What changed in this filing

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Item 1. Financial Statements

2023-07-19 compared with 2023-04-19 · 272 added, 146 removed, 880 unchanged (32% of the section changed)

57 unchanged sentences

Three Months Ended

(In millions, except per share data) (Restated)

June 30 Six Months Ended

2023 2022 2023 2022

(In millions, except per share data) (Restated) (Restated)

Premiums $ 36,589 $ 33,076 $ 72,457 $ 65,861

12 unchanged sentences

Income before income tax expense

2,441 2,122 5,060 4,428

Income tax expense 585 488 1,200 1,015

10 unchanged sentences

Three Months Ended

June 30 Six Months Ended

(In millions) 2023 2022 2023 2022

(Restated) (Restated)

Net income $ 1,856 $ 1,634 $ 3,860 $ 3,413

2 unchanged sentences

Change in non-credit component of impairment losses on investments

( 1 ) ( 1 ) ( 3 ) ( 2 )

Change in net unrealized gains/losses on cash flow hedges 4 3 15 6

2 unchanged sentences

Foreign currency translation adjustments — ( 5 ) 2 ( 8 )

Other comprehensive income (loss) 442 ( 1,054 )

Other comprehensive (loss) income ( 116 ) ( 908 ) 326 ( 1,962 )

Net (income) loss attributable to noncontrolling interests ( 3 ) 3 ( 18 ) 13

Other comprehensive (income) loss attributable to noncontrolling interests ( 2 ) 5

Other comprehensive loss (income) attributable to noncontrolling interests — 3 ( 2 ) 8

Total shareholders’ comprehensive income $ 1,737 $ 732 $ 4,166 $ 1,472

2 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

(In millions) (Restated)

30 unchanged sentences

Repayments of long-term borrowings ( 1,908 ) ( 943 )

Proceeds from short-term borrowings — 1,275

Repayments of short-term borrowings ( 90 ) ( 1,375 )

Changes in securities lending payable ( 145 ) 620

29 unchanged sentences

March 31, 2023 237.1 2 8,697 30,707 ( 2,050 ) 104 37,460

Net income — — — 1,853 — 3 1,856

Other comprehensive income — — — — ( 116 ) — ( 116 )

Repurchase and retirement of common stock, including excise tax ( 1.4 ) — ( 52 ) ( 600 ) — — ( 652 )

Dividends and dividend equivalents — — — ( 352 ) — — ( 352 )

Issuance of common stock under employee stock plans, net of related tax benefits 0.2 — 116 — — — 116

June 30, 2023 235.9 $ 2 $ 8,761 $ 31,608 $ ( 2,166 ) $ 107 $ 38,312

See accompanying notes.

Elevance Health, Inc.

Consolidated Statements of Changes in Equity (continued)

Total Shareholders’ Equity

Common Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Loss Noncontrolling

Interests Total

(In millions) Number of

December 31, 2021 (restated) 241.8 $ 2 $ 9,148 $ 27,142 $ ( 197 ) $ 68 $ 36,163

Adoption of Accounting Standards Update 2020-06 — — — ( 23 ) — — ( 23 )

January 1, 2022 241.8 2 9,148 27,119 ( 197 ) 68 36,140

January 1, 2022 (restated) 241.8 2 9,148 27,119 ( 197 ) 68 36,140

Net income (loss) (restated) — — — 1,789 — ( 10 ) 1,779

8 unchanged sentences

March 31, 2022 (restated) 241.1 2 9,151 28,096 ( 1,246 ) 56 36,059

Net income (loss) restated — — — 1,637 — ( 3 ) 1,634

Other comprehensive loss (restated) — — — — ( 905 ) ( 3 ) ( 908 )

Noncontrolling interests adjustment — — — — — 5 5

Repurchase and retirement of common stock

( 1.3 ) — ( 48 ) ( 576 ) — — ( 624 )

Dividends and dividend equivalents — — — ( 310 ) — — ( 310 )

Issuance of common stock under employee stock plans, net of related tax benefits

0.2 — 111 — — — 111

Convertible debenture repurchases and conversions

— — ( 80 ) — — — ( 80 )

June 30, 2022 (restated) 240.0 $ 2 $ 9,134 $ 28,847 $ ( 2,151 ) $ 55 $ 35,887

See accompanying notes.

1 unchanged sentence

Notes to Consolidated Financial Statements

March 31, 2023

June 30, 2023

(In Millions, Except Per Share Data or As Otherwise Stated Herein)

2 unchanged sentences

Elevance Health is a health company with the purpose of improving the health of humanity.

We are one of the largest health insurers in the United States in terms of medical membership, serving greater than 48 million medical members through our affiliated health plans as of March 31, 2023.

We are one of the largest health insurers in the United States in terms of medical membership, serving approximately 48 million medical members through our affiliated health plans as of June 30, 2023.

We offer a broad spectrum of network-based managed care risk-based plans to Individual, Employer Group, Medicaid and Medicare markets.

11 unchanged sentences

• Anthem Blue Cross/Anthem Blue Cross and Blue Shield — represents our existing Anthem-branded and affiliated Blue Cross and/or Blue Shield licensed plans;

• Wellpoint — we intend to unite select non-BCBSA licensed Medicare, Medicaid and commercial plans under the Wellpoint name;

• Wellpoint — we are uniting select non-BCBSA licensed Medicare, Medicaid and commercial plans under the Wellpoint name;

• Carelon — this brand brings together our healthcare-related brands and capabilities, including our CarelonRx and Carelon Services businesses, under a single brand name.

12 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements.

We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our 2022 Annual Report on Form 10-K, unless the information contained in those disclosures materially changed or is required by GAAP.

In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three months ended March 31, 2023 and 2022 have been recorded.

The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023, or any other period.

We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report on Form 10-K”) , unless the information contained in those disclosures materially changed or is required by GAAP.

In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three and six months ended June 30, 2023 and 2022 have been recorded.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023, or any other period.

The seasonal nature of portions of our health care and related benefits business, as well as competitive and other market conditions, may cause full-year results to differ from estimates based upon our interim results of operations.

7 unchanged sentences

We control a number of bank accounts that are used exclusively to hold customer funds for the administration of customer benefits, and we have cash and cash equivalents on deposit to meet certain regulatory requirements.

These amounts totaled $ 520 and $ 258 at March 31, 2023 and December 31, 2022, respectively, and are included in the cash and cash equivalents line on our consolidated balance sheets.

These amounts totaled $ 391 and $ 258 at June 30, 2023 and December 31, 2022, respectively, and are included in the cash and cash equivalents line on our consolidated balance sheets.

We classify fixed maturity securities in our investment portfolio as “available-for-sale” and report those securities at fair value.

35 unchanged sentences

Premium receivables include the uncollected amounts from employer risk-based groups, individuals and government programs for insurance services.

Premium receivables are reported net of an allowance for doubtful accounts of $ 149 and $ 152 at March 31, 2023 and December 31, 2022, respectively.

Premium receivables are reported net of an allowance for doubtful accounts of $ 184 and $ 152 at June 30, 2023 and December 31, 2022, respectively.

Self-funded receivables include administrative fees, claims and other amounts due from fee-based customers for administrative services.

Self-funded receivables are reported net of an allowance for doubtful accounts of $ 76 and $ 68 at March 31, 2023 and December 31, 2022, respectively.

Self-funded receivables are reported net of an allowance for doubtful accounts of $ 86 and $ 68 at June 30, 2023 and December 31, 2022, respectively.

Other receivables include pharmacy rebates, provider advances, claims recoveries, reinsurance receivables, proceeds due from brokers on investment trades, accrued investment income and other miscellaneous amounts due to us.

These receivables are reported net of an allowance for doubtful accounts of $ 763 and $ 744 at March 31, 2023 and December 31, 2022, respectively.

These receivables are reported net of an allowance for doubtful accounts of $ 816 and $ 744 at June 30, 2023 and December 31, 2022, respectively.

Revenue Recognition:

For our non-risk-based contracts, we had no material contract assets, contract liabilities or deferred contract costs recorded on our consolidated balance sheet at March 31, 2023.

For the three months ended March 31, 2023 and 2022, revenue recognized from performance obligations related to prior periods, such as changes in transaction price, were not material.

For our non-risk-based contracts, we had no material contract assets, contract liabilities or deferred contract costs recorded on our consolidated balance sheet at June 30, 2023.

For the three and six months ended June 30, 2023 and 2022, revenue recognized from performance obligations related to prior periods, such as changes in transaction price, were not material.

For contracts that have an original, expected duration of greater than one year, revenue expected to be recognized in future periods related to unfulfilled contractual performance obligations and contracts with variable consideration related to undelivered performance obligations is not material.

20 unchanged sentences

The divestiture is expected to close by the end of the first quarter of 2024 and is subject to standard closing conditions and customary approvals.

The related net assets held for sale and results of operations for the employee benefits businesses to be divested as of and for the period ending March 31, 2023 were not material.

The related net assets held for sale and results of operations for the employee benefits businesses to be divested as of and for the three and six months ending June 30, 2023 were not material.

Pending Acquisition

7 unchanged sentences

This acquisition aligns with our vision to be an innovative, valuable and inclusive healthcare partner by providing care management programs that improve the lives of the people we serve.

As of March 31, 2023, the purchase price was allocated to the tangible and

intangible net assets acquired based on management’s initial estimates of their fair values, of which $ 809 has been allocated to finite-lived intangible assets and $ 728 to goodwill.

As of June 30, 2023, the purchase price was allocated to the tangible and

intangible net assets acquired based on management’s initial estimates of their fair values, of which $ 820 has been allocated to finite-lived intangible assets and $ 877 to goodwill, including an increase to goodwill for measurement period adjustments of $ 149 during the quarter ended June 30, 2023.

The majority of goodwill is not deductible for income tax purposes.

As of March 31, 2023, the initial accounting for the acquisition had not been finalized.

As of June 30, 2023, the initial accounting for the acquisition had not been finalized.

The proforma effects of this acquisition for prior periods were not material to our consolidated results of operations.

1 unchanged sentence

Integra is a managed long-term care plan that serves New York state Medicaid members, enabling adults with long-term care needs and disabilities to live safely and independently in their own homes.

The initial accounting for this acquisition was finalized as of June 30, 2023.

The purchase price was allocated to tangible and intangible net assets acquired based on management’s estimates of their fair values, of which $ 89 has been allocated to finite-lived intangible assets, $ 250 to indefinite-lived intangible assets, and $ 139 to goodwill.

Contractual purchase price adjustments during the quarter ended June 30, 2023 were $ 13 and resulted in an increase to goodwill.

The majority of goodwill is deductible for income tax purposes.

There were no measurement period adjustments during the quarter ended March 31, 2023, and as of March 31, 2023, the initial accounting for the acquisition had not been finalized.

The proforma effects of this acquisition for prior periods were not material to our consolidated results of operations.

4 unchanged sentences

Given the inherent uncertainty of changes in market conditions and the significant judgments involved, there is a continuing risk that declines in fair value may occur and additional material impairment losses for credit losses on investments may be recorded in future periods.

A summary of current and long-term fixed maturity securities, available-for-sale, at March 31, 2023 and December 31, 2022 is as follows:

A summary of current and long-term fixed maturity securities, available-for-sale, at June 30, 2023 and December 31, 2022 is as follows:

Losses Allowance

Losses Estimated

March 31, 2023

June 30, 2023

Fixed maturity securities:

20 unchanged sentences

Other asset-backed securities primarily consists of collateralized loan obligations and other debt securities.

For fixed maturity securities in an unrealized loss position at March 31, 2023 and December 31, 2022, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position:

For fixed maturity securities in an unrealized loss position at June 30, 2023 and December 31, 2022, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position:

Less than 12 Months 12 Months or Greater

5 unchanged sentences

Fair Value Gross

March 31, 2023

June 30, 2023

Fixed maturity securities:

23 unchanged sentences

Total fixed maturity securities 7,781 $ 16,035 $ ( 1,071 ) 4,060 $ 7,537 $ ( 1,307 )

Unrealized losses on our securities shown in the table above have not been recognized into income because, as of March 31, 2023, we do not intend to sell these investments and it is likely that we will not be required to sell these investments prior to their maturity or anticipated recovery.

Unrealized losses on our securities shown in the table above have not been recognized into income because, as of June 30, 2023, we do not intend to sell these investments and it is likely that we will not be required to sell these investments prior to their maturity or anticipated recovery.

The declines in fair values are largely due to increasing interest rates driven by the higher rate of inflation and other market conditions.

Allowances for credit losses have been recorded in the amounts of $ 8 and $ 9 at March 31, 2023 and December 31, 2022, respectively, for declines in fair value due to unfavorable changes in the credit quality characteristics that impact our assessment of collectability of principal and interest.

The amortized cost and fair value of fixed maturity securities at March 31, 2023, by contractual maturity, are shown below.

Allowances for credit losses have been recorded in the amounts of $ 7 and $ 9 at June 30, 2023 and December 31, 2022, respectively, for declines in fair value due to unfavorable changes in the credit quality characteristics that impact our assessment of collectability of principal and interest.

The amortized cost and fair value of fixed maturity securities at June 30, 2023, by contractual maturity, are shown below.

Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations.

6 unchanged sentences

Total fixed maturity securities $ 30,724 $ 28,796

During the three months ended March 31, 2023 and 2022, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 5,410 and $ 3,646 , respectively.

During the three and six months ended June 30, 2023, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 9,675 and $ 15,085 , respectively.

During the three and six months ended June 30, 2022, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 7,026 and $ 10,672 , respectively.

In the ordinary course of business, we may sell securities at a loss for a number of reasons, including, but not limited to:

7 unchanged sentences

Equity Securities

A summary of marketable equity securities at March 31, 2023 and December 31, 2022 is as follows:

March 31, 2023 December 31, 2022

A summary of marketable equity securities at June 30, 2023 and December 31, 2022 is as follows:

June 30, 2023 December 31, 2022

Equity securities:

8 unchanged sentences

Investment Gains and Losses

Net investment (losses) gains for the three months ended March 31, 2023 and 2022 are as follows:

Three Months Ended March 31

Net investment (losses) gains for the three and six months ended June 30, 2023 and 2022 are as follows:

Three Months Ended June 30 Six Months Ended June 30

2023 2022 2023 2022

Net (losses) gains:

5 unchanged sentences

Equity securities:

Unrealized losses recognized on equity securities still held at the end of the period ( 1 ) ( 71 )

Net realized losses recognized on equity securities sold during the period ( 1 ) ( 14 )

Net losses on equity securities ( 2 ) ( 85 )

Unrealized gains (losses) recognized on equity securities still held at the end of the period 2 ( 83 ) ( 2 ) ( 154 )

Net realized gains (losses) recognized on equity securities sold during the period 1 ( 5 ) 4 ( 19 )

Net gains (losses) on equity securities 3 ( 88 ) 2 ( 173 )

Other investments:

2 unchanged sentences

Impairment losses recognized in income ( 26 ) ( 1 ) ( 29 ) ( 5 )

Net gains (losses) on other investments 23 ( 11 )

Net losses on other investments ( 40 ) ( 6 ) ( 18 ) ( 16 )

Net losses on investments $ ( 128 ) $ ( 255 ) $ ( 219 ) $ ( 428 )

Accrued Investment Income

At March 31, 2023 and December 31, 2022, accrued investment income totaled $ 256 and $ 245 , respectively.

At June 30, 2023 and December 31, 2022, accrued investment income totaled $ 266 and $ 245 , respectively.

We recognize accrued investment income under the caption “Other receivables” on our consolidated balance sheets.

1 unchanged sentence

We participate in securities lending programs whereby marketable securities in our investment portfolio are transferred to independent brokers or dealers in exchange for cash and securities collateral.

The fair value of the collateral received at the time of the transactions amounted to $ 2,252 and $ 2,457 at March 31, 2023 and December 31, 2022, respectively.

The value of the collateral represented 102 % of the market value of the securities on loan at each of March 31, 2023 and December 31, 2022.

The fair value of the collateral received at the time of the transactions amounted to $ 2,311 and $ 2,457 at June 30, 2023 and December 31, 2022, respectively.

The value of the collateral represented 102 % of the market value of the securities on loan at each of June 30, 2023 and December 31, 2022.

We recognize the collateral as an asset under the caption “Other current assets” in our consolidated balance sheets, and we recognize a corresponding liability for the obligation to return the collateral to the borrower under the caption “Other current liabilities.” The securities on loan are reported in the applicable investment category on our consolidated balance sheets.

At March 31, 2023 and December 31, 2022, the remaining contractual maturity of our securities lending agreements included overnight and continuous transactions of cash for $ 2,127 and $ 2,221 , respectively, of United States Government securities for $ 104 and $ 224 , respectively, and of Residential Mortgage-Backed securities for $ 21 and $ 12 , respectively.

At June 30, 2023 and December 31, 2022, the remaining contractual maturity of our securities lending agreements included overnight and continuous transactions of cash for $ 2,237 and $ 2,221 , respectively, of United States Government securities for $ 73 and $ 224 , respectively, and of Residential Mortgage-Backed securities for $ 1 and $ 12 , respectively.

Derivative Financial Instruments

3 unchanged sentences

We have entered into various interest rate swap contracts to convert a portion of our interest rate exposure on our long-term debt from fixed rates to floating rates.

The floating rates payable on all of our fair value hedges are benchmarked to LIBOR or the Secured Overnight Financing Rate (“SOFR”).

The floating rates payable on all of our fair value hedges are benchmarked to the Secured Overnight Financing Rate (“SOFR”).

Any amounts recognized for changes in fair value of these derivatives are included in the captions “Other current assets,” “Other noncurrent assets,” “Other current liabilities” or “Other noncurrent liabilities” in our consolidated balance sheets.

The unrecognized loss for all expired and terminated cash flow hedges included in accumulated other comprehensive loss, net of tax, was $ 217 and $ 229 at March 31, 2023 and December 31, 2022, respectively.

During the three months ended March 31, 2023 , we recognized net losses on non-hedging derivatives of $ 22 .

During the three months ended March 31, 2022 , we recognized net gains on non-hedging derivatives of $ 23 .

The unrecognized loss for all expired and terminated cash flow hedges included in accumulated other comprehensive loss, net of tax, was $ 214 and $ 229 at June 30, 2023 and December 31, 2022, respectively.

During the three and six months ended months ended June 30, 2023 , we recognized net gains of $ 7 and net losses of $ 15 , respectively, on non-hedging derivatives.

During the three and six months ended months ended June 30, 2022 , we recognized net gains on non-hedging derivatives of $ 24 and $ 46 , respectively.

For additional information relating to the fair value of our derivative assets and liabilities, see Note 6, “Fair Value,” of this Form 10-Q.

33 unchanged sentences

Derivatives presented within the fair value hierarchy table below are presented on a gross basis and not on a master netting basis by counterparty.

A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at March 31, 2023 and December 31, 2022 is as follows:

A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 is as follows:

Level I Level II Level III Total

March 31, 2023

June 30, 2023

Cash equivalents $ 6,100 $ — $ — $ 6,100

43 unchanged sentences

Total liabilities $ — $ ( 60 ) $ — $ ( 60 )

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the three months ended March 31, 2023 and 2022 is as follows:

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the three months ended June 30, 2023 and 2022 is as follows:

Securities Residential

2 unchanged sentences

Securities Total

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Beginning balance at April 1, 2023 $ 142 $ — $ 390 $ 78 $ 610

Total gains (losses):

Recognized in net income ( 2 ) — 1 2 1

Recognized in accumulated other comprehensive loss 1 — ( 9 ) — ( 8 )

Purchases 2 — 7 — 9

Sales ( 10 ) — ( 5 ) ( 5 ) ( 20 )

Settlements ( 4 ) — — — ( 4 )

Transfers into Level III — — 6 — 6

Transfers out of Level III ( 26 ) — ( 24 ) — ( 50 )

Ending balance at June 30, 2023 $ 103 $ — $ 366 $ 75 $ 544

Change in unrealized losses included in net income related to assets still held at June 30, 2023

$ — $ — $ — $ 1 $ 1

Three Months Ended June 30, 2022

Beginning balance at April 1, 2022 $ 341 $ 4 $ 37 $ 99 $ 481

Total gains (losses):

Recognized in net income ( 5 ) — — ( 2 ) ( 7 )

Purchases 11 — 190 11 212

Sales ( 188 ) — — ( 14 ) ( 202 )

Settlements ( 5 ) — — — ( 5 )

Transfers into Level III 14 — — — 14

Transfers out of Level III ( 13 ) ( 4 ) ( 9 ) — ( 26 )

Ending balance at June 30, 2022 $ 155 $ — $ 218 $ 94 $ 467

Change in unrealized gains included in net income related to assets still held at June 30, 2022

$ — $ — $ — $ ( 3 ) $ ( 3 )

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the six months ended June 30, 2023 and 2022 is as follows:

Securities Residential

Securities Other Asset-

Securities Equity

Securities Total

Six Months Ended June 30, 2023

Beginning balance at January 1, 2023 $ 137 $ — $ 356 $ 88 $ 581

1 unchanged sentence

Recognized in net income ( 3 ) — 1 ( 5 ) ( 7 )

Recognized in accumulated other comprehensive loss 2 — ( 4 ) — ( 2 )

Purchases 4 — 18 1 23

1 unchanged sentence

Settlements ( 6 ) — — — ( 6 )

Transfers into Level III — — 6 — 6

Transfers out of Level III ( 21 ) — — — ( 21 )

Ending balance at March 31, 2023 $ 142 $ — $ 390 $ 78 $ 610

Change in unrealized losses included in net income related to assets still held at March 31, 2023 $ — $ — $ — $ ( 7 ) $ ( 7 )

Three Months Ended March 31, 2022

Ending balance at June 30, 2023 $ 103 $ — $ 366 $ 75 $ 544

Change in unrealized gains included in net income related to assets still held at June 30, 2023

$ — $ — $ — $ ( 6 ) $ ( 6 )

Six Months Ended June 30, 2022

Beginning balance at January 1, 2022 $ 336 $ 5 $ 19 $ 89 $ 449

Total gains (losses):

Recognized in net income ( 4 ) — — 1 ( 3 )

3 unchanged sentences

Settlements ( 39 ) — — — ( 39 )

Ending balance at March 31, 2022 $ 341 $ 4 $ 37 $ 99 $ 481

Change in unrealized gains included in net income related to assets still held at March 31, 2022 $ — $ — $ — $ 3 $ 3

There were no individually material transfers into or out of Level III during the three months ended March 31, 2023 or 2022.

Transfers into Level III 14 — — — 14

Transfers out of Level III ( 10 ) ( 5 ) ( 6 ) — ( 21 )

Ending balance at June 30, 2022 $ 155 $ — $ 218 $ 94 $ 467

Change in unrealized gains included in net income related to assets still held at June 30, 2022

$ — $ — $ — $ 1 $ 1

There were no individually material transfers into or out of Level III during the three and six months ended June 30, 2023 or 2022.

Certain assets and liabilities are measured at fair value on a nonrecurring basis;

that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances.

As disclosed in Note 3, “Business Acquisitions and Divestitures,” we completed our acquisition of BioPlus in February 2023 and Integra in May 2022.

As disclosed in Note 3, “Business Acquisitions and Divestitures,” we completed our acquisition of BioPlus in the first quarter of 2023 and Integra during the second quarter of 2022.

The net assets acquired in our acquisitions of BioPlus and Integra and resulting goodwill and other intangible assets were recorded at fair value primarily using Level III inputs.

3 unchanged sentences

We developed internal estimates for the expected cash flows and discount rate in the present value calculation.

Other than the assets acquired and liabilities assumed in our acquisitions of BioPlus and Integra described above, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2023 or 2022.

Other than the assets acquired and liabilities assumed in our acquisitions of BioPlus and Integra described above, there were no

material assets or liabilities measured at fair value on a nonrecurring basis during the three and six months ended June 30, 2023 or 2022.

Our valuation policy is determined by members of our treasury and accounting departments.

10 unchanged sentences

Our analysis includes procedures such as a review of month-to-month price fluctuations and price comparisons to secondary pricing services.

There were no adjustments to quoted market prices obtained from the pricing services during the three months ended March 31, 2023 or 2022.

There were no adjustments to quoted market prices obtained from the pricing services during the three and six months ended June 30, 2023 or 2022.

In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in our consolidated balance sheets.

11 unchanged sentences

The fair value of our short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices were available, on the current market interest rates estimated to be available to us for debt of similar terms and remaining maturities.

Long-term debt—commercial paper:

The carrying amount for commercial paper approximates fair value, as the underlying instruments have variable interest rates at market value.

3 unchanged sentences

The fair value of our convertible debentures is based on the quoted market price in the active private market in which the convertible debentures trade.

A summary of the estimated fair values by level of each class of financial instrument that is recorded at its carrying value on our consolidated balance sheets at March 31, 2023 and December 31, 2022 is as follows:

A summary of the estimated fair values by level of each class of financial instrument that is recorded at its carrying value on our consolidated balance sheets at June 30, 2023 and December 31, 2022 is as follows:

Value Estimated Fair Value

Level I Level II Level III Total

March 31, 2023

June 30, 2023

Other invested assets $ 5,872 $ — $ — $ 5,872 $ 5,872

Short-term borrowings 265 — 265 — 265

Commercial paper 325 — 325 — 325

Notes 24,859 — 22,872 — 22,872

4 unchanged sentences

Convertible debentures 63 — 463 — 463

During the three months ended March 31, 2023 and 2022, we recognized income tax expense of $ 615 an d $ 527 (restated), respectively, which represent effective income tax rates of 23.5 % and 22.9 % (restated), respectively.

The increase in the incom e tax rate in 2023 primarily relates to the tax impact of expected geographic changes in our mix of 2023 earnings and reduced investment tax credits.

Income taxes payable totaled $ 399 at March 31, 2023 and income tax receivable was $ 440 at December 31, 2022.

We recognize the income tax payable as a liability under the caption “Other current liabilities” and the income receivable as an asset under the caption “Other current assets” in our consolidated balance sheets.

During the three months ended June 30, 2023 and 2022, we recognized income tax expense of $ 585 an d $ 488 (restated), respectively, which represent effective income tax rates of 24.0 % and 23.0 % (restated), respectively.

The increase in our effective incom e tax rate from the three months ended June 30, 2022 is primarily due to the tax impact of expected geographic changes in our mix of 2023 earnings and reduced investment tax credits.

During the six months ended June 30, 2023 and 2022, we recognized income tax expense of $ 1,200 an d $ 1,015 (restated), respectively, which represent effective income tax rates of 23.7 % and 22.9 % (restated), respectively.

The increase in our effective incom e tax rate from the six months ended June 30, 2022 is primarily related to the tax impact of expected geographic changes in our mix of 2023 earnings and reduced investment tax credits.

Income taxes receivable totaled $ 48 and $ 440 at June 30, 2023 and December 31, 2022, respectively.

We recognize the income receivable as an asset under the caption “Other current assets” in our consolidated balance sheets.

Medical Claims Payable

A reconciliation of the beginning and ending balances for medical claims payable, for the three months ended March 31, 2023 and 2022 is as follows:

A reconciliation of the beginning and ending balances for medical claims payable for the six months ended June 30, 2023 and 2022 is as follows:

Gross medical claims payable, beginning of period $ 15,348 $ 13,282

13 unchanged sentences

Gross medical claims payable, end of period $ 15,902 $ 14,889

At March 31, 2023, the total of net incurred but not reported liabilities plus expected development on reported claims was $ 644 , $ 4,036 and $ 10,804 for the claim years 2021 and prior, 2022 and 2023, respectively.

The favorable development recognized in the three months ended March 31, 2023 and 2022 resulted primarily from trend factors in late 2022 and late 2021, respectively, developing more favorably than originally expected.

Favorable development in the completion factors resulting from the latter parts of 2022 developing faster than expected also contributed to the favorable development in the three months ended March 31, 2023.

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for the three months ended March 31, 2023 and 2022 is as follows:

At June 30, 2023, the total of net incurred but not reported liabilities plus expected development on reported claims was $ 597 , $ 2,224 and $ 13,073 for the claim years 2021 and prior, 2022 and 2023, respectively.

The favorable development recognized in the six months ended June 30, 2023 and 2022 resulted primarily from trend factors in late 2022 and late 2021, respectively, developing more favorably than originally expected.

Favorable development in the completion factors resulting from the latter parts of 2022 developing faster than expected also contributed to the favorable development in the six months ended June 30, 2023.

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for the periods in 2023 is as follows:

Three Months Ended Six Months Ended June 30, 2023

March 31, 2023 June 30, 2023

Total net incurred medical claims $ 29,683 $ 30,495 $ 60,178

1 unchanged sentence

Benefit expense $ 30,786 $ 31,604 $ 62,390

The reconciliation of the medical claims payable reflected in the tables above to the consolidated ending balance for medical claims payable included in the consolidated balance sheet, as of March 31, 2023, is as follows:

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for the periods in 2022 is as follows:

Three Months Ended Six Months Ended June 30, 2022

March 31, 2022 June 30, 2022

(Restated) (Restated) (Restated)

Total net incurred medical claims $ 27,131 $ 27,634 $ 54,765

Quality improvement and other claims expense 1,100 1,161 2,261

Benefit expense $ 28,231 $ 28,795 $ 57,026

June 30, 2023 December 31, 2022

Net medical claims payable, end of period $ 15,894 $ 15,342

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We generally issue senior unsecured notes for long-term borrowing purposes.

At March 31, 2023 and December 31, 2022, we had $ 24,851 and $ 23,761 , respectively, outstanding under these notes.

At June 30, 2023 and December 31, 2022, we had $ 24,834 and $ 23,761 , respectively, outstanding under these notes.

On February 8, 2023, we issued $ 500 aggregate principal amount of 4.900 % Notes due 2026 (the “2026 Notes”), $ 1,000 aggregate principal amount of 4.750 % Notes due 2033 (the “2033 Notes”), and $ 1,100 aggregate principal amount of 5.125 % Notes due 2053 (the “2053 Notes”) under our shelf registration statement.

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On March 15, 2023, we repaid, at maturity, the $ 500 outstanding balance of our 0.450 % senior unsecured notes.

We have an unsecured surplus note with an outstanding principal balance of $ 25 at both March 31, 2023 and December 31, 2022.

We have an unsecured surplus note with an outstanding principal balance of $ 25 at both June 30, 2023 and December 31, 2022.

We have a senior revolving credit facility (the “5-Year Facility”) with a group of lenders for general corporate purposes.

1 unchanged sentence

Our ability to borrow under the 5-Year Facility is subject to compliance with certain covenants, including covenants requiring us to maintain a defined debt-to-capital ratio of not more than 60%, subject to increase in certain circumstances set forth in the credit agreement for the 5-Year Facility.

As of March 31, 2023, our debt-to-capital ratio, as defined and calculated under the 5-Year Facility, was 40.5%.

As of June 30, 2023, our debt-to-capital ratio, as defined and calculated under the 5-Year Facility, was 39.6%.

We do not believe the restrictions contained in our 5-Year Facility covenants materially affect our financial or operating flexibility.

As of March 31, 2023, we were in compliance with all of our debt covenants under the 5-Year Facility.

There were no amounts outstanding under the 5-Year Facility at any time during the three months ended March 31, 2023 or the year ended December 31, 2022.

Through certain subsidiaries, we have entered into multiple 364-day lines of credit (the “Subsidiary Credit Facilities”) with separate lenders for general corporate purposes.

The Subsidiary Credit Facilities provide combined credit of up to $ 200 .

Our ability to borrow under the Subsidiary Credit Facilities is subject to compliance with certain covenants.

At March 31, 2023 and December 31, 2022, we had no outstanding borrowings under the Subsidiary Credit Facilities.

As of June 30, 2023, we were in compliance with all of our debt covenants under the 5-Year Facility.

There were no amounts outstanding under the 5-Year Facility at any time during the six months ended June 30, 2023 or the year ended December 31, 2022.

Through certain subsidiaries, we had previously entered into multiple 364-day lines of credit (the “Subsidiary Credit Facilities”) with separate lenders for general corporate purposes.

The Subsidiary Credit Facilities provided combined credit of up to $ 200 .

As of June 30, 2023, the Subsidiary Credit Facilities have been terminated.

We have an authorized commercial paper program of up to $ 4,000 , the proceeds of which may be used for general corporate purposes.

At March 31, 2023 and December 31, 2022, we had $ 325 and $ 0 , respectively, outstanding under this program.

At June 30, 2023 and December 31, 2022, we had $ 90 and $ 0 , respectively, outstanding under this program.

Beginning June 30, 2023, we have reclassified our commercial paper balances from long-term debt to short-term debt as our intent is to not replace short-term commercial paper outstanding at expiration with additional short-term commercial paper for an uninterrupted period extending for more than one year.

On March 15, 2023, we redeemed all of our outstanding senior unsecured convertible debentures due 2042 (the “Debentures”), pursuant to the indenture dated as of October 9, 2012 between us and The Bank of New York Mellon Trust Company, N.A., as trustee.

The Debentures were redeemed at a redemption price equal to 100 % of the principal amount of the Debentures plus accrued and unpaid interest to, but excluding, the date of redemption, for cash totaling $ 5 .

During the three months ended March 31, 2023, $ 59 aggregate principal amount of the Debentures was surrendered for conversion by certain holders in accordance with the terms and conditions of the indenture.

During the three months ended March 31, 2023, $ 59 of aggregate principal amount of the Debentures was surrendered for conversion by certain holders in accordance with the terms and conditions of the indenture.

We elected to settle the excess of the principal amount of the conversions with cash for total payments during the three months ended March 31, 2023 of $ 404 .

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As a member, we have the ability to obtain short-term cash advances, subject to certain minimum collateral requirements.

We had $ 265 of outstanding short-term borrowings from the FHLBs at each of March 31, 2023 and December 31, 2022.

All debt is a direct obligation of Elevance Health, Inc., except for the surplus note, the FHLBs borrowings and the Subsidiary Credit Facilities.

We had $ 175 and $ 265 of outstanding short-term borrowings from the FHLBs at June 30, 2023 and December 31, 2022, respectively.

All debt is a direct obligation of Elevance Health, Inc., except for the surplus note and the FHLBs borrowings.

Commitments and Contingencies

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(i) there are novel or unsettled legal issues presented, (ii) the proceedings are in early stages, (iii) there is uncertainty as to the likelihood of a class being certified or decertified or the ultimate size and scope of the class, (iv) there is uncertainty as to the outcome of pending appeals or motions, (v) there are significant factual issues to be resolved, and/or (vi) in many cases, the plaintiffs have not specified damages in their complaint or in court filings.

For those legal proceedings where a loss is probable, or reasonably possible, and for which it is possible to reasonably estimate the amount of the possible loss or range of losses, we currently believe that the range of possible losses, in excess of established reserves is, in the aggregate, from $ 0 to approximately $ 250 at March 31, 2023.

This estimated aggregate range of reasonably possible losses is based upon currently available information taking into account our best estimate of such losses for which such an estimate can be made.

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Four notices of appeal of the Final Approval Order were filed prior to the September 2022 appeal deadline.

Those appeals are proceeding in the United States Court of Appeals for the Eleventh Circuit.

Those appeals are proceeding in the United States Court of Appeals for the Eleventh Circuit, which has scheduled oral argument on the appeals for September 2023.

In the event that all appellate rights are exhausted in a manner that affirms the Court’s Final Approval Order, the defendants’ payment and non-monetary obligations under the Subscriber Settlement Agreement will become effective and the funds held in escrow will be distributed in accordance with the Subscriber Settlement Agreement.

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does not affect the standard of review in this case.

In August 2022, the Court issued orders (i) granting in part the defendants’ motion regarding the antitrust standard of review, holding that for the period of time after the elimination of the “national best efforts” rule, the rule of reason applies to the provider plaintiffs’ market allocation conspiracy claims, and (ii) denying the provider plaintiffs’ motion for partial summary judgment on the standard of review, reaffirming its prior holding that the providers’ group boycott claims are subject to the rule of reason.

In November 2022, the Court issued an order requiring the parties to submit supplemental briefs on certain questions related to providers’ renewed motion for class certification.

In August 2022, the Court issued orders (i) granting in part the defendants’ motion regarding the antitrust standard of review, holding that for the period of time after the elimination of the “national best efforts” rule, the rule of reason applies to the provider plaintiffs’ market allocation conspiracy claims, and (ii) denying the provider plaintiffs’ motion for partial summary judgment on the standard of review, reaffirming its prior holding that the provider groups’ boycott claims are subject to the rule of reason.

In November 2022, the Court issued an order requiring the parties to submit supplemental briefs on certain questions related to the providers’ renewed motion for class certification.

We intend to continue to vigorously defend the provider litigation, which we believe is without merit;

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RG21106600 (Cal.

In February 2023, the Court denied the defendants’ motion to dismiss on statute of limitations in Alaska Air and Jet Blue .

In March 2023, pursuant to a stipulation by the parties, the Court denied the defendants’ motion to dismiss on the statute of limitations in Bed Bath & Beyond .

In February 2023, the Court denied the defendants’ motion to dismiss based on a statute of limitations defense in Alaska Air and Jet Blue .

In March 2023, pursuant to a stipulation by the parties, the Court denied the

defendants’ motion to dismiss also based on a statute of limitations defense in Bed Bath & Beyond .

We intend to continue to vigorously defend these follow-on cases, which we believe are without merit;

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As a licensed Health Care Service Plan, BCC has paid the California Corporate Franchise Tax (“CFT”), the tax paid by California businesses generally.

Plaintiff contends that BCC must pay the GPT rather than the CFT and seeks a writ of mandate directing the taxing agencies to collect the GPT

and an order requiring BCC to pay GPT back taxes, interest, and penalties for the eight-year period prior to the filing of the complaint.

Plaintiff contends that BCC must pay the GPT rather than the CFT and seeks a writ of mandate directing the taxing agencies to collect the GPT and an order requiring BCC to pay GPT back taxes, interest, and penalties for the eight-year period prior to the filing of the complaint.

Because the GPT is constitutionally imposed in lieu of certain other taxes, BCC has filed protective tax refund claims with the City of Los Angeles, the California Department of Health Care Services and the Franchise Tax Board to protect its rights to recover certain taxes previously paid should BCC eventually be determined to be subject to the GPT for the tax periods at issue in the litigation.

In March 2018, the Superior Court denied BCC’s motion for judgment on the pleadings and similar motions brought by other entities.

In December 2020, the Superior Court granted BCC’s motion for summary judgment, dismissing the plaintiff’s lawsuit.

In November 2021, the plaintiff appealed the summary judgment order.

BCC’s responding brief was filed in March 2022 and Plaintiff’s reply was filed in May 2022.

In March 2023, the appeal was argued before the California Second District Court of Appeal.

We expect a ruling in April 2023.

In March 2023, the appeal was argued before the California Second District Court of Appeal (the "Second District").

The Second District affirmed the Superior Court's summary judgment order in April 2023.

The plaintiff filed a petition for review with the California Supreme Court in June 2023, and BCC filed its answer to the petition in the same month.

We intend to continue to vigorously defend this suit, which we believe is without merit;

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As a result of the summary judgment decision, the only remaining claims as of the filing of this Quarterly Report on Form 10-Q are (i) our operational breach claim based on Express Scripts’ prior authorization processes and (ii) Express Scripts’ counterclaim for breach of the market check provision of the ESI Agreement.

Express Scripts filed a second motion for summary judgment in June 2022, challenging our remaining operational breach claims, which we opposed, and the District Court denied in March 2023, allowing our operational breach claim to proceed.

Scripts filed a second motion for summary judgment in June 2022, challenging our remaining operational breach claims, which we opposed, and the District Court denied in March 2023, allowing our operational breach claim to proceed.

A trial date has been set for December 2023.

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The DOJ further alleges that, as a result of these purported acts, we caused CMS to calculate the risk-adjustment payments based on inaccurate diagnosis information, which enabled us to obtain unspecified amounts of payments in Medicare funds in violation of the False Claims Act.

The DOJ filed an amended

complaint in July 2020, alleging the same causes of action but revising some of its factual allegations.

The DOJ filed an amended complaint in July 2020, alleging the same causes of action but revising some of its factual allegations.

In September 2020, we filed a motion to transfer the lawsuit to the Southern District of Ohio, a motion to dismiss part of the lawsuit, and a motion to strike certain allegations in the amended complaint, all of which the New York District Court denied in October 2022.

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Attorney General and subcommittees of the U.S.

Such investigations, audits, reviews and administrative proceedings could result in the imposition of civil or criminal fines, penalties, other sanctions and additional rules, regulations or other restrictions on our business operations.

business operations.

Any liability that may result from any one of these actions, or in the aggregate, could have a material adverse effect on our consolidated financial position or results of operations.

2 unchanged sentences

The agreement superseded certain prior agreements for such services and includes provisions for additional services not provided under those agreements.

Our remaining commitment under this agreement at March 31, 2023 is approximately $ 697 .

Our remaining commitment under this agreement at June 30, 2023 is approximately $ 621 .

We will have the ability to terminate the agreement upon the occurrence of certain events, subject to early termination fees.

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The comprehensive pharmacy services portfolio includes, but is not limited to, formulary management, pharmacy networks, specialty and home delivery pharmacy services and member services.

CarelonRx delegates certain pharmacy services, such

as claims processing and prescription fulfillment, to CaremarkPCS Health, L.L.C., which is a subsidiary of CVS Health Corporation, pursuant to a five-year agreement, which is set to terminate on December 31, 2024.

CarelonRx delegates certain pharmacy services, such as claims processing and prescription fulfillment, to CaremarkPCS Health, L.L.C., which is a subsidiary of CVS Health Corporation, pursuant to a five-year agreement, which is set to terminate on December 31, 2024.

With CarelonRx, we retain the responsibilities for clinical and formulary strategy and development, member and employer experiences, operations, sales, marketing, account management and retail network strategy.

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The declaration and payment of any dividends or repurchases of our common stock or debt is at the discretion of our Board of Directors and depends upon our financial condition, results of operations, future liquidity needs, regulatory and capital requirements and other factors deemed relevant by our Board of Directors.

A summary of our cash dividend activity for the three months ended March 31, 2023 and 2022 is as follows:

A summary of our cash dividend activity for the six months ended June 30, 2023 and 2022 is as follows:

Declaration Date Record Date Payment Date Cash

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

January 24, 2023 March 10, 2023 March 24, 2023 $ 1.48 $ 351

Three Months Ended March 31, 2022

April 18, 2023 June 9, 2023 June 23, 2023 $ 1.48 $ 350

Six Months Ended June 30, 2022

January 25, 2022 March 10, 2022 March 25, 2022 $ 1.28 $ 309

On April 18, 2023, our Audit Committee declared a second quarter 2023 dividend to shareholders of $ 1.48 per share, payable on June 23, 2023 to shareholders of record at the close of business on June 9, 2023 .

April 19, 2022 June 10, 2022 June 24, 2022 $ 1.28 $ 309

On July 18, 2023, our Audit Committee declared a third quarter 2023 dividend to shareholders of $ 1.48 per share, payable on September 22, 2023 to shareholders of record at the close of business on September 8, 2023 .

Under our Board of Directors’ authorization, we maintain a common stock repurchase program.

6 unchanged sentences

The excess cost of the repurchased shares over par value is charged on a pro rata basis to additional paid-in capital and retained earnings.

A summary of common stock repurchases for the three months ended March 31, 2023 and 2022 is as follows:

Three Months Ended March 31

A summary of common stock repurchases for the six months ended June 30, 2023 and 2022 is as follows:

Six Months Ended June 30

Shares repurchased 2.7 2.5

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Stock Incentive Plan s

A summary of stock option activity for the three months ended March 31, 2023 is as follows:

A summary of stock option activity for the six months ended June 30, 2023 is as follows:

Shares Weighted-

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Forfeited or expired — 391.44

Outstanding at March 31, 2023 3.3 322.65 6.72 $ 458

Exercisable at March 31, 2023 2.2 265.17 5.52 $ 424

A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the three months ended March 31, 2023 is as follows:

Outstanding at June 30, 2023 3.2 323.85 6.51 $ 402

Exercisable at June 30, 2023 2.1 265.51 5.31 $ 376

A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the six months ended June 30, 2023 is as follows:

and Units Weighted-

3 unchanged sentences

Forfeited — 405.25

Nonvested at March 31, 2023 1.2 420.84

During the three months ended March 31, 2023, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three-year period from 2023 to 2025.

Nonvested at June 30, 2023 1.2 422.67

During the six months ended June 30, 2023, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three-year period from 2023 to 2025.

These grants have been included in the activity shown above but will be subject to adjustment at the end of 2025 based on results in the three-year period.

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For a more detailed discussion of our stock incentive plan fair value methodology, see Note 15, “Capital Stock,” to our audited consolidated financial statements as of and for the year ended December 31, 2022 included in our 2022 Annual Report on Form 10-K.

The following weighted-average assumptions were used to estimate the fair values of options granted during the three months ended March 31, 2023 and 2022:

Three Months Ended March 31

The following weighted-average assumptions were used to estimate the fair values of options granted during the six months ended June 30, 2023 and 2022:

Six Months Ended June 30

Risk-free interest rate 3.95 % 1.97 %

2 unchanged sentences

Weighted-average expected life (years) 4.40 5.10

The following weighted-average fair values per option or share were determined for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31

The following weighted-average fair values per option or share were determined for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30

Options granted during the period $ 127.13 $ 116.80

1 unchanged sentence

Accumulated Other Comprehensive Loss

A reconciliation of the components of accumulated other comprehensive loss at March 31, 2023 and 2022 is as follows:

A reconciliation of the components of accumulated other comprehensive loss at June 30, 2023 and 2022 is as follows:

Three Months Ended

June 30 Six Months Ended

2023 2022 2023 2022

(Restated) (Restated)

Net unrealized investment (losses) gains:

Beginning of period balance $ ( 1,330 ) $ ( 570 ) $ ( 1,755 ) $ 494

Other comprehensive gain (loss) before reclassifications, net of tax (expense) benefit of $( 85 ) and $ 355 , respectively

Other comprehensive (loss) gain before reclassifications, net of tax benefit (expense) of $ 61 , $ 323 , $( 25 ) and $ 677 , respectively

( 191 ) ( 1,050 ) 146 ( 2,196 )

Amounts reclassified from accumulated other comprehensive loss, net of tax benefit (expense) of $( 29 ) and $( 21 ), respectively

Other comprehensive income (loss) 427 ( 1,069 )

Other comprehensive (income) loss attributable to noncontrolling interests, net of tax benefit of $ 0 and $( 2 ), respectively

Amounts reclassified from accumulated other comprehensive loss, net of tax expense of $( 23 ), $( 34 ), $( 51 ) and $( 55 ), respectively

72 128 162 205

Other comprehensive (loss) income ( 119 ) ( 922 ) 308 ( 1,991 )

Other comprehensive loss (income) attributable to noncontrolling interests, net of tax benefit (expense) of $ 0 , $( 1 ), $ 0 and $( 3 ), respectively

End of period balance ( 1,449 ) ( 1,489 ) ( 1,449 ) ( 1,489 )

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Other comprehensive loss, net of tax benefit of $ 0 , $ 0 , $ 1 and $ 1 , respectively

( 1 ) ( 1 ) ( 3 ) ( 2 )

End of period balance ( 6 ) ( 2 ) ( 6 ) ( 2 )

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Beginning of period balance ( 218 ) ( 236 ) ( 229 ) ( 239 )

Other comprehensive income, net of tax benefit (expense) of $ 8 and $( 1 ), respectively

Other comprehensive income, net of tax (expense) of $( 1 ), $( 1 ), $ 7 and $( 2 ), respectively

End of period balance ( 214 ) ( 233 ) ( 214 ) ( 233 )

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Beginning of period balance 15 ( 10 ) 13 ( 19 )

Other comprehensive income, net of tax expense of $ 0 and $ 3 , respectively

Other comprehensive (loss) income, net of tax expense of $ 1 , $ 0 , $ 1 and $ 0 , respectively

( 3 ) 8 ( 1 ) 17

End of period balance 12 ( 2 ) 12 ( 2 )

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Other comprehensive income (loss), net of tax benefit of $( 5 ), $ 1 , $( 3 ) and $ 2 , respectively

— ( 5 ) 2 ( 8 )

End of period balance ( 15 ) ( 12 ) ( 15 ) ( 12 )

Total beginning of period accumulated other comprehensive loss ( 2,050 ) ( 1,246 ) ( 2,490 ) ( 197 )

Total other comprehensive income (loss), net of tax (expense) benefit of $( 106 ) and $ 336 , respectively

Total other comprehensive (loss) income, net of tax benefit (expense) of $ 32 , $ 285 , $( 72 ), and $ 617 , respectively

( 116 ) ( 908 ) 326 ( 1,962 )

Total other comprehensive (income) loss attributable to noncontrolling interests, net of tax benefit of $ 0 and $( 2 ), respectively

Total other comprehensive loss (income) attributable to noncontrolling interests, net of tax benefit (expense) of $ 0 , $( 1 ), $ 0 and $( 3 ) respectively

Total end of period accumulated other comprehensive loss $ ( 2,166 ) $ ( 2,151 ) $ ( 2,166 ) $ ( 2,151 )

Earnings per Share

The denominator for basic and diluted earnings per share for the three months ended March 31, 2023 and 2022 is as follows:

The denominator for basic and diluted earnings per share for the three and six months ended June 30, 2023 and 2022 is as follows:

Three Months Ended

June 30 Six Months Ended

2023 2022 2023 2022

Denominator for basic earnings per share – weighted-average shares

236.6 240.7 237.0 241.0

Effect of dilutive securities – employee stock options, nonvested restricted stock awards and convertible debentures

1.2 2.7 1.7 2.9

Denominator for diluted earnings per share

During the three months ended March 31, 2023 and 2022, weighted-average shares related to certain stock options of 0.4 and 0.2 , respectively, were excluded from each of the denominators for diluted earnings per share because the stock options were anti-dilutive.

During the three months ended March 31, 2023, we issued approximately 0.6 restricted stock units under our stock incentive plans, 0.2 of which vesting is contingent upon us meeting specified annual earnings targets for the three-year period of 2023 through 2025.

During the three months ended March 31, 2022, we issued approximately 0.5 restricted stock units under our stock incentive plans, 0.2 of which vesting is contingent upon us meeting specified annual earnings targets for the three-year period of 2022 through 2024.

237.8 243.4 238.7 243.9

During the three months ended June 30, 2023 and 2022, weighted-average shares related to certain stock options of 1.0 and 0.5 respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive.

During the six months ended June 30, 2023 and 2022, weighted-average shares related to certain stock options of 0.7 and 0.4 , respectively, were excluded from each of the denominators for diluted earnings per share because the stock options were anti-dilutive.

During the three and six months ended June 30, 2023, we issued approximately 0.0 and 0.6 restricted stock units under our stock incentive plans, 0.0 and 0.2 of which vesting is contingent upon us meeting specified annual earnings targets for the three-year period of 2023 through 2025.

During the three and six months ended months ended June 30, 2022, we issued approximately 0.0 and 0.5 restricted stock units under our stock incentive plans, 0.0 and 0.2 of which vesting is contingent upon us meeting specified annual earnings targets for the three-year period of 2022 through 2024.

The contingent restricted stock units have been excluded from the denominators for diluted earnings per share and will be included only if and when the contingency is met.

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Our Health Benefits segment offers a comprehensive suite of health plans and services to our Individual, Employer Group risk-based, Employer Group fee-based, BlueCard ® , Medicare, Medicaid and FEHB program members.

Our Health Benefits segment also includes our National Government Services.

Our Health Benefits segment also includes our National Government Services business.

The Health Benefits segment offers health products on a full-risk basis;

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CarelonRx offers a comprehensive pharmacy services portfolio, which includes services such as formulary management, pharmacy networks, specialty and home delivery pharmacy services and member services.

Our Carelon Services segment is focused on lowering the cost and improving the quality of healthcare by enabling and creating new care delivery and payment models, with a special emphasis on serving those with complex and chronic conditions.

Carelon Services offers a broad array of healthcare-related services and capabilities to internal and external customers including integrated care delivery, behavioral health, palliative care, utilization management, payment integrity services and subrogation services, as well as health and wellness programs.

5 unchanged sentences

These affiliated revenues are eliminated in consolidation.

Financial data by reportable segment for the three months ended March 31, 2023 and 2022 is as follows:

Financial data by reportable segment for the three months ended June 30, 2023 and 2022 is as follows:

Benefits CarelonRx Carelon

1 unchanged sentence

& Other Eliminations Total

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Premiums $ 36,233 $ — $ 429 $ 429 $ — $ ( 73 ) $ 36,589

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Operating gain (loss) $ 2,148 $ 496 $ 136 $ 632 $ ( 152 ) $ — $ 2,628

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Premiums $ 32,787 $ — $ 327 $ 327 $ — $ ( 38 ) $ 33,076

5 unchanged sentences

Operating gain (loss) (restated) $ 1,781 $ 479 $ 113 $ 592 $ ( 27 ) $ — $ 2,346

Financial data by reportable segment for the six months ended June 30, 2023 and 2022 is as follows:

Benefits CarelonRx Carelon

Services Total Corporate

& Other Eliminations Total

Six Months Ended June 30, 2023

Premiums $ 71,767 $ — $ 839 $ 839 $ — $ ( 149 ) $ 72,457

Product revenue — 8,881 — 8,881 — — 8,881

Service fees 3,513 — 408 408 16 — 3,937

Operating revenue - unaffiliated 75,280 8,881 1,247 10,128 16 ( 149 ) 85,275

Operating revenue - affiliated — 7,609 5,506 13,115 522 ( 13,637 ) —

Operating revenue - total $ 75,280 $ 16,490 $ 6,753 $ 23,243 $ 538 $ ( 13,786 ) $ 85,275

Operating gain (loss) $ 4,307 $ 1,008 $ 345 $ 1,353 ( 201 ) — 5,459

Six Months Ended June 30, 2022

Premiums $ 65,250 $ — $ 693 $ 693 $ — $ ( 82 ) $ 65,861

Product revenue — 6,869 — 6,869 — — 6,869

Service fees 3,173 — 446 446 19 — 3,638

Operating revenue - unaffiliated 68,423 6,869 1,139 8,008 19 ( 82 ) 76,368

Operating revenue - affiliated — 6,885 4,792 11,677 569 ( 12,246 ) —

Operating revenue - total $ 68,423 $ 13,754 $ 5,931 $ 19,685 $ 588 $ ( 12,328 ) $ 76,368

Operating gain (loss) (restated) $ 3,632 $ 877 $ 313 $ 1,190 $ ( 49 ) $ — $ 4,773

For segment reporting, we present all capitated risk arrangements on a gross basis;

therefore, eliminations also include adjustments for unaffiliated capitated risk arrangements that are recognized on a net basis under GAAP, as well as affiliated eliminations.

A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three months ended March 31, 2023 and 2022 is as follows:

A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three and six months ended June 30, 2023 and 2022 is as follows:

Three Months Ended

June 30 Six Months Ended

2023 2022 2023 2022

Reportable segments’ operating revenue 43,377 $ 38,482 $ 85,275 $ 76,368

2 unchanged sentences

Total revenues $ 43,672 $ 38,632 $ 85,844 $ 76,727

A reconciliation of income before income tax expense to reportable segments’ operating gain included in our consolidated statements of income for the three months ended March 31, 2023 and 2022 is as follows:

A reconciliation of income before income tax expense to reportable segments’ operating gain included in our consolidated statements of income for the three and six months ended June 30, 2023 and 2022 is as follows:

Three Months Ended

June 30 Six Months Ended

2023 2022 2023 2022

(Restated) (Restated)

Income before income tax expense $ 2,441 $ 2,122 $ 5,060 $ 4,428

7 unchanged sentences

The information related to our leases is as follows:

Balance Sheet Location March 31, 2023 December 31, 2022

Balance Sheet Location June 30, 2023 December 31, 2022

Operating Leases

3 unchanged sentences

Three Months Ended

June 30 Six Months Ended

2023 2022 2023 2022

Lease Expense

6 unchanged sentences

Right-of-use assets obtained in exchange for new lease liabilities, operating leases $ 18 $ 29 $ 40 $ 37

As of March 31, 2023 and December 31, 2022, the weighted average remaining lease term of our operating leases was 7 years for each period.

The lease liabilities reflect a weighted average discount rate of 3.19 % at March 31, 2023 and 2.98 % at December 31, 2022.

As of June 30, 2023 and December 31, 2022, the weighted average remaining lease term of our operating leases was 7 years for each period.

The lease liabilities reflect a weighted average discount rate of 3.28 % at June 30, 2023 and 2.98 % at December 31, 2022.

Future lease payments for noncancellable operating leases with initial or remaining terms of one year or more are as follows:

2023 (excluding the three months ended March 31, 2023) $ 162

2023 (excluding the six months ended June 30, 2023) $ 110

Thereafter 329

3 unchanged sentences

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What changed 10-Q

Item 1. Financial Statements