|
☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Indiana
|
|
35-2145715
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
Title of each class
|
|
Trading symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
|
ANTM
|
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
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|
|
|
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Page
|
PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
ITEM 1.
|
|
|
|
|
|
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||
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||
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||
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||
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ITEM 2.
|
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ITEM 3.
|
||
ITEM 4.
|
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PART II. OTHER INFORMATION
|
|
|
ITEM 1.
|
||
ITEM 1A.
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
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||
ITEM 5.
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ITEM 6.
|
||
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
(In millions, except share data)
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,190
|
|
|
$
|
3,934
|
|
Fixed maturity securities, current (amortized cost of $19,267 and $16,894)
|
19,960
|
|
|
16,692
|
|
||
Equity securities, current
|
2,300
|
|
|
1,493
|
|
||
Other invested assets, current
|
10
|
|
|
21
|
|
||
Accrued investment income
|
168
|
|
|
162
|
|
||
Premium receivables
|
4,782
|
|
|
4,465
|
|
||
Self-funded receivables
|
2,555
|
|
|
2,278
|
|
||
Other receivables
|
2,870
|
|
|
2,558
|
|
||
Income taxes receivable
|
91
|
|
|
10
|
|
||
Securities lending collateral
|
465
|
|
|
604
|
|
||
Other current assets
|
2,113
|
|
|
2,104
|
|
||
Total current assets
|
39,504
|
|
|
34,321
|
|
||
Long-term investments:
|
|
|
|
||||
Fixed maturity securities (amortized cost of $500 and $486)
|
518
|
|
|
487
|
|
||
Equity securities
|
29
|
|
|
33
|
|
||
Other invested assets
|
3,914
|
|
|
3,726
|
|
||
Property and equipment, net
|
2,921
|
|
|
2,735
|
|
||
Goodwill
|
20,500
|
|
|
20,504
|
|
||
Other intangible assets
|
8,756
|
|
|
9,007
|
|
||
Other noncurrent assets
|
1,667
|
|
|
758
|
|
||
Total assets
|
$
|
77,809
|
|
|
$
|
71,571
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Policy liabilities:
|
|
|
|
||||
Medical claims payable
|
$
|
8,977
|
|
|
$
|
7,454
|
|
Reserves for future policy benefits
|
77
|
|
|
75
|
|
||
Other policyholder liabilities
|
2,503
|
|
|
2,590
|
|
||
Total policy liabilities
|
11,557
|
|
|
10,119
|
|
||
Unearned income
|
948
|
|
|
902
|
|
||
Accounts payable and accrued expenses
|
4,445
|
|
|
4,959
|
|
||
Security trades pending payable
|
542
|
|
|
197
|
|
||
Securities lending payable
|
465
|
|
|
604
|
|
||
Short-term borrowings
|
710
|
|
|
1,145
|
|
||
Current portion of long-term debt
|
700
|
|
|
849
|
|
||
Other current liabilities
|
3,867
|
|
|
3,190
|
|
||
Total current liabilities
|
23,234
|
|
|
21,965
|
|
||
Long-term debt, less current portion
|
18,820
|
|
|
17,217
|
|
||
Reserves for future policy benefits, noncurrent
|
661
|
|
|
706
|
|
||
Deferred tax liabilities, net
|
2,140
|
|
|
1,960
|
|
||
Other noncurrent liabilities
|
1,622
|
|
|
1,182
|
|
||
Total liabilities
|
46,477
|
|
|
43,030
|
|
||
Commitment and contingencies – Note 11
|
|
|
|
|
|
||
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 –
253,780,229 and 257,395,577
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
9,524
|
|
|
9,536
|
|
||
Retained earnings
|
22,104
|
|
|
19,988
|
|
||
Accumulated other comprehensive loss
|
(299
|
)
|
|
(986
|
)
|
||
Total shareholders’ equity
|
31,332
|
|
|
28,541
|
|
||
Total liabilities and shareholders’ equity
|
$
|
77,809
|
|
|
$
|
71,571
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
(In millions, except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Premiums
|
$
|
23,793
|
|
|
$
|
21,451
|
|
|
$
|
70,137
|
|
|
$
|
63,602
|
|
Administrative fees and other revenue
|
2,651
|
|
|
1,529
|
|
|
5,872
|
|
|
4,435
|
|
||||
Total operating revenue
|
26,444
|
|
|
22,980
|
|
|
76,009
|
|
|
68,037
|
|
||||
Net investment income
|
242
|
|
|
250
|
|
|
737
|
|
|
708
|
|
||||
Net realized gains on financial instruments
|
1
|
|
|
27
|
|
|
90
|
|
|
5
|
|
||||
Other-than-temporary impairment losses on investments:
|
|
|
|
|
|
|
|
||||||||
Total other-than-temporary impairment losses on investments
|
(14
|
)
|
|
(8
|
)
|
|
(36
|
)
|
|
(20
|
)
|
||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income
|
1
|
|
|
2
|
|
|
6
|
|
|
2
|
|
||||
Other-than-temporary impairment losses recognized in income
|
(13
|
)
|
|
(6
|
)
|
|
(30
|
)
|
|
(18
|
)
|
||||
Total revenues
|
26,674
|
|
|
23,251
|
|
|
76,806
|
|
|
68,732
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Benefit expense
|
20,753
|
|
|
18,185
|
|
|
60,403
|
|
|
52,959
|
|
||||
Cost of products sold
|
745
|
|
|
—
|
|
|
843
|
|
|
—
|
|
||||
Selling, general and administrative expense
|
3,418
|
|
|
3,546
|
|
|
9,862
|
|
|
10,402
|
|
||||
Interest expense
|
185
|
|
|
188
|
|
|
556
|
|
|
564
|
|
||||
Amortization of other intangible assets
|
84
|
|
|
91
|
|
|
256
|
|
|
265
|
|
||||
(Gain) loss on extinguishment of debt
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
17
|
|
||||
Total expenses
|
25,185
|
|
|
22,009
|
|
|
71,919
|
|
|
64,207
|
|
||||
Income before income tax expense
|
1,489
|
|
|
1,242
|
|
|
4,887
|
|
|
4,525
|
|
||||
Income tax expense
|
306
|
|
|
282
|
|
|
1,014
|
|
|
1,200
|
|
||||
Net income
|
$
|
1,183
|
|
|
$
|
960
|
|
|
$
|
3,873
|
|
|
$
|
3,325
|
|
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
4.64
|
|
|
$
|
3.70
|
|
|
$
|
15.11
|
|
|
$
|
12.89
|
|
Diluted
|
$
|
4.55
|
|
|
$
|
3.62
|
|
|
$
|
14.83
|
|
|
$
|
12.58
|
|
Dividends per share
|
$
|
0.80
|
|
|
$
|
0.75
|
|
|
$
|
2.40
|
|
|
$
|
2.25
|
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
|
$
|
1,183
|
|
|
$
|
960
|
|
|
$
|
3,873
|
|
|
$
|
3,325
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized gains/losses on investments
|
|
116
|
|
|
(36
|
)
|
|
711
|
|
|
(353
|
)
|
||||
Change in non-credit component of other-than-temporary impairment losses on investments
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||
Change in net unrealized losses on cash flow hedges
|
|
(34
|
)
|
|
2
|
|
|
(31
|
)
|
|
34
|
|
||||
Change in net periodic pension and postretirement costs
|
|
4
|
|
|
7
|
|
|
10
|
|
|
22
|
|
||||
Foreign currency translation adjustments
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Other comprehensive income (loss)
|
|
84
|
|
|
(29
|
)
|
|
687
|
|
|
(299
|
)
|
||||
Total comprehensive income
|
|
$
|
1,267
|
|
|
$
|
931
|
|
|
$
|
4,560
|
|
|
$
|
3,026
|
|
|
Nine Months Ended
September 30 |
||||||
(In millions)
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
3,873
|
|
|
$
|
3,325
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Net realized gains on financial instruments
|
(90
|
)
|
|
(5
|
)
|
||
Other-than-temporary impairment losses recognized in income
|
30
|
|
|
18
|
|
||
(Gain) Loss on extinguishment of debt
|
(1
|
)
|
|
17
|
|
||
Loss on disposal of assets
|
1
|
|
|
2
|
|
||
Deferred income taxes
|
(29
|
)
|
|
141
|
|
||
Amortization, net of accretion
|
778
|
|
|
752
|
|
||
Depreciation expense
|
109
|
|
|
92
|
|
||
Share-based compensation
|
226
|
|
|
135
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables, net
|
(880
|
)
|
|
(823
|
)
|
||
Other invested assets
|
(30
|
)
|
|
(17
|
)
|
||
Other assets
|
(280
|
)
|
|
(734
|
)
|
||
Policy liabilities
|
1,394
|
|
|
(556
|
)
|
||
Unearned income
|
46
|
|
|
(42
|
)
|
||
Accounts payable and accrued expenses
|
(931
|
)
|
|
756
|
|
||
Other liabilities
|
675
|
|
|
190
|
|
||
Income taxes
|
(81
|
)
|
|
273
|
|
||
Other, net
|
(76
|
)
|
|
(160
|
)
|
||
Net cash provided by operating activities
|
4,734
|
|
|
3,364
|
|
||
Investing activities
|
|
|
|
||||
Purchases of fixed maturity securities
|
(7,616
|
)
|
|
(6,790
|
)
|
||
Proceeds from fixed maturity securities:
|
|
|
|
||||
Sales
|
3,919
|
|
|
4,971
|
|
||
Maturities, calls and redemptions
|
1,583
|
|
|
1,442
|
|
||
Purchases of equity securities
|
(9,408
|
)
|
|
(812
|
)
|
||
Proceeds from sales of equity securities
|
8,671
|
|
|
2,119
|
|
||
Purchases of other invested assets
|
(286
|
)
|
|
(324
|
)
|
||
Proceeds from sales of other invested assets
|
242
|
|
|
251
|
|
||
Changes in securities lending collateral
|
139
|
|
|
(286
|
)
|
||
Purchases of subsidiaries, net of cash acquired
|
—
|
|
|
(1,732
|
)
|
||
Purchases of property and equipment
|
(726
|
)
|
|
(888
|
)
|
||
Other, net
|
(33
|
)
|
|
17
|
|
||
Net cash used in investing activities
|
(3,515
|
)
|
|
(2,032
|
)
|
||
Financing activities
|
|
|
|
||||
Net repayments of commercial paper borrowings
|
(197
|
)
|
|
(54
|
)
|
||
Proceeds from long-term borrowings
|
2,473
|
|
|
835
|
|
||
Repayments of long-term borrowings
|
(923
|
)
|
|
(1,393
|
)
|
||
Proceeds from short-term borrowings
|
6,480
|
|
|
5,300
|
|
||
Repayments of short-term borrowings
|
(6,915
|
)
|
|
(5,305
|
)
|
||
Changes in securities lending payable
|
(139
|
)
|
|
287
|
|
||
Changes in bank overdrafts
|
250
|
|
|
97
|
|
||
Proceeds from issuance of common stock under Equity Units stock purchase contracts
|
—
|
|
|
1,250
|
|
||
Repurchase and retirement of common stock
|
(1,396
|
)
|
|
(1,192
|
)
|
||
Change in collateral and settlements of debt-related derivatives
|
(34
|
)
|
|
22
|
|
||
Cash dividends
|
(616
|
)
|
|
(583
|
)
|
||
Proceeds from issuance of common stock under employee stock plans
|
137
|
|
|
133
|
|
||
Taxes paid through withholding of common stock under employee stock plans
|
(82
|
)
|
|
(77
|
)
|
||
Net cash used in financing activities
|
(962
|
)
|
|
(680
|
)
|
||
Effect of foreign exchange rates on cash and cash equivalents
|
(1
|
)
|
|
(1
|
)
|
||
Change in cash and cash equivalents
|
256
|
|
|
651
|
|
||
Cash and cash equivalents at beginning of period
|
3,934
|
|
|
3,609
|
|
||
Cash and cash equivalents at end of period
|
$
|
4,190
|
|
|
$
|
4,260
|
|
|
Nine Months Ended September 30, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Total
Shareholders’
Equity
|
|||||||||||||
(In millions)
|
Number of
Shares
|
|
Par
Value
|
|
||||||||||||||||||
December 31, 2018 (audited)
|
257.4
|
|
|
$
|
3
|
|
|
$
|
9,536
|
|
|
$
|
19,988
|
|
|
$
|
(986
|
)
|
|
$
|
28,541
|
|
Adoption of Accounting Standards Update No. 2016-02 (Note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|||||
January 1, 2019
|
257.4
|
|
|
3
|
|
|
9,536
|
|
|
20,014
|
|
|
(986
|
)
|
|
28,567
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,551
|
|
|
—
|
|
|
1,551
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
363
|
|
|
363
|
|
|||||
Repurchase and retirement of common stock
|
(1.1
|
)
|
|
—
|
|
|
(71
|
)
|
|
(223
|
)
|
|
—
|
|
|
(294
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|
—
|
|
|
(206
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
1.1
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||
Convertible debenture repurchases and conversions
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|||||
March 31, 2019
|
257.4
|
|
|
3
|
|
|
9,482
|
|
|
21,136
|
|
|
(623
|
)
|
|
29,998
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,139
|
|
|
—
|
|
|
1,139
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
240
|
|
|
240
|
|
|||||
Repurchase and retirement of common stock
|
(1.7
|
)
|
|
—
|
|
|
(70
|
)
|
|
(388
|
)
|
|
—
|
|
|
(458
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(208
|
)
|
|
—
|
|
|
(208
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
0.2
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|||||
Convertible debenture repurchases and conversions
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||||
June 30, 2019
|
255.9
|
|
|
3
|
|
|
9,494
|
|
|
21,679
|
|
|
(383
|
)
|
|
30,793
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,183
|
|
|
—
|
|
|
1,183
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|
84
|
|
|||||
Repurchase and retirement of common stock
|
(2.4
|
)
|
|
—
|
|
|
(90
|
)
|
|
(554
|
)
|
|
—
|
|
|
(644
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(204
|
)
|
|
—
|
|
|
(204
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
0.3
|
|
|
—
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|||||
September 30, 2019
|
253.8
|
|
|
$
|
3
|
|
|
$
|
9,524
|
|
|
$
|
22,104
|
|
|
$
|
(299
|
)
|
|
$
|
31,332
|
|
|
Nine Months Ended September 30, 2018
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Total
Shareholders’
Equity
|
|||||||||||||
(In millions)
|
Number of
Shares
|
|
Par
Value
|
|
||||||||||||||||||
December 31, 2017 (audited)
|
256.1
|
|
|
$
|
3
|
|
|
$
|
8,547
|
|
|
$
|
18,054
|
|
|
$
|
(101
|
)
|
|
$
|
26,503
|
|
Adoption of Accounting Standards Update No. 2016-01 (Note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
320
|
|
|
(320
|
)
|
|
—
|
|
|||||
January 1, 2018
|
256.1
|
|
|
3
|
|
|
8,547
|
|
|
18,374
|
|
|
(421
|
)
|
|
26,503
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,312
|
|
|
—
|
|
|
1,312
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(209
|
)
|
|
(209
|
)
|
|||||
Repurchase and retirement of common stock
|
(1.7
|
)
|
|
—
|
|
|
(56
|
)
|
|
(338
|
)
|
|
—
|
|
|
(394
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(198
|
)
|
|
—
|
|
|
(198
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
1.1
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||
Convertible debenture repurchases and conversions
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||||
Adoption of Accounting Standards Update No. 2018-02 (Note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|
(91
|
)
|
|
—
|
|
|||||
March 31, 2018
|
255.5
|
|
|
3
|
|
|
8,489
|
|
|
19,241
|
|
|
(721
|
)
|
|
27,012
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,053
|
|
|
—
|
|
|
1,053
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
|
(61
|
)
|
|||||
Issuance of common stock under Equity Units stock purchase contracts
|
6.0
|
|
|
—
|
|
|
1,250
|
|
|
—
|
|
|
—
|
|
|
1,250
|
|
|||||
Repurchase and retirement of common stock
|
(1.7
|
)
|
|
—
|
|
|
(60
|
)
|
|
(341
|
)
|
|
—
|
|
|
(401
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(197
|
)
|
|
—
|
|
|
(197
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
0.3
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||
June 30, 2018
|
260.1
|
|
|
3
|
|
|
9,748
|
|
|
19,756
|
|
|
(782
|
)
|
|
28,725
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
960
|
|
|
—
|
|
|
960
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(29
|
)
|
|||||
Repurchase and retirement of common stock
|
(1.6
|
)
|
|
—
|
|
|
(58
|
)
|
|
(339
|
)
|
|
—
|
|
|
(397
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(195
|
)
|
|
—
|
|
|
(195
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
0.4
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|||||
Convertible debenture repurchases and conversions
|
—
|
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
|||||
September 30, 2018
|
258.9
|
|
|
$
|
3
|
|
|
$
|
9,720
|
|
|
$
|
20,182
|
|
|
$
|
(811
|
)
|
|
$
|
29,094
|
|
1.
|
Organization
|
2.
|
Basis of Presentation and Significant Accounting Policies
|
3.
|
Business Acquisitions
|
4.
|
Investments
|
|
|
|
|
|
|
|
|
|
Non-Credit
Component of
OTTIs
Recognized in Accumulated
Other
Comprehensive
Loss
|
||||||||||||||
|
Cost or
Amortized Cost |
|
Gross
Unrealized Gains |
|
Gross Unrealized Losses
|
|
Estimated
Fair Value |
|
|||||||||||||||
|
|
|
Less than
12 Months
|
|
12 Months
or Greater
|
|
|
||||||||||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States Government securities
|
$
|
487
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
497
|
|
|
$
|
—
|
|
Government sponsored securities
|
125
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
131
|
|
|
—
|
|
||||||
States, municipalities and political subdivisions
|
4,469
|
|
|
275
|
|
|
(1
|
)
|
|
(1
|
)
|
|
4,742
|
|
|
—
|
|
||||||
Corporate securities
|
9,040
|
|
|
341
|
|
|
(17
|
)
|
|
(25
|
)
|
|
9,339
|
|
|
(5
|
)
|
||||||
Residential mortgage-backed securities
|
3,914
|
|
|
111
|
|
|
(4
|
)
|
|
(4
|
)
|
|
4,017
|
|
|
—
|
|
||||||
Commercial mortgage-backed securities
|
87
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
||||||
Other securities
|
1,645
|
|
|
24
|
|
|
(2
|
)
|
|
(5
|
)
|
|
1,662
|
|
|
—
|
|
||||||
Total fixed maturity securities
|
$
|
19,767
|
|
|
$
|
770
|
|
|
$
|
(24
|
)
|
|
$
|
(35
|
)
|
|
$
|
20,478
|
|
|
$
|
(5
|
)
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States Government securities
|
$
|
414
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
416
|
|
|
$
|
—
|
|
Government sponsored securities
|
108
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
108
|
|
|
—
|
|
||||||
States, municipalities and political subdivisions
|
4,716
|
|
|
91
|
|
|
(3
|
)
|
|
(19
|
)
|
|
4,785
|
|
|
—
|
|
||||||
Corporate securities
|
8,189
|
|
|
33
|
|
|
(170
|
)
|
|
(115
|
)
|
|
7,937
|
|
|
(3
|
)
|
||||||
Residential mortgage-backed securities
|
2,769
|
|
|
31
|
|
|
(3
|
)
|
|
(47
|
)
|
|
2,750
|
|
|
—
|
|
||||||
Commercial mortgage-backed securities
|
69
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
67
|
|
|
—
|
|
||||||
Other securities
|
1,115
|
|
|
14
|
|
|
(8
|
)
|
|
(5
|
)
|
|
1,116
|
|
|
—
|
|
||||||
Total fixed maturity securities
|
$
|
17,380
|
|
|
$
|
173
|
|
|
$
|
(184
|
)
|
|
$
|
(190
|
)
|
|
$
|
17,179
|
|
|
$
|
(3
|
)
|
|
Less than 12 Months
|
|
12 Months or Greater
|
||||||||||||||||||
(Securities are whole amounts)
|
Number of
Securities
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Loss
|
|
Number of
Securities
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Loss
|
||||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States Government securities
|
8
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
5
|
|
|
$
|
14
|
|
|
$
|
—
|
|
Government sponsored securities
|
6
|
|
|
5
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
66
|
|
|
108
|
|
|
(1
|
)
|
|
16
|
|
|
13
|
|
|
(1
|
)
|
||||
Corporate securities
|
455
|
|
|
711
|
|
|
(17
|
)
|
|
338
|
|
|
509
|
|
|
(25
|
)
|
||||
Residential mortgage-backed securities
|
228
|
|
|
422
|
|
|
(4
|
)
|
|
215
|
|
|
323
|
|
|
(4
|
)
|
||||
Commercial mortgage-backed securities
|
1
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|
8
|
|
|
—
|
|
||||
Other securities
|
190
|
|
|
483
|
|
|
(2
|
)
|
|
107
|
|
|
332
|
|
|
(5
|
)
|
||||
Total fixed maturity securities
|
954
|
|
|
$
|
1,781
|
|
|
$
|
(24
|
)
|
|
688
|
|
|
$
|
1,200
|
|
|
$
|
(35
|
)
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States Government securities
|
5
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
25
|
|
|
$
|
79
|
|
|
$
|
(1
|
)
|
Government sponsored securities
|
8
|
|
|
11
|
|
|
—
|
|
|
24
|
|
|
31
|
|
|
(1
|
)
|
||||
States, municipalities and political subdivisions
|
177
|
|
|
295
|
|
|
(3
|
)
|
|
604
|
|
|
1,032
|
|
|
(19
|
)
|
||||
Corporate securities
|
2,185
|
|
|
4,503
|
|
|
(170
|
)
|
|
1,220
|
|
|
2,072
|
|
|
(115
|
)
|
||||
Residential mortgage-backed securities
|
259
|
|
|
383
|
|
|
(3
|
)
|
|
816
|
|
|
1,458
|
|
|
(47
|
)
|
||||
Commercial mortgage-backed securities
|
6
|
|
|
11
|
|
|
—
|
|
|
19
|
|
|
37
|
|
|
(2
|
)
|
||||
Other securities
|
193
|
|
|
599
|
|
|
(8
|
)
|
|
93
|
|
|
237
|
|
|
(5
|
)
|
||||
Total fixed maturity securities
|
2,833
|
|
|
$
|
5,849
|
|
|
$
|
(184
|
)
|
|
2,801
|
|
|
$
|
4,946
|
|
|
$
|
(190
|
)
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
$
|
628
|
|
|
$
|
628
|
|
Due after one year through five years
|
5,569
|
|
|
5,701
|
|
||
Due after five years through ten years
|
5,504
|
|
|
5,731
|
|
||
Due after ten years
|
4,065
|
|
|
4,311
|
|
||
Mortgage-backed securities
|
4,001
|
|
|
4,107
|
|
||
Total fixed maturity securities
|
$
|
19,767
|
|
|
$
|
20,478
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Proceeds
|
$
|
2,048
|
|
|
$
|
1,532
|
|
|
$
|
5,502
|
|
|
$
|
6,413
|
|
Gross realized gains
|
26
|
|
|
12
|
|
|
66
|
|
|
73
|
|
||||
Gross realized losses
|
(9
|
)
|
|
(16
|
)
|
|
(43
|
)
|
|
(85
|
)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Equity securities:
|
|
|
|
||||
Exchange traded funds
|
$
|
563
|
|
|
$
|
2
|
|
Fixed maturity mutual funds
|
631
|
|
|
557
|
|
||
Common equity securities
|
829
|
|
|
654
|
|
||
Private equity securities
|
306
|
|
|
313
|
|
||
Total
|
$
|
2,329
|
|
|
$
|
1,526
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net realized (losses) gains recognized on equity securities
|
$
|
(16
|
)
|
|
$
|
27
|
|
|
$
|
75
|
|
|
$
|
(33
|
)
|
Less: Net realized gains recognized on equity securities sold during the period
|
(6
|
)
|
|
(11
|
)
|
|
(55
|
)
|
|
(208
|
)
|
||||
Unrealized (losses) gains recognized on equity securities still held at September 30
|
$
|
(22
|
)
|
|
$
|
16
|
|
|
$
|
20
|
|
|
$
|
(241
|
)
|
|
Overnight and Continuous
|
||
Securities lending transactions
|
|
||
United States Government securities
|
$
|
132
|
|
Corporate securities
|
324
|
|
|
Equity securities
|
9
|
|
|
Total
|
$
|
465
|
|
5.
|
Derivative Financial Instruments
|
6.
|
Fair Value
|
Level Input
|
|
Input Definition
|
Level I
|
|
Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
|
Level II
|
|
Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.
|
Level III
|
|
Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
September 30, 2019
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
1,258
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,258
|
|
Fixed maturity securities, available-for-sale:
|
|
|
|
|
|
|
|
||||||||
United States Government securities
|
—
|
|
|
497
|
|
|
—
|
|
|
497
|
|
||||
Government sponsored securities
|
—
|
|
|
131
|
|
|
—
|
|
|
131
|
|
||||
States, municipalities and political subdivisions
|
—
|
|
|
4,742
|
|
|
—
|
|
|
4,742
|
|
||||
Corporate securities
|
—
|
|
|
9,028
|
|
|
311
|
|
|
9,339
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
4,014
|
|
|
3
|
|
|
4,017
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||
Other securities
|
—
|
|
|
1,651
|
|
|
11
|
|
|
1,662
|
|
||||
Total fixed maturity securities, available-for-sale
|
—
|
|
|
20,153
|
|
|
325
|
|
|
20,478
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange traded funds
|
563
|
|
|
—
|
|
|
—
|
|
|
563
|
|
||||
Fixed maturity mutual funds
|
—
|
|
|
631
|
|
|
—
|
|
|
631
|
|
||||
Common equity securities
|
796
|
|
|
33
|
|
|
—
|
|
|
829
|
|
||||
Private equity securities
|
—
|
|
|
—
|
|
|
306
|
|
|
306
|
|
||||
Total equity securities
|
1,359
|
|
|
664
|
|
|
306
|
|
|
2,329
|
|
||||
Other invested assets, current
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Securities lending collateral
|
—
|
|
|
465
|
|
|
—
|
|
|
465
|
|
||||
Derivatives
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||
Total assets
|
$
|
2,627
|
|
|
$
|
21,307
|
|
|
$
|
631
|
|
|
$
|
24,565
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
1,815
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,815
|
|
Fixed maturity securities, available-for-sale:
|
|
|
|
|
|
|
|
||||||||
United States Government securities
|
—
|
|
|
416
|
|
|
—
|
|
|
416
|
|
||||
Government sponsored securities
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
||||
States, municipalities and political subdivisions
|
—
|
|
|
4,785
|
|
|
—
|
|
|
4,785
|
|
||||
Corporate securities
|
2
|
|
|
7,648
|
|
|
287
|
|
|
7,937
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
2,744
|
|
|
6
|
|
|
2,750
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
67
|
|
|
—
|
|
|
67
|
|
||||
Other securities
|
—
|
|
|
1,099
|
|
|
17
|
|
|
1,116
|
|
||||
Total fixed maturity securities, available-for-sale
|
2
|
|
|
16,867
|
|
|
310
|
|
|
17,179
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange traded funds
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Fixed maturity mutual funds
|
—
|
|
|
557
|
|
|
—
|
|
|
557
|
|
||||
Common equity securities
|
601
|
|
|
53
|
|
|
—
|
|
|
654
|
|
||||
Private equity securities
|
—
|
|
|
—
|
|
|
313
|
|
|
313
|
|
||||
Total equity securities
|
603
|
|
|
610
|
|
|
313
|
|
|
1,526
|
|
||||
Other invested assets, current
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||
Securities lending collateral
|
314
|
|
|
290
|
|
|
—
|
|
|
604
|
|
||||
Derivatives
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||
Total assets
|
$
|
2,755
|
|
|
$
|
17,783
|
|
|
$
|
623
|
|
|
$
|
21,161
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
Corporate
Securities
|
|
Residential
Mortgage-
backed
Securities
|
|
Other
Securities
|
|
Equity
Securities
|
|
Total
|
||||||||||
Three Months Ended September 30, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance at July 1, 2019
|
$
|
297
|
|
|
$
|
3
|
|
|
$
|
11
|
|
|
$
|
305
|
|
|
$
|
616
|
|
Total gains (losses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Recognized in net income
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(8
|
)
|
|||||
Recognized in accumulated other comprehensive loss
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Purchases
|
28
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
53
|
|
|||||
Sales
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(28
|
)
|
|||||
Settlements
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||
Transfers into Level III
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Transfers out of Level III
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Ending balance at September 30, 2019
|
$
|
311
|
|
|
$
|
3
|
|
|
$
|
11
|
|
|
$
|
306
|
|
|
$
|
631
|
|
Change in unrealized losses included in net income related to assets still held at September 30, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance at July 1, 2018
|
$
|
304
|
|
|
$
|
4
|
|
|
$
|
26
|
|
|
$
|
312
|
|
|
$
|
646
|
|
Total gains (losses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Recognized in net income
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||
Recognized in accumulated other comprehensive loss
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Purchases
|
32
|
|
|
—
|
|
|
3
|
|
|
5
|
|
|
40
|
|
|||||
Sales
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(5
|
)
|
|||||
Settlements
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||||
Transfers into Level III
|
6
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
7
|
|
|||||
Transfers out of Level III
|
(2
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Ending balance at September 30, 2018
|
$
|
307
|
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
318
|
|
|
$
|
646
|
|
Change in unrealized gains included in net income related to assets still held at September 30, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
Corporate
Securities
|
|
Residential
Mortgage-
backed
Securities
|
|
Other
Securities
|
|
Equity
Securities
|
|
Total
|
||||||||||
Nine Months Ended September 30, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance at January 1, 2019
|
$
|
287
|
|
|
$
|
6
|
|
|
$
|
17
|
|
|
$
|
313
|
|
|
$
|
623
|
|
Total (losses) gains:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recognized in net income
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(12
|
)
|
|||||
Recognized in accumulated other comprehensive loss
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||
Purchases
|
91
|
|
|
—
|
|
|
2
|
|
|
46
|
|
|
139
|
|
|||||
Sales
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
(59
|
)
|
|||||
Settlements
|
(58
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(61
|
)
|
|||||
Transfers into Level III
|
4
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
7
|
|
|||||
Transfers out of Level III
|
(9
|
)
|
|
(2
|
)
|
|
(9
|
)
|
|
—
|
|
|
(20
|
)
|
|||||
Ending balance at September 30, 2019
|
$
|
311
|
|
|
$
|
3
|
|
|
$
|
11
|
|
|
$
|
306
|
|
|
$
|
631
|
|
Change in unrealized losses included in net income related to assets still held at September 30, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance at January 1, 2018
|
$
|
229
|
|
|
$
|
5
|
|
|
$
|
16
|
|
|
$
|
287
|
|
|
$
|
537
|
|
Total (losses) gains:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recognized in net income
|
1
|
|
|
—
|
|
|
—
|
|
|
(228
|
)
|
|
(227
|
)
|
|||||
Recognized in accumulated other comprehensive loss
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Purchases
|
94
|
|
|
—
|
|
|
12
|
|
|
263
|
|
|
369
|
|
|||||
Sales
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(21
|
)
|
|||||
Settlements
|
(60
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(62
|
)
|
|||||
Transfers into Level III
|
65
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
70
|
|
|||||
Transfers out of Level III
|
(2
|
)
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(17
|
)
|
|||||
Ending balance at September 30, 2018
|
$
|
307
|
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
318
|
|
|
$
|
646
|
|
Change in unrealized gains included in net income related to assets still held at September 30, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
27
|
|
|
Carrying
Value
|
|
Estimated Fair Value
|
||||||||||||||||
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|||||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other invested assets, long-term
|
$
|
3,914
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,914
|
|
|
$
|
3,914
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
710
|
|
|
—
|
|
|
710
|
|
|
—
|
|
|
710
|
|
|||||
Commercial paper
|
500
|
|
|
—
|
|
|
500
|
|
|
—
|
|
|
500
|
|
|||||
Notes
|
18,841
|
|
|
—
|
|
|
20,198
|
|
|
—
|
|
|
20,198
|
|
|||||
Convertible debentures
|
179
|
|
|
—
|
|
|
893
|
|
|
—
|
|
|
893
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other invested assets, long-term
|
$
|
3,726
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,726
|
|
|
$
|
3,726
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
1,145
|
|
|
—
|
|
|
1,145
|
|
|
—
|
|
|
1,145
|
|
|||||
Commercial paper
|
697
|
|
|
—
|
|
|
697
|
|
|
—
|
|
|
697
|
|
|||||
Notes
|
17,178
|
|
|
—
|
|
|
17,145
|
|
|
—
|
|
|
17,145
|
|
|||||
Convertible debentures
|
191
|
|
|
—
|
|
|
1,030
|
|
|
—
|
|
|
1,030
|
|
7.
|
Income Taxes
|
8.
|
Retirement Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
Three Months Ended
September 30 |
|
Three Months Ended
September 30 |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest cost
|
15
|
|
|
14
|
|
|
3
|
|
|
4
|
|
||||
Expected return on assets
|
(35
|
)
|
|
(37
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||
Recognized actuarial loss
|
5
|
|
|
6
|
|
|
1
|
|
|
1
|
|
||||
Settlement loss
|
4
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||
Net periodic benefit credit
|
$
|
(11
|
)
|
|
$
|
(9
|
)
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
Nine Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
47
|
|
|
41
|
|
|
11
|
|
|
11
|
|
||||
Expected return on assets
|
(104
|
)
|
|
(110
|
)
|
|
(17
|
)
|
|
(18
|
)
|
||||
Recognized actuarial loss
|
13
|
|
|
18
|
|
|
2
|
|
|
3
|
|
||||
Settlement loss
|
8
|
|
|
19
|
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||
Net periodic benefit credit
|
$
|
(36
|
)
|
|
$
|
(26
|
)
|
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Total
|
||||||
Gross medical claims payable, beginning of period
|
$
|
2,586
|
|
|
$
|
4,680
|
|
|
$
|
7,266
|
|
Ceded medical claims payable, beginning of period
|
(10
|
)
|
|
(24
|
)
|
|
(34
|
)
|
|||
Net medical claims payable, beginning of period
|
2,576
|
|
|
4,656
|
|
|
7,232
|
|
|||
Net incurred medical claims:
|
|
|
|
|
|
||||||
Current period
|
18,986
|
|
|
39,171
|
|
|
58,157
|
|
|||
Prior periods redundancies
|
(162
|
)
|
|
(275
|
)
|
|
(437
|
)
|
|||
Total net incurred medical claims
|
18,824
|
|
|
38,896
|
|
|
57,720
|
|
|||
Net payments attributable to:
|
|
|
|
|
|
||||||
Current period medical claims
|
16,277
|
|
|
33,474
|
|
|
49,751
|
|
|||
Prior periods medical claims
|
2,213
|
|
|
4,253
|
|
|
6,466
|
|
|||
Total net payments
|
18,490
|
|
|
37,727
|
|
|
56,217
|
|
|||
Net medical claims payable, end of period
|
2,910
|
|
|
5,825
|
|
|
8,735
|
|
|||
Ceded medical claims payable, end of period
|
8
|
|
|
27
|
|
|
35
|
|
|||
Gross medical claims payable, end of period
|
$
|
2,918
|
|
|
$
|
5,852
|
|
|
$
|
8,770
|
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Total
|
||||||
Gross medical claims payable, beginning of period
|
$
|
3,383
|
|
|
$
|
4,431
|
|
|
$
|
7,814
|
|
Ceded medical claims payable, beginning of period
|
(78
|
)
|
|
(27
|
)
|
|
(105
|
)
|
|||
Net medical claims payable, beginning of period
|
3,305
|
|
|
4,404
|
|
|
7,709
|
|
|||
Business combinations and purchase adjustments
|
—
|
|
|
199
|
|
|
199
|
|
|||
Net incurred medical claims:
|
|
|
|
|
|
||||||
Current period
|
17,732
|
|
|
33,664
|
|
|
51,396
|
|
|||
Prior periods redundancies
|
(424
|
)
|
|
(434
|
)
|
|
(858
|
)
|
|||
Total net incurred medical claims
|
17,308
|
|
|
33,230
|
|
|
50,538
|
|
|||
Net payments attributable to:
|
|
|
|
|
|
||||||
Current period medical claims
|
15,275
|
|
|
29,236
|
|
|
44,511
|
|
|||
Prior periods medical claims
|
2,671
|
|
|
3,833
|
|
|
6,504
|
|
|||
Total net payments
|
17,946
|
|
|
33,069
|
|
|
51,015
|
|
|||
Net medical claims payable, end of period
|
2,667
|
|
|
4,764
|
|
|
7,431
|
|
|||
Ceded medical claims payable, end of period
|
10
|
|
|
27
|
|
|
37
|
|
|||
Gross medical claims payable, end of period
|
$
|
2,677
|
|
|
$
|
4,791
|
|
|
$
|
7,468
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
September 30, 2019 |
||||||||||||
|
|
March 31, 2019
|
|
June 30, 2019
|
|
September 30, 2019
|
|
|||||||||
Net incurred medical claims:
|
|
|
|
|
|
|
|
|
||||||||
Commercial & Specialty Business
|
|
$
|
5,856
|
|
|
$
|
6,422
|
|
|
$
|
6,546
|
|
|
$
|
18,824
|
|
Government Business
|
|
12,483
|
|
|
13,062
|
|
|
13,351
|
|
|
38,896
|
|
||||
Total net incurred medical claims
|
|
18,339
|
|
|
19,484
|
|
|
19,897
|
|
|
57,720
|
|
||||
Quality improvement and other claims expense
|
|
943
|
|
|
884
|
|
|
856
|
|
|
2,683
|
|
||||
Benefit expense
|
|
$
|
19,282
|
|
|
$
|
20,368
|
|
|
$
|
20,753
|
|
|
$
|
60,403
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
September 30, 2018 |
||||||||||||
|
|
March 31, 2018
|
|
June 30, 2018
|
|
September 30, 2018
|
|
|||||||||
Net incurred medical claims:
|
|
|
|
|
|
|
|
|
||||||||
Commercial & Specialty Business
|
|
$
|
5,410
|
|
|
$
|
5,884
|
|
|
$
|
6,014
|
|
|
$
|
17,308
|
|
Government Business
|
|
10,794
|
|
|
11,039
|
|
|
11,397
|
|
|
33,230
|
|
||||
Total net incurred medical claims
|
|
16,204
|
|
|
16,923
|
|
|
17,411
|
|
|
50,538
|
|
||||
Quality improvement and other claims expense
|
|
842
|
|
|
805
|
|
|
774
|
|
|
2,421
|
|
||||
Benefit expense
|
|
$
|
17,046
|
|
|
$
|
17,728
|
|
|
$
|
18,185
|
|
|
$
|
52,959
|
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Total
|
||||||
Net medical claims payable, end of period
|
$
|
2,910
|
|
|
$
|
5,825
|
|
|
$
|
8,735
|
|
Ceded medical claims payable, end of period
|
8
|
|
|
27
|
|
|
35
|
|
|||
Insurance lines other than short duration
|
—
|
|
|
207
|
|
|
207
|
|
|||
Gross medical claims payable, end of period
|
$
|
2,918
|
|
|
$
|
6,059
|
|
|
$
|
8,977
|
|
10.
|
Debt
|
|
|
|
|
Outstanding principal amount
|
$
|
267
|
|
Unamortized debt discount
|
$
|
85
|
|
Net debt carrying amount
|
$
|
179
|
|
Equity component carrying amount
|
$
|
97
|
|
Conversion rate (shares of common stock per $1,000 of principal amount)
|
13.9250
|
|
|
Effective conversion price (per $1,000 of principal amount)
|
$
|
71.8129
|
|
11.
|
Commitments and Contingencies
|
12.
|
Capital Stock
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Cash
Dividend
per Share
|
|
Total
|
||
Nine Months Ended September 30, 2019
|
|
|
|
|
|
|
|
|
||
January 29, 2019
|
|
March 18, 2019
|
|
March 29, 2019
|
|
$0.80
|
|
$
|
206
|
|
April 23, 2019
|
|
June 10, 2019
|
|
June 25, 2019
|
|
$0.80
|
|
$
|
206
|
|
July 23, 2019
|
|
September 10, 2019
|
|
September 25, 2019
|
|
$0.80
|
|
$
|
204
|
|
|
|
|
|
|
|
|
|
|
||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
||
January 30, 2018
|
|
March 9, 2018
|
|
March 23, 2018
|
|
$0.75
|
|
$
|
192
|
|
April 24, 2018
|
|
June 8, 2018
|
|
June 25, 2018
|
|
$0.75
|
|
$
|
196
|
|
July 24, 2018
|
|
September 10, 2018
|
|
September 25, 2018
|
|
$0.75
|
|
$
|
195
|
|
|
October 1, 2019
Through October 16, 2019 |
|
Nine Months Ended September 30
|
||||||||
|
|
2019
|
|
2018
|
|||||||
Shares repurchased
|
0.4
|
|
|
5.2
|
|
|
5.0
|
|
|||
Average price per share
|
$
|
238.71
|
|
|
$
|
270.42
|
|
|
$
|
240.15
|
|
Aggregate cost
|
$
|
104
|
|
|
$
|
1,396
|
|
|
$
|
1,192
|
|
Authorization remaining at the end of the period
|
$
|
3,994
|
|
|
$
|
4,098
|
|
|
$
|
5,986
|
|
|
Number of
Shares
|
|
Weighted-
Average
Option Price
per Share
|
|
Weighted-
Average
Remaining
Contractual
Life (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2019
|
3.7
|
|
|
$
|
149.65
|
|
|
|
|
|
||
Granted
|
0.7
|
|
|
306.74
|
|
|
|
|
|
|||
Exercised
|
(0.9
|
)
|
|
127.92
|
|
|
|
|
|
|||
Forfeited or expired
|
(0.1
|
)
|
|
238.81
|
|
|
|
|
|
|||
Outstanding at September 30, 2019
|
3.4
|
|
|
185.47
|
|
|
6.28
|
|
$
|
233
|
|
|
Exercisable at September 30, 2019
|
2.2
|
|
|
142.26
|
|
|
5.02
|
|
$
|
220
|
|
|
Restricted
Stock Shares
and Units
|
|
Weighted-
Average
Grant Date
Fair Value
per Share
|
|||
Nonvested at January 1, 2019
|
1.7
|
|
|
$
|
183.32
|
|
Granted
|
0.5
|
|
|
306.13
|
|
|
Vested
|
(0.8
|
)
|
|
152.97
|
|
|
Forfeited
|
—
|
|
|
243.77
|
|
|
Nonvested at September 30, 2019
|
1.4
|
|
|
240.92
|
|
|
Nine Months Ended September 30
|
||||
|
2019
|
|
2018
|
||
Risk-free interest rate
|
2.69
|
%
|
|
2.90
|
%
|
Volatility factor
|
25.00
|
%
|
|
30.00
|
%
|
Quarterly dividend yield
|
0.260
|
%
|
|
0.323
|
%
|
Weighted-average expected life (years)
|
4.40
|
|
|
3.70
|
|
|
Nine Months Ended September 30
|
||||||
|
2019
|
|
2018
|
||||
Options granted during the period
|
$
|
68.69
|
|
|
$
|
55.44
|
|
Restricted stock awards granted during the period
|
306.13
|
|
|
233.27
|
|
13.
|
Accumulated Other Comprehensive Loss
|
|
September 30
|
||||||
|
2019
|
|
2018
|
||||
Investments, excluding non-credit component of other-than-temporary impairments:
|
|
|
|
||||
Gross unrealized gains
|
$
|
770
|
|
|
$
|
170
|
|
Gross unrealized losses
|
(54
|
)
|
|
(289
|
)
|
||
Net pre-tax unrealized gains (losses)
|
716
|
|
|
(119
|
)
|
||
Deferred tax (liability) asset
|
(164
|
)
|
|
24
|
|
||
Net unrealized gains (losses) on investments
|
552
|
|
|
(95
|
)
|
||
Non-credit components of other-than-temporary impairments on investments:
|
|
|
|
||||
Unrealized losses
|
(5
|
)
|
|
(2
|
)
|
||
Deferred tax asset
|
1
|
|
|
—
|
|
||
Net unrealized non-credit component of other-than-temporary impairments on investments
|
(4
|
)
|
|
(2
|
)
|
||
Cash flow hedges:
|
|
|
|
||||
Gross unrealized losses
|
(340
|
)
|
|
(315
|
)
|
||
Deferred tax asset
|
63
|
|
|
66
|
|
||
Net unrealized losses on cash flow hedges
|
(277
|
)
|
|
(249
|
)
|
||
Defined benefit pension plans:
|
|
|
|
||||
Deferred net actuarial loss
|
(730
|
)
|
|
(587
|
)
|
||
Deferred prior service credits
|
(1
|
)
|
|
(1
|
)
|
||
Deferred tax asset
|
188
|
|
|
153
|
|
||
Net unrecognized periodic benefit costs for defined benefit pension plans
|
(543
|
)
|
|
(435
|
)
|
||
Postretirement benefit plans:
|
|
|
|
||||
Deferred net actuarial loss
|
(57
|
)
|
|
(75
|
)
|
||
Deferred prior service costs
|
25
|
|
|
37
|
|
||
Deferred tax asset
|
8
|
|
|
10
|
|
||
Net unrecognized periodic benefit costs for postretirement benefit plans
|
(24
|
)
|
|
(28
|
)
|
||
Foreign currency translation adjustments:
|
|
|
|
||||
Gross unrealized losses
|
(4
|
)
|
|
(2
|
)
|
||
Deferred tax asset
|
1
|
|
|
—
|
|
||
Net unrealized losses on foreign currency translation adjustments
|
(3
|
)
|
|
(2
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(299
|
)
|
|
$
|
(811
|
)
|
|
Three Months Ended September 30
|
||||||
|
2019
|
|
2018
|
||||
Investments:
|
|
|
|
||||
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($35) and $12, respectively
|
$
|
119
|
|
|
$
|
(45
|
)
|
Reclassification adjustment for net realized (gain) loss on investment securities, net of tax expense (benefit) of $1 and ($3), respectively
|
(3
|
)
|
|
9
|
|
||
Total reclassification adjustment on investments
|
116
|
|
|
(36
|
)
|
||
Non-credit component of other-than-temporary impairments on investments:
|
|
|
|
||||
Non-credit component of other-than-temporary impairments on investments, net of tax expense of ($0) and ($2), respectively
|
(1
|
)
|
|
(2
|
)
|
||
Cash flow hedges:
|
|
|
|
||||
Holding (loss) gain, net of tax expense of ($2) and ($1), respectively
|
(34
|
)
|
|
2
|
|
||
Other:
|
|
|
|
||||
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($1) and ($2), respectively
|
4
|
|
|
7
|
|
||
Foreign currency translation adjustment, net of tax expense of ($0) and ($0), respectively
|
(1
|
)
|
|
—
|
|
||
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($37) and $4, respectively
|
$
|
84
|
|
|
$
|
(29
|
)
|
|
Nine Months Ended September 30
|
||||||
|
2019
|
|
2018
|
||||
Investments:
|
|
|
|
||||
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($205) and $109, respectively
|
$
|
705
|
|
|
$
|
(378
|
)
|
Reclassification adjustment for net realized (gain) loss on investment securities, net of tax benefit of $(1) and $(7), respectively
|
6
|
|
|
25
|
|
||
Total reclassification adjustment on investments
|
711
|
|
|
(353
|
)
|
||
Non-credit component of other-than-temporary impairments on investments:
|
|
|
|
||||
Non-credit component of other-than-temporary impairments on investments, net of tax expense of ($0) and ($2), respectively
|
(2
|
)
|
|
(2
|
)
|
||
Cash flow hedges:
|
|
|
|
||||
Holding (loss) gain, net of tax expense of ($2) and ($9), respectively
|
(31
|
)
|
|
34
|
|
||
Other:
|
|
|
|
||||
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($3) and ($7), respectively
|
10
|
|
|
22
|
|
||
Foreign currency translation adjustment, net of tax expense of ($0) and ($1), respectively
|
(1
|
)
|
|
—
|
|
||
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($211) and $83, respectively
|
$
|
687
|
|
|
$
|
(299
|
)
|
14.
|
Earnings per Share
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Denominator for basic earnings per share – weighted-average shares
|
255.2
|
|
|
259.5
|
|
|
256.3
|
|
|
258.0
|
|
Effect of dilutive securities – employee stock options, nonvested restricted stock awards, convertible debentures and equity units
|
4.8
|
|
|
5.9
|
|
|
4.8
|
|
|
6.3
|
|
Denominator for diluted earnings per share
|
260.0
|
|
|
265.4
|
|
|
261.1
|
|
|
264.3
|
|
15.
|
Segment Information
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
Three Months Ended September 30, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenue - unaffiliated
|
$
|
9,284
|
|
|
$
|
15,955
|
|
|
$
|
1,205
|
|
|
$
|
—
|
|
|
$
|
26,444
|
|
Operating revenue - affiliated
|
—
|
|
|
—
|
|
|
1,303
|
|
|
(1,303
|
)
|
|
—
|
|
|||||
Operating gain (loss)
|
930
|
|
|
616
|
|
|
(18
|
)
|
|
—
|
|
|
1,528
|
|
|||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenue - unaffiliated
|
$
|
8,933
|
|
|
$
|
13,979
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
22,980
|
|
Operating revenue - affiliated
|
—
|
|
|
—
|
|
|
330
|
|
|
(330
|
)
|
|
—
|
|
|||||
Operating gain (loss)
|
834
|
|
|
456
|
|
|
(41
|
)
|
|
—
|
|
|
1,249
|
|
|||||
Nine Months Ended September 30, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenue - unaffiliated
|
$
|
28,093
|
|
|
$
|
46,419
|
|
|
$
|
1,497
|
|
|
$
|
—
|
|
|
$
|
76,009
|
|
Operating revenue - affiliated
|
—
|
|
|
—
|
|
|
2,353
|
|
|
(2,353
|
)
|
|
—
|
|
|||||
Operating gain (loss)
|
3,511
|
|
|
1,471
|
|
|
(81
|
)
|
|
—
|
|
|
4,901
|
|
|||||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenue - unaffiliated
|
$
|
26,939
|
|
|
$
|
40,951
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
68,037
|
|
Operating revenue - affiliated
|
—
|
|
|
—
|
|
|
961
|
|
|
(961
|
)
|
|
—
|
|
|||||
Operating gain (loss)
|
3,284
|
|
|
1,477
|
|
|
(85
|
)
|
|
—
|
|
|
4,676
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Commercial & Specialty Business
|
|
|
|
|
|
|
|
||||||||
Managed care products
|
$
|
7,542
|
|
|
$
|
7,211
|
|
|
$
|
22,806
|
|
|
$
|
21,852
|
|
Managed care services
|
1,330
|
|
|
1,332
|
|
|
4,049
|
|
|
3,913
|
|
||||
Dental/Vision products and services
|
325
|
|
|
306
|
|
|
975
|
|
|
914
|
|
||||
Other
|
87
|
|
|
84
|
|
|
263
|
|
|
260
|
|
||||
Total Commercial & Specialty Business
|
9,284
|
|
|
8,933
|
|
|
28,093
|
|
|
26,939
|
|
||||
Government Business
|
|
|
|
|
|
|
|
||||||||
Managed care products
|
15,847
|
|
|
13,860
|
|
|
46,111
|
|
|
40,610
|
|
||||
Managed care services
|
108
|
|
|
119
|
|
|
308
|
|
|
341
|
|
||||
Total Government Business
|
15,955
|
|
|
13,979
|
|
|
46,419
|
|
|
40,951
|
|
||||
Other
|
|
|
|
|
|
|
|
||||||||
Other
|
2,508
|
|
|
398
|
|
|
3,850
|
|
|
1,108
|
|
||||
Eliminations
|
|
|
|
|
|
|
|
||||||||
Eliminations
|
(1,303
|
)
|
|
(330
|
)
|
|
(2,353
|
)
|
|
(961
|
)
|
||||
Total product revenues
|
$
|
26,444
|
|
|
$
|
22,980
|
|
|
$
|
76,009
|
|
|
$
|
68,037
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Reportable segments’ operating revenue
|
$
|
26,444
|
|
|
$
|
22,980
|
|
|
$
|
76,009
|
|
|
$
|
68,037
|
|
Net investment income
|
242
|
|
|
250
|
|
|
737
|
|
|
708
|
|
||||
Net realized gains on financial instruments
|
1
|
|
|
27
|
|
|
90
|
|
|
5
|
|
||||
Other-than-temporary impairment losses recognized in income
|
(13
|
)
|
|
(6
|
)
|
|
(30
|
)
|
|
(18
|
)
|
||||
Total revenues
|
$
|
26,674
|
|
|
$
|
23,251
|
|
|
$
|
76,806
|
|
|
$
|
68,732
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Reportable segments’ operating gain
|
$
|
1,528
|
|
|
$
|
1,249
|
|
|
$
|
4,901
|
|
|
$
|
4,676
|
|
Net investment income
|
242
|
|
|
250
|
|
|
737
|
|
|
708
|
|
||||
Net realized gains on financial instruments
|
1
|
|
|
27
|
|
|
90
|
|
|
5
|
|
||||
Other-than-temporary impairment losses recognized in income
|
(13
|
)
|
|
(6
|
)
|
|
(30
|
)
|
|
(18
|
)
|
||||
Interest expense
|
(185
|
)
|
|
(188
|
)
|
|
(556
|
)
|
|
(564
|
)
|
||||
Amortization of other intangible assets
|
(84
|
)
|
|
(91
|
)
|
|
(256
|
)
|
|
(265
|
)
|
||||
Gain (loss) on extinguishment of debt
|
—
|
|
|
1
|
|
|
1
|
|
|
(17
|
)
|
||||
Income before income tax expense
|
$
|
1,489
|
|
|
$
|
1,242
|
|
|
$
|
4,887
|
|
|
$
|
4,525
|
|
16.
|
Leases
|
|
|
Three Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2019
|
||||
Lease Expense
|
|
|
|
|||||
Operating lease expense
|
$
|
48
|
|
|
$
|
138
|
|
|
Short-term lease expense
|
9
|
|
|
33
|
|
|||
Sublease income
|
(4
|
)
|
|
(12
|
)
|
|||
Total lease expense
|
$
|
53
|
|
|
$
|
159
|
|
|
|
|
|
|
|
||||
Other information
|
|
|
|
|||||
Operating cash paid for amounts included in the measurement of lease liabilities, operating leases
|
$
|
43
|
|
|
$
|
132
|
|
|
Right-of-use assets obtained in exchange for new lease liabilities, operating leases
|
$
|
33
|
|
|
$
|
33
|
|
|
Weighted average remaining lease term, operating leases
|
6 years
|
|
|
6 years
|
|
|||
Weighted average discount rate, operating leases
|
3.96
|
%
|
|
3.96
|
%
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
September 30
|
|
|
|
|
||||||
(In thousands)
|
2019
|
|
2018 1
|
|
Change
|
|
% Change
|
|||||
Medical Membership
|
|
|
|
|
|
|
|
|||||
Customer Type
|
|
|
|
|
|
|
|
|||||
Local Group
|
15,659
|
|
|
15,688
|
|
|
(29
|
)
|
|
(0.2
|
)%
|
|
Individual
|
711
|
|
|
692
|
|
|
19
|
|
|
2.7
|
%
|
|
National:
|
|
|
|
|
|
|
|
|||||
National Accounts
|
7,666
|
|
|
7,610
|
|
|
56
|
|
|
0.7
|
%
|
|
BlueCard®
|
5,967
|
|
|
5,794
|
|
|
173
|
|
|
3.0
|
%
|
|
Total National
|
13,633
|
|
|
13,404
|
|
|
229
|
|
|
1.7
|
%
|
|
Medicare:
|
|
|
|
|
|
|
|
|||||
Medicare Advantage
|
1,203
|
|
|
992
|
|
|
211
|
|
|
21.3
|
%
|
|
Medicare Supplement
|
893
|
|
|
837
|
|
|
56
|
|
|
6.7
|
%
|
|
Total Medicare
|
2,096
|
|
|
1,829
|
|
|
267
|
|
|
14.6
|
%
|
|
Medicaid
|
7,293
|
|
|
6,731
|
|
|
562
|
|
|
8.3
|
%
|
|
Federal Health Products & Services
|
1,592
|
|
|
1,557
|
|
|
35
|
|
|
2.2
|
%
|
|
Total Medical Membership by Customer Type
|
40,984
|
|
|
39,901
|
|
|
1,083
|
|
|
2.7
|
%
|
|
Funding Arrangement
|
|
|
|
|
|
|
|
|||||
Self-Funded
|
25,368
|
|
|
25,253
|
|
|
115
|
|
|
0.5
|
%
|
|
Fully-Insured
|
15,616
|
|
|
14,648
|
|
|
968
|
|
|
6.6
|
%
|
|
Total Medical Membership by Funding Arrangement
|
40,984
|
|
|
39,901
|
|
|
1,083
|
|
|
2.7
|
%
|
|
Reportable Segment
|
|
|
|
|
|
|
|
|||||
Commercial & Specialty Business
|
30,003
|
|
|
29,784
|
|
|
219
|
|
|
0.7
|
%
|
|
Government Business
|
10,981
|
|
|
10,117
|
|
|
864
|
|
|
8.5
|
%
|
|
Total Medical Membership by Reportable Segment
|
40,984
|
|
|
39,901
|
|
|
1,083
|
|
|
2.7
|
%
|
|
Other Membership
|
|
|
|
|
|
|
|
|||||
Life and Disability Members
|
4,970
|
|
|
4,701
|
|
|
269
|
|
|
5.7
|
%
|
|
Dental Members
|
5,942
|
|
|
5,804
|
|
|
138
|
|
|
2.4
|
%
|
|
Dental Administration Members
|
5,526
|
|
|
5,367
|
|
|
159
|
|
|
3.0
|
%
|
|
Vision Members
|
7,232
|
|
|
6,906
|
|
|
326
|
|
|
4.7
|
%
|
|
Medicare Part D Standalone Members
|
285
|
|
|
312
|
|
|
(27
|
)
|
|
(8.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
1
|
During the fourth quarter of 2018, we made a number of changes to our membership reporting to better align our reported membership to the appropriate type, funding arrangement and segment. Accordingly, certain types of membership have been reclassified to conform to the current year presentation.
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
|
Change
|
||||||||||||||||||||||||
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||||||||||||||||
|
|
2019 vs. 2018
|
|
2019 vs. 2018
|
||||||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||
Total operating revenue
|
$
|
26,444
|
|
|
$
|
22,980
|
|
|
$
|
76,009
|
|
|
$
|
68,037
|
|
|
$
|
3,464
|
|
|
15.1
|
%
|
|
$
|
7,972
|
|
|
11.7
|
%
|
|
Net investment income
|
242
|
|
|
250
|
|
|
737
|
|
|
708
|
|
|
(8
|
)
|
|
(3.2
|
)%
|
|
29
|
|
|
4.1
|
%
|
|||||||
Net realized gains on financial instruments
|
1
|
|
|
27
|
|
|
90
|
|
|
5
|
|
|
(26
|
)
|
|
(96.3
|
)%
|
|
85
|
|
|
1,700.0
|
%
|
|||||||
Other-than-temporary impairment losses recognized in income
|
(13
|
)
|
|
(6
|
)
|
|
(30
|
)
|
|
(18
|
)
|
|
(7
|
)
|
|
116.7
|
%
|
|
(12
|
)
|
|
66.7
|
%
|
|||||||
Total revenues
|
26,674
|
|
|
23,251
|
|
|
76,806
|
|
|
68,732
|
|
|
3,423
|
|
|
14.7
|
%
|
|
8,074
|
|
|
11.7
|
%
|
|||||||
Benefit expense
|
20,753
|
|
|
18,185
|
|
|
60,403
|
|
|
52,959
|
|
|
2,568
|
|
|
14.1
|
%
|
|
7,444
|
|
|
14.1
|
%
|
|||||||
Cost of products sold
|
745
|
|
|
—
|
|
|
843
|
|
|
—
|
|
|
745
|
|
|
NM
|
|
|
843
|
|
|
NM
|
|
|||||||
Selling, general and administrative expense
|
3,418
|
|
|
3,546
|
|
|
9,862
|
|
|
10,402
|
|
|
(128
|
)
|
|
(3.6
|
)%
|
|
(540
|
)
|
|
(5.2
|
)%
|
|||||||
Other expense1
|
269
|
|
|
278
|
|
|
811
|
|
|
846
|
|
|
(9
|
)
|
|
(3.2
|
)%
|
|
(35
|
)
|
|
(4.1
|
)%
|
|||||||
Total expenses
|
25,185
|
|
|
22,009
|
|
|
71,919
|
|
|
64,207
|
|
|
3,176
|
|
|
14.4
|
%
|
|
7,712
|
|
|
12.0
|
%
|
|||||||
Income before income tax expense
|
1,489
|
|
|
1,242
|
|
|
4,887
|
|
|
4,525
|
|
|
247
|
|
|
19.9
|
%
|
|
362
|
|
|
8.0
|
%
|
|||||||
Income tax expense
|
306
|
|
|
282
|
|
|
1,014
|
|
|
1,200
|
|
|
24
|
|
|
8.5
|
%
|
|
(186
|
)
|
|
(15.5
|
)%
|
|||||||
Net income
|
$
|
1,183
|
|
|
$
|
960
|
|
|
$
|
3,873
|
|
|
$
|
3,325
|
|
|
$
|
223
|
|
|
23.2
|
%
|
|
$
|
548
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average diluted shares outstanding
|
260.0
|
|
|
265.4
|
|
|
261.1
|
|
|
264.3
|
|
|
(5.4
|
)
|
|
(2.0
|
)%
|
|
(3.2
|
)
|
|
(1.2
|
)%
|
|||||||
Diluted net income per share
|
$
|
4.55
|
|
|
$
|
3.62
|
|
|
$
|
14.83
|
|
|
$
|
12.58
|
|
|
$
|
0.93
|
|
|
25.7
|
%
|
|
$
|
2.25
|
|
|
17.9
|
%
|
|
Effective tax rate
|
20.6
|
%
|
|
22.7
|
%
|
|
20.7
|
%
|
|
26.5
|
%
|
|
|
|
(210)bp3
|
|
|
|
|
(580)bp3
|
|
|||||||||
Benefit expense ratio2
|
87.2
|
%
|
|
84.8
|
%
|
|
86.1
|
%
|
|
83.3
|
%
|
|
|
|
240bp3
|
|
|
|
|
280bp3
|
|
|||||||||
Selling, general and administrative expense ratio4
|
12.9
|
%
|
|
15.4
|
%
|
|
13.0
|
%
|
|
15.3
|
%
|
|
|
|
(250)bp3
|
|
|
|
|
(230)bp3
|
|
|||||||||
Income before income tax expense as a percentage of total revenues
|
5.6
|
%
|
|
5.3
|
%
|
|
6.4
|
%
|
|
6.6
|
%
|
|
|
|
30bp3
|
|
|
|
|
(20)bp3
|
|
|||||||||
Net income as a percentage of total revenues
|
4.4
|
%
|
|
4.1
|
%
|
|
5.0
|
%
|
|
4.8
|
%
|
|
|
|
30bp3
|
|
|
|
|
20bp3
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM
|
Not meaningful.
|
1
|
Includes interest expense, amortization of other intangible assets and (gain) loss on extinguishment of debt.
|
2
|
Benefit expense ratio represents benefit expense as a percentage of premium revenue. Premiums for the three months ended September 30, 2019 and 2018 were $23,793 and $21,451, respectively. Premiums for the nine months ended September 30, 2019 and 2018 were $70,137 and $63,602, respectively. Premiums are included in total operating revenue presented above.
|
3
|
bp = basis point; one hundred basis points = 1%.
|
4
|
Selling, general and administrative expense ratio represents selling, general and administrative expense as a percentage of total operating revenue.
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
|
Change
|
||||||||||||||||||||||||
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||||||||||||||||
|
|
2019 vs. 2018
|
|
2019 vs. 2018
|
||||||||||||||||||||||||||
|
|
2019
|
|
2018 1
|
|
2019
|
|
2018 1
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||
Operating Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial & Specialty Business
|
$
|
9,284
|
|
|
$
|
8,933
|
|
|
$
|
28,093
|
|
|
$
|
26,939
|
|
|
$
|
351
|
|
|
3.9
|
%
|
|
$
|
1,154
|
|
|
4.3
|
%
|
|
Government Business
|
15,955
|
|
|
13,979
|
|
|
46,419
|
|
|
40,951
|
|
|
1,976
|
|
|
14.1
|
%
|
|
5,468
|
|
|
13.4
|
%
|
|||||||
Other
|
2,508
|
|
|
398
|
|
|
3,850
|
|
|
1,108
|
|
|
2,110
|
|
|
530.2
|
%
|
|
2,742
|
|
|
247.5
|
%
|
|||||||
Eliminations
|
(1,303
|
)
|
|
(330
|
)
|
|
(2,353
|
)
|
|
(961
|
)
|
|
(973
|
)
|
|
NM
|
|
|
(1,392
|
)
|
|
NM
|
|
|||||||
Total operating revenue
|
$
|
26,444
|
|
|
$
|
22,980
|
|
|
$
|
76,009
|
|
|
$
|
68,037
|
|
|
$
|
3,464
|
|
|
15.1
|
%
|
|
$
|
7,972
|
|
|
11.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating Gain (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial & Specialty Business
|
$
|
930
|
|
|
$
|
834
|
|
|
$
|
3,511
|
|
|
$
|
3,284
|
|
|
$
|
96
|
|
|
11.5
|
%
|
|
$
|
227
|
|
|
6.9
|
%
|
|
Government Business
|
616
|
|
|
456
|
|
|
1,471
|
|
|
1,477
|
|
|
160
|
|
|
35.1
|
%
|
|
(6
|
)
|
|
(0.4
|
)%
|
|||||||
Other
|
(18
|
)
|
|
(41
|
)
|
|
(81
|
)
|
|
(85
|
)
|
|
23
|
|
|
(56.1
|
)%
|
|
4
|
|
|
(4.7
|
)%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial & Specialty Business
|
10.0
|
%
|
|
9.3
|
%
|
|
12.5
|
%
|
|
12.2
|
%
|
|
|
|
|
70
|
bp
|
|
|
|
|
30
|
bp
|
|||||||
Government Business
|
3.9
|
%
|
|
3.3
|
%
|
|
3.2
|
%
|
|
3.6
|
%
|
|
|
|
|
60
|
bp
|
|
|
|
|
(40
|
)bp
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
During the second quarter of 2019, we reclassified DBG from our Government Business segment to our Other segment to reflect changes in how our segments are being managed. Accordingly, certain amounts for the three and nine months ended September 30, 2018 have been reclassified to conform to the current year presentation for comparability.
|
|
|
|
|
|
|
|
Favorable Developments by
Changes in Key Assumptions |
||||||
|
|
|
|
|
|
|
Nine Months Ended
September 30 |
||||||
|
|
|
|
|
|
|
2019
|
|
2018
|
||||
Assumed trend factors
|
|
|
|
|
|
|
$
|
311
|
|
|
$
|
477
|
|
Assumed completion factors
|
|
|
|
|
|
|
126
|
|
|
381
|
|
||
Total
|
|
|
|
|
|
|
$
|
437
|
|
|
$
|
858
|
|
|
Nine Months Ended
September 30 |
|
2019 vs. 2018
|
||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
Sources of Cash:
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
4,734
|
|
|
$
|
3,364
|
|
|
$
|
1,370
|
|
Issuance of common stock under Equity Units stock purchase contracts
|
—
|
|
|
1,250
|
|
|
(1,250
|
)
|
|||
Issuances of commercial paper and short- and long-term debt, net of repayments
|
918
|
|
|
—
|
|
|
918
|
|
|||
Proceeds from sales, maturities, calls and redemptions of investments, net of purchases
|
—
|
|
|
857
|
|
|
(857
|
)
|
|||
Proceeds from issuance of common stock under employee stock plans
|
137
|
|
|
133
|
|
|
4
|
|
|||
Changes in bank overdrafts
|
250
|
|
|
97
|
|
|
153
|
|
|||
Other sources of cash, net
|
139
|
|
|
326
|
|
|
(187
|
)
|
|||
Total sources of cash
|
6,178
|
|
|
6,027
|
|
|
151
|
|
|||
Uses of Cash:
|
|
|
|
|
|
||||||
Purchases of investments, net of proceeds from sales, maturities, calls and redemptions
|
(2,895
|
)
|
|
—
|
|
|
(2,895
|
)
|
|||
Purchases of subsidiaries, net of cash acquired
|
—
|
|
|
(1,732
|
)
|
|
1,732
|
|
|||
Repurchase and retirement of common stock
|
(1,396
|
)
|
|
(1,192
|
)
|
|
(204
|
)
|
|||
Purchases of property and equipment
|
(726
|
)
|
|
(888
|
)
|
|
162
|
|
|||
Repayments of commercial paper and short- and long-term debt, net of issuances
|
—
|
|
|
(617
|
)
|
|
617
|
|
|||
Cash dividends
|
(616
|
)
|
|
(583
|
)
|
|
(33
|
)
|
|||
Other uses of cash, net
|
(288
|
)
|
|
(363
|
)
|
|
75
|
|
|||
Total uses of cash
|
(5,921
|
)
|
|
(5,375
|
)
|
|
(546
|
)
|
|||
Effect of foreign exchange rates on cash and cash equivalents
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Net increase in cash and cash equivalents
|
$
|
256
|
|
|
$
|
651
|
|
|
$
|
(395
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number
of Shares
Purchased1
|
|
Average
Price Paid
per Share
|
|
Total Number
of Shares
Purchased
as Part
of Publicly
Announced
Programs2
|
|
Approximate
Dollar Value
of Shares
that May Yet
Be Purchased
Under the
Programs
|
||||||
(in millions, except share and per share data)
|
|
|
|
|
|
|
|
||||||
July 1, 2019 to July 31, 2019
|
434,343
|
|
|
$
|
291.21
|
|
|
431,500
|
|
|
$
|
4,616
|
|
August 1, 2019 to August 31, 2019
|
753,321
|
|
|
276.59
|
|
|
752,268
|
|
|
4,408
|
|
||
September 1, 2019 to September 30, 2019
|
1,234,527
|
|
|
251.71
|
|
|
1,230,971
|
|
|
4,098
|
|
||
|
2,422,191
|
|
|
|
|
2,414,739
|
|
|
|
1
|
Total number of shares purchased includes 7,452 shares delivered to or withheld by us in connection with employee payroll tax withholding upon exercise or vesting of stock awards. Stock grants to employees and directors and stock issued for stock option plans and stock purchase plans in the consolidated statements of shareholders’ equity are shown net of these shares purchased.
|
2
|
Represents the number of shares repurchased through the common stock repurchase program authorized by our Board of Directors, which the Board of Directors evaluates periodically. During the three months ended September 30, 2019, we repurchased 2,414,739 shares at a cost of $644 under the program, including the cost of options to purchase shares. The Board of Directors has authorized our common stock repurchase program since 2003. The Board of Director’s most recent authorized increase to the program was $5,000 on December 7, 2017. Between October 1, 2019 and October 16, 2019, we repurchased 434,700 shares at a cost of $104 bringing our current availability to $3,994 at October 16, 2019. No duration has been placed on our common stock repurchase program, and we reserve the right to discontinue the program at any time.
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
|
ANTHEM, INC.
Registrant
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Date: October 23, 2019
|
By:
|
|
/S/ JOHN E. GALLINA
|
|
|
|
John E. Gallina
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
|
|
|
|
Date: October 23, 2019
|
By:
|
|
/S/ RONALD W. PENCZEK
|
|
|
|
Ronald W. Penczek
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
TABLE OF CONTENTS
|
|||||
|
|
|
|
|
|
|
|
|
Page
|
||
|
|
|
|
|
|
Article I HISTORY AND PURPOSE
|
|
1
|
|
||
|
1.01
|
History
|
|
1
|
|
|
1.02
|
Purpose
|
|
2
|
|
Article II DEFINITIONS
|
|
2
|
|
||
|
2.01
|
"Account"
|
|
2
|
|
|
2.02
|
"Administrator"
|
|
3
|
|
|
2.03
|
"Affiliate"
|
|
3
|
|
|
2.04
|
"Anthem LTIP"
|
|
3
|
|
|
2.05
|
"Anthem Plan"
|
|
3
|
|
|
2.06
|
"Anthem SERP"
|
|
3
|
|
|
2.07
|
"Anthem SERP Participant"
|
|
3
|
|
|
2.08
|
"Beneficiary"
|
|
3
|
|
|
2.09
|
"Bonus"
|
|
3
|
|
|
2.10
|
"Bonus Deferral"
|
|
3
|
|
|
2.11
|
"Code"
|
|
3
|
|
|
2.12
|
"Committee"
|
|
3
|
|
|
2.13
|
"Company"
|
|
4
|
|
|
2.14
|
"Company Contribution"
|
|
4
|
|
|
2.15
|
"Compensation"
|
|
4
|
|
|
2.16
|
"Compensation Deferral"
|
|
4
|
|
|
2.17
|
"Election Form"
|
|
4
|
|
|
2.18
|
"Eligible Employee"
|
|
4
|
|
|
2.19
|
"In-Service Payout"
|
|
4
|
|
|
2.20
|
"Key Employee"
|
|
4
|
|
|
2.21
|
"Make-Up Contribution"
|
|
4
|
|
|
2.22
|
"Matching Contribution"
|
|
4
|
|
|
2.23
|
"Merged Plan"
|
|
4
|
|
|
2.24
|
"Participant"
|
|
5
|
|
|
2.25
|
"Pension Benefit"
|
|
5
|
|
|
2.26
|
"Pension Plan"
|
|
5
|
|
|
2.27
|
"Plan"
|
|
5
|
|
|
2.28
|
"Plan Year"
|
|
5
|
|
|
2.29
|
"Predecessor Plan"
|
|
5
|
|
|
2.30
|
"Predecessor Plan Account"
|
|
5
|
|
|
2.31
|
"Predecessor Plan Participant"
|
|
5
|
|
|
2.32
|
"Regulations"
|
|
5
|
|
|
2.33
|
"Savings Plan"
|
|
5
|
|
|
2.34
|
"Separation from Service"
|
|
5
|
|
|
2.35
|
"Trigon Plan"
|
|
6
|
|
|
2.36
|
"Trigon SERP"
|
|
6
|
|
|
2.37
|
"UGS Pension Plan"
|
|
6
|
|
|
2.38
|
"WellPoint Plan"
|
|
6
|
|
|
2.39
|
"WellPoint SERP Participant"
|
|
6
|
|
|
2.40
|
"2005 Anthem SERP"
|
|
6
|
|
|
2.41
|
"2005 WellPoint Plan"
|
|
6
|
|
|
2.42
|
"2005 Anthem Plan"
|
|
6
|
|
|
2.43
|
"2005 Trigon Plan"
|
|
6
|
|
|
2.44
|
"2005 Trigon SERP"
|
|
6
|
|
Article III ELIGIBILITY AND PARTICIPATION
|
|
6
|
|
||
|
3.01
|
Eligibility
|
|
6
|
|
|
3.02
|
Participation
|
|
7
|
|
|
3.03
|
Enrollment Requirements
|
|
7
|
|
|
3.04
|
Cessation of Participation
|
|
7
|
|
Article IV DEFERRALS AND CONTRIBUTIONS
|
|
8
|
|
||
|
4.01
|
Compensation
|
|
8
|
|
|
4.02
|
Bonus
|
|
9
|
|
|
4.03
|
Matching Contributions
|
|
9
|
|
|
4.04
|
Non-Elective Contributions
|
|
10
|
|
Article V SUPPLEMENTAL PENSION PLAN CONTRIBUTIONS
|
|
11
|
|
||
|
5.01
|
Eligibility for Supplemental Pension Contribution
|
|
11
|
|
|
5.02
|
In General
|
|
11
|
|
|
5.03
|
Former DeCare Dental Pension Plan Participants
|
|
11
|
|
|
5.04
|
QSERP
|
|
12
|
|
Article VI EARNINGS
|
|
13
|
|
||
|
6.01
|
Investment Funds
|
|
13
|
|
|
6.02
|
Conversion of Investments from Predecessor Plans and Merged Plans
|
|
13
|
|
Article VII VESTING
|
|
13
|
|
||
|
7.01
|
Elective Deferrals under the Plan
|
|
13
|
|
|
7.02
|
Supplemental Pension Plan Contributions
|
|
13
|
|
|
7.03
|
Predecessor or Merged Plans
|
|
14
|
|
|
7.04
|
Company and/or Make-Up Contributions
|
|
14
|
|
|
7.05
|
Matching Contributions
|
|
14
|
|
Article VIII DISTRIBUTIONS
|
|
14
|
|
||
|
8.01
|
Annual Election
|
|
14
|
|
|
8.02
|
Time for Distribution
|
|
14
|
|
|
8.03
|
In-Service Payout
|
|
14
|
|
|
8.04
|
Separation from Service
|
|
14
|
|
|
8.05
|
Subsequent Changes in Elections
|
|
16
|
|
|
8.06
|
Death
|
|
16
|
|
|
8.07
|
Hardship Withdrawal
|
|
16
|
|
|
8.08
|
Valuation
|
|
17
|
|
|
8.09
|
Tax Withholding
|
|
17
|
|
|
8.10
|
Payment of Small Accounts
|
|
17
|
|
|
8.11
|
Right of Offset
|
|
17
|
|
|
8.12
|
Bona Fide Dispute
|
|
18
|
|
|
8.13
|
Income Inclusion Under Code Section 409A
|
|
18
|
|
|
8.14
|
Effect of Rehire
|
|
18
|
|
Article IX EFFECT ON PREDECESSOR AND MERGED PLANS
|
|
18
|
|
||
|
9.01
|
Coordination With Predecessor Plans
|
|
18
|
|
|
9.02
|
Predecessor Plan Accounts
|
|
18
|
|
|
9.03
|
Merged Plans
|
|
18
|
|
Article X CLAIMS PROCEDURES
|
|
19
|
|
||
|
10.01
|
Presentation of Claim
|
|
19
|
|
|
10.02
|
Decision on Initial Claim
|
|
19
|
|
|
10.03
|
Right to Review
|
|
19
|
|
|
10.04
|
Decision on Review
|
|
20
|
|
|
10.05
|
Form of Notice and Decision
|
|
21
|
|
|
10.06
|
Legal Action
|
|
21
|
|
Article XI ADMINISTRATION
|
|
21
|
|
||
|
11.01
|
Plan Administration
|
|
21
|
|
|
11.02
|
Powers, Duties and Procedures
|
|
21
|
|
|
11.03
|
Agents
|
|
21
|
|
|
11.04
|
Binding Effect of Decisions
|
|
21
|
|
|
11.05
|
Information
|
|
22
|
|
|
11.06
|
Coordination with Other Benefits
|
|
22
|
|
Article XII MISCELLANEOUS
|
|
22
|
|
||
|
12.01
|
Limitation of Rights
|
|
22
|
|
|
12.02
|
Additional Restrictions
|
|
22
|
|
|
12.03
|
Indemnification
|
|
22
|
|
|
12.04
|
Assignment
|
|
22
|
|
|
12.05
|
Inability to Locate Recipient
|
|
23
|
|
|
12.06
|
Amendment and Termination
|
|
23
|
|
|
12.07
|
Applicable Law
|
|
23
|
|
|
12.08
|
No Funding
|
|
23
|
|
|
12.09
|
Trust
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
the 2005 Anthem Supplemental Executive Retirement Plan;
|
(ii)
|
the 2005 Anthem Deferred Compensation Plan;
|
(iii)
|
the 2005 Trigon Insurance Company 401(k) Restoration Plan; and
|
(iv)
|
the 2005 Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.
|
(i)
|
each pre-2005 Anthem Long-Term Incentive Plan;
|
(ii)
|
the WellPoint Health Networks Inc. Comprehensive Executive Non-Qualified Retirement Plan;
|
(iii)
|
the Anthem Supplemental Executive Retirement Plan;
|
(iv)
|
the Anthem Deferred Compensation Plan;
|
(v)
|
the Trigon Insurance Company 401(k) Restoration Plan; and
|
(vi)
|
the Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.
|
(i)
|
Generally. Subject to Article III (including the last paragraph of Section 3.01), an Eligible Employee may make a Bonus Deferral by filing an Election Form with the Administrator before the beginning of the Plan Year in which the Bonus is earned. All deferrals shall be made on a pre-tax basis.
|
(ii)
|
Performance-Based Compensation. Notwithstanding anything in the Plan to the contrary, to the extent the Committee determines that a Bonus constitutes "performance-based compensation" (within the meaning of Code Section 409A and Regulations issued thereunder), the Committee may permit an Eligible Employee to file an Election Form with the Administrator on or before a date that occurs no later than six months before the end of the performance period provided that (A) the Eligible Employee performs services continuously from the later of the beginning of the performance period or the date the criteria are established through the date the Election Form is submitted and (B) the compensation is not readily ascertainable (within the meaning of Code Section 409A and Regulations issued thereunder) as of the date the Election Form is filed. If a Bonus Deferral election is made pursuant to this paragraph after the beginning of the Plan Year in which the Bonus is earned, such election shall be void if the Bonus becomes payable as a result of the Eligible Employee's death before the satisfaction of the performance criteria.
|
(i)
|
Form of Payment. A Participant who receives a Company Contribution may make a separate election as to the form of payment for such Amount. Any Election Form pursuant to which a Participant selects a form of payment must be filed with the Administrator either:
|
(A)
|
During a period of at least 30 days, or as otherwise specified by the Administrator in its discretion, that occurs before the beginning of the Plan Year in which the Company Contribution is earned or begins to be earned, as the case may be, or
|
(B)
|
Within 30 days after the Company Contribution is awarded, provided the Company Contribution is subject to a vesting schedule of at least 12 months from the date the completed Election Form is filed with the Administrator (taking into account any automatic vesting provisions that may be provided upon certain terminations from employment that may occur before such 12 month period).
|
(ii)
|
No Changes. Subject to Section 3.03, a Participant's Election Form shall be irrevocable as of the first day of the Plan Year to which the Election Form relates.
|
(iii)
|
Amount. The Company Contribution credited to a Participant shall be determined by the Committee or the Administrator, in their discretion. Such contribution may be smaller or larger than the amount credited to any other
|
(i)
|
Form of Payment. If a Participant is credited with a Make-Up Contribution, such contribution shall be paid in a lump sum at the earlier of the Participant's Separation from Service or death.
|
(ii)
|
Amount. The Make-Up Contribution credited to a Participant shall be determined by the Committee or the Administrator, in their discretion.
|
(i)
|
the Part A Benefit (as determined under and set forth in the Pension Plan) that would have been payable to the Participant without regard to Code Section 401(a)(17) or Code Section 415, as of December 31, 2014 (or such earlier Separation from Service) less the Part A Benefit actually payable to the Participant under the Pension Plan and determined in an annuity, less
|
(ii)
|
an annuity equivalent of any lump sum amount received by the Participant from (i) the DeCare Dental Deferred Compensation Plan and the DeCare Dental Restoration Plan upon the respective plans' termination, and (ii) if applicable, the non-qualified plans sponsored by BCBSM, Inc. (d/b/a Blue Cross Blue Shield of Minnesota) that provided benefits in excess of the benefits provided under such entity's qualified plans.
|
(i)
|
timely elected by the Participant pursuant to the Plan; or
|
(ii)
|
no valid payment election is in effect when distribution is to be made.
|
(i)
|
Effective for amounts credited to subaccounts for Plan Years beginning on and after January 1, 2020, a Participant may elect to receive payment of his or her Plan Year subaccount balances in annual installments with a minimum installment period of two years and a maximum installment period of 15 years, provided that each installment shall be calculated by dividing the existing account balance by the number of years remaining in the elected installment period.
|
(ii)
|
Effective for amounts credited to subaccounts for Plan Years beginning before January 1, 2020, a Participant may elect to receive payment of his or her Plan Year subaccount balance in either:
|
1.
|
five annual installments; or
|
2.
|
ten annual installments.
|
(i)
|
If a Participant's Account balance constituting contributions (other than Company and Make-Up Contributions) for all Plan Years at Separation from Service or death, whichever is earlier, is equal to or less than the limit then in effect under Code Section 402(g)(1)(B), such balance shall be paid in a lump sum in lieu of any election to receive installments.
|
(ii)
|
A Participant who is entitled to receive a Supplemental Part A Benefit, as provided under Article V, shall receive such benefit in a lump sum. Payment of the Supplemental Part A* Benefit, if any, and Supplemental Part B Benefit, if any, shall be made as otherwise specified in the Plan.
|
|
ANTHEM, INC.
By:
Gail K. Boudreaux
President & Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Anthem, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
October 23, 2019
|
|
/s/ GAIL K. BOUDREAUX
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Anthem, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
October 23, 2019
|
|
/s/ JOHN E. GALLINA
|
|
|
Executive Vice President and
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ GAIL K. BOUDREAUX
|
|
Gail K. Boudreaux
|
|
President and Chief Executive Officer
|
|
October 23, 2019
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ JOHN E. GALLINA
|
|
John E. Gallina
|
|
Executive Vice President and Chief Financial Officer
|
|
October 23, 2019
|
|