Elevance Health Reports Third Quarter 2024 Results

Rhea-AI Summary

Elevance Health (NYSE: ELV) reported third quarter 2024 results with operating revenue of $44.7 billion, a $2.2 billion increase from the prior year. The company's adjusted operating gain was $2.4 billion, with diluted EPS of $4.36 and adjusted diluted EPS of $8.37. Elevance Health revised its 2024 outlook, now expecting GAAP net income per diluted share to be approximately $26.50 and adjusted net income per diluted share to be approximately $33.00.

The benefit expense ratio increased to 89.5%, up 270 basis points, primarily due to a timing mismatch between Medicaid rates and higher member acuity. The operating expense ratio improved to 11.8%, or 9.6% excluding adjustment items. The company's Health Benefits segment saw operating revenue increase to $38.3 billion, while Carelon's operating revenue grew to $13.8 billion. Elevance Health declared a fourth quarter 2024 dividend of $1.63 per share.

Positive

• Operating revenue increased by $2.2 billion to $44.7 billion in Q3 2024
• Adjusted operating gain of $2.4 billion in Q3 2024
• Operating expense ratio improved by 110 basis points to 11.8%
• Carelon segment operating revenue increased by 15% to $13.8 billion
• Carelon operating gain increased by 20% to $0.8 billion
• Board approved an $8.0 billion increase to the common stock repurchase program

Negative

• Benefit expense ratio increased by 270 basis points to 89.5%
• Health Benefits segment operating gain decreased to $1.6 billion from $1.8 billion in the prior year quarter
• Medical membership decreased by 1.5 million, or 3%, primarily due to Medicaid attrition
• Revised 2024 outlook with lower expected GAAP and adjusted net income per diluted share
• Days in Claims Payable decreased by 5.8 days compared to September 30, 2023

Insights

Financial Analyst

Elevance Health's Q3 2024 results reveal a mixed financial picture. Operating revenue increased to $44.7 billion, up 5.2% year-over-year, driven by higher premium yields in Health Benefits and growth in CarelonRx. However, the operating gain decreased to $1.4 billion from $1.8 billion in Q3 2023, primarily due to challenges in the Medicaid business.

The benefit expense ratio increased by 270 basis points to 89.5%, reflecting a mismatch between Medicaid rates and member acuity. This pressured margins, with the operating margin declining to 3.1% from 4.1% year-over-year. On a positive note, the company improved its operating expense ratio by 110 basis points to 11.8%, demonstrating cost management efforts.

Elevance Health has revised its 2024 outlook, now expecting adjusted EPS of approximately $33.00, down from previous guidance. This adjustment, coupled with the $8 billion increase in share repurchase authorization, suggests the company is focusing on shareholder returns while navigating near-term challenges in its Medicaid business.

Healthcare Policy Expert

The Q3 results highlight significant challenges in Elevance Health's Medicaid business, primarily due to the ongoing eligibility redeterminations process. This has led to membership attrition and a mismatch between rates and member acuity, impacting the company's financial performance.

The Medicaid membership decline is part of a broader industry trend as states resume eligibility checks following the end of the COVID-19 public health emergency. This transition period is causing volatility in Medicaid enrollment and profitability for managed care organizations.

Elevance Health's statement that they "expect Medicaid rates will align with the needs of our members in time" suggests a cautiously optimistic outlook. However, the timing and extent of this alignment remain uncertain and will likely depend on state-by-state negotiations and policy adjustments.

Investors should monitor how effectively Elevance Health can navigate this challenging Medicaid landscape, as it will be important for the company's near-term performance and long-term positioning in the government-sponsored healthcare market.

• 3Q 2024 operating revenue of $44.7 billion
• 3Q 2024 adjusted operating gain¹ of $2.4 billion
• 3Q 2024 diluted EPS² of $4.36; adjusted diluted EPS¹ of $8.37
• 4Q 2024 dividend of $1.63 per share declared to shareholders

INDIANAPOLIS--(BUSINESS WIRE)-- Elevance Health, Inc. (NYSE: ELV) reported third quarter 2024 results.

“We remain confident in the long-term earnings potential of our diverse businesses as we navigate a dynamic operating environment and unprecedented challenges in the Medicaid business. We expect Medicaid rates will align with the needs of our members in time, and are taking proactive actions to enhance operational efficiencies that will ensure we emerge from this period even stronger.”

Gail K. Boudreaux
President and Chief Executive Officer

Given third quarter results and the timing mismatch between Medicaid rates and acuity, Elevance Health now expects 2024 GAAP net income per diluted share to be approximately $26.50 and adjusted net income per diluted share to be approximately $33.00.

1.		Refer to GAAP reconciliation tables herein for reconciliation of GAAP to adjusted measures.
2.		Earnings per diluted share ("EPS").

	Elevance Health
	Consolidated Enterprise Highlights
	(Unaudited)
	(In billions)	Three Months Ended
		September 30, 2024		September 30, 2023		June 30, 2024
	Operating Revenue1	$44.7		$42.5		$43.2
	Operating Gain1,2	$1.4		$1.8		$2.8
	Adjusted Operating Gain1,3	$2.4		$2.5		$2.8
	Operating Margin1	3.1 %		4.1 %		6.4 %
	Adjusted Operating Margin1,3	5.3 %		6.0 %		6.6 %

1.		See “Basis of Presentation” herein.
2.		Operating Gain for the three months ended September 30, 2024, and September 30, 2023, include items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation."
3.		Adjusted Operating Gain for the three months ended September 30, 2024, and September 30, 2023, exclude items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation" herein.

Operating revenue was $44.7 billion in the third quarter of 2024, an increase of $2.2 billion compared to the prior year quarter. This was driven by higher premium yields in our Health Benefits segment and growth in CarelonRx product revenue, partially offset by membership attrition in our Medicaid business.

The benefit expense ratio was 89.5 percent, an increase of 270 basis points, driven primarily by the timing mismatch between Medicaid rates and the higher acuity of our members. Days in Claims Payable was 42.8 days as of September 30, 2024, a decrease of 2.5 days from June 30, 2024, and a decrease of 5.8 days compared to September 30, 2023 due to increases in average benefit expense per day.

The operating expense ratio was 11.8 percent, an improvement of 110 basis points. Excluding adjustment items, the operating expense ratio was 9.6 percent, an improvement of 150 basis points, reflecting disciplined cost management to enhance operating efficiency.

Cash Flow & Balance Sheet

Operating cash flow was $2.7 billion in the quarter, an increase of approximately $0.1 billion year-over-year. As of September 30, 2024, cash and investments at the parent company totaled approximately $2.6 billion.

During the third quarter of 2024, the Company repurchased 0.1 million shares of its common stock for $60 million, at a weighted average price of $511.01, and paid a quarterly dividend of $1.63 per share, representing a distribution of cash totaling $378 million. As of September 30, 2024, the Company had approximately $3.1 billion of Board approved share repurchase authorization remaining. On October 15, 2024, our Audit Committee, pursuant to authorization granted by the Board of Directors, authorized an $8.0 billion increase to the common stock repurchase program. The Company intends to utilize this authorization over a multi-year period, subject to market and industry conditions.

Health Benefits is comprised of Individual, Employer Group risk-based, Employer Group fee-based, BlueCard^®, Medicare, Medicaid, and Federal Health Products & Services businesses.

	Health Benefits
	Reportable Segment Highlights
	(Unaudited)
	(In billions)	Three Months Ended
		September 30, 2024		September 30, 2023		June 30, 2024
	Operating Revenue1	$38.3		$36.7		$37.2
	Operating Gain1	$1.6		$1.8		$2.1
	Operating Margin1	4.2 %		5.0 %		5.8 %

1.

See “Basis of Presentation” herein.

Health Benefits segment operating revenue was $38.3 billion in the third quarter of 2024, an increase of $1.5 billion compared to the prior year quarter, driven primarily by higher premium yields, partially offset by membership attrition in our Medicaid business.

Operating gain totaled $1.6 billion, impacted primarily by the unfavorable mix shift in Medicaid membership related to eligibility redeterminations, partially offset by premium rate increases, focused medical management, and the proactive actions we are taking to enhance operating efficiency.

Medical membership totaled approximately 45.8 million as of September 30, 2024, a decrease of 1.5 million, or 3 percent, driven by attrition in our Medicaid business associated with eligibility redeterminations and footprint adjustments in certain Medicaid states. These losses were partially offset by growth in Employer Group fee-based and Affordable Care Act health plan membership.

Carelon is comprised of CarelonRx and Carelon Services.

	Carelon
	Reportable Segment Highlights
	(Unaudited)
	(In billions)	Three Months Ended
		September 30, 2024		September 30, 2023		June 30, 2024
	Operating Revenue1	$13.8		$12.0		$13.3
	Operating Gain1	$0.8		$0.7		$0.7
	Operating Margin1	5.8 %		5.6 %		5.3 %

1.

See “Basis of Presentation” herein.

Operating revenue for Carelon was $13.8 billion in the third quarter of 2024, an increase of $1.8 billion, or 15 percent compared to the prior year quarter. This was driven by the launch and growth of risk-based capabilities in Carelon Services and growth in CarelonRx product revenue, related to the acquisition of Paragon Healthcare in the first quarter and increases in external members served.

Operating gain for Carelon totaled $0.8 billion, an increase of $134 million, or 20 percent, primarily driven by growth in product revenue and a one-time favorable intra-year true up in CarelonRx, partially offset by results in our Carelon Health businesses.

Quarterly Dividend

On October 15, 2024, the Audit Committee of the Company's Board of Directors declared a fourth quarter 2024 dividend to shareholders of $1.63 per share. The fourth quarter dividend is payable on December 20, 2024, to shareholders of record at the close of business on December 5, 2024.

About Elevance Health

Elevance Health is a lifetime, trusted health partner whose purpose is to improve the health of humanity. The company supports consumers, families, and communities across the entire healthcare journey – connecting them to the care, support, and resources they need to lead better lives. Elevance Health’s companies serve approximately 113 million consumers through a diverse portfolio of industry-leading medical, pharmacy, behavioral, clinical, and complex care solutions. For more information, please visit www.elevancehealth.com or follow us @ElevanceHealth on X and Elevance Health on LinkedIn.

Conference Call and Webcast

Management will host a conference call and webcast today at 8:30 a.m. Eastern Daylight Time (“EDT”) to discuss the company’s third quarter results and outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers:

888-947-9963 (Domestic)	866-510-4837 (Domestic Replay)
312-470-0178 (International)	203-369-1943 (International Replay)

The access code for today's conference call is 3972058. There is no access code for the replay. The replay will be available from 11:30 a.m. EDT today, until the end of the day on November 15, 2024. The call will also be available through a live webcast at www.elevancehealth.com under the “Investors” link. A webcast replay will be available following the call.

Basis of Presentation

1. Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reporting segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and operating expense. It does not include net investment income, net gains/losses on financial instruments, interest expense, amortization of other intangible assets, gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management. Refer to the GAAP reconciliation tables.
2. Operating margin is defined as operating gain divided by operating revenue.

Elevance Health
Earnings Release Financial Schedules and Supplementary Information
Quarter & Year-to-Date Ended September 30, 2024

• Membership and Other Metrics
• Quarterly & Year-to-Date Consolidated Statements of Income
• Condensed Consolidated Balance Sheet
• Condensed Consolidated Statement of Cash Flows
• Supplemental Financial Information - Reportable Segments
• Supplemental Financial Information - Reconciliation of Medical Claims Payable
• Reconciliation of Non-GAAP Financial Measures

Elevance Health
Membership and Other Metrics
(Unaudited)
							Change from
Medical Membership (in thousands)	September 30, 2024		September 30, 2023		June 30, 2024		September 30, 2023		June 30, 2024
Individual	1,299		999		1,281		30.0 %		1.4 %
Employer Group Risk-Based	3,672		3,754		3,648		(2.2) %		0.7 %
Commercial Risk-Based	4,971		4,753		4,929		4.6 %		0.9 %
BlueCard®1	6,677		6,737		6,692		(0.9) %		(0.2) %
Employer Group Fee-Based	20,589		20,166		20,542		2.1 %		0.2 %
Commercial Fee-Based	27,266		26,903		27,234		1.3 %		0.1 %
Medicare Advantage	2,047		2,064		2,031		(0.8) %		0.8 %
Medicare Supplement	894		928		894		(3.7) %		— %
Total Medicare	2,941		2,992		2,925		(1.7) %		0.5 %
Medicaid	8,926		11,018		9,028		(19.0) %		(1.1) %
Federal Employees Health Benefits	1,656		1,640		1,660		1.0 %		(0.2) %
Total Medical Membership	45,760		47,306		45,776		(3.3) %		— %
Other Membership (in thousands)
Dental Members	7,021		6,775		7,008		3.6 %		0.2 %
Dental Administration Members	1,878		1,708		1,851		10.0 %		1.5 %
Vision Members	10,382		9,861		10,275		5.3 %		1.0 %
Medicare Part D Standalone Members	258		261		260		(1.1) %		(0.8) %
Other Metrics (in millions)
CarelonRx Quarterly Adjusted Scripts	80.2		77.3		78.2		3.8 %		2.6 %
Carelon Services Consumers Served	101.3		104.8		102.3		(3.3) %		(1.0) %

1.

BlueCard® membership for the three months ended September 30, 2023, is restated to align to the Blue Cross Blue Shield Association reporting methodology. For the three months ended September 30, 2023, BlueCard® membership has been restated lower by 19.

Elevance Health
Consolidated Statements of Income
(Unaudited)
(In millions, except per share data)	Three Months Ended September 30							Nine Months Ended September 30
	2024		2023		Change			2024		2023		Change
Revenues
Premiums	$ 36,809		$ 35,259		4.4 %			$ 107,921		$ 107,716		0.2 %
Product revenue	5,887		5,177		13.7 %			15,916		14,058		13.2 %
Service fees	2,023		2,044		(1.0) %			6,378		5,981		6.6 %
Total operating revenue	44,719		42,480		5.3 %			130,215		127,755		1.9 %
Net investment income	551		493		11.8 %			1,524		1,296		17.6 %
Net losses on financial instruments	(125)		(124)		NM			(371)		(358)		NM
(Loss) gain on sale of business	(39)		—		NM			201		—		NM
Total revenues	45,106		42,849		5.3 %			131,569		128,693		2.2 %
Expenses
Benefit expense	32,949		30,606		7.7 %			94,067		92,996		1.2 %
Cost of products sold	5,093		4,648		9.6 %			13,738		12,456		10.3 %
Operating expense	5,269		5,470		(3.7) %			15,221		15,088		0.9 %
Interest expense	300		259		15.8 %			845		771		9.6 %
Amortization of other intangible assets	122		212		(42.5) %			400		668		(40.1) %
Total expenses	43,733		41,195		6.2 %			124,271		121,979		1.9 %
Income before income tax expense	1,373		1,654		(17.0) %			7,298		6,714		8.7 %
Income tax expense	365		354		3.1 %			1,740		1,554		12.0 %
Net income	1,008		1,300		(22.5) %			5,558		5,160		7.7 %
Net loss (income) attributable to noncontrolling interests	8		(11)		NM			4		(29)		NM
Shareholders' net income	$ 1,016		$ 1,289		(21.2) %			$ 5,562		$ 5,131		8.4 %
Shareholders' earnings per diluted share	$ 4.36		$ 5.45		(20.0) %			$ 23.81		$ 21.56		10.4 %
Diluted shares	233.1		236.5		(1.4) %			233.6		238.0		(1.8) %
Benefit expense as a percentage of premiums	89.5 %		86.8 %		270 bp			87.2 %		86.3 %		90 bp
Operating expense as a percentage of total operating revenue	11.8 %		12.9 %		(110) bp			11.7 %		11.8 %		(10) bp
Income before income tax expense as a percentage of total revenue	3.0 %		3.9 %		(90) bp			5.5 %		5.2 %		30 bp

"NM" = calculation not meaningful

Elevance Health
Condensed Consolidated Balance Sheet
(In millions)	September 30, 2024		December 31, 2023
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$7,866		$6,526
Fixed maturity and equity securities	30,067		29,843
Premium and other receivables	18,399		17,865
Other current assets	5,949		5,795
Assets held for sale	565		—
Total current assets	62,846		60,029
Long-term investments	10,287		6,983
Property and equipment, net	4,505		4,359
Goodwill and other intangible assets	36,292		35,590
Other noncurrent assets	2,603		1,967
Total assets	$116,533		$108,928
Liabilities and equity
Liabilities
Current liabilities:
Medical claims payable	$15,346		$16,111
Short-term borrowings	360		225
Current portion of long-term debt	2,100		1,649
Other current liabilities	24,064		23,806
Liabilities held for sale	163		—
Total current liabilities	42,033		41,791
Long-term debt, less current portion	24,688		23,246
Other noncurrent liabilities	5,933		4,486
Total liabilities	72,654		69,523
Total shareholders’ equity	43,775		39,306
Noncontrolling interests	104		99
Total equity	43,879		39,405
Total liabilities and equity	$116,533		$108,928

Elevance Health
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(In millions)	Nine Months Ended September 30
	2024			2023
Operating activities
Net income	$5,558			$5,160
Depreciation and amortization	995			1,321
Share-based compensation	220			217
Changes in operating assets and liabilities	(1,701	)		3,821
Other non-cash items	30			513
Net cash provided by operating activities	5,102			11,032
Investing activities
Purchases of investments, net of sales and maturities	(1,614	)		(1,976	)
Net purchases of subsidiaries, net of cash acquired/sold	(725	)		(1,570	)
Purchases of property and equipment	(934	)		(970	)
Other, net	(256	)		(27	)
Net cash used in investing activities	(3,529	)		(4,543	)
Financing activities
Net change in short-term and long-term borrowings	1,915			401
Repurchase and retirement of common stock	(1,089	)		(1,748	)
Cash dividends	(1,135	)		(1,049	)
Other, net	94			(559	)
Net cash provided by (used in) financing activities	(215	)		(2,955	)
Effect of foreign exchange rates on cash and cash equivalents	2			(2	)
Change in cash and cash equivalents	1,360			3,532
Cash and cash equivalents at beginning of period	6,526			7,387
Less cash and equivalents included in assets held for sale at end of period	(20	)		—
Cash and cash equivalents at end of period	$7,866			$10,919

REPORTABLE SEGMENTS

Elevance Health has four reportable segments: Health Benefits (comprised of Individual, Employer Group risk-based, Employer Group fee-based, BlueCard^®, Medicare, Medicaid, and Federal Health Products & Services businesses); CarelonRx; Carelon Services; and Corporate & Other (comprised of businesses that do not individually meet the quantitative thresholds for an operating division as well as corporate expenses not allocated to our other reportable segments).

	Elevance Health
	Reportable Segment Highlight Details
	(Unaudited)
	(In millions)	Three Months Ended September 30						Nine Months Ended September 30
		2024		2023		Change		2024		2023		Change
	Operating Revenue
	Health Benefits	$38,278		$36,744		4.2 %		$112,695		$112,024		0.6 %
	CarelonRx	9,143		8,518		7.3 %		25,984		25,008		3.9 %
	Carelon Services	4,638		3,509		32.2 %		13,192		10,573		24.8 %
	Corporate & Other	74		95		(22.1) %		323		298		8.4 %
	Eliminations	(7,414)		(6,386)		16.1 %		(21,979)		(20,148)		9.1 %
	Total Operating Revenue1	$44,719		$42,480		5.3 %		$130,215		$127,755		1.9 %
	Operating Gain (Loss)
	Health Benefits	$1,604		$1,834		(12.5) %		$6,036		$6,121		(1.4) %
	CarelonRx	619		477		29.8 %		1,639		1,485		10.4 %
	Carelon Services	184		192		(4.2) %		682		578		18.0 %
	Corporate & Other2	(999)		(747)		NM3		(1,168)		(969)		NM3
	Total Operating Gain1	$1,408		$1,756		(19.8) %		$7,189		$7,215		(0.4) %
	Operating Margin
	Health Benefits	4.2 %		5.0 %		(80) bp		5.4 %		5.5 %		(10) bp
	CarelonRx	6.8 %		5.6 %		120 bp		6.3 %		5.9 %		40 bp
	Carelon Services	4.0 %		5.5 %		(150) bp		5.2 %		5.5 %		(30) bp
	Total Operating Margin1	3.1 %		4.1 %		(100) bp		5.5 %		5.6 %		(10) bp

1.		See “Basis of Presentation” on page 5 herein.
2.		Operating Gain for the three months ended September 30, 2024, and September 30, 2023, included items adjusted out of adjusted shareholders' net income. See "GAAP Reconciliation" herein.
3.		"NM" = calculation not meaningful.

Elevance Health
Reconciliation of Medical Claims Payable
	Nine Months Ended September 30								Years Ended December 31
	2024				2023				2023				2022				2021
(In millions)	(Unaudited)				(Unaudited)
Gross medical claims payable, beginning of period	$	15,865			$	15,348			$	15,348			$	13,282			$	11,135
Ceded medical claims payable, beginning of period		(7	)			(6	)			(6	)			(21	)			(46	)
Net medical claims payable, beginning of period		15,858				15,342				15,342				13,261				11,089
Business combinations and purchase adjustments		—				—				—				133				420
Net incurred medical claims:
Current year		92,715				91,058				121,798				113,414				100,440
Prior years redundancies1		(1,610	)			(1,342	)			(1,571	)			(869	)			(1,703	)
Total net incurred medical claims		91,105				89,716				120,227				112,545				98,737
Net payments attributable to:
Current year medical claims		79,220				77,048				107,146				98,997				88,156
Prior years medical claims		12,567				12,097				12,565				11,600				8,829
Total net payments		91,787				89,145				119,711				110,597				96,985
Net medical claims payable, end of period		15,176				15,913				15,858				15,342				13,261
Ceded medical claims payable, end of period		9				4				7				6				21
Gross medical claims payable, end of period2	$	15,185			$	15,917			$	15,865			$	15,348			$	13,282
Current year medical claims paid as a percentage of current year net incurred medical claims		85.4	%			84.6	%			88.0	%			87.3	%			87.8	%
Prior year redundancies in the current year as a percentage of prior year net medical claims payable less prior year redundancies in the current year		11.3	%			9.6	%			11.4	%			7.0	%			18.1	%
Prior year redundancies in the current year as a percentage of prior year net incurred medical claims		1.3	%			1.2	%			1.4	%			0.9	%			2.0	%

1.		Negative amounts reported for net incurred medical claims related to prior years result from claims being settled for amounts less than originally estimated.
2.		Excludes insurance lines other than short duration.

Elevance Health

GAAP Reconciliation

(Unaudited)

This document references non-GAAP measures, including “Adjusted Shareholders’ Net Income,” “Adjusted Shareholders’ Net Income Per Share,” “Adjusted EPS,” “Adjusted Operating Gain,” “Adjusted Operating Expense” and “Adjusted Operating Expense Ratio,” which are non-GAAP measures. These non-GAAP measures are intended to aid investors when comparing Elevance Health’s financial results among periods and are not intended to be alternatives to any measure calculated in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable measures calculated in accordance with GAAP are available below. In addition to these non-GAAP measures, references are made to the measures “Operating Revenue” and “Operating Gain/Loss,” “Operating Margin” and “Adjusted EPS”. Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reportable segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and operating expense. It does not include net investment income, net gains/losses on financial instruments, interest expense, amortization of other intangible assets and gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management. Each of these measures is provided to further aid investors in understanding and analyzing Elevance Health’s operating and financial results. A reconciliation of Operating Revenue to Total Revenue is set forth in the Consolidated Statements of Income herein. A reconciliation of the non-GAAP measures to the most directly comparable measures calculated in accordance with GAAP, together with a reconciliation of reportable segments operating gain to income before income tax expense, is provided below. Prior amounts may be grouped differently to conform to the current presentation. Net adjustment items per share may not sum due to rounding. A reconciliation of Operating Revenue to Total Revenue is set forth in the Consolidated Statements of Income herein.

	Three Months Ended September 30											Nine Months Ended September 30
(In millions, except per share data)		2024				2023			Change				2024				2023			Change
Shareholders' net income	$	1,016			$	1,289			(21.2	)%		$	5,562			$	5,131			8.4	%
Add / (Subtract):
Litigation and settlement expenses1		669				2							680				5
Business optimization charges1		268				697							268				697
Net losses on financial instruments		125				124							371				358
Amortization of other intangible assets		122				212							400				668
Transaction and integration related costs1		42				73							158				154
Loss (gain) on sale of business		39				—							(201	)			—
Tax impact of non-GAAP adjustments		(329	)			(270	)						(432	)			(470	)
Net adjustment items		936				838							1,244				1,412
Adjusted shareholders' net income	$	1,952			$	2,127			(8.2	)%		$	6,806			$	6,543			4.0	%
Shareholders' earnings per diluted share	$	4.36			$	5.45			(20.0	)%		$	23.81			$	21.56			10.4	%
Add / (Subtract):
Litigation and settlement expenses1		2.87				0.01							2.91				0.02
Business optimization charges1		1.15				2.95							1.15				2.93
Net losses on financial instruments		0.54				0.52							1.59				1.50
Amortization of other intangible assets		0.52				0.90							1.71				2.81
Transaction and integration related costs1		0.18				0.31							0.68				0.65
Loss (gain) on sale of business		0.17				—							(0.86	)			—
Tax impact of non-GAAP adjustments		(1.41	)			(1.14	)						(1.85	)			(1.97	)
Net adjustment items		4.01				3.54							5.33				5.93
Adjusted shareholders' earnings per diluted share	$	8.37			$	8.99			(6.9	)%		$	29.14			$	27.49			6.0	%
	Three Months Ended September 30											Nine Months Ended September 30
(In millions)		2024				2023			Change				2024				2023			Change
Income before income tax expense	$	1,373			$	1,654			(17.0	)%		$	7,298			$	6,714			8.7	%
Net investment income		(551	)			(493	)						(1,524	)			(1,296	)
Loss (gain) on sale of business		39				—							(201	)			—
Net losses on financial instruments		125				124							371				358
Interest expense		300				259							845				771
Amortization of other intangible assets		122				212							400				668
Reportable segments operating gain	$	1,408			$	1,756			(19.8	)%		$	7,189			$	7,215			(0.4	)%

1.		Adjustment item resides in the Corporate & Other reportable segment.
2.		Totals may not foot due to rounding

Elevance Health
GAAP Reconciliation
(Unaudited)
	Three Months Ended September 30											Nine Months Ended September 30
(In millions)		2024				2023			Change				2024				2023			Change
Reportable segments operating gain	$	1,408			$	1,756			(19.8	)%		$	7,189			$	7,215			(0.4	)%
Add / (Subtract):
Litigation and settlement expenses1		669				2							680				5
Business optimization charges1		268				697							268				697
Transaction and integration related costs1		42				73							158				154
Net adjustment items		979				772							1,106				856
Reportable segments adjusted operating gain	$	2,387			$	2,528			(5.6	)%		$	8,295			$	8,071			2.8	%
	Three Months Ended September 30											Nine Months Ended September 30
(In millions)		2024				2023			Change				2024				2023			Change
Operating expense	$	5,269			$	5,470			(3.7	)%		$	15,221			$	15,088			0.9	%
Add / (Subtract):
Litigation and settlement expenses1		(669	)			(2	)						(680	)			(5	)
Business optimization charges1		(268	)			(697	)						(268	)			(697	)
Transaction and integration related costs1		(42	)			(73	)						(158	)			(154	)
Net adjustment items		(979	)			(772	)						(1,106	)			(856	)
Adjusted operating expense	$	4,290			$	4,698			(8.7	)%		$	14,115			$	14,232			(0.8	)%
Operating revenue	$	44,719			$	42,480			5.3	%		$	130,215			$	127,755			1.9	%
Operating expense ratio		11.8	%			12.9	%		(110) bp				11.7	%			11.8	%		(10) bp
Adjusted operating expense ratio		9.6	%			11.1	%		(150) bp				10.8	%			11.1	%		(30) bp
	Full Year 2024 Outlook
Shareholders' earnings per diluted share	Approximately $26.50
Add / (Subtract):
Litigation and settlement expenses1	$2.93
Amortization of other intangibles	$2.21
Net losses on financial instruments	$1.93
Business optimization charges1	$1.15
Transaction and integration related costs1	$1.03
Gain on sale of business	($0.86						)
Tax impact of non-GAAP adjustments	Approximately ($1.89)
Net adjustment items	$6.50
Adjusted shareholders' earnings per diluted share	Approximately $33.00

1.

Adjustment item resides in the Corporate & Other reportable segment.

Forward-Looking Statements

This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our views about future events and financial performance and are generally not historical facts. Words such as “expect,” “feel,” “believe,” “will,” “may,” “should,” “anticipate,” “intend,” “estimate,” “project,” “forecast,” “plan” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to: financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. You are also urged to carefully review and consider the various risks and other disclosures discussed in our reports filed with the U.S. Securities and Exchange Commission from time to time, which attempt to advise interested parties of the factors that affect our business. Except to the extent required by law, we do not update or revise any forward-looking statements to reflect events or circumstances occurring after the date hereof. These risks and uncertainties include, but are not limited to: trends in healthcare costs and utilization rates; reduced enrollment; our ability to secure and implement sufficient premium rates; the impact of large scale medical emergencies, such as public health epidemics and pandemics, and other catastrophes; the impact of new or changes in existing federal, state and international laws or regulations, including laws and regulations impacting healthcare, insurance, pharmacy services and other diversified products and services, or their enforcement or application; the impact of cyber-attacks or other privacy or data security incidents or our failure to comply with any privacy, data or security laws or regulations, including any investigations, claims or litigation related thereto; failure to effectively maintain and modernize our information systems or failure of our information systems or technology, including artificial intelligence, to operate as intended; failure to effectively maintain the availability and integrity of our data; changes in economic and market conditions, as well as regulations that may negatively affect our liquidity and investment portfolios; competitive pressures and our ability to adapt to changes in the industry and develop and implement strategic growth opportunities; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations imposed thereon; our ability to maintain and achieve improvement in Centers for Medicare and Medicaid Services Star ratings and other quality scores and funding risks with respect to revenue received from participation therein; a negative change in our healthcare product mix; costs and other liabilities associated with litigation, government investigations, audits or reviews; our ability to contract with providers on cost-effective and competitive terms; risks associated with providing healthcare, pharmacy and other diversified products and services, including medical malpractice or professional liability claims and non-compliance by any party with the pharmacy services agreement between us and CaremarkPCS Health, L.L.C.; risks associated with mergers, acquisitions, joint ventures and strategic alliances; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; possible restrictions in the payment of dividends from our subsidiaries and increases in required minimum levels of capital; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; the potential negative effect from our substantial amount of outstanding indebtedness and the risk that increased interest rates or market volatility could impact our access to or further increase the cost of financing; a downgrade in our financial strength ratings; the effects of any negative publicity related to the health benefits industry in general or us in particular; events that may negatively affect our licenses with the Blue Cross and Blue Shield Association; intense competition to attract and retain employees; risks associated with our international operations; and various laws and provisions in our governing documents that may prevent or discourage takeovers and business combinations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241016900631/en/

Investor Relations

Stephen Tanal

Investor.Relations@elevancehealth.com

Media

Leslie Porras

Leslie.Porras@elevancehealth.com

Source: Elevance Health, Inc.

FAQ

What was Elevance Health's (ELV) operating revenue in Q3 2024?

Elevance Health's operating revenue in Q3 2024 was $44.7 billion, an increase of $2.2 billion compared to the prior year quarter.

How did Elevance Health's (ELV) benefit expense ratio change in Q3 2024?

Elevance Health's benefit expense ratio increased by 270 basis points to 89.5% in Q3 2024, primarily due to a timing mismatch between Medicaid rates and higher member acuity.

What is Elevance Health's (ELV) revised 2024 earnings outlook?

Elevance Health now expects 2024 GAAP net income per diluted share to be approximately $26.50 and adjusted net income per diluted share to be approximately $33.00.

How much did Elevance Health (ELV) declare for its Q4 2024 dividend?

Elevance Health declared a fourth quarter 2024 dividend of $1.63 per share, payable on December 20, 2024, to shareholders of record as of December 5, 2024.

What was the change in Elevance Health's (ELV) medical membership as of September 30, 2024?

Elevance Health's medical membership decreased by 1.5 million, or 3%, primarily driven by attrition in the Medicaid business associated with eligibility redeterminations and footprint adjustments in certain Medicaid states.