Business Context and Reporting Period
This Form 8-K is a current report filed by Anthem, Inc. (now Elevance Health, Inc.) on September 12, 2017. The filing serves as a Regulation FD disclosure regarding upcoming investor communications scheduled between September 12, 2017, and September 29, 2017.
Key Financial Metrics
The filing does not provide historical revenue, profit, cash flow, margin, debt, or liquidity figures for the current or prior periods. It focuses exclusively on forward-looking earnings guidance.
- Full Year 2017 Net Income Guidance: Greater than $10.35 per share.
- Unfavorable Items: Approximately $1.35 per share included in the net income guidance.
- Adjusted Net Income Guidance: Greater than $11.70 per share (excluding the unfavorable items).
Material Changes
The filing does not report material changes to financial results compared to prior periods. It confirms that the guidance provided does not include any adjustment items beyond those already reported in the Company's second quarter 2017 earnings release.
Guidance, Outlook, and Risks
Management intends to reaffirm the full-year 2017 earnings guidance during the specified investor meetings. The filing includes an extensive list of risks and uncertainties that could cause actual results to differ from projections, including:
- Regulatory Environment: Impacts of the Affordable Care Act, potential repeal or modification of health care reform, and government regulation of health benefits.
- Market Dynamics: Trends in health care costs, utilization rates, premium rate adequacy, and competitor pricing.
- Legal and Litigation: Ongoing litigation with Cigna Corporation regarding a failed merger agreement, including potential termination fees and damages.
- Operational Risks: Provider contracting, Medicare/Medicaid compliance, financial strength ratings, and cyber security (referencing the 2015 attack).
- Financial Risks: Liquidity, indebtedness, investment portfolio performance, and potential impairment of intangible assets.
Investor Verification Checklist
- Verify the specific nature and magnitude of the $1.35 per share in "net unfavorable items" referenced in the guidance.
- Review the status and potential financial impact of the litigation between Anthem and Cigna Corporation.
- Confirm the Company's ability to secure sufficient premium rates in light of regulatory changes and health care cost trends.
- Assess the impact of the 2015 cyber attack on ongoing costs, reputation, and future risk management.
- Monitor regulatory developments regarding the Affordable Care Act and its effect on the Individual and Small Group markets.