Business Context and Reporting Period
This Form 8-K is a current report filed by Anthem, Inc. (now Elevance Health, Inc.) on June 14, 2017. The filing serves as a Regulation FD disclosure regarding upcoming investor communications scheduled between June 14, 2017, and June 30, 2017.
Key Financial Metrics
The filing does not report historical revenue, profit, cash flow, margins, debt, or liquidity figures for a specific reporting period. Instead, it provides forward-looking per-share earnings guidance for the full year 2017:
- Full Year 2017 Net Income Guidance: Greater than $10.37 per share.
- Unfavorable Items: The net income guidance includes greater than $1.23 per share of net unfavorable items.
- Adjusted Net Income Guidance: Excluding unfavorable items, the company expects adjusted net income to be greater than $11.60 per share.
Material Changes
The filing does not disclose material changes to financial results compared to prior periods. It explicitly states that the guidance does not include any adjustment items beyond those reported in the Company's first quarter 2017 earnings release.
Guidance, Outlook, and Risks
Management Commentary and Outlook: Officers intend to reaffirm the full-year 2017 net income guidance during investor meetings. The guidance assumes no new adjustment items beyond Q1 2017.
Risks and Contingencies: The filing includes an extensive list of risks 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 participation in managed care.
- 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 claims for damages and termination fees.
- Operational Risks: Provider contracting, Medicare/Medicaid compliance, financial strength rating downgrades, and cyber security (referencing the February 2015 attack).
- Financial Risks: Liquidity constraints, investment portfolio performance, and substantial outstanding indebtedness.
Investor Verification Checklist
- Verify the specific composition of the "$1.23 per share" of net unfavorable items referenced in the Q1 2017 earnings release.
- Monitor the status and potential financial impact of the litigation between Anthem and Cigna Corporation.
- Review regulatory updates regarding the Affordable Care Act and its potential repeal or modification.
- Assess the company's ability to secure sufficient premium rates in the Individual and Small Group markets.
- Confirm the status of the Express Scripts, Inc. pharmacy benefit management services agreement.