01—Abstract
Summary
Summary of the 10-K filed February 15, 2023. Cited figures are marked; the original filing is the authoritative source.
Elevance Health, Inc. (ELV) reported strong performance for the fiscal year ended December 31, 2022, demonstrating resilience and strategic growth.
The company experienced a significant increase in total operating revenue, primarily driven by robust membership growth in its Government Business segment, particularly within Medicaid, bolstered by the temporary suspension of eligibility recertifications due to the COVID-19 pandemic. Acquisitions in the Medicaid space also contributed positively to revenue. While net income saw a slight decrease year-over-year, largely due to realized losses on financial instruments and increased amortization, the company maintained a strong operating gain across all segments.
Elevance Health continues to focus on its transformation into a lifetime, trusted health partner, expanding its brand portfolio and optimizing its business operations. The company also highlighted its commitment to shareholder returns through share repurchases and dividends, underpinned by solid liquidity and capital resources. Looking ahead, Elevance Health is strategically positioned to benefit from ongoing healthcare trends, including potential growth in the individual exchange market as Medicaid eligibility recertifications resume.
The company's diversification across commercial, government, and specialty segments, coupled with its integrated capabilities in pharmacy benefits management (CarelonRx) and health services (Carelon Services), provides a solid foundation for future expansion and profitability. Investors should monitor the company's integration of recent acquisitions and its continued progress in achieving its 'whole health' strategy.
02—Key points
Key Highlights
- Total operating revenue increased by 13.7% to $155.66 billion in 2022, driven by membership growth, particularly in Medicaid and Medicare Advantage plans, and strategic acquisitions.
- Total medical membership increased by 4.8% to 47.5 million, primarily due to organic growth in Government Business (Medicaid and Medicare Advantage) and Commercial & Specialty Business.
- Net income slightly decreased by 1.2% to $6.02 billion, impacted by realized losses on financial instruments and increased amortization, but operating gain remained strong across segments.
- Elevance Health announced plans to organize its brand portfolio into three core go-to-market brands: Anthem Blue Cross/Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon, reflecting its evolution.
- The company completed several acquisitions in 2022, including Integra (managed long-term care) and entered into an agreement to acquire Louisiana Health Service & Indemnity Company (Blue Cross Blue Shield of Louisiana) in early 2023, demonstrating a continued focus on strategic growth.
- Diluted Earnings Per Share (EPS) increased slightly by 0.3% to $24.81, benefiting from a reduction in average diluted shares outstanding.
- The company maintained a strong liquidity position with consolidated cash, cash equivalents, and investments totaling $35 billion at year-end 2022.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Elevance Health, Inc. kept $0.04.
- Revenue$156.59B100.0%
- Cost of revenue−$13.04B8.3%
- Gross profit$143.56B91.7%
- Operating costs−$135.28B86.4%
- Operating income$8.28B5.3%
- Interest, other & tax−$2.40B1.5%
- Net income$5.89B3.8%
Where FY2022 revenue went
$156.59B- Other operating costs: $117.58B, 75% of revenue
- Net income: $5.89B, 3.8% of revenue
- Cost of revenue: $13.04B, 8.3% of revenue
- SG&A: $17.70B, 11% of revenue
- Interest, other & tax: $2.40B, 1.5% of revenue
Kept 3.8% as net incomeNet income $5.89B · 3.8%Interest, other & tax $2.40B · 1.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 15, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $156.59B$138.64B | +13.0% |
| Cost of Revenue | $13.04B$10.89B | +19.6% |
| Gross Profit | $143.56B$127.74B | +12.4% |
| SG&A Expenses | $17.70B$15.92B | +11.2% |
| Operating Income | $8.28B$7.56B | +9.6% |
| Interest Expense | $851.00M$798.00M | +6.6% |
| Net Income | $5.89B$6.15B | −4.2% |
| EPS (Basic) | $24.56$25.26 | −2.8% |
| EPS (Diluted) | $24.28$24.95 | −2.7% |
| Shares Outstanding (Basic) | 240.00M243.80M | −1.6% |
| Shares Outstanding (Diluted) | 242.80M246.80M | −1.6% |
05—Questions
Frequently Asked Questions
What was Elevance Health's financial performance in 2022?
In 2022, Elevance Health reported a 13.7% increase in total operating revenue to $155.66 billion, driven by strong membership growth in its Government segment (Medicaid and Medicare Advantage) and contributions from acquisitions. Net income was $6.02 billion, a slight decrease of 1.2% compared to 2021, mainly due to realized losses on financial instruments and higher amortization costs. However, operating gains remained robust across all business segments.
How did Elevance Health's membership perform in 2022?
Total medical membership grew by 4.8% to 47.5 million as of December 31, 2022. This growth was primarily fueled by organic increases in the Government Business segment, particularly Medicaid, due to the continued suspension of eligibility recertifications, and also by acquisitions. Commercial & Specialty Business also saw growth, especially in group fee-based membership and through public exchange expansion.
What are Elevance Health's key strategic initiatives or changes mentioned in the report?
Elevance Health is undergoing a strategic evolution to become a 'lifetime, trusted health partner.' Key initiatives include organizing its brand portfolio into Anthem Blue Cross/Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon. The company is also enhancing its digital platform and care delivery models, focusing on 'whole health' by addressing physical, behavioral, and social needs. Recent acquisitions and planned acquisitions, like the one for Blue Cross Blue Shield of Louisiana, further support this strategy.
What are the main risks highlighted by Elevance Health?
Elevance Health identifies several key risks, including the potential failure to accurately predict, price, and manage healthcare costs, which could impact profitability. Other significant risks include reductions in enrollment, cyber-attacks and data security incidents, the impact of pandemics and other public health crises, and the inherent risks associated with participating in government programs like Medicare and Medicaid, including regulatory changes and payment uncertainties. The company also notes competition and the need to maintain strong provider relationships.
06—Continue