|
☒
|
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
|
☐
|
|
|
|
|
|
|
Page
|
PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
ITEM 1.
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
PART II. OTHER INFORMATION
|
|
|
ITEM 1.
|
||
ITEM 1A.
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
ITEM 5.
|
||
ITEM 6.
|
||
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
(In millions, except share data)
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
5,345
|
|
|
$
|
4,937
|
|
Fixed maturity securities (amortized cost of $20,211 and $19,021; allowance for credit losses of $51 and $0)
|
19,881
|
|
|
19,676
|
|
||
Equity securities
|
570
|
|
|
1,009
|
|
||
Premium receivables
|
5,786
|
|
|
5,014
|
|
||
Self-funded receivables
|
2,613
|
|
|
2,570
|
|
||
Other receivables
|
2,926
|
|
|
2,807
|
|
||
Other current assets
|
4,135
|
|
|
3,020
|
|
||
Total current assets
|
41,256
|
|
|
39,033
|
|
||
Long-term investments:
|
|
|
|
||||
Fixed maturity securities (amortized cost of $489 and $487;
allowance for credit losses of $0 and $0) |
505
|
|
|
505
|
|
||
Other invested assets
|
4,181
|
|
|
4,258
|
|
||
Property and equipment, net
|
3,350
|
|
|
3,133
|
|
||
Goodwill
|
21,661
|
|
|
20,500
|
|
||
Other intangible assets
|
9,613
|
|
|
8,674
|
|
||
Other noncurrent assets
|
1,833
|
|
|
1,350
|
|
||
Total assets
|
$
|
82,399
|
|
|
$
|
77,453
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Medical claims payable
|
$
|
9,902
|
|
|
$
|
8,842
|
|
Other policyholder liabilities
|
3,252
|
|
|
3,050
|
|
||
Unearned income
|
947
|
|
|
1,017
|
|
||
Accounts payable and accrued expenses
|
5,058
|
|
|
4,198
|
|
||
Short-term borrowings
|
1,075
|
|
|
700
|
|
||
Current portion of long-term debt
|
1,603
|
|
|
1,598
|
|
||
Other current liabilities
|
5,202
|
|
|
4,127
|
|
||
Total current liabilities
|
27,039
|
|
|
23,532
|
|
||
Long-term debt, less current portion
|
19,005
|
|
|
17,787
|
|
||
Reserves for future policy benefits
|
754
|
|
|
759
|
|
||
Deferred tax liabilities, net
|
2,213
|
|
|
2,227
|
|
||
Other noncurrent liabilities
|
1,695
|
|
|
1,420
|
|
||
Total liabilities
|
50,706
|
|
|
45,725
|
|
||
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 –
252,020,028 and 252,922,161
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
9,338
|
|
|
9,448
|
|
||
Retained earnings
|
23,360
|
|
|
22,573
|
|
||
Accumulated other comprehensive loss
|
(1,008
|
)
|
|
(296
|
)
|
||
Total shareholders’ equity
|
31,693
|
|
|
31,728
|
|
||
Total liabilities and shareholders’ equity
|
$
|
82,399
|
|
|
$
|
77,453
|
|
|
|
Three Months Ended
March 31 |
||||||
(In millions, except per share data)
|
|
2020
|
|
2019
|
||||
Revenues
|
|
|
|
|
||||
Premiums
|
|
$
|
25,517
|
|
|
$
|
22,843
|
|
Product revenue
|
|
2,344
|
|
|
—
|
|
||
Administrative fees and other revenue
|
|
1,587
|
|
|
1,545
|
|
||
Total operating revenue
|
|
29,448
|
|
|
24,388
|
|
||
Net investment income
|
|
254
|
|
|
210
|
|
||
Net realized (losses) gains on financial instruments
|
|
(24
|
)
|
|
78
|
|
||
Impairment losses on investments:
|
|
|
|
|
||||
Total impairment losses on investments
|
|
(101
|
)
|
|
(13
|
)
|
||
Portion of impairment losses recognized in other comprehensive income
|
|
44
|
|
|
3
|
|
||
Impairment losses recognized in income
|
|
(57
|
)
|
|
(10
|
)
|
||
Total revenues
|
|
29,621
|
|
|
24,666
|
|
||
Expenses
|
|
|
|
|
||||
Benefit expense
|
|
21,489
|
|
|
19,282
|
|
||
Cost of products sold
|
|
1,984
|
|
|
—
|
|
||
Selling, general and administrative expense
|
|
3,781
|
|
|
3,166
|
|
||
Interest expense
|
|
194
|
|
|
187
|
|
||
Amortization of other intangible assets
|
|
83
|
|
|
87
|
|
||
Loss (gain) on extinguishment of debt
|
|
1
|
|
|
(1
|
)
|
||
Total expenses
|
|
27,532
|
|
|
22,721
|
|
||
Income before income tax expense
|
|
2,089
|
|
|
1,945
|
|
||
Income tax expense
|
|
566
|
|
|
394
|
|
||
Net income
|
|
$
|
1,523
|
|
|
$
|
1,551
|
|
Net income per share
|
|
|
|
|
||||
Basic
|
|
$
|
6.03
|
|
|
$
|
6.03
|
|
Diluted
|
|
$
|
5.94
|
|
|
$
|
5.91
|
|
Dividends per share
|
|
$
|
0.95
|
|
|
$
|
0.80
|
|
|
|
Three Months Ended
March 31 |
||||||
(In millions)
|
|
2020
|
|
2019
|
||||
Net income
|
|
$
|
1,523
|
|
|
$
|
1,551
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
||||
Change in net unrealized losses/gains on investments
|
|
(689
|
)
|
|
357
|
|
||
Change in non-credit component of impairment losses on investments
|
|
(32
|
)
|
|
—
|
|
||
Change in net unrealized gains/losses on cash flow hedges
|
|
3
|
|
|
3
|
|
||
Change in net periodic pension and postretirement costs
|
|
7
|
|
|
3
|
|
||
Foreign currency translation adjustments
|
|
(1
|
)
|
|
—
|
|
||
Other comprehensive (loss) income
|
|
(712
|
)
|
|
363
|
|
||
Total comprehensive income
|
|
$
|
811
|
|
|
$
|
1,914
|
|
|
Three Months Ended
March 31 |
||||||
(In millions)
|
2020
|
|
2019
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
1,523
|
|
|
$
|
1,551
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Net realized losses (gains) on financial instruments
|
24
|
|
|
(78
|
)
|
||
Depreciation and amortization
|
270
|
|
|
289
|
|
||
Deferred income taxes
|
57
|
|
|
55
|
|
||
Share-based compensation
|
67
|
|
|
70
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables, net
|
(639
|
)
|
|
(753
|
)
|
||
Other invested assets
|
63
|
|
|
(21
|
)
|
||
Other assets
|
(525
|
)
|
|
(125
|
)
|
||
Policy liabilities
|
692
|
|
|
791
|
|
||
Unearned income
|
(109
|
)
|
|
96
|
|
||
Accounts payable and other liabilities
|
588
|
|
|
(354
|
)
|
||
Income taxes
|
491
|
|
|
115
|
|
||
Other, net
|
13
|
|
|
(6
|
)
|
||
Net cash provided by operating activities
|
2,515
|
|
|
1,630
|
|
||
Investing activities
|
|
|
|
||||
Purchases of investments
|
(3,896
|
)
|
|
(6,069
|
)
|
||
Proceeds from sale of investments
|
2,728
|
|
|
5,236
|
|
||
Maturities, calls and redemptions from investments
|
597
|
|
|
393
|
|
||
Purchases of subsidiaries, net of cash acquired
|
(1,908
|
)
|
|
—
|
|
||
Purchases of property and equipment
|
(204
|
)
|
|
(234
|
)
|
||
Other, net
|
(101
|
)
|
|
22
|
|
||
Net cash used in investing activities
|
(2,784
|
)
|
|
(652
|
)
|
||
Financing activities
|
|
|
|
||||
Net proceeds from commercial paper borrowings
|
905
|
|
|
178
|
|
||
Proceeds from long-term borrowings
|
300
|
|
|
2
|
|
||
Repayments of long-term borrowings
|
(52
|
)
|
|
(63
|
)
|
||
Proceeds from short-term borrowings
|
1,075
|
|
|
2,710
|
|
||
Repayments of short-term borrowings
|
(700
|
)
|
|
(2,760
|
)
|
||
Repurchase and retirement of common stock
|
(529
|
)
|
|
(294
|
)
|
||
Cash dividends
|
(240
|
)
|
|
(206
|
)
|
||
Proceeds from issuance of common stock under employee stock plans
|
44
|
|
|
76
|
|
||
Taxes paid through withholding of common stock under employee stock plans
|
(107
|
)
|
|
(78
|
)
|
||
Other, net
|
(17
|
)
|
|
6
|
|
||
Net cash provided by (used in) financing activities
|
679
|
|
|
(429
|
)
|
||
Effect of foreign exchange rates on cash and cash equivalents
|
(2
|
)
|
|
(1
|
)
|
||
Change in cash and cash equivalents
|
408
|
|
|
548
|
|
||
Cash and cash equivalents at beginning of period
|
4,937
|
|
|
3,934
|
|
||
Cash and cash equivalents at end of period
|
$
|
5,345
|
|
|
$
|
4,482
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Shareholders’
Equity
|
|||||||||||||
(In millions)
|
Number of
Shares
|
|
Par
Value
|
|
||||||||||||||||||
December 31, 2019 (audited)
|
252.9
|
|
|
$
|
3
|
|
|
$
|
9,448
|
|
|
$
|
22,573
|
|
|
$
|
(296
|
)
|
|
$
|
31,728
|
|
Adoption of Accounting Standards Update No. 2016-13 (Note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|||||
January 1, 2020
|
252.9
|
|
|
3
|
|
|
9,448
|
|
|
22,538
|
|
|
(296
|
)
|
|
31,693
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,523
|
|
|
—
|
|
|
1,523
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(712
|
)
|
|
(712
|
)
|
|||||
Repurchase and retirement of common stock
|
(1.9
|
)
|
|
—
|
|
|
(71
|
)
|
|
(458
|
)
|
|
—
|
|
|
(529
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(243
|
)
|
|
—
|
|
|
(243
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
1.0
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Convertible debenture repurchases and conversions
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|||||
March 31, 2020
|
252.0
|
|
|
$
|
3
|
|
|
$
|
9,338
|
|
|
$
|
23,360
|
|
|
(1,008
|
)
|
|
$
|
31,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Organization
|
2.
|
Basis of Presentation and Significant Accounting Policies
|
3.
|
Business Acquisition
|
4.
|
Investments
|
|
Cost or
Amortized Cost |
|
|
|
|
|
|
|
|
|
Non-Credit
Component of
Impairment Recognized in
Accumulated
Other
Comprehensive
Loss
|
||||||||||||||||
|
|
Gross
Unrealized Gains |
|
Gross Unrealized Losses
|
|
Allowance For Credit Losses
|
|
Estimated
Fair Value |
|
||||||||||||||||||
|
|
|
Less than
12 Months
|
|
12 Months
or Greater
|
|
|
|
|||||||||||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
United States Government securities
|
$
|
450
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
474
|
|
|
$
|
—
|
|
Government sponsored securities
|
369
|
|
|
5
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
326
|
|
|
—
|
|
|||||||
States, municipalities and political subdivisions
|
4,768
|
|
|
233
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
4,987
|
|
|
—
|
|
|||||||
Corporate securities
|
9,609
|
|
|
148
|
|
|
(450
|
)
|
|
(44
|
)
|
|
(51
|
)
|
|
9,212
|
|
|
(44
|
)
|
|||||||
Residential mortgage-backed securities
|
3,731
|
|
|
93
|
|
|
(95
|
)
|
|
(7
|
)
|
|
—
|
|
|
3,722
|
|
|
—
|
|
|||||||
Commercial mortgage-backed securities
|
81
|
|
|
1
|
|
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|
78
|
|
|
—
|
|
|||||||
Other securities
|
1,692
|
|
|
6
|
|
|
(97
|
)
|
|
(14
|
)
|
|
—
|
|
|
1,587
|
|
|
—
|
|
|||||||
Total fixed maturity securities
|
$
|
20,700
|
|
|
$
|
510
|
|
|
$
|
(707
|
)
|
|
$
|
(66
|
)
|
|
$
|
(51
|
)
|
|
$
|
20,386
|
|
|
$
|
(44
|
)
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
United States Government securities
|
$
|
524
|
|
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
525
|
|
|
$
|
—
|
|
Government sponsored securities
|
136
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|
—
|
|
|||||||
States, municipalities and political subdivisions
|
4,592
|
|
|
262
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
4,851
|
|
|
—
|
|
|||||||
Corporate securities
|
8,870
|
|
|
339
|
|
|
(9
|
)
|
|
(15
|
)
|
|
—
|
|
|
9,185
|
|
|
(3
|
)
|
|||||||
Residential mortgage-backed securities
|
3,654
|
|
|
87
|
|
|
(6
|
)
|
|
(3
|
)
|
|
—
|
|
|
3,732
|
|
|
—
|
|
|||||||
Commercial mortgage-backed securities
|
84
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|||||||
Other securities
|
1,648
|
|
|
21
|
|
|
(3
|
)
|
|
(5
|
)
|
|
—
|
|
|
1,661
|
|
|
—
|
|
|||||||
Total fixed maturity securities
|
$
|
19,508
|
|
|
$
|
720
|
|
|
$
|
(24
|
)
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
|
$
|
20,181
|
|
|
$
|
(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
|
||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States Government securities
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government sponsored securities
|
278
|
|
|
224
|
|
|
(48
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
239
|
|
|
509
|
|
|
(14
|
)
|
|
3
|
|
|
4
|
|
|
—
|
|
||||
Corporate securities
|
2,773
|
|
|
5,003
|
|
|
(450
|
)
|
|
170
|
|
|
176
|
|
|
(44
|
)
|
||||
Residential mortgage-backed securities
|
603
|
|
|
1,182
|
|
|
(95
|
)
|
|
63
|
|
|
57
|
|
|
(7
|
)
|
||||
Commercial mortgage-backed securities
|
14
|
|
|
29
|
|
|
(3
|
)
|
|
3
|
|
|
6
|
|
|
(1
|
)
|
||||
Other securities
|
520
|
|
|
1,175
|
|
|
(97
|
)
|
|
58
|
|
|
142
|
|
|
(14
|
)
|
||||
Total fixed maturity securities
|
4,428
|
|
|
$
|
8,122
|
|
|
$
|
(707
|
)
|
|
298
|
|
|
$
|
385
|
|
|
$
|
(66
|
)
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States Government securities
|
27
|
|
|
$
|
250
|
|
|
$
|
(3
|
)
|
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Government sponsored securities
|
14
|
|
|
12
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
114
|
|
|
306
|
|
|
(3
|
)
|
|
14
|
|
|
11
|
|
|
—
|
|
||||
Corporate securities
|
386
|
|
|
558
|
|
|
(9
|
)
|
|
224
|
|
|
286
|
|
|
(15
|
)
|
||||
Residential mortgage-backed securities
|
321
|
|
|
635
|
|
|
(6
|
)
|
|
189
|
|
|
237
|
|
|
(3
|
)
|
||||
Commercial mortgage-backed securities
|
1
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|
8
|
|
|
—
|
|
||||
Other securities
|
166
|
|
|
415
|
|
|
(3
|
)
|
|
113
|
|
|
358
|
|
|
(5
|
)
|
||||
Total fixed maturity securities
|
1,029
|
|
|
$
|
2,179
|
|
|
$
|
(24
|
)
|
|
549
|
|
|
$
|
902
|
|
|
$
|
(23
|
)
|
|
|
|
Corporate Securities
|
|||
Allowance for credit losses:
|
|
|
|
|||
|
Beginning balance
|
|
|
$
|
—
|
|
|
Additions for securities for which no previous expected credit losses were recognized
|
|
|
51
|
|
|
Total allowance for credit losses
|
|
|
$
|
51
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
$
|
520
|
|
|
$
|
511
|
|
Due after one year through five years
|
5,730
|
|
|
5,583
|
|
||
Due after five years through ten years
|
6,035
|
|
|
5,882
|
|
||
Due after ten years
|
4,603
|
|
|
4,610
|
|
||
Mortgage-backed securities
|
3,812
|
|
|
3,800
|
|
||
Total fixed maturity securities
|
$
|
20,700
|
|
|
$
|
20,386
|
|
|
|
Three Months Ended
March 31 |
||||||
|
|
2020
|
|
2019
|
||||
Proceeds
|
|
$
|
1,931
|
|
|
$
|
1,468
|
|
Gross realized gains
|
|
43
|
|
|
18
|
|
||
Gross realized losses
|
|
(20
|
)
|
|
(17
|
)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Equity securities:
|
|
|
|
||||
Exchange traded funds
|
$
|
245
|
|
|
$
|
44
|
|
Fixed maturity mutual funds
|
211
|
|
|
643
|
|
||
Common equity securities
|
32
|
|
|
237
|
|
||
Private equity securities
|
82
|
|
|
85
|
|
||
Total
|
$
|
570
|
|
|
$
|
1,009
|
|
|
|
Three Months Ended March 31
|
||||||
|
|
2020
|
|
2019
|
||||
Net realized (losses) gains recognized on equity securities
|
|
$
|
(50
|
)
|
|
$
|
79
|
|
Less: Net realized gains recognized on equity securities sold during the period
|
|
(18
|
)
|
|
(21
|
)
|
||
Unrealized (losses) gains recognized on equity securities still held at March 31
|
|
$
|
(68
|
)
|
|
$
|
58
|
|
|
Overnight and Continuous
|
||
Securities lending transactions
|
|
||
Cash
|
$
|
354
|
|
United States Government securities
|
69
|
|
|
Other securities
|
4
|
|
|
Total
|
$
|
427
|
|
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
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
2,363
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,363
|
|
Fixed maturity securities, available-for-sale:
|
|
|
|
|
|
|
|
||||||||
United States Government securities
|
—
|
|
|
474
|
|
|
—
|
|
|
474
|
|
||||
Government sponsored securities
|
—
|
|
|
326
|
|
|
—
|
|
|
326
|
|
||||
States, municipalities and political subdivisions, tax-exempt
|
—
|
|
|
4,987
|
|
|
—
|
|
|
4,987
|
|
||||
Corporate securities
|
—
|
|
|
8,896
|
|
|
316
|
|
|
9,212
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
3,720
|
|
|
2
|
|
|
3,722
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
||||
Other securities
|
—
|
|
|
1,582
|
|
|
5
|
|
|
1,587
|
|
||||
Total fixed maturity securities, available-for-sale
|
—
|
|
|
20,063
|
|
|
323
|
|
|
20,386
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange traded funds
|
245
|
|
|
—
|
|
|
—
|
|
|
245
|
|
||||
Fixed maturity mutual funds
|
—
|
|
|
211
|
|
|
—
|
|
|
211
|
|
||||
Common equity securities
|
2
|
|
|
30
|
|
|
—
|
|
|
32
|
|
||||
Private equity securities
|
—
|
|
|
—
|
|
|
82
|
|
|
82
|
|
||||
Total equity securities
|
247
|
|
|
241
|
|
|
82
|
|
|
570
|
|
||||
Securities lending collateral
|
—
|
|
|
426
|
|
|
—
|
|
|
426
|
|
||||
Derivatives
|
—
|
|
|
49
|
|
|
—
|
|
|
49
|
|
||||
Total assets
|
$
|
2,610
|
|
|
$
|
20,779
|
|
|
$
|
405
|
|
|
$
|
23,794
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
2,015
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,015
|
|
Fixed maturity securities, available-for-sale:
|
|
|
|
|
|
|
|
||||||||
United States Government securities
|
—
|
|
|
525
|
|
|
—
|
|
|
525
|
|
||||
Government sponsored securities
|
—
|
|
|
141
|
|
|
—
|
|
|
141
|
|
||||
States, municipalities and political subdivisions, tax-exempt
|
—
|
|
|
4,851
|
|
|
—
|
|
|
4,851
|
|
||||
Corporate securities
|
—
|
|
|
8,882
|
|
|
303
|
|
|
9,185
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
3,730
|
|
|
2
|
|
|
3,732
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
86
|
|
|
—
|
|
|
86
|
|
||||
Other securities
|
—
|
|
|
1,654
|
|
|
7
|
|
|
1,661
|
|
||||
Total fixed maturity securities, available-for-sale
|
—
|
|
|
19,869
|
|
|
312
|
|
|
20,181
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exchange traded funds
|
44
|
|
|
—
|
|
|
—
|
|
|
44
|
|
||||
Fixed maturity mutual funds
|
—
|
|
|
643
|
|
|
—
|
|
|
643
|
|
||||
Common equity securities
|
206
|
|
|
31
|
|
|
—
|
|
|
237
|
|
||||
Private equity securities
|
—
|
|
|
—
|
|
|
85
|
|
|
85
|
|
||||
Total equity securities
|
250
|
|
|
674
|
|
|
85
|
|
|
1,009
|
|
||||
Securities lending collateral
|
—
|
|
|
353
|
|
|
—
|
|
|
353
|
|
||||
Derivatives
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||
Total assets
|
$
|
2,265
|
|
|
$
|
20,919
|
|
|
$
|
397
|
|
|
$
|
23,581
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Securities
|
|
Residential
Mortgage-
backed
Securities
|
|
Other
Securities
|
|
Equity
Securities
|
|
Total
|
||||||||||
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance at January 1, 2020
|
$
|
303
|
|
|
$
|
2
|
|
|
$
|
7
|
|
|
$
|
85
|
|
|
$
|
397
|
|
Total losses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recognized in net income
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(8
|
)
|
|||||
Recognized in accumulated other comprehensive loss
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Purchases
|
26
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
38
|
|
|||||
Sales
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(12
|
)
|
|||||
Settlements
|
(11
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Transfers into Level III
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Ending balance at March 31, 2020
|
$
|
316
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
82
|
|
|
$
|
405
|
|
Change in unrealized losses included in net income related to assets still held at March 31, 2020
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance at January 1, 2019
|
$
|
287
|
|
|
$
|
6
|
|
|
$
|
17
|
|
|
$
|
313
|
|
|
$
|
623
|
|
Total (losses) gains:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recognized in net income
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
|||||
Recognized in accumulated other comprehensive loss
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Purchases
|
33
|
|
|
—
|
|
|
2
|
|
|
7
|
|
|
42
|
|
|||||
Sales
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(22
|
)
|
|||||
Settlements
|
(21
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(22
|
)
|
|||||
Transfers into Level III
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Transfers out of Level III
|
(2
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Ending balance at March 31, 2019
|
$
|
297
|
|
|
$
|
6
|
|
|
$
|
14
|
|
|
$
|
297
|
|
|
$
|
614
|
|
Change in unrealized gains included in net income related to assets still held at March 31, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
Carrying
Value
|
|
Estimated Fair Value
|
||||||||||||||||
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other invested assets
|
$
|
4,181
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,181
|
|
|
$
|
4,181
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
1,075
|
|
|
—
|
|
|
1,075
|
|
|
—
|
|
|
1,075
|
|
|||||
Senior revolving credit facility
|
300
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
300
|
|
|||||
Commercial paper
|
1,305
|
|
|
—
|
|
|
1,305
|
|
|
—
|
|
|
1,305
|
|
|||||
Notes
|
18,867
|
|
|
—
|
|
|
20,343
|
|
|
—
|
|
|
20,343
|
|
|||||
Convertible debentures
|
136
|
|
|
—
|
|
|
680
|
|
|
—
|
|
|
680
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other invested assets
|
$
|
4,258
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,258
|
|
|
$
|
4,258
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
700
|
|
|
—
|
|
|
700
|
|
|
—
|
|
|
700
|
|
|||||
Commercial paper
|
400
|
|
|
—
|
|
|
400
|
|
|
—
|
|
|
400
|
|
|||||
Notes
|
18,840
|
|
|
—
|
|
|
20,470
|
|
|
—
|
|
|
20,470
|
|
|||||
Convertible debentures
|
145
|
|
|
—
|
|
|
904
|
|
|
—
|
|
|
904
|
|
7.
|
Income Taxes
|
8.
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
Three Months Ended
March 31 |
|
Three Months Ended
March 31 |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Interest cost
|
$
|
12
|
|
|
$
|
16
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Expected return on assets
|
(40
|
)
|
|
(34
|
)
|
|
(6
|
)
|
|
(5
|
)
|
||||
Recognized actuarial loss
|
6
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
5
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
||||
Net periodic benefit credit
|
$
|
(17
|
)
|
|
$
|
(12
|
)
|
|
$
|
(5
|
)
|
|
$
|
(4
|
)
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Other
|
|
Total
|
||||||||
Gross medical claims payable, beginning of period
|
$
|
3,039
|
|
|
$
|
5,608
|
|
|
$
|
—
|
|
|
$
|
8,647
|
|
Ceded medical claims payable, beginning of period
|
(14
|
)
|
|
(19
|
)
|
|
—
|
|
|
(33
|
)
|
||||
Net medical claims payable, beginning of period
|
3,025
|
|
|
5,589
|
|
|
—
|
|
|
8,614
|
|
||||
Business combinations and purchase adjustments
|
—
|
|
|
141
|
|
|
198
|
|
|
339
|
|
||||
Net incurred medical claims:
|
|
|
|
|
|
|
|
||||||||
Current period
|
6,090
|
|
|
15,010
|
|
|
130
|
|
|
21,230
|
|
||||
Prior periods redundancies
|
(293
|
)
|
|
(407
|
)
|
|
—
|
|
|
(700
|
)
|
||||
Total net incurred medical claims
|
5,797
|
|
|
14,603
|
|
|
130
|
|
|
20,530
|
|
||||
Net payments attributable to:
|
|
|
|
|
|
|
|
||||||||
Current period medical claims
|
3,908
|
|
|
9,698
|
|
|
138
|
|
|
13,744
|
|
||||
Prior periods medical claims
|
1,875
|
|
|
4,234
|
|
|
—
|
|
|
6,109
|
|
||||
Total net payments
|
5,783
|
|
|
13,932
|
|
|
138
|
|
|
19,853
|
|
||||
Net medical claims payable, end of period
|
3,039
|
|
|
6,401
|
|
|
190
|
|
|
9,630
|
|
||||
Ceded medical claims payable, end of period
|
37
|
|
|
23
|
|
|
—
|
|
|
60
|
|
||||
Gross medical claims payable, end of period
|
$
|
3,076
|
|
|
$
|
6,424
|
|
|
$
|
190
|
|
|
$
|
9,690
|
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Other
|
|
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
|
6,053
|
|
|
12,741
|
|
|
—
|
|
|
18,794
|
|
||||
Prior periods redundancies
|
(197
|
)
|
|
(258
|
)
|
|
—
|
|
|
(455
|
)
|
||||
Total net incurred medical claims
|
5,856
|
|
|
12,483
|
|
|
—
|
|
|
18,339
|
|
||||
Net payments attributable to:
|
|
|
|
|
|
|
|
||||||||
Current period medical claims
|
3,898
|
|
|
8,265
|
|
|
—
|
|
|
12,163
|
|
||||
Prior periods medical claims
|
1,766
|
|
|
3,648
|
|
|
—
|
|
|
5,414
|
|
||||
Total net payments
|
5,664
|
|
|
11,913
|
|
|
—
|
|
|
17,577
|
|
||||
Net medical claims payable, end of period
|
2,768
|
|
|
5,226
|
|
|
—
|
|
|
7,994
|
|
||||
Ceded medical claims payable, end of period
|
8
|
|
|
26
|
|
|
—
|
|
|
34
|
|
||||
Gross medical claims payable, end of period
|
$
|
2,776
|
|
|
$
|
5,252
|
|
|
$
|
—
|
|
|
$
|
8,028
|
|
|
|
|
Three Months Ended
March 31, 2020 |
|
Three Months Ended
March 31, 2019 |
||||
|
|
|
|
||||||
Net incurred medical claims:
|
|
|
|
|
|
||||
Commercial & Specialty Business
|
|
|
$
|
5,797
|
|
|
$
|
5,856
|
|
Government Business
|
|
|
14,603
|
|
|
12,483
|
|
||
Other
|
|
|
130
|
|
|
—
|
|
||
Total net incurred medical claims
|
|
|
20,530
|
|
|
18,339
|
|
||
Quality improvement and other claims expense
|
|
|
959
|
|
|
943
|
|
||
Benefit expense
|
|
|
$
|
21,489
|
|
|
$
|
19,282
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Other
|
|
Total
|
||||||||
Net medical claims payable, end of period
|
$
|
3,039
|
|
|
$
|
6,401
|
|
|
$
|
190
|
|
|
$
|
9,630
|
|
Ceded medical claims payable, end of period
|
37
|
|
|
23
|
|
|
—
|
|
|
60
|
|
||||
Insurance lines other than short duration
|
—
|
|
|
212
|
|
|
—
|
|
|
212
|
|
||||
Gross medical claims payable, end of period
|
$
|
3,076
|
|
|
$
|
6,636
|
|
|
$
|
190
|
|
|
$
|
9,902
|
|
10.
|
Debt
|
|
|
|
|
Outstanding principal amount
|
$
|
202
|
|
Unamortized debt discount
|
$
|
64
|
|
Net debt carrying amount
|
$
|
136
|
|
Equity component carrying amount
|
$
|
73
|
|
Conversion rate (shares of common stock per $1,000 of principal amount)
|
13.9862
|
|
|
Effective conversion price (per $1,000 of principal amount)
|
$
|
71.4990
|
|
11.
|
Commitments and Contingencies
|
12.
|
Capital Stock
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Cash
Dividend
per Share
|
|
Total
|
||
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
||
January 28, 2020
|
|
March 16, 2020
|
|
March 27, 2020
|
|
$0.95
|
|
$
|
240
|
|
|
|
|
|
|
|
|
|
|
||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
||
January 29, 2019
|
|
March 18, 2019
|
|
March 29, 2019
|
|
$0.80
|
|
$
|
206
|
|
|
|
Three Months Ended March 31
|
||||||
|
|
2020
|
|
2019
|
||||
Shares repurchased
|
|
1.9
|
|
|
1.1
|
|
||
Average price per share
|
|
$
|
275.38
|
|
|
$
|
275.23
|
|
Aggregate cost
|
|
$
|
529
|
|
|
$
|
294
|
|
Authorization remaining at the end of the period
|
|
$
|
3,263
|
|
|
$
|
5,199
|
|
|
Number of
Shares
|
|
Weighted-
Average
Option Price
per Share
|
|
Weighted-
Average
Remaining
Contractual
Life (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2020
|
3.1
|
|
|
$
|
190.31
|
|
|
|
|
|
||
Granted
|
1.0
|
|
|
271.27
|
|
|
|
|
|
|||
Exercised
|
(0.3
|
)
|
|
107.46
|
|
|
|
|
|
|||
Forfeited or expired
|
—
|
|
|
256.05
|
|
|
|
|
|
|||
Outstanding at March 31, 2020
|
3.8
|
|
|
216.40
|
|
|
7.15
|
|
$
|
139
|
|
|
Exercisable at March 31, 2020
|
2.2
|
|
|
171.44
|
|
|
5.57
|
|
$
|
139
|
|
|
Restricted
Stock Shares
and Units
|
|
Weighted-
Average
Grant Date
Fair Value
per Share
|
|||
Nonvested at January 1, 2020
|
1.4
|
|
|
$
|
242.47
|
|
Granted
|
1.2
|
|
|
272.03
|
|
|
Vested
|
(1.1
|
)
|
|
193.23
|
|
|
Forfeited
|
(0.1
|
)
|
|
264.40
|
|
|
Nonvested at March 31, 2020
|
1.4
|
|
|
271.00
|
|
|
Three Months Ended March 31
|
||||
|
2020
|
|
2019
|
||
Risk-free interest rate
|
1.30
|
%
|
|
2.69
|
%
|
Volatility factor
|
26.00
|
%
|
|
25.00
|
%
|
Quarterly dividend yield
|
0.350
|
%
|
|
0.260
|
%
|
Weighted-average expected life (years)
|
4.30
|
|
|
4.40
|
|
|
Three Months Ended March 31
|
||||||
|
2020
|
|
2019
|
||||
Options granted during the period
|
$
|
54.03
|
|
|
$
|
68.92
|
|
Restricted stock awards granted during the period
|
272.03
|
|
|
307.59
|
|
13.
|
Accumulated Other Comprehensive Loss
|
|
March 31
|
||||||
|
2020
|
|
2019
|
||||
Investments:
|
|
|
|
||||
Gross unrealized gains
|
$
|
510
|
|
|
$
|
379
|
|
Gross unrealized losses
|
(729
|
)
|
|
(121
|
)
|
||
Net pre-tax unrealized (losses) gains
|
(219
|
)
|
|
258
|
|
||
Deferred tax asset (liability)
|
51
|
|
|
(61
|
)
|
||
Net unrealized (losses) gains on investments
|
(168
|
)
|
|
197
|
|
||
Non-credit components of impairments on investments:
|
|
|
|
||||
Unrealized losses
|
(44
|
)
|
|
(3
|
)
|
||
Deferred tax asset
|
10
|
|
|
1
|
|
||
Net unrealized non-credit component of impairments on investments
|
(34
|
)
|
|
(2
|
)
|
||
Cash flow hedges:
|
|
|
|
||||
Gross unrealized losses
|
(327
|
)
|
|
(308
|
)
|
||
Deferred tax asset
|
68
|
|
|
65
|
|
||
Net unrealized losses on cash flow hedges
|
(259
|
)
|
|
(243
|
)
|
||
Defined benefit pension plans:
|
|
|
|
||||
Deferred net actuarial loss
|
(724
|
)
|
|
(744
|
)
|
||
Deferred prior service credits
|
—
|
|
|
(1
|
)
|
||
Deferred tax asset
|
185
|
|
|
191
|
|
||
Net unrecognized periodic benefit costs for defined benefit pension plans
|
(539
|
)
|
|
(554
|
)
|
||
Postretirement benefit plans:
|
|
|
|
||||
Deferred net actuarial loss
|
(25
|
)
|
|
(57
|
)
|
||
Deferred prior service costs
|
18
|
|
|
31
|
|
||
Deferred tax asset
|
2
|
|
|
7
|
|
||
Net unrecognized periodic benefit costs for postretirement benefit plans
|
(5
|
)
|
|
(19
|
)
|
||
Foreign currency translation adjustments:
|
|
|
|
||||
Gross unrealized losses
|
(4
|
)
|
|
(3
|
)
|
||
Deferred tax asset
|
1
|
|
|
1
|
|
||
Net unrealized losses on foreign currency translation adjustments
|
(3
|
)
|
|
(2
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(1,008
|
)
|
|
$
|
(623
|
)
|
|
|
|
|
|
Three Months Ended March 31
|
||||||
|
2020
|
|
2019
|
||||
Investments:
|
|
|
|
||||
Net holding (loss) gain on investment securities arising during the period, net of tax benefit (expense) of $213 and $(98), respectively
|
$
|
(716
|
)
|
|
$
|
350
|
|
Reclassification adjustment for net realized gains on investment securities, net of tax benefit of $7 and $2, respectively
|
27
|
|
|
7
|
|
||
Total reclassification adjustment on investments
|
(689
|
)
|
|
357
|
|
||
Non-credit component of impairments on investments:
|
|
|
|
||||
Non-credit component of impairments on investments, net of tax benefit of $9
|
(32
|
)
|
|
—
|
|
||
Cash flow hedges:
|
|
|
|
||||
Holding gain, net of tax expense of ($1) and ($0), respectively
|
3
|
|
|
3
|
|
||
Other:
|
|
|
|
||||
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($3) and ($1), respectively
|
7
|
|
|
3
|
|
||
Foreign currency translation adjustment, net of tax expense of ($0) and ($0), respectively
|
(1
|
)
|
|
—
|
|
||
Net (loss) gain recognized in other comprehensive income, net of tax benefit (expense) of $211 and $(101), respectively
|
$
|
(712
|
)
|
|
$
|
363
|
|
14.
|
Earnings per Share
|
|
|
Three Months Ended
March 31 |
||||
|
|
2020
|
|
2019
|
||
Denominator for basic earnings per share – weighted-average shares
|
|
252.4
|
|
|
257.1
|
|
Effect of dilutive securities – employee stock options, nonvested restricted stock awards and convertible debentures
|
|
4.0
|
|
|
5.2
|
|
Denominator for diluted earnings per share
|
|
256.4
|
|
|
262.3
|
|
15.
|
Segment Information
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
IngenioRx
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||||
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating revenue - unaffiliated
|
$
|
9,361
|
|
|
$
|
17,466
|
|
|
$
|
2,344
|
|
|
$
|
277
|
|
|
$
|
—
|
|
|
$
|
29,448
|
|
Operating revenue - affiliated
|
—
|
|
|
—
|
|
|
2,853
|
|
|
750
|
|
|
(3,603
|
)
|
|
—
|
|
||||||
Operating gain
|
1,420
|
|
|
411
|
|
|
349
|
|
|
14
|
|
|
—
|
|
|
2,194
|
|
||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating revenue - unaffiliated
|
$
|
9,392
|
|
|
$
|
14,925
|
|
|
$
|
—
|
|
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
24,388
|
|
Operating revenue - affiliated
|
—
|
|
|
—
|
|
|
—
|
|
|
477
|
|
|
(477
|
)
|
|
—
|
|
||||||
Operating gain (loss)
|
1,598
|
|
|
374
|
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
1,940
|
|
|
|
Three Months Ended
March 31 |
||||||
|
|
2020
|
|
2019
|
||||
Commercial & Specialty Business
|
|
|
|
|
||||
Managed care products
|
|
$
|
7,569
|
|
|
$
|
7,618
|
|
Managed care services
|
|
1,381
|
|
|
1,366
|
|
||
Dental/Vision products and services
|
|
315
|
|
|
323
|
|
||
Other
|
|
96
|
|
|
85
|
|
||
Total Commercial & Specialty Business
|
|
9,361
|
|
|
9,392
|
|
||
Government Business
|
|
|
|
|
||||
Managed care products
|
|
17,375
|
|
|
14,821
|
|
||
Managed care services
|
|
91
|
|
|
104
|
|
||
Total Government Business
|
|
17,466
|
|
|
14,925
|
|
||
IngenioRx
|
|
|
|
|
||||
Pharmacy products and services
|
|
5,197
|
|
|
—
|
|
||
Total IngenioRx
|
|
5,197
|
|
|
—
|
|
||
Other
|
|
|
|
|
||||
Other
|
|
1,027
|
|
|
548
|
|
||
Eliminations
|
|
|
|
|
||||
Eliminations
|
|
(3,603
|
)
|
|
(477
|
)
|
||
Total product revenues
|
|
$
|
29,448
|
|
|
$
|
24,388
|
|
|
|
Three Months Ended
March 31 |
||||||
|
|
2020
|
|
2019
|
||||
Reportable segments’ operating revenue
|
|
$
|
29,448
|
|
|
$
|
24,388
|
|
Net investment income
|
|
254
|
|
|
210
|
|
||
Net realized (losses) gains on financial instruments
|
|
(24
|
)
|
|
78
|
|
||
Impairment losses recognized in income
|
|
(57
|
)
|
|
(10
|
)
|
||
Total revenues
|
|
$
|
29,621
|
|
|
$
|
24,666
|
|
|
|
Three Months Ended
March 31 |
||||||
|
|
2020
|
|
2019
|
||||
Reportable segments’ operating gain
|
|
$
|
2,194
|
|
|
$
|
1,940
|
|
Net investment income
|
|
254
|
|
|
210
|
|
||
Net realized (losses) gains on financial instruments
|
|
(24
|
)
|
|
78
|
|
||
Impairment losses recognized in income
|
|
(57
|
)
|
|
(10
|
)
|
||
Interest expense
|
|
(194
|
)
|
|
(187
|
)
|
||
Amortization of other intangible assets
|
|
(83
|
)
|
|
(87
|
)
|
||
(Loss) gain on extinguishment of debt
|
|
(1
|
)
|
|
1
|
|
||
Income before income tax expense
|
|
$
|
2,089
|
|
|
$
|
1,945
|
|
16.
|
Leases
|
|
Balance Sheet Location
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Operating Leases
|
|
|
|
|
|
||||
Right-of-use assets
|
Other noncurrent assets
|
|
$
|
915
|
|
|
$
|
575
|
|
Lease liabilities, current
|
Other current liabilities
|
|
195
|
|
|
158
|
|
||
Lease liabilities, noncurrent
|
Other noncurrent liabilities
|
|
801
|
|
|
482
|
|
|
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Lease Expense
|
|
|
|
|
|||||
Operating lease expense
|
|
$
|
47
|
|
|
$
|
45
|
|
|
Short-term lease expense
|
|
13
|
|
|
12
|
|
|||
Sublease income
|
|
(3
|
)
|
|
(4
|
)
|
|||
Total lease expense
|
|
$
|
57
|
|
|
$
|
53
|
|
|
|
|
|
|
|
|
||||
Other information
|
|
|
|
|
|||||
Operating cash paid for amounts included in the measurement of lease liabilities, operating leases
|
|
$
|
44
|
|
|
$
|
44
|
|
|
Right-of-use assets obtained in exchange for new lease liabilities, operating leases
|
|
$
|
323
|
|
|
$
|
—
|
|
|
Weighted average remaining lease term, operating leases
|
|
7.2 years
|
|
|
6.5 years
|
|
|||
Weighted average discount rate, operating leases
|
|
3.57
|
%
|
|
3.97
|
%
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
◦
|
Signed into law on March 6, 2020, the Coronavirus Preparedness and Response Supplemental Appropriations Act provided supplemental appropriations for the Department of Health and Human Services, the State Department, and the Small Business Administration to respond to the COVID-19 pandemic, as well as certain reforms, including waiving Medicare originating site restrictions for qualified providers providing telehealth services.
|
◦
|
Signed into law on March 19, 2020, the Families and Workers First Act enacted a prohibition on prior authorization and cost-sharing for certain items and services related to COVID-19 tests.
|
◦
|
Signed into law on March 27, 2020, the CARES Act provided financial support to health care providers, including expansion of the Medicare accelerated payment program to all providers receiving Medicare payments. The CARES Act also provided a broad lending program for small businesses to help keep their workers employed and healthcare benefits covered in the group market.
|
◦
|
Signed into law on April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act allocated additional funds to replenish and administer small business loan programs and increased financial support to providers and bolstered COVID-19 testing.
|
|
|
March 31
|
|
|
|
|
||||||
(In thousands)
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||
Medical Membership
|
|
|
|
|
|
|
|
|||||
Customer Type
|
|
|
|
|
|
|
|
|||||
Local Group
|
15,848
|
|
|
15,697
|
|
|
151
|
|
|
1.0
|
%
|
|
Individual
|
717
|
|
|
773
|
|
|
(56
|
)
|
|
(7.2
|
)%
|
|
National:
|
|
|
|
|
|
|
|
|||||
National Accounts
|
7,898
|
|
|
7,757
|
|
|
141
|
|
|
1.8
|
%
|
|
BlueCard®
|
6,197
|
|
|
5,981
|
|
|
216
|
|
|
3.6
|
%
|
|
Total National
|
14,095
|
|
|
13,738
|
|
|
357
|
|
|
2.6
|
%
|
|
Medicare:
|
|
|
|
|
|
|
|
|||||
Medicare Advantage
|
1,341
|
|
|
1,144
|
|
|
197
|
|
|
17.2
|
%
|
|
Medicare Supplement
|
914
|
|
|
867
|
|
|
47
|
|
|
5.4
|
%
|
|
Total Medicare
|
2,255
|
|
|
2,011
|
|
|
244
|
|
|
12.1
|
%
|
|
Medicaid
|
7,615
|
|
|
7,033
|
|
|
582
|
|
|
8.3
|
%
|
|
Federal Employees Health Benefits
|
1,614
|
|
|
1,591
|
|
|
23
|
|
|
1.4
|
%
|
|
Total Medical Membership by Customer Type
|
42,144
|
|
|
40,843
|
|
|
1,301
|
|
|
3.2
|
%
|
|
Funding Arrangement
|
|
|
|
|
|
|
|
|||||
Self-Funded
|
26,120
|
|
|
25,495
|
|
|
625
|
|
|
2.5
|
%
|
|
Fully-Insured
|
16,024
|
|
|
15,348
|
|
|
676
|
|
|
4.4
|
%
|
|
Total Medical Membership by Funding Arrangement
|
42,144
|
|
|
40,843
|
|
|
1,301
|
|
|
3.2
|
%
|
|
Reportable Segment
|
|
|
|
|
|
|
|
|||||
Commercial & Specialty Business
|
30,660
|
|
|
30,208
|
|
|
452
|
|
|
1.5
|
%
|
|
Government Business
|
11,484
|
|
|
10,635
|
|
|
849
|
|
|
8.0
|
%
|
|
Total Medical Membership by Reportable Segment
|
42,144
|
|
|
40,843
|
|
|
1,301
|
|
|
3.2
|
%
|
|
Other Membership
|
|
|
|
|
|
|
|
|||||
Life and Disability Members
|
5,158
|
|
|
4,849
|
|
|
309
|
|
|
6.4
|
%
|
|
Dental Members
|
6,172
|
|
|
5,955
|
|
|
217
|
|
|
3.6
|
%
|
|
Dental Administration Members
|
1,311
|
|
|
5,491
|
|
|
(4,180
|
)
|
|
(76.1
|
)%
|
|
Vision Members
|
7,510
|
|
|
7,169
|
|
|
341
|
|
|
4.8
|
%
|
|
Medicare Part D Standalone Members
|
383
|
|
|
289
|
|
|
94
|
|
|
32.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31 |
|
|
|
|
|
|||||||||
|
|
|
|
||||||||||||||
|
|
|
|
||||||||||||||
|
|
|
2020
|
|
2019
|
|
|
$ Change
|
|
% Change
|
|||||||
Total operating revenue
|
|
$
|
29,448
|
|
|
$
|
24,388
|
|
|
|
$
|
5,060
|
|
|
20.7
|
%
|
|
Net investment income
|
|
254
|
|
|
210
|
|
|
|
44
|
|
|
21.0
|
%
|
||||
Net realized (losses) gains on financial instruments
|
|
(24
|
)
|
|
78
|
|
|
|
(102
|
)
|
|
(130.8
|
)%
|
||||
Impairment losses recognized in income
|
|
(57
|
)
|
|
(10
|
)
|
|
|
(47
|
)
|
|
470.0
|
%
|
||||
Total revenues
|
|
29,621
|
|
|
24,666
|
|
|
|
4,955
|
|
|
20.1
|
%
|
||||
Benefit expense
|
|
21,489
|
|
|
19,282
|
|
|
|
2,207
|
|
|
11.4
|
%
|
||||
Cost of products sold
|
|
1,984
|
|
|
—
|
|
|
|
1,984
|
|
|
NM
|
|
||||
Selling, general and administrative expense
|
|
3,781
|
|
|
3,166
|
|
|
|
615
|
|
|
19.4
|
%
|
||||
Other expense1
|
|
278
|
|
|
273
|
|
|
|
5
|
|
|
1.8
|
%
|
||||
Total expenses
|
|
27,532
|
|
|
22,721
|
|
|
|
4,811
|
|
|
21.2
|
%
|
||||
Income before income tax expense
|
|
2,089
|
|
|
1,945
|
|
|
|
144
|
|
|
7.4
|
%
|
||||
Income tax expense
|
|
566
|
|
|
394
|
|
|
|
172
|
|
|
43.7
|
%
|
||||
Net income
|
|
$
|
1,523
|
|
|
$
|
1,551
|
|
|
|
$
|
(28
|
)
|
|
(1.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average diluted shares outstanding
|
|
256.4
|
|
|
262.3
|
|
|
|
(5.9
|
)
|
|
(2.2
|
)%
|
||||
Diluted net income per share
|
|
$
|
5.94
|
|
|
$
|
5.91
|
|
|
|
$
|
0.03
|
|
|
0.5
|
%
|
|
Effective tax rate
|
|
27.1
|
%
|
|
20.3
|
%
|
|
|
|
|
680bp3
|
|
|||||
Benefit expense ratio2
|
|
84.2
|
%
|
|
84.4
|
%
|
|
|
|
|
(20)bp3
|
|
|||||
Selling, general and administrative expense ratio4
|
|
12.8
|
%
|
|
13.0
|
%
|
|
|
|
|
(20)bp3
|
|
|||||
Income before income tax expense as a percentage of total revenues
|
|
7.1
|
%
|
|
7.9
|
%
|
|
|
|
|
(80)bp3
|
|
|||||
Net income as a percentage of total revenues
|
|
5.1
|
%
|
|
6.3
|
%
|
|
|
|
|
(120)bp3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
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 March 31, 2020 and 2019 were $25,517 and $22,843, 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
March 31 |
|
|
|||||||||||
|
|
2020
|
|
2019 1
|
|
$ Change
|
|
% Change
|
|||||||
Operating Revenue
|
|
|
|
|
|
|
|
||||||||
Commercial & Specialty Business
|
$
|
9,361
|
|
|
$
|
9,392
|
|
|
$
|
(31
|
)
|
|
(0.3
|
)%
|
|
Government Business
|
17,466
|
|
|
14,925
|
|
|
2,541
|
|
|
17.0
|
%
|
||||
IngenioRx
|
5,197
|
|
|
—
|
|
|
5,197
|
|
|
NM
|
|
||||
Other
|
1,027
|
|
|
548
|
|
|
479
|
|
|
87.4
|
%
|
||||
Eliminations
|
(3,603
|
)
|
|
(477
|
)
|
|
(3,126
|
)
|
|
NM
|
|
||||
Total operating revenue
|
$
|
29,448
|
|
|
$
|
24,388
|
|
|
$
|
5,060
|
|
|
20.7
|
%
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Gain (Loss)
|
|
|
|
|
|
|
|
||||||||
Commercial & Specialty Business
|
$
|
1,420
|
|
|
$
|
1,598
|
|
|
$
|
(178
|
)
|
|
(11.1
|
)%
|
|
Government Business
|
411
|
|
|
374
|
|
|
37
|
|
|
9.9
|
%
|
||||
IngenioRx
|
349
|
|
|
—
|
|
|
349
|
|
|
NM
|
|
||||
Other
|
14
|
|
|
(32
|
)
|
|
46
|
|
|
NM
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Margin
|
|
|
|
|
|
|
|
||||||||
Commercial & Specialty Business
|
15.2
|
%
|
|
17.0
|
%
|
|
|
|
|
(180
|
)bp
|
||||
Government Business
|
2.4
|
%
|
|
2.5
|
%
|
|
|
|
|
(10
|
)bp
|
||||
IngenioRx
|
|
6.7
|
%
|
|
—
|
%
|
|
|
|
NM
|
|
||||
|
|
|
|
|
|
|
|
|
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 months ended March 31, 2019 have been reclassified to conform to the current year presentation for comparability.
|
|
|
|
|
|
|
|
Favorable Developments by
Changes in Key Assumptions |
||||||
|
|
|
|
|
|
|
Three Months Ended
March 31 |
||||||
|
|
|
|
|
|
|
2020
|
|
2019
|
||||
Assumed trend factors
|
|
|
|
|
|
|
$
|
510
|
|
|
$
|
345
|
|
Assumed completion factors
|
|
|
|
|
|
|
190
|
|
|
110
|
|
||
Total
|
|
|
|
|
|
|
$
|
700
|
|
|
$
|
455
|
|
|
Three Months Ended
March 31 |
|
2020 vs. 2019
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
Sources of Cash:
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
2,515
|
|
|
$
|
1,630
|
|
|
$
|
885
|
|
Issuances of commercial paper and short- and long-term debt, net of repayments
|
1,528
|
|
|
67
|
|
|
1,461
|
|
|||
Proceeds from issuance of common stock under employee stock plans
|
44
|
|
|
76
|
|
|
(32
|
)
|
|||
Other sources of cash, net
|
—
|
|
|
28
|
|
|
(28
|
)
|
|||
Total sources of cash
|
4,087
|
|
|
1,801
|
|
|
2,286
|
|
|||
Uses of Cash:
|
|
|
|
|
|
||||||
Purchases of investments, net of proceeds from sales, maturities, calls and redemptions
|
(571
|
)
|
|
(440
|
)
|
|
(131
|
)
|
|||
Purchases of subsidiaries, net of cash acquired
|
(1,908
|
)
|
|
—
|
|
|
(1,908
|
)
|
|||
Repurchase and retirement of common stock
|
(529
|
)
|
|
(294
|
)
|
|
(235
|
)
|
|||
Purchases of property and equipment
|
(204
|
)
|
|
(234
|
)
|
|
30
|
|
|||
Cash dividends
|
(240
|
)
|
|
(206
|
)
|
|
(34
|
)
|
|||
Other uses of cash, net
|
(225
|
)
|
|
(78
|
)
|
|
(147
|
)
|
|||
Total uses of cash
|
(3,677
|
)
|
|
(1,252
|
)
|
|
(2,425
|
)
|
|||
Effect of foreign exchange rates on cash and cash equivalents
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Net increase in cash and cash equivalents
|
$
|
408
|
|
|
$
|
548
|
|
|
$
|
(140
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
Increased healthcare costs due to higher utilization rates of medical facilities and services, medical expenses and other increases in associated hospital and pharmaceutical costs. We have begun to offer our members expanded benefit coverage, such as providing full coverage for COVID-19 testing and treatment, and governmental action has required, and may continue to require, us to provide additional coverage.
|
•
|
A reduction in enrollment in our health benefits and pharmacy benefit management products and services, or a change in membership mix to less profitable lines of business, as a result of reductions in workforce by existing customers and other impacts of an economic downturn.
|
•
|
Cash flow volatility or shortfalls caused by an increase in delayed, delinquent or non-collectable payments from customers and government payers.
|
•
|
Reductions in our operating effectiveness as our employees work from home or otherwise are impacted by COVID-19. We have transitioned nearly all of our employee population to a remote work environment in an effort to mitigate the spread of COVID-19, which may exacerbate certain risks to our business, including an increased demand for information technology resources, increased risk of phishing and other cybersecurity attacks, and increased risk of unauthorized dissemination of sensitive personal information or proprietary or confidential information about us, our members or other third parties.
|
•
|
Disruptions in our normal business operations due to disruptions in public and private infrastructure, including communications, financial services and supply chains.
|
•
|
Loss of functionality due to the disruption of services provided to us by third-party vendors, including as a result of financial difficulties experienced by such vendors and the impact of vendor employees working from home or otherwise being impacted by COVID-19.
|
•
|
Increased cost of capital and limited ability to access the capital markets due to disruption and volatility in global financial markets or a downgrade in our credit rating.
|
•
|
A further decrease in the value of our investments, which may result in additional losses charged to income.
|
•
|
An increase in our effective income tax rate due to the impacts of COVID-19 on our income and other factors described above and the non-tax deductibility of the HIP Fee.
|
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)
|
|
|
|
|
|
|
|
||||||
January 1, 2020 to January 31, 2020
|
509,949
|
|
|
$
|
298.71
|
|
|
509,300
|
|
|
$
|
3,640
|
|
February 1, 2020 to February 29, 2020
|
671,852
|
|
|
278.76
|
|
|
670,900
|
|
|
3,453
|
|
||
March 1, 2020 to March 31, 2020
|
1,135,798
|
|
|
261.46
|
|
|
740,058
|
|
|
3,263
|
|
||
|
2,317,599
|
|
|
|
|
1,920,258
|
|
|
|
1
|
Total number of shares purchased includes 397,341 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 March 31, 2020, we repurchased 1,920,258 shares at a cost of $529 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. 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: April 29, 2020
|
By:
|
|
/S/ JOHN E. GALLINA
|
|
|
|
John E. Gallina
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
|
|
|
|
Date: April 29, 2020
|
By:
|
|
/S/ RONALD W. PENCZEK
|
|
|
|
Ronald W. Penczek
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
•
|
for any institutional investor (as defined in our articles of incorporation), one share less than 10% of our outstanding voting securities;
|
•
|
for any non-institutional investor (as defined in our articles of incorporation), one share less than 5% of our outstanding voting securities; and
|
•
|
for any person, one share less than the number of shares of our common stock or other equity securities (or a combination thereof) representing a 20% ownership interest in us.
|
•
|
the division of the board of directors into three classes serving staggered terms of office of three years;
|
•
|
provisions limiting the maximum number of directors to 19;
|
•
|
provisions requiring that, except in certain limited circumstances, the filling of any vacancy on the board of directors must be approved by a majority of continuing directors; and
|
•
|
requirements for advance notice for raising business or making nominations at shareholders’ meetings.
|
Notice:
|
You have been granted the following nonqualified stock option to purchase shares of common stock of the Company in accordance with the terms of the Plan and the attached Nonqualified Stock Option Award Agreement.
|
Exercisability:
|
Subject to the terms of the Plan and this Agreement, your Option will become exercisable on and after the dates indicated below as to the number of Shares set forth below opposite each such date, plus any Shares as to which your Option could have been exercised previously but was not so exercised.
|
Shares
|
Date
|
[•]
|
[•]
|
[•]
|
[•]
|
[•]
|
[•]
|
Expiration Date:
|
Your Option will expire ten years from the Grant Date, subject to earlier termination as set forth in the Plan and this Agreement.
|
Acceptance:
|
In order to accept your Options, you must electronically accept this Agreement through the Company’s broker at any time within ninety (90) days after the Grant Date. To effect your acceptance, please follow the instructions included with your grant materials. Acceptance of the Agreement includes acceptance of the terms and conditions of the Plan. If you do not timely and electronically accept this Agreement, this Agreement will be null and void as of the 90th day after the Grant Date and you will have no right or claim to the Options described above.
|
By:
|
______________________________
|
Printed:
|
Lewis Hay III
|
Its:
|
Chair, Compensation Committee of the Board of Directors
|
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.
|
|
|
|
April 29, 2020
|
|
/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.
|
April 29, 2020
|
|
/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
|
|
April 29, 2020
|
|
(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
|
|
April 29, 2020
|
|