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Anthem Reports First Quarter 2021 Results, Raises Full Year Outlook

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·24-min read
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  • First quarter GAAP net income was $6.71 per share, including net negative adjustment items of $0.30 per share. Adjusted net income was $7.01* per share.

  • Operating revenue grew by 9.0%, or 10.7% adjusted for the repeal of the health insurance tax, over the prior year quarter to $32.1 billion.

  • Medical enrollment increased by 1.4 million members year over year and 596 thousand members sequentially to 43.5 million members.

  • Second quarter 2021 dividend of $1.13 per share declared to shareholders.

  • Raising full year adjusted net income outlook from greater than $24.50* per share to greater than $25.10* per share.

Anthem, Inc. (NYSE: ANTM) reported first quarter 2021 results that reflect strong financial performance.

"Our results in the first quarter reflect strong execution and a continued focus on supporting our communities through the pandemic," said Gail K. Boudreaux, President and CEO. "We expect the positive momentum in the first quarter to persist through the balance of the year, driven by our commitment to delivering affordable healthcare and innovative solutions for those we serve. At Anthem, we are modernizing our business while transforming into a digitally-enabled platform for health. Our solid performance demonstrates the value we bring to the market and I am confident that we are well positioned to capitalize on future opportunities for growth."

*Refer to GAAP reconciliation tables.

CONSOLIDATED HIGHLIGHTS

Earnings Per Share: GAAP net income was $6.71 per share in the first quarter, including net negative adjustment items of $0.30 per share. Adjusted net income was $7.01* per share.

*Please refer to the GAAP reconciliation tables.

Membership: Medical enrollment totaled approximately 43.5 million members at March 31, 2021, an increase of 1.4 million lives, or 3.3 percent from the prior year quarter. Government Business enrollment increased by 1.8 million lives compared to the prior year quarter, attributable to Medicaid, reflecting organic growth, aided by the temporary suspension of eligibility recertification efforts in our markets, and growth in Medicare Advantage. Commercial & Specialty Business enrollment decreased by 411 thousand lives compared to the prior year quarter primarily attributable to higher in-group change in the group fee-based business as a result of the economic environment, partially offset by growth in Individual.

During the first quarter of 2021, medical enrollment increased sequentially by 596 thousand lives, reflecting organic growth in the Medicaid and Medicare businesses, higher BlueCard activity, and sales in excess of lapses in our Commercial risk-based businesses, partially offset by higher in-group change in the group fee-based business.

Operating Revenue: Operating revenue was $32.1 billion in the first quarter of 2021, an increase of $2.7 billion, or 9.0 percent, versus the prior year quarter and 10.7 percent after adjusting for the health insurance tax. The increase was driven by higher premium revenue due to growth in Medicaid and Medicare. The increase was further attributable to pharmacy product revenue related to IngenioRx, partially offset by the impact of lower premium revenue due to the repeal of the health insurance tax in 2021.

Benefit Expense Ratio: The benefit expense ratio was 85.6 percent in the first quarter of 2021, an increase of 140 basis points versus the prior year quarter and a decrease of 10 basis points after adjusting for the health insurance tax. The increase was driven by costs associated with COVID-19, including testing and vaccine administration, and to a lesser extent, the repeal of the health insurance tax in 2021. These increases were partially offset by reduced non-COVID healthcare utilization and the impact of one less calendar day compared to the first quarter of 2020.

Medical claims reserves established at December 31, 2020 developed better than the Company’s expectations during the first quarter of 2021.

Days in Claims Payable: Days in Claims Payable was 46.9 days as of March 31, 2021, an increase of 3.5 days from December 31, 2020 and an increase of 5.0 days as compared to March 31, 2020.

SG&A Expense Ratio: The SG&A expense ratio was 12.2 percent in the first quarter of 2021, a decrease of 60 basis points from 12.8 percent in the first quarter of 2020, primarily driven by the repeal of the health insurance tax in 2021 and growth in operating revenue, partially offset by increased spend to support growth.

Operating Cash Flow: Operating cash flow was $2.5 billion, or 1.5 times net income in the first quarter of 2021. Operating cash flow was primarily driven by changes in working capital, membership growth in our Government business, and higher net income, offset by the repeal of the health insurance tax in 2021.

Share Repurchase Program: During the first quarter of 2021, the Company repurchased 1.4 million shares of its common stock for $447 million, at a weighted average price of $316.06. As of March 31, 2021, the Company had approximately $5.6 billion remaining of Board-approved share repurchase authorization.

Cash Dividend: During the first quarter of 2021, the Company paid a quarterly dividend of $1.13 per share, representing a distribution of cash totaling $277 million.

On April 20, 2021, the Audit Committee declared a second quarter 2021 dividend to shareholders of $1.13 per share. On an annualized basis, this equates to a dividend of $4.52 per share. The second quarter dividend is payable on June 25, 2021 to shareholders of record at the close of business on June 10, 2021.

Investment Portfolio & Capital Position: During the first quarter of 2021, the Company recorded net realized losses of $4 million. During the first quarter of 2020, the Company recorded net realized losses of $81 million.

As of March 31, 2021, the Company’s net unrealized gain position in the investment portfolio was $776 million, consisting primarily of fixed maturity securities. As of March 31, 2021 cash and investments at the parent company totaled approximately $4.6 billion.

REPORTABLE SEGMENTS

Anthem, Inc. has four reportable segments: Commercial & Specialty Business (comprised of Individual, Group risk-based, Group fee-based, and BlueCard businesses); Government Business (comprised of the Medicaid, Medicare, and Federal Health Products & Services businesses); IngenioRx, and Other (comprised of the Diversified Business Group and corporate expenses not allocated to our other reportable segments).

Anthem, Inc.

Reportable Segment Highlights

(Unaudited)

(In millions)

Three Months Ended March 31

2021

2020

Change

Operating Revenue

Commercial & Specialty Business

$9,491

$9,361

1.4

%

Government Business

19,283

17,466

10.4

%

IngenioRx

5,862

5,197

12.8

%

Other

2,370

1,027

130.8

%

Eliminations

(4,908)

(3,603)

NM2

Total Operating Revenue1

$32,098

$29,448

9.0

%

Operating Gain / (Loss)

Commercial & Specialty Business

$1,268

$1,420

(10.7)

%

Government Business

478

411

16.3

%

IngenioRx

407

349

16.6

%

Other

8

14

NM2

Total Operating Gain1

$2,161

$2,194

(1.5)

%

Operating Margin

Commercial & Specialty Business

13.4

%

15.2

%

(180) bp

Government Business

2.5

%

2.4

%

10 bp

IngenioRx

6.9

%

6.7

%

20 bp

Total Operating Margin1

6.7

%

7.5

%

(80) bp

(1)

See "Basis of Presentation."

(2)

"NM" = calculation not meaningful.

Commercial & Specialty Business: Operating gain in the Commercial & Specialty Business segment totaled $1,268 million in the first quarter of 2021, a decrease of $152 million from an operating gain of $1,420 million in the first quarter of 2020. The decrease was primarily attributable to costs associated with COVID-19, including testing and vaccine administration, as well as investments to support growth. These decreases were partially offset by reduced non-COVID healthcare utilization and the impact of one less calendar day compared to the first quarter of 2020.

Government Business: Operating gain in the Government Business segment was $478 million in the first quarter of 2021, an increase of $67 million, or 16.3 percent, from $411 million in the first quarter of 2020. The increase was primarily driven by growth in Medicaid membership and the impact of one less calendar day compared to the first quarter of 2020. These increases were partially offset by costs associated with COVID-19 net of reduced non-COVID healthcare utilization, experience rated rebates in the Medicaid business, and lower risk revenue.

IngenioRx: Operating gain was $407 million in the first quarter of 2021, an increase of $58 million, or 16.6 percent, from $349 million in the first quarter of 2020. The increase was driven by an out of period adjustment and growth in integrated medical and pharmacy membership.

Other: The Company reported an operating gain of $8 million in the Other segment for the first quarter of 2021, compared with an operating gain of $14 million in the prior year quarter. The decrease is attributable to increased corporate expenses, partially offset by growth in the Diversified Business Group.

OUTLOOK

Full Year 2021:

  • GAAP net income is now expected to be greater than $24.05 per share, including approximately $1.05 per share of net unfavorable items. Excluding these items, adjusted net income is expected to be greater than $25.10* per share.

  • Medical membership is expected to be in the range of 44.1 - 44.7 million. Risk-based membership is expected to be in the range of 18.6 - 19.0 million. Fee-based membership is expected to be in the range of 25.5 - 25.7 million.

  • Operating revenue is expected to be approximately $135.1 billion, including premium revenue of $114.5 billion - $115.5 billion.

  • Benefit expense ratio is expected to be in the range of 88.0% plus or minus 50 basis points.

  • SG&A ratio is expected to be 10.8% plus or minus 50 basis points.

  • Operating cash flow is expected to be greater than $5.7 billion.

  • Investment income is now expected to be $970 million.

  • Interest expense is now expected to be $820 million.

* Refer to the GAAP reconciliation tables.

Basis of Presentation

  1. Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reporting segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and selling, general and administrative expense. It does not include net investment income, net realized gains/losses on financial instruments, interest expense, amortization of other intangible assets, gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management. Refer to the GAAP reconciliation tables.

  2. Operating margin is defined as operating gain divided by operating revenue.

Conference Call and Webcast

Management will host a conference call and webcast today at 8:30 a.m. Eastern Daylight Time ("EDT") to discuss the company’s first quarter results and outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers:

888-947-9963 (Domestic)

866-430-8786 (Domestic Replay)

312-470-0178 (International)

203-369-0937 (International Replay)

The access code for today's conference call is 9054819. The replay will be available from 11:30 a.m. EDT today, until the end of the day on May 20, 2021. The call will also be available through a live webcast at www.antheminc.com under the "Investors" link. A webcast replay will be available following the call.

About Anthem, Inc.

Anthem is a leading health benefits company dedicated to improving lives and communities, and making healthcare simpler. Through its affiliated companies, Anthem serves more than 116 million people, including more than 43 million within its family of health plans. We aim to be the most innovative, valuable and inclusive partner. For more information, please visit www.antheminc.com or follow @AnthemInc on Twitter.

Anthem, Inc.

Membership Summary

(Unaudited and in Thousands)

Change from

Medical Membership

March 31,
2021

March 31,
2020

December 31,
2020

March 31,
2020

December 31,
2020

Commercial & Specialty Business

Individual

731

717

680

2.0

%

7.5

%

Group Risk-Based

3,837

3,841

3,799

(0.1)

%

1.0

%

Commercial Risk-Based

4,568

4,558

4,479

0.2

%

2.0

%

BlueCard®

6,166

6,197

6,059

(0.5)

%

1.8

%

Group Fee-Based

19,515

19,905

19,551

(2.0)

%

(0.2)

%

Commercial Fee-Based

25,681

26,102

25,610

(1.6)

%

0.3

%

Total Commercial & Specialty Business

30,249

30,660

30,089

(1.3)

%

0.5

%

Government Business

Medicare Advantage

1,538

1,341

1,428

14.7

%

7.7

%

Medicare Supplement

930

914

933

1.8

%

(0.3)

%

Total Medicare

2,468

2,255

2,361

9.4

%

4.5

%

Medicaid

9,172

7,615

8,852

20.4

%

3.6

%

Federal Employees Health Benefits

1,632

1,614

1,623

1.1

%

0.6

%

Total Government Business

13,272

11,484

12,836

15.6

%

3.4

%

Total Medical Membership

43,521

42,144

42,925

3.3

%

1.4

%

Other Membership

Life and Disability Members

4,766

5,158

5,064

(7.6)

%

(5.9)

%

Dental Members

6,599

6,476

6,385

1.9

%

3.4

%

Dental Administration Members

1,488

1,311

1,316

13.5

%

13.1

%

Vision Members

7,798

7,510

7,536

3.8

%

3.5

%

Medicare Part D Standalone Members

450

383

413

17.5

%

9.0

%

Anthem, Inc.

Consolidated Statements of Income

(Unaudited)

(In millions, except per share data)

Three Months Ended
March 31

2021

2020

Change

Revenues

Premiums

$

27,676

$

25,517

8.5

%

Product revenue

2,737

2,344

16.8

%

Administrative fees and other revenue

1,685

1,587

6.2

%

Total operating revenue

32,098

29,448

9.0

%

Net investment income

291

254

14.6

%

Net realized losses on financial instruments

(4)

(81)

NM

Total revenues

32,385

29,621

9.3

%

Expenses

Benefit expense

23,699

21,489

10.3

%

Cost of products sold

2,313

1,984

16.6

%

Selling, general and administrative expense

3,925

3,781

3.8

%

Interest expense

192

194

(1.0)

%

Amortization of other intangible assets

80

83

(3.6)

%

Loss on extinguishment of debt

1

NM

Total expenses

30,209

27,532

9.7

%

Income before income tax expense

2,176

2,089

4.2

%

Income tax expense

509

566

(10.1)

%

Net income

$

1,667

$

1,523

9.5

%

Net income attributable to noncontrolling interests

(2)

NM

Shareholders' net income

$

1,665

$

1,523

9.3

%

Shareholders' net income per diluted share

$

6.71

$

5.94

13.0

%

Diluted shares

248.2

256.4

(3.2)

%

Benefit expense as a percentage of premiums

85.6

%

84.2

%

140

bp

Selling, general and administrative expense as a percentage of total operating revenue

12.2

%

12.8

%

(60)

bp

Income before income taxes as a percentage of total revenue

6.7

%

7.1

%

(40)

bp

"NM" = calculation not meaningful

Anthem, Inc.

Consolidated Balance Sheets

(In millions)

March 31,
2021

December 31,
2020

Assets

(Unaudited)

Current assets:

Cash and cash equivalents

$

9,326

$

5,741

Fixed maturity securities

24,555

23,433

Equity securities, current

3,630

1,559

Premium receivables

6,111

5,279

Self-funded receivables

3,109

2,849

Other receivables

3,071

2,830

Other current assets

4,693

4,060

Total current assets

54,495

45,751

Long-term investments:

Fixed maturity securities

558

562

Other invested assets

4,474

4,285

Property and equipment, net

3,533

3,483

Goodwill

21,708

21,691

Other intangible assets

9,352

9,405

Other noncurrent assets

1,563

1,438

Total assets

$

95,683

$

86,615

Liabilities and equity

Liabilities

Current liabilities:

Medical claims payable

$

12,347

$

11,359

Other policyholder liabilities

5,075

4,590

Unearned income

1,139

1,259

Accounts payable and accrued expenses

5,329

5,493

Current portion of long-term debt

700

700

Other current liabilities

10,159

6,052

Total current liabilities

34,749

29,453

Long-term debt, less current portion

22,534

19,335

Reserves for future policy benefits

776

794

Deferred tax liabilities, net

1,961

2,019

Other noncurrent liabilities

1,745

1,815

Total liabilities

61,765

53,416

Shareholders’ equity

Common stock

2

3

Additional paid-in capital

9,253

9,244

Retained earnings

24,793

23,802

Accumulated other comprehensive (loss) income

(195)

150

Total shareholders’ equity

33,853

33,199

Noncontrolling interests

65

Total equity

33,918

33,199

Total liabilities and equity

$

95,683

$

86,615

Anthem, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(In millions)

Three Months Ended March 31

2021

2020

Operating activities

Net income

$1,667

$1,523

Adjustments to reconcile net income to net cash provided by operating activities:

Net realized gains on financial instruments

4

81

Depreciation and amortization

282

270

Deferred income taxes

31

57

Share-based compensation

64

67

Changes in operating assets and liabilities:

Receivables, net

(1,258)

(639)

Other invested assets

(20)

63

Other assets

(288)

(525)

Policy liabilities

1,455

692

Unearned income

(119)

(109)

Accounts payable and other liabilities

358

588

Income taxes

438

491

Other, net

(109)

(44)

Net cash provided by operating activities

2,505

2,515

Investing activities

Purchases of investments

(6,978)

(3,896)

Proceeds from sale of investments

4,650

2,728

Maturities, calls and redemptions from investments

998

597

Changes in securities lending collateral

(731)

(77)

Purchases of subsidiaries, net of cash acquired

(27)

(1,908)

Purchases of property and equipment

(204)

(204)

Other, net

(15)

(24)

Net cash used in investing activities

(2,307)

(2,784)

Financing activities

Net (repayments of)/proceeds from commercial paper borrowings

(250)

905

Net proceeds from short-term borrowings

375

Net proceeds from long-term borrowings

3,462

248

Changes in securities lending payable

731

77

Repurchase and retirement of common stock

(447)

(529)

Cash dividends

(277)

(240)

Proceeds from issuance of common stock under employee stock plans

89

44

Taxes paid through withholding of common stock under employee stock plans

(91)

(107)

Other, net

171

(94)

Net cash used in financing activities

3,388

679

Effect of foreign exchange rates on cash and cash equivalents

(1)

(2)

Change in cash and cash equivalents

3,585

408

Cash and cash equivalents at beginning of period

5,741

4,937

Cash and cash equivalents at end of period

$9,326

$5,345

Anthem, Inc.

Reconciliation of Medical Claims Payable

Three Months Ended

March 31

Years Ended December 31

2021

2020

2020

2019

2018

(In millions)

(Unaudited)

(Unaudited)

Gross medical claims payable, beginning of period

$

11,135

$

8,647

$

8,647

$

7,266

$

7,814

Ceded medical claims payable, beginning of period

(46)

(33)

(33)

(34)

(105)

Net medical claims payable, beginning of period

11,089

8,614

8,614

7,232

7,709

Business combinations and purchase adjustments

339

339

199

Net incurred medical claims:

Current year

24,215

21,230

85,094

78,695

69,581

Prior years redundancies(1)

(1,488)

(700)

(637)

(500)

(930)

Total net incurred medical claims

22,727

20,530

84,457

78,195

68,651

Net payments attributable to:

Current year medical claims

15,031

13,744

74,629

70,294

62,748

Prior years medical claims

6,748

6,109

7,692

6,519

6,579

Total net payments

21,779

19,853

82,321

76,813

69,327

Net medical claims payable, end of period

12,037

9,630

11,089

8,614

7,232

Ceded medical claims payable, end of period

39

60

46

33

34

Gross medical claims payable, end of period

$

12,076

$

9,690

$

11,135

$

8,647

$

7,266

Current year medical claims paid as a percentage of current year net incurred medical claims

62.1

%

64.7

%

87.7

%

89.3

%

90.2

%

Prior year redundancies in the current year as a percentage of prior year net medical claims payable less prior year redundancies in the current year

15.5

%

8.8

%

8.0

%

7.4

%

13.7

%

Prior year redundancies in the current year as a percentage of prior year net incurred medical claims

1.8

%

0.9

%

0.8

%

0.7

%

1.3

%

(1)

Negative amounts reported for net incurred medical claims related to prior years result from claims being settled for amounts less than originally estimated.

Anthem, Inc.

GAAP Reconciliation

(Unaudited)

Anthem, Inc. has referenced "Adjusted Net Income" and "Adjusted Net Income Per Share," which are non-GAAP measures, in this document. These non-GAAP measures are not intended to be alternatives to any measure calculated in accordance with GAAP. In addition to these non-GAAP measures, references are made to the measures "Operating Revenue" and "Operating Gain." Each of these measures is provided to further aid investors in understanding and analyzing the company’s core operating results and comparing Anthem, Inc.’s financial results. A reconciliation of Operating Revenue to Total Revenue is set forth in the Consolidated Statements of Income herein. A reconciliation of the non-GAAP measures to the most directly comparable measures calculated in accordance with GAAP, together with a reconciliation of reportable segments operating gain to income before income tax expense, is reported below. Prior amounts may be grouped differently to conform to current presentation.

Three Months Ended
March 31

(In millions, except per share data)

2021

2020

Change

Shareholders' net income

$

1,665

$

1,523

9.3

%

Add / (Subtract):

Net realized losses on financial instruments

4

81

Amortization of other intangible assets

80

83

Loss on extinguishment of debt

1

Transaction and integration related costs

9

12

Litigation expenses

6

8

Tax impact of non-GAAP adjustments

(25)

(46)

Net adjustment items

74

139

Adjusted shareholders' net income

$

1,739

$

1,662

4.6

%

Shareholders' net income per diluted share

$

6.71

$

5.94

13.0

%

Add / (Subtract):

Net realized losses on financial instruments

0.02

0.31

Amortization of other intangible assets

0.32

0.32

Loss on extinguishment of debt

Transaction and integration related costs

0.04

0.05

Litigation expenses

0.02

0.03

Tax impact of non-GAAP adjustments

(0.10)

(0.18)

Rounding impact

0.01

Net adjustment items

0.30

0.54

Adjusted shareholders' net income per diluted share

$

7.01

$

6.48

8.2

%

Full Year
2021 Outlook

Shareholders' net income per diluted share

Greater than $24.05

Add / (Subtract):

Net realized losses on financial instruments

$0.02

Transaction and integration related costs

$0.04

Litigation expenses

$0.02

Amortization of other intangible assets

Approximately $1.31

Tax impact of non-GAAP adjustments

Approximately $(0.34)

Net adjustment items

Approximately $1.05

Adjusted shareholders' net income per diluted share

Greater than $25.10

Three Months Ended
March 31

(In millions)

2021

2020

Change

Reportable segments operating gain

$

2,161

$

2,194

(1.5)

%

Net investment income

291

254

Net realized losses on financial instruments

(4)

(81)

Interest expense

(192)

(194)

Amortization of other intangible assets

(80)

(83)

Loss on extinguishment of debt

(1)

Income before income tax expense

$

2,176

$

2,089

4.2

%

Anthem, Inc.

Reclassified Membership Summary

(Unaudited and in Thousands)

Medical Membership

December 31,
2020

September 30,

2020

June 30,
2020

March 31,

2020

Commercial & Specialty Business

Individual

680

701

711

717

Group Risk-Based

3,799

3,774

3,789

3,841

Commercial Risk-Based

4,479

4,475

4,500

4,558

BlueCard®

6,059

6,106

6,171

6,197

Group Fee-Based

19,551

19,508

19,699

19,905

Commercial Fee-Based

25,610

25,614

25,870

26,102

Total Commercial & Specialty Business

30,089

30,089

30,370

30,660

Government Business

Medicare Advantage

1,428

1,416

1,366

1,341

Medicare Supplement

933

933

921

914

Total Medicare

2,361

2,349

2,287

2,255

Medicaid

8,852

8,569

8,180

7,615

Federal Employees Health Benefits

1,623

1,618

1,616

1,614

Total Government Business

12,836

12,536

12,083

11,484

Total Medical Membership

42,925

42,625

42,453

42,144

Other Membership

Life and Disability Members

5,064

5,029

5,110

5,158

Dental Members

6,385

6,356

6,400

6,476

Dental Administration Members

1,316

1,315

1,318

1,311

Vision Members

7,536

7,487

7,457

7,510

Medicare Part D Standalone Members

413

405

392

383

Forward-Looking Statements

This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our views about future events and financial performance and are generally not historical facts. Words such as "expect," "feel," "believe," "will," "may," "should," "anticipate," "intend," "estimate," "project," "forecast," "plan" and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to: financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. You are cautioned not to place undue reliance on these forward- looking statements that speak only as of the date hereof. You are also urged to carefully review and consider the various risks and other disclosures discussed in our reports filed with the U.S. Securities and Exchange Commission from time to time, which attempt to advise interested parties of the factors that affect our business. Except to the extent otherwise required by federal securities laws, we do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof. These risks and uncertainties include, but are not limited to: the impact of large scale medical emergencies, such as public health epidemics and pandemics, including COVID-19, and catastrophes; trends in healthcare costs and utilization rates; our ability to secure sufficient premium rates, including regulatory approval for and implementation of such rates; the impact of federal and state regulation, including ongoing changes in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended (collectively, the "ACA") and the ultimate outcome of legal challenges to the ACA; changes in economic and market conditions, as well as regulations that may negatively affect our liquidity and investment portfolios; our ability to contract with providers on cost-effective and competitive terms; competitive pressures and our ability to adapt to changes in the industry and develop and implement strategic growth opportunities; reduced enrollment; unauthorized disclosure of member or employee sensitive or confidential information, including the impact and outcome of any investigations, inquiries, claims and litigation related thereto; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations imposed thereon; our ability to maintain and achieve improvement in Centers for Medicare and Medicaid Services Star ratings and other quality scores and funding risks with respect to revenue received from participation therein; a negative change in our healthcare product mix; costs and other liabilities associated with litigation (including the ultimate outcome of litigation between Cigna Corporation and us related to the merger agreement between the parties), government investigations, audits or reviews; risks and uncertainties related to our pharmacy benefit management ("PBM"), business including non-compliance by any party with the PBM services agreement between us and CaremarkPCS Health, L.L.C.; medical malpractice or professional liability claims or other risks related to healthcare and PBM services provided by our subsidiaries; general risks associated with mergers, acquisitions, joint ventures and strategic alliances; changes in U.S. tax laws; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; possible restrictions in the payment of dividends from our subsidiaries and increases in required minimum levels of capital; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; the potential negative effect from our substantial amount of outstanding indebtedness; a downgrade in our financial strength ratings; the effects of any negative publicity related to the health benefits industry in general or us in particular; failure to effectively maintain and modernize our information systems; events that may negatively affect our licenses with the Blue Cross and Blue Shield Association; the impact of international laws and regulations; intense competition to attract and retain employees; and various laws and provisions in our governing documents that may prevent or discourage takeovers and business combinations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210421005300/en/

Contacts

Investor Relations
Stephen Tanal
Stephen.Tanal@anthem.com

Media
Michelle Vanstory
Michelle.Vanstory@anthem.com