01—Abstract
Summary
Summary of the 10-K filed February 19, 2016. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb, 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.
02—Key points
Key Highlights
- Total operating revenue increased by 7.4% to $78.4 billion in 2015, driven by membership growth in Government Business and rate increases.
- The company announced a pending acquisition of Cigna Corporation in July 2015, aiming to create a premier health benefits company with significant scale and diversification.
- Medical membership grew to 38.6 million members by December 31, 2015, with notable increases in Medicaid and National Accounts segments.
- Net income remained stable at $2.56 billion, with diluted earnings per share of $9.38, benefiting from share repurchases.
- Operating cash flow increased by $746.7 million to $4.1 billion, indicating strong operational performance.
- The company successfully acquired Simply Healthcare in February 2015, strengthening its position in the Medicaid and Medicare programs in Florida.
- The company continued to manage its capital effectively through dividends and share repurchases, demonstrating a commitment to shareholder returns.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 19, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $79.16B$73.87B | +7.2% |
| SG&A Expenses | $12.53B$11.75B | +6.7% |
| Operating Income | $4.75B$4.42B | +7.6% |
| Interest Expense | $653.00M$600.70M | +8.7% |
| Net Income | $2.56B$2.57B | −0.4% |
| EPS (Basic) | $9.73$9.31 | +4.5% |
| EPS (Diluted) | $9.38$8.99 | +4.3% |
| Shares Outstanding (Basic) | 263.00M275.90M | −4.7% |
| Shares Outstanding (Diluted) | 272.90M285.90M | −4.5% |
05—Questions
Frequently Asked Questions
What was Elevance Health's (Anthem's) primary strategy for growth in 2015?
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.
How did the Patient Protection and Affordable Care Act (ACA) impact Elevance Health's operations in 2015?
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.
What is the status and expected impact of the Cigna acquisition announced in 2015?
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.
How did the company manage its investments and capital in 2015?
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.
06—Continue