Financials

Financial Highlights

Total Revenue
‍(in billions)

2018

$92.1

2019

$104.2

2020

$121.9

Total Medical Membership
‍(in millions)

2018

39.9

2019

41.0

2020

42.9

Net Income Per Diluted Share
‍(in whole dollars)

2018

$14.19

2019

$18.47

2020

$17.98

Adjusted Net Income Per Diluted Share
‍(in whole dollars)

2018

$15.89

2019

$19.44

2020

$22.48

Selling, General and Administrative Expense Ratio

2018

15.3%

2019

13.0%

2020

14.4%

Benefit Expense Ratio

2018

84.2%

2019

86.8%

2020

84.6%

Operating Cash Flow
‍(in billions)

2018

$3.8

2019

$6.1

2020

$10.7

Funding Arrangement

Self-funded 25,296

Fully insured 17,296

Customer Type

Local group 15,614

Medicaid 8,852

National account 7,736

BlueCard® 6,059

Medicare 2,361

FEHB 1,623

Individual 680

Financial and Membership Highlights

(dollars in millions, except per share data)	2020	2019	2018
Operating Results
Total operating revenue	$120,808	$103,141	$91,341
Total revenue	121,867	104,213	92,105
Net income	4,572	4,807	3,750

Net Income Per Share
Basic	$18.23	$18.81	$14.53
Diluted	17.98	18.47	14.19
Dividends per share	3.80	3.20	3.00

Balance Sheet Information
Total assets	$86,615	$77,453	$71,571
Total liabilities	53,416	45,725	43,030
Total shareholders’ equity	33,199	31,728	28,541

Medical Membership (000’s)
Commercial and specialty business	30,089	30,022	29,814
Government business	12,836	10,978	10,124
Total medical membership	42,925	41,000	39,938

Customer Type
Local group	15,614	15,682	15,733
Individual	680	684	655
National:
National accounts	7,736	7,596	7,588
BlueCard^®	6,059	6,060	5,838
Total national	13,795	13,656	13,426

Medicare	2,361	2,119	1,852
Medicaid	8,852	7,265	6,716
FEHB	1,623	1,594	1,556
Total medical membership	42,925	41,000	39,938

Funding Arrangement
Self-funded	25,629	25,418	25,287
Fully insured	17,296	15,582	14,651
Total medical membership	42,925	41,000	39,938

Other Membership
Life and disability members	5,064	5,259	4,795
Dental members	6,385	6,263	5,807
Dental administration members	1,316	5,516	5,327
Vision members	7,536	7,261	6,946

The information presented above should be read in conjunction with the audited consolidated financial statements and accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Anthem’s 2020 Annual Report on Form 10-K.

Consolidated Balance Sheets

(in millions, except share data)	December 31, 2020	December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$5,741	$4,937
Fixed maturity securities, current (amortized cost of $22,222 and $19,021)	23,433	19,676
Equity securities	1,559	1,009
Premium receivables	5,279	5,014
Self-funded receivables	2,849	2,570
Other receivables	2,830	2,807
Other current assets	4,060	3,020
Total current assets	45,751	39,033
Long-term investments:
Fixed maturity securities (amortized cost of $532 and $487)	562	505
Other invested assets	4,285	4,258
Property and equipment, net	3,483	3,133
Goodwill	21,691	20,500
Other intangible assets	9,405	8,674
Other noncurrent assets	1,438	1,350
Total assets	$86,615	$77,453

Liabilities and shareholders’ equity
Liabilities
Current liabilities:
Policy liabilities:
Medical claims payable	$11,359	$8,842
Other policyholder liabilities	4,590	3,050
Unearned income	1,259	1,017
Accounts payable and accrued expenses	5,493	4,198
Short-term borrowings	—	700
Current portion of long-term debt	700	1,598
Other current liabilities	6,052	4,127
Total current liabilities	29,453	23,532
Long-term debt, less current portion	19,335	17,787
Reserves for future policy benefits	794	759
Deferred tax liabilities, net	2,019	2,227
Other noncurrent liabilities	1,815	1,420
Total liabilities	$53,416	$45,725
Commitments and contingencies – Note 14
Shareholders’ equity
Preferred stock, without par value, shares authorized – 100,000,000; shares issued and outstanding – none	—	—
Common stock, par value $0.01, shares authorized – 900,000,000; shares issued and outstanding – 245,401,430 and 252,922,161	3	3
Additional paid-in capital	9,244	9,448
Retained earnings	23,802	22,573
Accumulated other comprehensive income (loss)	150	(296)
Total shareholders’ equity	33,199	31,728
Total liabilities and shareholders’ equity	$86,615	$77,453

The information presented above should be read in conjunction with the audited financial statements and accompanying notes included in Anthem’s 2020 Annual Report on Form 10-K.

Consolidated Statements of Income

Years Ended December 31
(in millions, except per share data)	2020	2019	2018
Revenues
Premiums	$104,109	$94,173	$85,421
Product revenue	10,384	2,760	—
Administrative fees and other revenue	6,315	6,208	5,920
Total operating revenue	120,808	103,141	91,341
Net investment income	877	1,005	970
Net realized gains (losses) on financial instruments	182	67	(206)
Total revenues	121,867	104,213	92,105
Expenses
Benefit expense	88,045	81,786	71,895
Cost of products sold	8,953	1,992	—
Selling, general and administrative expense	17,450	13,364	14,020
Interest expense	784	746	753
Amortization of other intangible assets	361	338	358
Loss on extinguishment of debt	36	2	11
Total expenses	115,629	98,228	87,037
Income before income tax expense	6,238	5,985	5,068
Income tax expense	1,666	1,178	1,318
Net income	$4,572	$4,807	$3,750
Net income per share
Basic	$18.23	$18.81	$14.53
Diluted	$17.98	$18.47	$14.19
Dividends per share	$3.80	$3.20	$3.00

The information presented above should be read in conjunction with the audited financial statements and accompanying notes included in Anthem’s 2020 Annual Report on Form 10-K.

Consolidated Statements of Comprehensive Income

Years Ended December 31
(in millions)	2020	2019	2018
Net income	$4,572	$4,807	$3,750
Other comprehensive income (loss), net of tax:
Change in net unrealized gains/losses on investments	428	680	(418)
Change in non-credit component of other-than-temporary impairment losses on investments	—	—	(2)
Change in net unrealized gains/losses on cash flow hedges	12	(16)	37
Change in net periodic pension and post-retirement costs	(1)	26	(90)
Foreign currency translation adjustments	7	—	(1)
Other comprehensive income (loss)	446	690	(474)
Total comprehensive income	$5,018	$5,497	$3,276

The information presented above should be read in conjunction with the audited financial statements and accompanying notes included in Anthem’s 2020 Annual Report on Form 10-K.

Consolidated Statements of Cash Flows

Years Ended December 31
(in millions)	2020	2019	2018
Operating activities
Net income	$4,572	$4,807	$3,750
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized (gains) losses on financial instruments	(182)	(67)	206
Depreciation and amortization	1,154	1,133	1,132
Deferred income taxes	(540)	81	91
Impairment of property and equipment	198	—	—
Share-based compensation	283	294	226
Changes in operating assets and liabilities:
Receivables, net	(256)	(1,053)	(695)
Other invested assets	(32)	(48)	(1)
Other assets	(283)	(170)	(26)
Policy liabilities	3,528	1,826	(1,059)
Unearned income	202	115	(36)
Accounts payable and other liabilities	1,978	(445)	97
Income taxes	72	(325)	323
Other, net	(6)	(87)	(181)
Net cash provided by operating activities	10,688	6,061	3,827
Investing activities
Purchases of investments	(19,492)	(22,954)	(9,671)
Proceeds from sales of investments	11,318	18,598	9,662
Maturities, calls and redemptions from investments	4,741	2,437	1,938
Changes in securities lending collateral	(849)	254	(149)
Purchases of subsidiaries, net of cash acquired	(1,976)	—	(1,760)
Purchases of property and equipment	(1,021)	(1,077)	(1,208)
Other, net	(45)	(50)	(71)
Net cash used in investing activities	(7,324)	(2,792)	(1,259)
Financing activities
Net repayments of commercial paper borrowings	(150)	(297)	(107)
Proceeds from long-term borrowings	2,484	2,473	835
Repayments of long-term borrowings	(1,932)	(1,123)	(1,684)
Proceeds from short-term borrowings	970	7,590	9,120
Repayments of short-term borrowings	(1,670)	(8,035)	(9,250)
Changes in securities lending payable	849	(254)	150
Proceeds from issuance of common stock under Equity Units stock purchase contracts	—	—	1,250
Repurchase and retirement of common stock	(2,700)	(1,701)	(1,685)
Cash dividends	(954)	(818)	(776)
Proceeds from issuance of common stock under employee stock plans	176	187	173
Taxes paid through withholding of common stock under employee stock plans	(128)	(84)	(81)
Other, net	488	(204)	(186)
Net cash used in financing activities	(2,567)	(2,266)	(2,241)
Effect of foreign exchange rates on cash and cash equivalents	7	—	(2)
Change in cash and cash equivalents	804	1,003	325
Cash and cash equivalents at beginning of year	4,937	3,934	3,609
Cash and cash equivalents at end of year	$5,741	$4,937	$3,934

The information presented above should be read in conjunction with the audited financial statements and accompanying notes included in Anthem’s 2020 Annual Report on Form 10-K.

GAAP Reconciliation (Unaudited)

We have referenced “Adjusted Net Income Per Diluted Share”, which is a non-GAAP measure, in this document. This non-GAAP measure is not intended to be an alternative to any measure calculated in accordance with GAAP. Rather, this non-GAAP measure is intended to aid investors in understanding and analyzing our core operating results and comparing our financial results. A reconciliation of this measure to the most directly comparable measure calculated in accordance with GAAP is presented below.

Years Ended December 31
	2020	2019	2018
Net income per diluted share	$17.98	$18.47	$14.19
Add / (Subtract):
Net realized (gains) losses	(0.72)	(0.26)	0.78
Amortization of intangibles	1.42	1.30	1.36
Loss on extinguishment of debt	0.14	0.01	0.04
Business optimization charges	2.57	—	—
BCBSA litigation settlement	2.15	—	—
Transaction and integration related costs	0.19	0.04	0.03
Litigation expenses	0.16	0.20	—
Tax impact of non GAAP adjustments	(1.42)	(0.32)	(0.51)
Rounding impact	0.01	—	—
Net adjustment items	4.50	0.97	1.70
Adjusted net income per diluted share	$22.48	$19.44	$15.89