | 2015 | 2014 | 2014 | 2013 | 2012 | |||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Gross medical claims payable, beginning of year | |
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Ceded medical claims payable, beginning of year | (767.4 | ) | (23.4 | ) | (23.4 | ) | (27.2 | ) | (16.4 | ) | ||||||||||
Net medical claims payable, beginning of year | 6,093.8 | 6,103.8 | 6,103.8 | 6,147.3 | 5,472.6 | |||||||||||||||
Business combinations and purchase adjustments | 121.8 | – | – | – | 804.4 | |||||||||||||||
Net incurred medical claims: | ||||||||||||||||||||
Current year | 29,516.8 | 27,814.9 | 56,305.8 | 55,894.3 | 48,080.1 | |||||||||||||||
Prior years (redundancies) 1 | (760.9 | ) | (524.7 | ) | (541.9 | ) | (599.1 | ) | (513.6 | ) | ||||||||||
Total net incurred medical claims | 28,755.9 | 27,290.2 | 55,763.9 | 55,295.2 | 47,566.5 | |||||||||||||||
Net payments attributable to: | ||||||||||||||||||||
Current year medical claims | 24,249.2 | 21,493.5 | 50,353.9 | 49,887.2 | 42,832.4 | |||||||||||||||
Prior years medical claims | 4,594.8 | 5,165.9 | 5,420.0 | 5,451.5 | 4,863.8 | |||||||||||||||
Total net payments | 28,844.0 | 26,659.4 | 55,773.9 | 55,338.7 | 47,696.2 | |||||||||||||||
Net medical claims payable, end of period | 6,127.5 | 6,734.6 | 6,093.8 | 6,103.8 | 6,147.3 | |||||||||||||||
Ceded medical claims, end of period | 1,050.4 | 210.5 | 767.4 | 23.4 | 27.2 | |||||||||||||||
Gross medical claims payable, end of period | |
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Current year medical claims paid as a percentage of | ||||||||||||||||||||
current year net incurred medical claims | 82.2 | % | 77.3 | % | 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 | 14.3 | % | 9.4 | % | 9.7 | % | 10.8 | % | 10.4 | % | ||||||||||
Prior year redundancies in the current year as a | ||||||||||||||||||||
percentage of prior year net incurred medical claims | 1.4 | % | 0.9 | % | 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. |
|
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GAAP Reconciliation | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
|
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Three Months Ended |
Six Months Ended |
||||||||||||||||||||||
(In millions, except per share data) | 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||
Net income | |
|
17.5 | % | |
|
20.4 | % | |||||||||||||||
Add / (Subtract) - net of related tax effects: | |||||||||||||||||||||||
Net realized gains on investments | (60.0 | ) | (42.8 | ) | (90.2 | ) | (69.9 | ) | |||||||||||||||
Other-than-temporary impairment losses on investments | 14.2 | 7.1 | 23.3 | 14.1 | |||||||||||||||||||
(Gain)/Loss on extinguishment of debt | (1.9 | ) | 2.0 | 0.3 | 3.9 | ||||||||||||||||||
Amortization of other intangible assets | 39.1 | 35.1 | 73.2 | 70.2 | |||||||||||||||||||
1-800 CONTACTS 2014 income | – | – | – | (9.6 | ) | ||||||||||||||||||
Rounding impact | – | (0.1 | ) | – | – | ||||||||||||||||||
Net adjustment items | (8.6 | ) | 1.3 | 6.6 | 8.7 | ||||||||||||||||||
Adjusted net income | |
|
16.1 | % | |
|
20.1 | % | |||||||||||||||
Net income per diluted share | |
|
22.3 | % | |
|
25.7 | % | |||||||||||||||
Add / (Subtract) - net of related tax effects: | |||||||||||||||||||||||
Net realized gains on investments | (0.22 | ) | (0.15 | ) | (0.33 | ) | (0.24 | ) | |||||||||||||||
Other-than-temporary impairment losses on investments | 0.05 | 0.02 | 0.08 | 0.05 | |||||||||||||||||||
Loss on extinguishment of debt | (0.01 | ) | 0.01 | 0.00 | 0.01 | ||||||||||||||||||
Amortization of other intangible assets | 0.14 | 0.12 | 0.26 | 0.24 | |||||||||||||||||||
1-800 CONTACTS 2014 income | – | – | – | (0.03 | ) | ||||||||||||||||||
Rounding impact | 0.01 | – | 0.01 | – | |||||||||||||||||||
Net adjustment items | (0.03 | ) | 0.00 | 0.02 | 0.03 | ||||||||||||||||||
Adjusted net income per diluted share | |
|
21.1 | % | |
|
25.3 | % | |||||||||||||||
Full Year | |||||||||||||||||||||||
2015 Outlook | |||||||||||||||||||||||
Net income per diluted share | Greater than |
||||||||||||||||||||||
Add / (Subtract) - net of related tax effects: | |||||||||||||||||||||||
Net realized gains on investments | ( |
) | |||||||||||||||||||||
Other-than-temporary impairment losses on investments | |
||||||||||||||||||||||
Loss on extinguishment of debt | |
||||||||||||||||||||||
Future Transaction Related Costs | |
||||||||||||||||||||||
Amortization of other intangible assets | Greater than |
||||||||||||||||||||||
Net adjustment items | Greater than |
||||||||||||||||||||||
Adjusted net income per diluted share | Greater than |
||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||||||||
(In millions) | 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||
Reportable segments operating gain | |
|
23.6 | % | |
|
32.0 | % | |||||||||||||||
Net investment income | 186.7 | 188.5 | 354.3 | 372.2 | |||||||||||||||||||
Net realized gains on investments | 92.3 | 65.8 | 138.8 | 107.5 | |||||||||||||||||||
Other-than-temporary impairment losses recognized in income | (21.8 | ) | (10.9 | ) | (35.8 | ) | (21.7 | ) | |||||||||||||||
Interest expense | (154.1 | ) | (145.6 | ) | (308.5 | ) | (291.8 | ) | |||||||||||||||
Amortization of other intangible assets | (60.1 | ) | (54.0 | ) | (112.6 | ) | (108.0 | ) | |||||||||||||||
Gain/(Loss) on extinguishment of debt | 2.9 | (3.0 | ) | (0.5 | ) | (6.0 | ) | ||||||||||||||||
Income from continuing operations before income tax expense | |
|
23.3 | % | |
|
30.6 | % | |||||||||||||||
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This document contains certain forward-looking information about us that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not generally historical facts. 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
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