01—Abstract
Summary
Summary of the 10-K filed February 22, 2013. Cited figures are marked; the original filing is the authoritative source.
Elevance Health, Inc. (formerly WellPoint, Inc.) reported strong financial performance for the fiscal year ended December 31, 2012.
The company experienced an increase in total operating revenue to $60.73 billiona, a 1.4% rise year-over-year, primarily driven by membership growth in its Medicare Advantage and State-Sponsored businesses, as well as contributions from recent acquisitions. Net income saw a marginal increase of 0.3% to $2.66 billion, with diluted earnings per share (EPS) rising significantly by 12.8% to $8.18. This EPS growth was attributed to a reduction in outstanding shares due to active share repurchase programs and the modest net income increase.
The company also highlighted its strategic acquisitions, including Amerigroup and 1-800 CONTACTS, which are expected to bolster its capabilities in government-backed programs and diversify revenue streams. Looking ahead, Elevance Health expressed its commitment to organic growth, strategic acquisitions, and efficient capital deployment, aiming to enhance shareholder value while navigating the evolving healthcare landscape. The company's financial health remains robust, with significant cash reserves and available credit facilities to support its growth initiatives.
02—Key points
Key Highlights
- Total operating revenue increased by 1.4% to $60.73 billion.
- Net income increased by 0.3% to $2.66 billion.
- Diluted EPS increased by 12.8% to $8.18, aided by share repurchases.
- Significant acquisitions of Amerigroup and 1-800 CONTACTS completed in 2012, enhancing market position and revenue diversification.
- Medical membership grew by 5.5% to 36.1 million members.
- Benefit expense ratio remained stable at 85.3%, indicating effective cost management.
- Company continues to focus on strategic growth through organic expansion and acquisitions, alongside capital return to shareholders via dividends and share repurchases.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Elevance Health, Inc. kept $0.04.
- Revenue$61.50B100.0%
- Cost of revenue−$137.4M0.2%
- Gross profit$61.36B99.8%
- Operating costs−$57.74B93.9%
- Operating income$3.62B5.9%
- Interest, other & tax−$964.4M1.6%
- Net income$2.66B4.3%
Where FY2012 revenue went
$61.50B- Other operating costs: $49.06B, 80% of revenue
- SG&A: $8.68B, 14% of revenue
- Net income: $2.66B, 4.3% of revenue
- Cost of revenue: $137.4M, 0.2% of revenue
- Interest, other & tax: $964.4M, 1.6% of revenue
Kept 4.3% as net incomeCost of revenue $137.4M · 0.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 22, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $61.50B$60.71B | +1.3% |
| Cost of Revenue | $137.40M$0 | — |
| Gross Profit | $61.36B$60.71B | +1.1% |
| SG&A Expenses | $8.68B$8.44B | +2.9% |
| Operating Income | $3.62B$3.78B | −4.3% |
| Interest Expense | $511.80M$430.30M | +18.9% |
| Net Income | $2.66B$2.65B | +0.3% |
| EPS (Basic) | $8.26$7.35 | +12.4% |
| EPS (Diluted) | $8.18$7.25 | +12.8% |
| Shares Outstanding (Basic) | 321.50M360.20M | −10.7% |
| Shares Outstanding (Diluted) | 324.80M365.10M | −11.0% |
05—Questions
Frequently Asked Questions
What were the key drivers of Elevance Health's revenue growth in 2012?
Elevance Health's revenue growth in 2012 was primarily driven by an increase in premium revenue, particularly in its Consumer segment. This growth was bolstered by membership gains in its Senior Medicare Advantage business and State-Sponsored business, further enhanced by the post-acquisition contributions from Amerigroup. Additionally, strategic product portfolio changes and premium rate increases in certain segments also contributed to the revenue uplift.
How did the company's recent acquisitions impact its financial performance?
The acquisitions of Amerigroup and 1-800 CONTACTS, completed in late 2012, significantly impacted the company's financial performance. Amerigroup's inclusion strengthened Elevance Health's position in the Medicaid and Medicare markets, contributing to membership and revenue growth in the Consumer segment. The acquisition of 1-800 CONTACTS diversified revenue into specialty businesses and contributed to the Commercial segment's performance. Both acquisitions resulted in increased operating revenue, although they also led to higher acquisition and integration-related expenses.
What is the company's outlook and strategy for future growth?
Elevance Health plans to achieve future growth through a combination of organic growth, strategic acquisitions, and efficient capital utilization. The company aims to capitalize on economies of scale, new technologies, and evolving products. Geographic and product diversification are key elements of its strategy to mitigate regional pressures and enhance growth opportunities. The company also remains committed to returning capital to shareholders through dividends and share repurchases, demonstrating confidence in its ongoing financial strength and market position.
How is Elevance Health managing healthcare costs?
Elevance Health focuses on managing healthcare costs through various strategies including effective provider contracting, medical management programs, and health and wellness initiatives. The company is actively engaged in payment reform, such as its Patient Centered Primary Care program, and value-based contracting to align provider compensation with quality outcomes and cost-effectiveness. Despite rising healthcare costs driven by factors like an aging population and medical technology advancements, the company strives to maintain competitive pricing and manage its benefit expense ratio.
06—Continue