What were the primary drivers of revenue growth in the quarter?

Revenue growth was primarily driven by premium rate increases in Local Group, expansion in State-Sponsored business due to the addition of five new states, and growth in the Medicare Advantage business.

How is the company returning capital to shareholders?

The company is actively returning capital to shareholders through its common stock repurchase program. During the first nine months of 2007, it repurchased approximately 54.4 million shares for $4.3 billion. As of September 30, 2007, $624.5 million remained authorized for future repurchases.

What significant strategic acquisitions or initiatives were mentioned?

Elevance Health acquired Imaging Management Holdings, LLC (AIM) on August 1, 2007, for $300.0 million to enhance its radiology benefit management services. Additionally, the company announced a new organizational structure, effective January 1, 2008, to create two new strategic business units (Commercial and Consumer) and a Comprehensive Health Solutions unit.

What is the company's outlook on cost of care trends?

For the Local Group and Individual fully-insured businesses, the company estimated an aggregate cost of care trend of less than 8% for 2007. Inpatient and outpatient services are primary drivers, with efforts focused on contracting, plan design changes, and management programs, including the recent acquisition of AIM to manage radiology costs.

ELV 10-Q Quarterly Report Q3 FY2007 — Revenue, Net Income, EPS

Summary

Elevance Health, Inc. (formerly WellPoint, Inc.) reported a solid third quarter for 2007, demonstrating continued revenue and net income growth. Total operating revenue increased by 5% to $15.0 billion, driven by premium rate increases and expansion in state-sponsored and Medicare Advantage programs. Net income rose by 7% to $868.0 million, resulting in diluted earnings per share of $1.45, a 12% increase year-over-year. The company also generated strong operating cash flow of $3.2 billion for the first nine months of the year, indicating healthy operational performance and effective cash management. Management highlighted strategic initiatives including the acquisition of American Imaging Management, Inc. to enhance radiology services and a re-organization into a more customer-focused structure, effective January 1, 2008. Shareholder returns were a key focus, with significant share repurchases totaling $4.3 billion year-to-date, underscoring a commitment to returning capital to investors. The company maintains a strong balance sheet and ample liquidity to support its operations and strategic growth plans.

Key Highlights

1Total operating revenue increased 5% to $15.0 billion for the three months ended September 30, 2007, compared to $14.2 billion in the prior year period.
2Net income grew 7% to $868.0 million for the three months ended September 30, 2007, compared to $810.8 million in the prior year period.
3Diluted earnings per share (EPS) increased 12% to $1.45 for the three months ended September 30, 2007, compared to $1.29 in the prior year period.
4Operating cash flow for the nine months ended September 30, 2007 was $3.2 billion, an increase from $2.6 billion in the same period last year.
5The company repurchased approximately 54.4 million shares for an aggregate cost of $4.3 billion during the nine months ended September 30, 2007.
6Elevance Health acquired Imaging Management Holdings, LLC (AIM) on August 1, 2007, for approximately $300.0 million in cash to enhance its radiology benefit management capabilities.
7The company announced a new organizational structure effective January 1, 2008, aimed at improving customer focus and cross-selling opportunities.

Elevance Health, Inc. Quarterly Report for Q3 Ended Sep 30, 2007

Summary

Key Highlights

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