Elevance Health(US:ELV)2024-07-17 19:01PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents Elevance Health's unaudited consolidated financial statements, including Balance Sheets, Income, Comprehensive Income, Cash Flows, and Equity Statements Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Cash Flows Consolidated Statements of Changes in Equity Consolidated Financial Highlights (Six Months Ended June 30): | Metric | 2024 (Millions USD) | 2023 (Millions USD) | | :-------------------------------- | :------------------ | :------------------ | | Total Operating Revenue | 85,496 | 85,275 | | Net Investment Income | 973 | 803 | | Net Income | 4,550 | 3,860 | | Shareholders' Net Income | 4,546 | 3,842 | | Diluted EPS | 19.44 | 16.10 | | Dividends per Share | 3.26 | 2.96 | | Net Cash Provided by Operating Activities | 2,425 | 8,419 | Consolidated Balance Sheet Highlights (As of June 30, 2024 vs. December 31, 2023): | Metric | June 30, 2024 (Millions USD) | December 31, 2023 (Millions USD) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Total Assets | 112,988 | 108,928 | | Total Liabilities | 70,691 | 69,523 | | Total Equity | 42,297 | 39,405 | Notes to Consolidated Financial Statements This section provides detailed notes to the unaudited consolidated financial statements, covering organization, accounting policies, acquisitions, investments, and segment information Note 1. Organization Elevance Health is a major US health insurer, serving nearly 46 million medical members through affiliated health plans and its brand portfolio - Elevance Health is one of the largest health insurers in the US, serving nearly 46 million medical members as of June 30, 2024198 - The company's brand portfolio includes Anthem Blue Cross/Blue Shield, Wellpoint (for non-BCBSA licensed plans), and Carelon (for healthcare-related brands and capabilities like CarelonRx and Carelon Services)221 - Elevance Health operates in four reportable segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other, with Carelon Global Solutions reclassified to Carelon Services in Q4 2023 for comparability221 Note 2. Basis of Presentation and Significant Accounting Policies This note outlines the basis of presentation for interim financial statements, details significant accounting policies for investments and receivables, and discusses recently adopted and not-yet-adopted accounting guidance - The unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial reporting, omitting certain annual disclosures unless materially changed or required222 - Fixed maturity securities are classified as 'available-for-sale' and reported at fair value, with current/long-term classification based on operational support or contractual requirements223 Allowance for Doubtful Accounts (Millions USD): | Receivable Type | June 30, 2024 | December 31, 2023 | | :-------------------- | :------------ | :---------------- | | Premium Receivables | 177 | 212 | | Self-Funded Receivables | 87 | 87 | | Other Receivables | 1,046 | 941 | - The company adopted ASU 2020-11 on January 1, 2023, changing accounting for long-duration contracts, requiring annual review of cash flow assumptions and quarterly updates to discount rates, with no material overall impact230 - New accounting pronouncements not yet adopted, including ASU 2023-07 (segment reporting), ASU 2023-09 (income taxes), and ASU 2023-05 (joint venture formations), are not expected to have a material impact231232256257 Note 3. Business Acquisitions and Divestitures This note details the company's acquisition and divestiture activities, including completed acquisitions, a business sale, and pending strategic partnerships - Completed the acquisition of Paragon Healthcare, Inc. on March 11, 2024, integrating its infusion services and injectable therapies into CarelonRx, with $411 million allocated to finite-lived intangible assets and $753 million to goodwill233 - Completed the acquisition of BioPlus Parent, LLC on February 15, 2023, enhancing CarelonRx's specialty pharmacy services, with $820 million allocated to finite-lived intangible assets and $893 million to goodwill260 - Completed the sale of life and disability businesses to StanCorp Financial Group, Inc. on April 1, 2024, resulting in a $240 million gain on sale261 - Entered into an agreement on April 12, 2024, to partner with Clayton, Dubilier & Rice (CD&R) to form Augusta Topco Holdings, L.P., combining certain care delivery assets234 - Entered into an agreement on December 31, 2023, to acquire Centers Plan for Healthy Living LLC, a managed long-term care plan, expected to close in Q3 2024262 - A $44 million goodwill impairment was recorded in Q2 2024 related to CMSI Assets classified as held for sale235 Note 4. Business Optimization Initiatives The company implemented the "2023-2024 Business Efficiency Program" to enhance operating efficiency, refine investment focus, and optimize its physical footprint - The 2023-2024 Business Efficiency Program, initiated in Q3 2023, aims to enhance operating efficiency and optimize physical footprint236 - The program includes write-offs of IT assets, contract exit costs, staff reductions, and asset impairments related to data center and office closures236 - Employee termination costs under the program were $125 million at June 30, 2024, down from $191 million at December 31, 2023265 Note 5. Investments This note details the company's investment portfolio, including fixed maturity securities, equity securities, and other invested assets, with summaries of fair values, unrealized gains/losses, and investment income Total Fixed Maturity Securities (Millions USD): | Metric | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :------------ | :---------------- | | Cost or Amortized Cost | 30,701 | 31,336 | | Gross Unrealized Gains | 313 | 496 | | Gross Unrealized Losses | (1,261) | (1,338) | | Allowance For Credit Losses | (4) | (4) | | Estimated Fair Value | 29,749 | 30,490 | Total Equity Securities (Millions USD): | Metric | June 30, 2024 | December 31, 2023 | | :-------------------- | :------------ | :---------------- | | Exchange Traded Funds | 481 | 106 | | Common Equity Securities | 35 | 45 | | Private Equity Securities | 78 | 78 | | Total | 594 | 229 | Net Losses on Investments (Millions USD): | Period | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Losses on Investments | (87) | (128) | (253) | (219) | - Unrealized losses on fixed maturity securities are primarily due to increasing interest rates and market conditions, but are not recognized into income as the company does not intend to sell these investments before recovery or maturity239 - Accrued investment income totaled $316 million at June 30, 2024, and **