01—Abstract
Summary
Summary of the 10-K filed February 20, 2014. Cited figures are marked; the original filing is the authoritative source.
Elevance Health, Inc. (formerly WellPoint, Inc.) reported strong revenue growth in 2013, driven primarily by its Government Business segment, largely due to the acquisition of Amerigroup.
However, net income saw a slight decrease compared to the previous year, impacted by the divestiture of its 1-800 CONTACTS business, preparation costs for the Affordable Care Act (ACA), and debt extinguishment losses. The company experienced a slight decline in total medical membership, with notable decreases in Medicare and Individual segments, partially offset by growth in Medicaid.
Management highlighted strategic repositioning in certain Medicare Advantage plans and continued focus on integrating acquisitions, managing healthcare costs, and enhancing digital member interactions. The company continued its capital return strategy through dividends and share repurchases.
02—Key points
Key Highlights
- Total operating revenue increased by 16.0% to $70.2 billion in 2013, primarily driven by the acquisition of Amerigroup and growth in the Government Business segment.
- Net income decreased by 6.2% to $2.5 billion in 2013, impacted by a loss on the sale of the 1-800 CONTACTS business and costs associated with the upcoming implementation of the Affordable Care Act (ACA).
- Total medical membership slightly decreased by 1.3% to 35.7 million members, with declines in Medicare and Individual segments offset by growth in Medicaid.
- The company repurchased $1.6 billion of its common stock in 2013 and increased its quarterly dividend by 16.7% for 2014, indicating a commitment to returning capital to shareholders.
- The company is actively managing healthcare costs through various medical management programs and value-based payment initiatives.
- Elevance Health's financial position remained strong, with consolidated cash, cash equivalents, and investments totaling $22.4 billion at year-end 2013.
- The company is navigating the significant changes brought about by the Affordable Care Act, which is expected to present both opportunities and challenges for its business.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 20, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $71.02B$61.50B | +15.5% |
| SG&A Expenses | $9.95B$8.68B | +14.7% |
| Operating Income | $4.00B$3.62B | +10.5% |
| Interest Expense | $602.70M$511.80M | +17.8% |
| Net Income | $2.49B$2.66B | −6.2% |
| EPS (Basic) | $8.34$8.26 | +1.0% |
| EPS (Diluted) | $8.20$8.18 | +0.2% |
| Shares Outstanding (Basic) | 298.50M321.50M | −7.2% |
| Shares Outstanding (Diluted) | 303.80M324.80M | −6.5% |
05—Questions
Frequently Asked Questions
What was the main driver of revenue growth in 2013?
Revenue growth was primarily driven by the acquisition of Amerigroup in December 2012, which significantly boosted the Government Business segment's performance. Growth in the Federal Employee Program (FEP) and CareMore subsidiary also contributed.
What factors led to the decrease in net income in 2013?
The decrease in net income was primarily due to a loss on the disposal of the 1-800 CONTACTS business, costs incurred in preparation for the implementation of the Affordable Care Act (ACA), realized losses on the extinguishment of debt, and increased interest expenses related to the Amerigroup acquisition.
How did the company's membership change in 2013?
Total medical membership saw a slight decrease of 1.3% to 35.7 million members. This was mainly due to declines in Medicare, Medicaid (in certain states), and National Accounts, partially offset by growth in Medicaid (overall) and BlueCard® membership.
What is the company's strategy regarding the Affordable Care Act (ACA)?
The company is actively preparing for and analyzing the impacts of the ACA, which is expected to bring significant changes to the health insurance market. While acknowledging new risks and uncertainties, management views the ACA as a source of potential growth opportunities and is adapting its products, pricing, and administrative strategies accordingly.
06—Continue