Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation as of December 31, 2023, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) required to be disclosed in our reports under the Exchange Act. In addition, based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
Management’s Report on Internal Control over Financial Reporting
Management, under the supervision and with the participation of the principal executive officer and principal financial officer, of Elevance Health, Inc. (the “Company”) is responsible for establishing and maintaining effective internal control over financial reporting (“Internal Control”), as such term is defined in the Exchange Act. The Company’s Internal Control is designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP. The Company’s Internal Control includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
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Because of inherent limitations in any Internal Control, no matter how well designed, misstatements due to error or fraud may occur and not be detected. Accordingly, even effective Internal Control can provide only reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
Management, under the supervision and with the participation of the principal executive officer and principal financial officer, assessed the effectiveness of the Company’s Internal Control as of December 31, 2023. Management’s assessment was based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The Company completed its acquisition of BioPlus Parent, LLC and subsidiaries in February 2023. As permitted by the U.S. Securities and Exchange Commission, management's assessment as of December 31, 2023 did not include the Internal Control of BioPlus Parent, LLC and subsidiaries, which are included in the Company's consolidated financial statements as of December 31, 2023. Such operations of BioPlus Parent, LLC and subsidiaries constituted 2% and 4% of the Company's total assets and net assets, respectively, as of December 31, 2023, and 1% and 0% of the Company's total revenues and net income, respectively, for the year then ended.
Based on management’s assessment, which excluded assessment of Internal Control of BioPlus Parent, LLC and subsidiaries, management has concluded that the Company’s Internal Control was effective as of December 31, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP.
Ernst & Young LLP, the Company’s independent registered public accounting firm, has audited the consolidated financial statements of the Company for the year ended December 31, 2023, and has also issued an audit report dated February 21, 2024, on the effectiveness of the Company’s Internal Control as of December 31, 2023, which is included in this Annual Report on Form 10-K.
/ S / G AIL K. B OUDREAUX
/ S / M ARK B. K AYE
President and Chief Executive Officer Executive Vice President and Chief Financial Officer
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Elevance Health, Inc.
Opinion on Internal Control over Financial Reporting
We have audited Elevance Health, Inc.’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Elevance Health, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.
As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of BioPlus Parent, LLC and subsidiaries, which is included in the 2023 consolidated financial statements of the Company and constituted 2% and 4% of total and net assets, respectively, as of December 31, 2023 and 1% and 0% of revenues and net income, respectively, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of BioPlus Parent, LLC and subsidiaries.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Elevance Health, Inc. as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(c) and our report dated February 21, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Indianapolis, Indiana
February 21, 2024
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ITEM 9B. OTHER INFORMATION.
Rule 10b5-1 Trading Plans
Peter D. Haytaian , an executive officer of the Company , adopted a stock trading plan on December 4, 2023 , pursuant to which he may sell up to 21,095 shares of the Company’s common stock prior to December 2, 2024. This trading plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, and the Company’s policies regarding transactions in our securities.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information required by this Item concerning our Executive Officers is included in Part I, Item 1, “Business - Information about our Executive Officers. ” The information required by this Item concerning our Directors and nominees for Director, information about our Audit Committee members and financial expert(s), disclosure of any delinquent filers under Section 16(a) of the Exchange Act and our Code of Conduct is incorporated herein by reference from our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders, which will be filed with the SEC pursuant to Regulation 14A within 120 days after the end of our last fiscal year.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item concerning remuneration of our Executive Officers and Directors, material transactions involving such Executive Officers and Directors and Compensation Committee interlocks, as well as the Compensation and Talent Committee Report and the CEO pay ratio are incorporated herein by reference from our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders, which will be filed with the SEC pursuant to Regulation 14A within 120 days after the end of our last fiscal year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Securities Authorized for Issuance under Equity Compensation Plans
Securities authorized for issuance under our equity compensation plans as of December 31, 2023 are as follows:
Plan
Category 1
Number of securities to be
issued upon exercise of
outstanding options, warrants and rights 2
(a)
Weighted-average
exercise price of
outstanding options, warrants and rights 3
(b)
Number of securities
remaining available for
future issuance under equity
compensation plans (excluding securities reflected in column (a)) 4
(c)
Equity compensation plans approved by shareholders as of December 31, 2023
4,739,034 $327.13 15,977,193
1 We have no equity compensation plans pursuant to which awards may be granted in the future that have not been approved by shareholders.
2 Includes shares that may be issued under the Elevance Health Incentive Compensation Plan and the 2017 Elevance Health Incentive Compensation Plan pursuant to the following outstanding awards: 2,984,903 stock options, 527,664 unvested restricted stock units, and 1,226,466 performance stock units (assuming that the outstanding performance stock units are earned at the maximum award level).
3 Represents the weighted average exercise price of outstanding stock options. Does not take into consideration outstanding restricted stock units or performance stock units, which, once vested, may be converted into shares of our common stock on a one-for-one basis upon distribution at no additional cost.
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4 Excludes securities reflected in the first column, “Number of securities to be issued upon exercise of outstanding options, warrants and rights”. Includes 11,812,885 shares of common stock available for issuance as stock options, restricted stock awards, performance stock awards, performance awards and stock appreciation rights under the 2017 Elevance Health Incentive Compensation Plan at December 31, 2023. Includes 4,164,308 shares of common stock available for issuance under the Stock Purchase Plan at December 31, 2023.
The information required by this Item concerning the stock ownership of management and five percent beneficial owners is incorporated herein by reference from our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders, which will be filed with the SEC pursuant to Regulation 14A within 120 days after the end of our last fiscal year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required by this Item concerning certain relationships and related person transactions and Director independence is incorporated herein by reference from our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders, which will be filed with the SEC pursuant to Regulation 14A within 120 days after the end of our last fiscal year.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The information required by this Item concerning principal accountant fees and services is incorporated herein by reference from our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders, which will be filed with the SEC pursuant to Regulation 14A within 120 days after the end of our last fiscal year.
136
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) 1. Financial Statements:
The following consolidated financial statements of the Company are set forth in Part II, Item 8:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
2. Financial Statement Schedule:
The following financial statement schedule of the Company is included in Item 15(c):
Schedule II—Condensed Financial Information of Registrant (Parent Company Only).
All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, are inapplicable, or the required information is included in the consolidated financial statements, and therefore, have been omitted.
3. Exhibits required to be filed as part of this report:
Exhibit
Number
Exhibit
3.1 Amended and Restated Articles of Incorporation of the Company, as amended and restated effective June 27, 2022, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 28, 2022.
3.2 Bylaws of the Company, as amended effective October 4, 2023 , incorporated by reference to Exhibit 3. 1 to the Company’s Current Report on Form 8-K filed on October 5, 2023 .
4.1 Indenture, dated as of December 9, 2004, between the Company and The Bank of New York Trust Company, N.A., as trustee, including the Form of the Company’s 5.950% Notes due 2034, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 15, 2004.
4.2 Indenture, dated as of January 10, 2006, between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 11, 2006.
(a) Form of 5.85% Notes due 2036, incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on January 11, 2006.
(b) Form of 6.375% Notes due 2037, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on June 8, 2007.
(c) Form of 5.800% Notes due 2040, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on August 12, 2010.
(d) Form of 4.625% Notes due 2042, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on May 7, 2012.
(e) Form of 4.650% Notes due 2043, incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on September 10, 2012.
137
Exhibit
Number
Exhibit
(f) Form of 5.100% Notes due 2044, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on July 31, 2013.
(g) Form of 3.500% Notes due 2024, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on August 12, 2014.
(h) Form of 4.650% Notes due 2044, incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on August 12, 2014.
(i) Form of 4.850% Notes due 2054, incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on August 12, 2014.
4.3 Subordinated Indenture, dated as of May 12, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on May 12, 2015.
4.4 Indenture dated as of November 21, 2017 between the Company and The Bank of New York Mellon Trust Company, N.A. as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on November 21, 2017.
(a) Form of 3.350% Notes due 2024, incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on November 21, 2017.
(b) Form of 3.650% Notes due 2027, incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on November 21, 2017.
(c) Form of 4.375% Notes due 2047, incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K filed on November 21, 2017.
(d) Form of 4.101% Notes due 2028, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 2, 2018.
(e) Form of 4.550% Notes due 2048, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on March 2, 2018.
(f) Form of 2.375% Notes due 2025, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 9, 2019.
(g) Form of 2.875% Notes due 2029, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on September 9, 2019.
(h) Form of 3.700% Notes due 2049, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on September 9, 2019.
(i) Form of 2.250% Notes due 2030, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on May 5, 2020.
(j) Form of 3.125% Notes due 2050, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on May 5, 2020.
(k) Form of 1.500% Notes due 2026, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on March 17, 2021.
(l) Form of 2.550% Notes due 2031, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on March 17, 2021.
(m) Form of 3.600% Notes due 2051, incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on March 17, 2021.
(n) Form of 4.100% Notes due 2032, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 29, 2022.
(o) Form of 4.550% Notes due 2052, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on April 29, 2022.
138
Exhibit
Number
Exhibit
(p) Form of 5.350% Notes due 2025, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on November 4, 2022.
(q) Form of 5.500% Notes due 2032, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on November 4, 2022.
(r) Form of 6.100% Notes due 2052, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on November 4, 2022.
(s) Form of 4.900% Notes due 2026, incorporated by reference to Exhibit 4.1 to the Company ’ s Current Report on Form 8-K filed on February 8, 2023.
(t) Form of 4.750% Notes due 2033, incorporated by reference to Exhibit 4.2 to the Company ’ s Current Report on Form 8-K filed on February 8, 2023.
(u) Form of 5.125% Notes due 2053, incorporated by reference to Exhibit 4.3 to the Company ’ s Current Report on Form 8-K filed on February 8, 2023.
4.5 Upon the request of the Securities and Exchange Commission, the Company will furnish copies of any other instruments defining the rights of holders of long-term debt of the Company or its subsidiaries.
4.6 Description of the Company’s Securities Registered Pursuant to Section 12 of the Exchange Act, incorporated by reference to Exhibit 4.7 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022 .
10.1 * Elevance Health Incentive Compensation Plan, as amended and restated effective June 28, 2022 , incorporated by reference to Exhibit 10.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
(a) Form of Incentive Compensation Plan Nonqualified Stock Option Award Agreement for 2016 and 2017, incorporated by reference to Exhibit 10.2(s) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
10.2 * 2017 Elevance Health Incentive Compensation Plan, as amended and restated effective June 28, 2022, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
(a) Form of Incentive Compensation Plan Nonqualified Stock Option Award Agreement for 2018, incorporated by reference to Exhibit 10.2(d) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.
(b) Form of Incentive Compensation Plan Nonqualified Stock Option Award Agreement commencing July 2018, incorporated by reference to Exhibit 10.2(h) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.
(c) Form of Incentive Compensation Plan Nonqualified Stock Option Award Agreement for 2019, incorporated by reference to Exhibit 10.2(l) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.
(d) Form of Incentive Compensation Plan Nonqualified Stock Option Award Agreement for 2020, incorporated by reference to Exhibit 10.2(l) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
(e) Form of Incentive Compensation Plan Restricted Stock Unit Award Agreement for 2020, incorporated by reference to Exhibit 10.2(m) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
(f) Form of Incentive Compensation Plan Performance Stock Unit Award Agreement for 2020, incorporated by reference to Exhibit 10.2(n) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
(g) Form of Incentive Compensation Plan Nonqualified Stock Option Award Agreement for 2021, incorporated by reference to Exhibit 10.2(m) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.
139
Exhibit
Number
Exhibit
(h) Form of Incentive Compensation Plan Restricted Stock Unit Award Agreement for 2021, incorporated by reference to Exhibit 10.2(n) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.
(i) Form of Incentive Compensation Plan Performance Stock Unit Award Agreement for 2021, incorporated by reference to Exhibit 10.2(o) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.
(j) Form of Incentive Compensation Plan Nonqualified Stock Option Award Agreement for 2022, as amended and restated effective June 28, 2022, incorporated by reference to Exhibit 10.2(l) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
(k) Form of Incentive Compensation Plan Restricted Stock Unit Award Agreement for 2022, as amended and restated effective June 28, 2022, incorporated by reference to Exhibit 10.2(m) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
(l) Form of Incentive Compensation Plan Performance Stock Unit Award Agreement for 2022, as amended and restated effective June 28, 2022, incorporated by reference to Exhibit 10.2(n) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
(m) F orm of Incentive Comp ensat ion Plan Nonqualif ied Stoc k Option Award Agreement for 2023, inc orporated by reference to Exhibit 10.2(o) to the Company ’ s Quarterly R eport on Form 10-Q for the quarter ended March 31, 2023.
(n) Form of Incentive Compensation Plan Restricted Stock Unit Award Agreement for 2023, incorporated by reference to Exhibit 10.2( p ) to the Company ’ s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.
(o) Form of Incentive Compensation Plan Performance Stock Unit Award Agreement for 2023, incorporated by reference to Exhibit 10.2( q ) to the Company ’ s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.
10.3 * Elevance Health Comprehensive Nonqualified Deferred Compensation Plan, as amended and restated effective January 1, 2024.
10.4 * Elevance Health Executive Agreement Plan, as amended and restated effective June 28, 2022, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
10.5 * Elevance Health Executive Salary Continuation Plan, as amended and restated effective June 28, 2022, incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
10.6 * Elevance Health Directed Executive Compensation Plan, as amended and restated effective June 28, 2022, incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
10.7 * Elevance Health Board of Directors Compensation Program, as amended and restated effective May 10, 2023 , incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 202 3 .
10.8 * Elevance Health Board of Directors’ Deferred Compensation Plan, as amended and restated effective June 28, 2022, incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
10.9 * (a) Form of Employment Agreement between the Company and each of the following: John E. Gallina, Peter D. Haytaian, and Gloria McCarthy, incorporated by reference to Exhibit A to Exhibit 10.41 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007.
(b) Form of Employment Agreement between the Company and Gail Boudreaux, incorporated by reference to Exhibit A to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 6, 2017.
(c) Form of Employment Agreement between the Company and each of the following: Charles Morgan Kendrick, Felicia F. Norwood, and Blair W. Todt incorporated by reference to Exhibit 10.9(d) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.
140
Exhibit
Number
Exhibit
(d) Form of Employment Agreement between the Company and Mark Kaye, incorporated by reference to Exhibit 10.9(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.
10.10 * Offer Letter, by and between the Company and Gail Boudreaux, dated as of November 5, 2017, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 6, 2017.
10.11 * Offer Letter, by and between the Company and Mark Kaye , dated as of August 2 , 20 23 , incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 8 , 20 23 .
10.12 Blue Cross License Agreement by and between Blue Cross Blue Shield Association and the Company, including revisions, if any, adopted by the Member Plans through November 16, 202 3 .
10.13 Blue Shield License Agreement by and between Blue Cross Blue Shield Association and the Company, including revisions, if any, adopted by the Member Plans through November 16, 202 3 .
21 Subsidiaries of the Company.
23 Consent of Independent Registered Public Accounting Firm.
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97 Elevance Health, Inc. Incentive Compensation Recoupment Policy, amended and restated effective as of October 3, 2023.
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* Indicates management contracts or compensatory plans or arrangements.
(b) Exhibits
The response to this portion of Item 15 is set forth in paragraph (a) 3 above.
(c) Financial Statement Schedule
Schedule II—Condensed Financial Information of Registrant (Parent Company Only).
ITEM 16. FORM 10-K SUMMARY.
None.
141
Schedule II—Condensed Financial Information of Registrant
Elevance Health, Inc. (Parent Company Only)
Balance Sheets
(In millions, except share data) December 31,
2023 December 31,
2022
Assets
Current assets:
Cash and cash equivalents $ 1,483 $ 942
Fixed maturity securities (amortized cost of $ 0 and $ 175 ; allowance for credit losses of $ 0 and $ 0 )
— 163
Equity securities 80 104
Other receivables 58 55
Other current assets 959 721
Total current assets 2,580 1,985
Other invested assets 822 783
Property and equipment, net 178 187
Deferred tax assets, net 199 313
Investments in subsidiaries 63,426 58,978
Other noncurrent assets 217 240
Total assets $ 67,422 $ 62,486
Liabilities and shareholders’ equity
Liabilities
Current liabilities:
Accounts payable and accrued expenses $ 1,709 $ 894
Net due to subsidiaries 734 789
Current portion of long-term debt 1,649 1,500
Other current liabilities 413 361
Total current liabilities 4,505 3,544
Long-term debt, less current portion 23,221 22,324
Other noncurrent liabilities 390 375
Total liabilities 28,116 26,243
Commitments and contingencies—Note 5
Shareholders’ equity
Preferred stock, without par value, shares authorized - 100,000,000 ; shares issued and outstanding - none
— —
Common stock, par value $ 0.01 , shares authorized - 900,000,000 ; shares issued and outstanding - 233,071,088 and 237,958,067
2 2
Additional paid-in capital 8,868 9,084
Retained earnings 31,749 29,647
Accumulated other comprehensive loss ( 1,313 ) ( 2,490 )
Total shareholders’ equity 39,306 36,243
Total liabilities and shareholders’ equity $ 67,422 $ 62,486
See accompanying notes.
142
Elevance Health, Inc. (Parent Company Only)
Statements of Income
Years ended December 31
(In millions) 2023 2022 2021
Revenues
Net investment income $ 25 $ 4 $ 6
Net (losses) gains on financial instruments
( 100 ) 2 6
Service fees 8 7 24
Total revenues ( 67 ) 13 36
Expenses
Operating expense 352 188 119
Interest expense 1,017 845 794
Loss on extinguishment of debt — — 21
Total expenses 1,369 1,033 934
Loss before income tax credits and equity in net income of subsidiaries ( 1,436 ) ( 1,020 ) ( 898 )
Income tax credits ( 214 ) ( 461 ) ( 244 )
Equity in net income of subsidiaries 7,209 6,453 6,812
Shareholders’ net income $ 5,987 $ 5,894 $ 6,158
See accompanying notes.
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Elevance Health, Inc. (Parent Company Only)
Statements of Comprehensive Income
Years ended December 31
(in millions) 2023 2022 2021
Shareholders’ net income
$ 5,987 $ 5,894 $ 6,158
Other comprehensive income (loss), net of tax:
Change in net unrealized gains/losses on investments
1,123 ( 2,249 ) ( 455 )
Change in non-credit component of impairment losses on investments — ( 3 ) 2
Change in net unrealized gains/losses on cash flow hedges 18 10 11
Change in net periodic pension and postretirement costs 40 ( 70 ) 123
Change in future policy benefits ( 3 ) 32 ( 7 )
Foreign currency translation adjustments ( 1 ) ( 13 ) ( 9 )
Other comprehensive income (loss)
1,177 ( 2,293 ) ( 335 )
Total shareholders’ comprehensive income $ 7,164 $ 3,601 $ 5,823
See accompanying notes.
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Elevance Health, Inc. (Parent Company Only)
Statements of Cash Flows
Years ended December 31
(In millions) 2023 2022 2021
Net cash provided by operating activities $ 4,113 $ 1,447 $ 2,038
Investing activities
Purchases of investments ( 95 ) ( 367 ) ( 2,059 )
Proceeds from sales, maturities, calls and redemptions of investments 212 618 2,449
Repayment (issuance) of note to subsidiary — 1,500 ( 1,500 )
Capitalization of subsidiaries ( 363 ) ( 411 ) ( 807 )
Changes in securities lending collateral 42 36 173
Purchases of property and equipment, net of sales ( 55 ) ( 47 ) ( 77 )
Net cash provided by (used in) investing activities ( 259 ) 1,329 ( 1,821 )
Financing activities
Net (repayments of) proceeds from short-term borrowings
— ( 300 ) 50
Proceeds from long-term borrowings 2,574 3,071 3,462
Repayments of long-term borrowings ( 1,909 ) ( 1,899 ) ( 1,068 )
Changes in securities lending payable ( 42 ) ( 36 ) ( 173 )
Repurchase and retirement of common stock ( 2,676 ) ( 2,316 ) ( 1,900 )
Cash dividends ( 1,466 ) ( 1,290 ) ( 1,158 )
Proceeds from issuance of common stock under employee stock plans 152 182 203
Taxes paid through withholding of common stock under employee stock plans ( 99 ) ( 93 ) ( 102 )
Other, net 153 217 399
Net cash used in financing activities ( 3,313 ) ( 2,464 ) ( 287 )
Change in cash and cash equivalents 541 312 ( 70 )
Cash and cash equivalents at beginning of year 942 630 700
Cash and cash equivalents at end of year $ 1,483 $ 942 $ 630
See accompanying notes.
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Elevance Health, Inc.
(Parent Company Only)
Notes to Condensed Financial Statements
December 31, 2023
(In Millions, Except Per Share Data)
1. Basis of Presentation and Significant Accounting Policies
In the parent company only financial statements of Elevance Health, Inc. (“Elevance Health”), Elevance Health’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of the subsidiaries. Elevance Health’s share of net income of its unconsolidated subsidiaries is included in income using the equity method of accounting.
Certain amounts presented in the parent company only financial statements are eliminated in the consolidated financial statements of Elevance Health.
Elevance Health’s parent company only financial statements should be read in conjunction with Elevance Health’s audited consolidated financial statements and the accompanying notes included in Part II, Item 8 of this Annual Report on Form 10-K.
2. Subsidiary Transactions
Dividends from Subsidiaries
Elevance Health received cash dividends from subsidiaries of $ 4,909 , $ 3,097 and $ 3,134 during 2023, 2022 and 2021, respectively.
Dividends to Subsidiaries
Certain subsidiaries of Elevance Health own shares of Elevance Health common stock. Elevance Health paid cash dividends to subsidiaries related to these shares of common stock in the amount of $ 71 , $ 61 and $ 54 during 2023, 2022 and 2021, respectively.
Investments in Subsidiaries
Capital contributions to subsidiaries were $ 363 , $ 411 and $ 3,271 during 2023, 2022 and 2021, respectively.
Amounts Due From and To Subsidiaries
At December 31, 2023 and 2022, Elevance Health reported amounts due (to) from subsidiaries of $( 734 ) and $( 789 ), respectively. The amounts due (to) and from subsidiaries primarily include amounts for allocated operating expenses or daily cash management activities. These items are routinely settled, and as such, are classified as current liabilities or assets.
In June 2021 Elevance Health entered into a short-term loan agreement with a subsidiary for the amount of $ 1,500 , which is also included in amounts due from subsidiaries at December 31, 2021. This loan was repaid in February 2022.
Guarantees on Behalf of Subsidiaries
Elevance Health guarantees contractual or financial obligations or solvency requirements for certain of its subsidiaries. These guarantees approximated $ 435 at December 31, 2023. There were no payments made on these guarantees in 2023.
3. Derivative Financial Instruments
The information regarding derivative financial instruments contained in Note 6, “Derivative Financial Instruments,” of the Notes to Consolidated Financial Statements of Elevance Health and its subsidiaries, included in Part II, Item 8 of this Annual Report on Form 10-K, is incorporated herein by reference.
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4. Long-Term Debt
The information regarding long-term debt contained in Note 13, “Debt,” of the Notes to Consolidated Financial Statements of Elevance Health and its subsidiaries, included in Part II, Item 8 of this Annual Report on Form 10-K, is incorporated herein by reference.
5. Commitments and Contingencies
The information regarding commitments and contingencies contained in Note 14, “Commitments and Contingencies,” of the Notes to Consolidated Financial Statements of Elevance Health and its subsidiaries, included in Part II, Item 8 of this Annual Report on Form 10-K, is incorporated herein by reference.
6. Capital Stock
The information regarding capital stock contained in Note 15, “Capital Stock,” of the Notes to Consolidated Financial Statements of Elevance Health and its subsidiaries, included in Part II, Item 8 of this Annual Report on Form 10-K, is incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ELEVANCE HEALTH, I NC .
By: /s/ GAIL K. BOUDREAUX
Gail K. Boudreaux
President and Chief Executive Officer
Dated: February 21, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ GAIL K. BOUDREAUX President and Chief Executive Officer, Director
(Principal Executive Officer) February 21, 2024
Gail K. Boudreaux
/s/ MARK B. KAYE
Executive Vice President and Chief Financial Officer (Principal Financial Officer) February 21, 2024
Mark B. Kaye
/s/ RONALD W. PENCZEK Chief Accounting Officer and Controller (Principal Accounting Officer) February 21, 2024
Ronald W. Penczek
/s/ ELIZABETH E. TALLETT Chair of the Board February 21, 2024
Elizabeth E. Tallett
/s/ R. KERRY CLARK Director February 21, 2024
R. Kerry Clark
/s/ SUSAN D. DEVORE Director February 21, 2024
Susan D. DeVore
/s/ ROBERT L. DIXON, JR.
Director February 21, 2024
Robert L. Dixon, Jr.
/s/ LEWIS HAY III Director February 21, 2024
Lewis Hay III
/s/ BAHIJA JALLAL Director February 21, 2024
Bahija Jallal
/s/ ANTONIO F. NERI Director February 21, 2024
Antonio F. Neri
/s/ RAMIRO G. PERU Director February 21, 2024
Ramiro G. Peru
/s/ RYAN M. SCHNEIDER Director February 21, 2024
Ryan M. Schneider
/s/ DEANNA D. STRABLE Director February 21, 2024
Deanna D. Strable
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