What was the primary driver for the increase in operating revenue?

The primary driver for the increase in operating revenue was higher premium revenues across both the Government Business and Commercial & Specialty Business segments. This was supported by rate increases designed to cover overall cost trends and membership growth, particularly in Medicaid and Large Group product offerings.

What factors contributed to the significant increase in net income?

The significant increase in net income was primarily due to lower income tax expense. This was mainly driven by the suspension of the Health Insurance Provider Fee (HIP Fee) for 2017 and favorable tax benefits recognized from prior acquisition costs related to the terminated merger agreement with Cigna. Additionally, there was an increase in net earnings from investment activities.

What are the key risks or contingencies the company faces as disclosed in this filing?

The company faces several significant risks and contingencies. These include ongoing litigation with Cigna related to the terminated merger agreement, a lawsuit against Express Scripts concerning pharmacy benefit management pricing, and the financial impact of the 2015 cyber attack, for which a settlement accrual was made. Additionally, the company is subject to various government investigations and potential regulatory actions, as well as the inherent uncertainties in the healthcare industry related to healthcare reform and evolving regulations.

How did the company's medical membership change during the period?

The company's total medical membership increased by 1.6% to 40,387 thousand (approximately 40.4 million) as of June 30, 2017, compared to the prior year. Notable increases were seen in the Medicaid (+3.0%) and Local Group (+3.4%) segments. However, there were decreases in Individual (-1.8%) and National Accounts (-0.7%) memberships.

ELV 10-Q Quarterly Report Q2 FY2017 — Revenue, Net Income, EPS

Summary

Elevance Health, Inc. (formerly Anthem, Inc.) reported solid financial performance for the six months ended June 30, 2017. Total operating revenue increased by 7.1% year-over-year to $44.5 billion, driven by higher premium revenues across both Government and Commercial & Specialty segments. Net income saw a significant jump of 25.7% to $1.9 billion, largely attributed to lower income tax expenses, notably the suspension of the Health Insurance Provider Fee (HIP Fee) and favorable tax benefits from prior acquisition costs. Diluted EPS also grew by 24.4% to $6.89. The company experienced growth in its medical membership by 1.6%, reaching over 40.3 million members, with notable increases in Medicaid and Local Group segments. However, operating gain for the segments saw a decline, particularly in the Government Business (down 21.1%) and Commercial & Specialty Business (down 4.1%), driven by factors such as the HIP Fee suspension and increased incentive compensation. Despite these segment-level pressures, the overall financial health appears robust, supported by strong operating cash flow of $3.1 billion. Investors should monitor the ongoing legal proceedings, particularly the litigation with Cigna and the ongoing pharmacy benefit management dispute with Express Scripts, which represent significant contingent liabilities and potential financial risks.

Financial Highlights

51 data points

Beta

Revenue

$22.41B

Net Income

$855.00M

0.0% Net Margin

EPS (Diluted)

$3.16

Total Assets

$68.24B

Cash & Equivalents

$4.56B

Free Cash Flow

$223.50M

Financial Statements

Beta

Revenue	$22.41B
SG&A Expenses	$3.05B
Operating Income	$1.23B
Interest Expense	$189.90M
Net Income	$855.00M
EPS (Basic)	$3.23
EPS (Diluted)	$3.16
Shares Outstanding (Basic)	264.60M
Shares Outstanding (Diluted)	270.80M

Key Highlights

1Total operating revenue for the first six months of 2017 increased by 7.1% to $44.5 billion, compared to the same period in 2016.
2Net income for the first six months of 2017 rose by 25.7% to $1.9 billion.
3Diluted EPS increased by 24.4% to $6.89 for the first six months of 2017.
4Total medical membership grew by 1.6% to 40.4 million members as of June 30, 2017.
5Operating gain for the Government Business segment decreased by 21.1% for the six-month period.
6Operating gain for the Commercial & Specialty Business segment decreased by 4.1% for the six-month period.
7The company recognized a $115.0 million settlement accrual for litigation related to the 2015 cyber attack during the second quarter of 2017.

Elevance Health, Inc. Quarterly Report for Q2 Ended Jun 30, 2017

Summary

Financial Highlights

Key Highlights

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