10-KPeriod: FY2015

Elevance Health, Inc. Annual Report, Year Ended Dec 31, 2015

Filed February 19, 2016For Securities:ELV

Summary

Elevance Health, Inc. (formerly Anthem, Inc.)'s 2015 10-K report highlights a year of significant growth and strategic positioning, marked by a robust increase in total operating revenue to $78.4 billion, driven primarily by expansion in its Government Business segment, particularly Medicaid and Medicare, and by rate increases across its portfolio. The company served 38.6 million medical members by year-end. A pivotal event disclosed is the pending acquisition of Cigna Corporation, announced in July 2015, which is expected to create a premier health benefits company. This strategic move underscores the company's commitment to scale and transformation in the healthcare landscape. Despite a slight decrease in net income to $2.56 billion, the company reported solid diluted earnings per share of $9.38, reflecting effective share repurchases that reduced the share count. The company's financial health remains strong, with significant operating cash flow and substantial investments, positioning it to navigate the evolving healthcare market and pursue future growth opportunities.

Financial Highlights

51 data points
Beta

Revenue

$79.16B

Net Income

$2.56B

3.2% Net Margin

EPS (Diluted)

$9.38

Total Assets

$61.72B

Cash & Equivalents

$2.11B

Free Cash Flow

$3.57B

Financial Statements
Beta
Revenue$79.16B
SG&A Expenses$12.53B
Operating Income$4.75B
Interest Expense$653.00M
Net Income$2.56B
EPS (Basic)$9.73
EPS (Diluted)$9.38
Shares Outstanding (Basic)263.00M
Shares Outstanding (Diluted)272.90M

Key Highlights

  • 1Total operating revenue increased by 7.4% to $78.4 billion in 2015, driven by membership growth in Government Business and rate increases.
  • 2The company announced a pending acquisition of Cigna Corporation in July 2015, aiming to create a premier health benefits company with significant scale and diversification.
  • 3Medical membership grew to 38.6 million members by December 31, 2015, with notable increases in Medicaid and National Accounts segments.
  • 4Net income remained stable at $2.56 billion, with diluted earnings per share of $9.38, benefiting from share repurchases.
  • 5Operating cash flow increased by $746.7 million to $4.1 billion, indicating strong operational performance.
  • 6The company successfully acquired Simply Healthcare in February 2015, strengthening its position in the Medicaid and Medicare programs in Florida.
  • 7The company continued to manage its capital effectively through dividends and share repurchases, demonstrating a commitment to shareholder returns.

Frequently Asked Questions

Elevance Health's primary growth strategy in 2015 involved a combination of organic growth across its Commercial and Specialty Business and Government Business segments, strategic acquisitions like Simply Healthcare, and efficient capital deployment. The pending acquisition of Cigna Corporation also represented a significant strategic initiative to enhance scale and market position.

The ACA continued to significantly shape Elevance Health's operations in 2015. The company was actively adapting its products, pricing, and distribution strategies to comply with ACA mandates, including operating on public exchanges and managing new regulations. The company noted both new growth opportunities and regulatory challenges presented by the ACA.

The acquisition of Cigna was announced in July 2015 and was pending regulatory and other closing conditions, expected in the second half of 2016. The company anticipated that the acquisition would create a premier health benefits company with critical diversification and scale. The transaction was valued at approximately $53 billion and was to be financed through cash on hand and new debt.

Elevance Health maintained a strong liquidity position with $23.1 billion in cash, cash equivalents, and investments. The company continued its capital management strategy by declaring dividends, repurchasing common stock, and managing its debt, including issuing new debt to partially finance the Cigna acquisition. Its investment portfolio was diversified, and managed according to strict policies to balance safety, liquidity, and return.