What changed in this filing

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Item 1. Financial Statements

2025-07-17 compared with 2025-04-22 · 267 added, 171 removed, 799 unchanged (35% of the section changed)

59 unchanged sentences

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

(In millions, except per share data)

5 unchanged sentences

Net losses on financial instruments ( 131 ) ( 85 ) ( 595 ) ( 246 )

Gain on sale of business

Total revenues 49,776 43,886 98,667 86,463

6 unchanged sentences

Income before income tax expense

2,292 2,986 5,089 5,925

Income tax expense 548 685 1,161 1,375

1 unchanged sentence

Net income attributable to noncontrolling interests

( 1 ) ( 1 ) ( 2 ) ( 4 )

Shareholders’ net income $ 1,743 $ 2,300 $ 3,926 $ 4,546

7 unchanged sentences

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

(In millions)

1 unchanged sentence

Other comprehensive income (loss), net of tax:

Change in net unrealized losses/gains on investments 235 ( 56 )

Change in net unrealized gains (losses) on investments

148 ( 26 ) 383 ( 82 )

Change in non-credit component of impairment losses on investments

( 3 ) — ( 2 ) —

Change in net unrealized gains (losses) on cash flow hedges

3 unchanged sentences

Other comprehensive income (loss)

152 ( 22 ) 389 ( 74 )

Net loss attributable to noncontrolling interests

( 1 ) ( 1 ) ( 2 ) ( 4 )

Other comprehensive income attributable to noncontrolling interests

( 1 ) — ( 2 ) —

Total shareholders’ comprehensive income $ 1,894 $ 2,278 $ 4,313 $ 4,472

2 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

(In millions)

3 unchanged sentences

Net losses on financial instruments 595 246

Gain on sale of business — ( 240 )

Equity in net (earnings) losses of other invested assets

17 unchanged sentences

Purchases of subsidiaries, net of cash acquired 54 ( 1,124 )

Proceeds from sale of subsidiaries, net of cash sold

Purchases of property and equipment ( 463 ) ( 602 )

Other, net ( 38 ) ( 65 )

Net cash provided by (used in) investing activities

Net cash used in investing activities

( 584 ) ( 3,128 )

Financing activities

Proceeds from long-term borrowings — 2,580

Repayments of long-term borrowings ( 1,250 ) —

Proceeds from short-term borrowings — 1,350

Repayments of short-term borrowings ( 115 ) —

Repayments of short-term borrowings, net of issuances

Changes in securities lending payable 466 320

6 unchanged sentences

Net cash provided by (used in) financing activities

( 2,217 ) 700

Effect of foreign exchange rates on cash and cash equivalents 2 ( 5 )

1 unchanged sentence

Cash and cash equivalents at beginning of period 8,288 6,526

Cash and cash equivalents included in assets held for sale at end of period

Cash and cash equivalents at end of period $ 8,560 $ 6,497

12 unchanged sentences

Net income — — — 2,183 — 1 2,184

Other comprehensive loss

Other comprehensive gain

— — — — 236 1 237

4 unchanged sentences

March 31, 2025 225.7 $ 2 $ 8,866 $ 34,546 $ ( 911 ) $ 117 $ 42,620

Net income — — — 1,743 $ — 1 $ 1,744

Other comprehensive gain

— — — — 151 1 152

Noncontrolling interests adjustment — — — — — 10 10

Repurchase and retirement of common stock, including excise tax ( 1.0 ) — ( 27 ) ( 354 ) — — ( 381 )

Dividends and dividend equivalents — — — ( 386 ) — — ( 386 )

Issuance of common stock under employee stock plans, net of related tax benefits 0.1 — 92 — — — 92

June 30, 2025 224.8 $ 2 $ 8,931 $ 35,549 $ ( 760 ) $ 129 $ 43,851

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, 2023

8 unchanged sentences

March 31, 2024 232.5 $ 2 $ 8,883 $ 33,088 $ ( 1,365 ) $ 102 $ 40,710

— — — 2,300 — 1 2,301

Other comprehensive loss

— — — — ( 22 ) — ( 22 )

Noncontrolling interests adjustment — — — — — 3 3

Repurchase and retirement of common stock, including excise tax

( 0.9 ) — ( 34 ) ( 432 ) — — ( 466 )

Dividends and dividend equivalents — — — ( 381 ) — — ( 381 )

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

0.3 — 152 — — — 152

June 30, 2024 231.9 $ 2 $ 9,001 $ 34,575 $ ( 1,387 ) $ 106 $ 42,297

See accompanying notes.

1 unchanged sentence

Notes to Consolidated Financial Statements

March 31, 2025

June 30, 2025

(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 approximately 45.8 million medical members through our affiliated health plans as of March 31, 2025.

We are one of the largest health insurers in the United States in terms of medical membership, serving approximately 45.6 million medical members through our affiliated health plans as of June 30, 2025.

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

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December 31, 2024 (the “2024 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, 2025 and 2024 have been recorded.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025, or any other period.

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, 2025 and 2024 have been recorded.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025, or any other period.

The seasonal nature of portions of our healthcare 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.

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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 $ 695 and $ 409 at March 31, 2025 and December 31, 2024, respectively, and are included in the “Cash and cash equivalents” line on our consolidated balance sheets.

These amounts totaled $ 519 and $ 409 at June 30, 2025 and December 31, 2024, 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.

3 unchanged sentences

For impaired fixed maturity securities that we do not intend to sell or if it is more likely than not that we will not have to sell such securities, but we expect that we will not fully recover the amortized cost basis, we recognize the credit component of the impairment as an allowance for credit loss in our consolidated balance sheets and record an impairment loss in our consolidated statements of income.

The non-credit component of the impairment is recognized in “Accumulated other comprehensive loss.” Furthermore, unrealized losses entirely caused by non-credit-related factors related to fixed maturity securities for which we expect to fully recover the amortized cost basis continue to be recognized in “Accumulated other comprehensive loss.”

The non-credit component of the impairment is recognized in the consolidated statements of comprehensive income.

Furthermore, unrealized losses entirely caused by non-credit-related factors related to fixed maturity securities for which we expect to fully recover the amortized cost basis continue to be recognized in “Accumulated other comprehensive loss.”

The credit component of an impairment is determined primarily by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security.

6 unchanged sentences

Such adjustments are reported within net investment income.

The changes in fair value of our marketable equity securities are recognized in our results of operations within net losses on financial instruments.

The changes in fair value of our marketable equity securities are recognized in our consolidated statements of income within net losses on financial instruments.

Certain marketable equity securities are held to satisfy contractual obligations or for other business purposes and are reported under the caption “Other invested assets” in our consolidated balance sheets.

23 unchanged sentences

Premium receivables include the uncollected amounts from insured groups, individuals and government programs.

Premium receivables are reported net of an allowance for doubtful accounts of $ 178 and $ 183 at March 31, 2025 and December 31, 2024, respectively.

Premium receivables are reported net of an allowance for doubtful accounts of $ 163 and $ 183 at June 30, 2025 and December 31, 2024, 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 $ 128 and $ 115 at March 31, 2025 and December 31, 2024, respectively.

Self-funded receivables are reported net of an allowance for doubtful accounts of $ 134 and $ 115 at June 30, 2025 and December 31, 2024, respectively.

Other receivables include pharmacy rebates, provider advances, claims recoveries, reinsurance receivables, proceeds due from brokers on investment trades that have not yet settled, accrued investment income and other miscellaneous amounts due to us.

These receivables are reported net of an allowance for doubtful accounts of $ 1,458 and $ 1,385 at March 31, 2025 and December 31, 2024, respectively.

These receivables are reported net of an allowance for doubtful accounts of $ 1,395 and $ 1,385 at June 30, 2025 and December 31, 2024, respectively.

During the quarter ended June 30, 2025, we realized a $ 209 settlement with a value-based care provider, which allowed us to release $ 129 from the allowance for doubtful accounts.

Of the settlement amount, $ 154 pertains to services rendered in 2024, with the remaining $ 55 attributable to 2025.

Revenue Recognition:

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We also record premiums for certain value-based arrangements of our Carelon Services care delivery businesses.

Under these value-based arrangements, we carry financial responsibility across medical claims costs through risk contracts with health plans in which we deliver, integrate, direct and control certain health care services for patients.

In exchange, we receive a premium that is typically paid on a per-patient per-month basis and performance-based payments that are recognized when performance metrics are achieved.

We consider these value-based arrangements to represent a single performance obligation where revenues are recognized in the period in which health care services are made available.

We consider these value-based arrangements to represent a single performance obligation where revenues are recognized in the period in which healthcare services are made available.

Service fees include revenue from certain group contracts that provide for the group to be at risk for all or, with supplemental insurance arrangements, a portion, of their claims experience.

16 unchanged sentences

CarelonRx recognizes revenue when control of the prescription drugs is transferred to customers, in an amount it expects to be entitled to in exchange for the products or services provided.

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, 2025 or December 31, 2024.

For the three months ended March 31, 2025 and 2024, 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, 2025 or December 31, 2024.

For the three and six months ended June 30, 2025 and 2024, 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.

Recently Adopted Accounting Guidance:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

The amendments in ASU 2023-07 are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments are to be applied retrospectively to all prior periods presented in the financial statements, and upon transition, the significant segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

In August 2023, the FASB issued Accounting Standards Update No.

2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement (“ASU 2023-05”).

ASU 2023-05 clarifies existing guidance to reduce diversity in practice and requires a joint venture to recognize and initially measure its assets and liabilities using a new basis of accounting, at fair value, upon formation.

These amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025.

We adopted ASU 2023-05 as of January 1, 2025.

The adoption of ASU 2023-07 did not have an impact on our results of operations or our consolidated cash flows.

The adoption of ASU 2023-05 did not have an impact on our financial statements.

Recent Accounting Guidance Not Yet Adopted:

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, Income Taxes (Topic 740) (“ASU 2023-09”).

The amendments in ASU 2023-09 are intended to improve income tax disclosures, primarily related to the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for our fiscal year beginning after December 15, 2024, however, these disclosures are not required for interim periods.

The amendments are to be applied on a prospective basis, although retrospective adoption is permitted.

We do not believe the adoption of ASU 2023-09 will have a material impact on our consolidated financial statements or disclosures.

In November 2024, the FASB issued Accounting Standards Update No.

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We are currently evaluating the effects the adoption of ASU 2024-03 will have on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, Income Taxes (Topic 740) (“ASU 2023-09”).

The amendments in ASU 2023-09 are intended to improve income tax disclosures, primarily related to the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for our fiscal year beginning after December 15, 2024, however, these disclosures are not required for interim periods.

The amendments are to be applied on a prospective basis, although retrospective adoption is permitted.

We do not believe the adoption of ASU 2023-09 will have a material impact on our consolidated financial statements or disclosures.

In August 2023, the FASB issued Accounting Standards Update No.

2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement (“ASU 2023-05”).

These amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025.

We do not believe the adoption of ASU 2023-05 will have a material impact on our consolidated financial statements and disclosures.

There were no other new accounting pronouncements that were issued or became effective since the issuance of our 2024 Annual Report on Form 10-K that had, or are expected to have, a material impact on our consolidated financial position, results of operations, cash flows or disclosures.

3 unchanged sentences

Centers is a managed long-term care plan that serves New York state Medicaid and dual-eligible Medicaid/Medicare members, enabling adults with long-term care needs and disabilities to live safely and independently in their own home.

This acquisition aligns with our strategic plan to grow the Health Benefits segment and leverage industry-leading expertise while serving Medicaid and dual-eligible populations.

As of March 31, 2025, 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 $ 152 has been allocated to finite-lived intangible assets, $ 426 to indefinite-lived intangible assets and $ 451 to goodwill.

This acquisition aligns with our strategic plan to grow the Health Benefits segment and leverage industry-leading expertise while serving Medicaid and dual-eligible Medicaid/Medicare populations.

As of June 30, 2025, the purchase price was allocated to the tangible and intangible net assets acquired based on management's estimates of their fair values, of which $ 211 has been allocated to finite-lived intangible assets, $ 690 to indefinite-lived intangible assets and $ 285 to goodwill.

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

As of March 31, 2025, the initial accounting for the acquisition has not been finalized.

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

As of June 30, 2025, the initial accounting for the acquisition has not been finalized.

The proforma effects of this acquisition for prior periods along with revenue and net income for the six months ended June 30, 2025 were not material to our consolidated results of operations.

On December 10, 2024, we completed our acquisition of RSV QOZB LTSS, Inc.

and certain affiliated entities (“CareBridge”), a value-based healthcare company that manages home and community-based services for Medicaid and dual-eligible members receiving long-term services and support.

and certain affiliated entities (“CareBridge”), a value-based healthcare company that manages home and community-based services for Medicaid and dual-eligible Medicaid/Medicare members receiving long-term services and support.

This acquisition aligns with Carelon Services’ care at home strategy, and 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, 2025, 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 $ 995 has been allocated to finite-lived intangible assets and $ 1,756 to goodwill.

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

As of March 31, 2025, the initial accounting for the acquisition has not been finalized.

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

On March 11, 2024, we completed our acquisition of Paragon Healthcare, Inc.

Paragon, which operates as part of CarelonRx, provides infusion services and injectable therapies through its omnichannel model of ambulatory infusion centers, home infusion pharmacies, and other specialty pharmacy services.

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, 2025, the purchase price was allocated to the tangible and intangible net assets acquired based on their fair values, of which $ 411 has been allocated to finite-lived intangible assets and $ 747 to goodwill.

As of June 30, 2025, the purchase price was allocated to the tangible and intangible net assets acquired based on management's estimates of their fair values, of which $ 305 has been allocated to finite-lived intangible assets, and $ 1,814 to goodwill.

The purchase price includes a contingent consideration payable with a fair value of $ 27 related to an earnout arrangement based on 2025 and 2026 earnings of Carebridge.

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

Since closing and during the measurement period we have adjusted goodwill by $( 30 ).

As of March 31, 2025, the accounting for the acquisition is finalized.

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

As of June 30, 2025, the initial accounting for the acquisition has not been finalized.

The proforma effects of this acquisition for prior periods along with revenue and net income for the six months ended June 30, 2025 were not material to our consolidated results of operations.

On April 1, 2024, we completed the sale of our life and disability businesses to StanCorp Financial Group, Inc.

(“The Standard”), a provider of financial protection products and services for employers and individuals, which resulted in a gain on sale of business of $ 201 .

(“The Standard”), a provider of financial protection products and services for employers and individuals, which resulted in a gain on sale of business of $ 240 in the three months ended June 30, 2024.

Upon closing, we and The Standard entered into a product distribution partnership.

The related net assets held for sale for the life and disability businesses divested and results of operations as of and for the three months ended March 31, 2024 were not material.

The related net assets held for sale for the life and disability businesses that were divested and results of operations as of and for the six months ended June 30, 2024 were not material.

Business Optimization Initiative

2 unchanged sentences

The 2023-2024 Business Efficiency Program was finalized as of December 31, 2024, except as to cash outlays related to personnel-related costs associated with this program, which are expected to be paid through 2025

The ending liability balances related to the employee termination costs under the 2023-2024 Business Efficiency Program at March 31, 2025 and December 31, 2024 were $ 190 and $ 224 , respectively.

During the three months ended March 31, 2025, there were no charges recorded related to employee termination costs under the 2023-2024 Business Efficiency Program, and payments were $ 34 .

The ending liability balances related to the employee termination costs under the 2023-2024 Business Efficiency Program at June 30, 2025 and December 31, 2024 were $ 141 and $ 224 , respectively.

During the six months ended June 30, 2025, there were no charges recorded related to employee termination costs under the 2023-2024 Business Efficiency Program, and payments were $ 83 .

Fixed Maturity Securities

A summary of current and long-term fixed maturity securities, available-for-sale, at March 31, 2025 and December 31, 2024 is as follows:

A summary of current and long-term fixed maturity securities, available-for-sale, at June 30, 2025 and December 31, 2024 is as follows:

Losses Allowance

Losses Estimated

March 31, 2025

June 30, 2025

Fixed maturity securities:

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

For fixed maturity securities in an unrealized loss position at March 31, 2025 and December 31, 2024, 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, 2025 and December 31, 2024, 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, 2025

June 30, 2025

Fixed maturity securities:

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Total fixed maturity securities 2,559 $ 9,213 $ ( 218 ) 3,886 $ 6,649 $ ( 752 )

Unrealized losses on our securities shown in the table above have not been recognized into income because, as of March 31, 2025, 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 anticipated recovery.

Unrealized losses on our securities shown in the table above have not been recognized into income because, as of June 30, 2025, 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 anticipated recovery.

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

Allowances for credit losses have been recorded in the amount of $ 7 and $ 6 at March 31, 2025 and December 31, 2024, 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, 2025, by contractual maturity, are shown below.

Allowances for credit losses have been recorded in the amount of $ 15 and $ 6 at June 30, 2025 and December 31, 2024, 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, 2025, 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.

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Equity Securities

A summary of current equity securities at March 31, 2025 and December 31, 2024 is as follows:

March 31, 2025 December 31, 2024

A summary of current equity securities at June 30, 2025 and December 31, 2024 is as follows:

June 30, 2025 December 31, 2024

Equity securities:

4 unchanged sentences

Other Invested Assets

At March 31, 2025, “Other invested assets” include non-controlled joint ventures, including our minority interest ownership of approximately 40 % of Augusta Topco Holdings, L.P.

At June 30, 2025, “Other invested assets” include non-controlled joint ventures, including our minority interest ownership of approximately 40 % of Augusta Topco Holdings, L.P.

(“Mosaic Health”) and our 40 % minority interest ownership of Project Freedom Holdings, LLC, which is the ultimate parent of LIBERTY Dental Plan Corporation (“Liberty Dental”).

On August 6, 2024, we made an investment of $ 2,580 , consisting of cash and the net put option discussed in Note 6, “Derivative Financial Instruments”.

On August 6, 2024, we made an investment of $ 2,580 , consisting of cash and the net put option discussed in Note 6, “Derivative Financial Instruments”, in Mosaic Health.

Mosaic Health is a joint venture with Clayton, Dubilier & Rice (“CD&R”) that is designed to accelerate innovation in care delivery across multiple regions in the United States by bringing together certain care delivery and enablement assets of Carelon Management Services Inc.

3 unchanged sentences

In connection with our equity method investment in Mosaic Health, we entered into a financing agreement to provide a term loan of $ 200 and a revolving credit facility of up to $ 500 to Mosaic Health.

Net amounts receivable under these arrangements were $ 188 at both March 31, 2025 and December 31, 2024, which are included under the caption “Other noncurrent assets” in our consolidated balance sheets as of March 31, 2025 and December 31, 2024.

During the three months ended March 31, 2025, we recognized $ 4 in interest income from the financing arrangement with Mosaic Health.

Net amounts receivable under these arrangements were $ 188 at both June 30, 2025 and December 31, 2024, which are included under the caption “Other noncurrent assets” in our consolidated balance sheets as of June 30, 2025 and December 31, 2024.

During the six months ended June 30, 2025, we recognized $ 9 in interest income from the financing arrangement with Mosaic Health.

In addition to the term loan and line of credit, we committed to providing $ 70 of funding with no additional equity interest in Mosaic Health to meet any shortfall in operating cash flow and regulatory capital requirements of the CMSI Assets through December 31, 2026, and to fund any remaining shortfalls as necessary for which we would receive additional equity interests in Mosaic Health.

In addition, during the quarter ended March 31, 2025, in the normal course of business, Mosaic provided care delivery and enablement services to Elevance Health subsidiaries amounting to $ 175 , reported in benefit expense.

In January 2023, we made an equity investment consisting of cash and a net put option in Liberty Dental, a joint venture with Welsh, Carson, Anderson & Stowe which engages in dental insurance and dental health care administration.

No additional funding has been provided as of June 30, 2025 or December 31, 2024.

In addition, during the three and six months ended June 30, 2025, in the normal course of business, Mosaic provided care delivery and enablement services to Elevance Health subsidiaries amounting to $ 171 and $ 346 , respectively, reported in benefit expense.

The investment is accounted for as an equity method investment.

In connection with our equity method investment in Liberty Dental, in December 2024 we entered into a commitment to provide funding in the form of mandatorily redeemable preferred equity shares in Liberty Dental of up to $ 250 , of which $ 93 and $ 87 was disbursed as of March 31, 2025 and December 31, 2024, respectively.

The mandatorily redeemable preferred equity in Liberty Dental is included in the caption “Other invested assets” in our consolidated balance sheets at March 31, 2025 and December 31, 2024.

Dividend income recognized from the financing arrangement during the three months ended March 31, 2025 and the year ended December 31, 2024 was not material.During the quarter ended March 31, 2025, in the normal course of business, Liberty Dental provided administrative services to our Medicare Advantage members under a capitated arrangement amounting to $ 146 , reported in benefit expense.

In connection with our equity method investment in Liberty Dental, in December 2024 we entered into a commitment to provide funding in the form of mandatorily redeemable preferred equity shares in Liberty Dental of up to $ 250 , of which $ 146 and $ 87 was disbursed as of June 30, 2025 and December 31, 2024, respectively.

Mandatorily redeemable preferred equity in Liberty Dental of $ 118 and $ 87 is included in the caption “Other invested assets” in our consolidated balance sheets at June 30, 2025 and December 31, 2024, respectively.

Dividend income recognized from the financing arrangement during the six months ended June 30, 2025 and the year ended December 31, 2024 was not material.

During the three and six months ended June 30, 2025, in the normal course of business, Liberty Dental provided services to our Medicare Advantage members under a capitated arrangement amounting to $ 146 and $ 292 , respectively, reported in benefit expense.

Investment Gains (Losses)

Net investment gains (losses) for the three months ended March 31, 2025 and 2024 are as follows:

Net investment gains (losses) for the three and six months ended June 30, 2025 and 2024 are as follows:

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Net gains (losses):

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Impairment losses recognized in income

( 9 ) ( 3 ) ( 10 ) ( 4 )

Net realized losses from sales of fixed maturity securities ( 49 ) ( 74 ) ( 105 ) ( 212 )

1 unchanged sentence

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

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

Net gains (losses) on equity securities

— ( 2 ) ( 6 ) 1

Net realized losses recognized on equity securities sold during the period

( 1 ) — ( 2 ) ( 1 )

Net losses on equity securities

( 1 ) ( 2 ) ( 8 ) —

Other investments:

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In achieving this goal, assets may be sold to take advantage of market conditions or other investment opportunities as well as tax considerations.

Sales will generally produce realized gains and losses.

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

Sales will generally produce realized gains and

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

(i) changes in the investment environment;

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or (v) changes in expected cash flow.

Total proceeds from sales, maturities, calls or redemptions of fixed maturity securities were $ 3,338 and $ 5,401 during the three months ended March 31, 2025 and 2024, respectively.

During the three and six months ended June 30, 2025, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 2,682 and $ 6,021 , respectively.

During the three and six months ended June 30, 2024, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 3,014 and $ 8,414 , respectively.

Accrued Investment Income

At March 31, 2025 and December 31, 2024, accrued investment income totaled $ 268 and $ 287 , respectively.

At June 30, 2025 and December 31, 2024, accrued investment income totaled $ 284 and $ 287 , respectively.

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

Securities Lending Programs

The fair value of the cash and securities received as collateral for securities loaned at March 31, 2025 and December 31, 2024 was $ 2,596 and $ 2,305 , respectively.

The collateral received was 102 % of the market value of the loaned securities at each of March 31, 2025 and December 31, 2024.

The fair value of the cash and securities received as collateral for securities loaned at June 30, 2025 and December 31, 2024 was $ 2,772 and $ 2,305 , respectively.

The collateral received was 102 % of the market value of the loaned securities at each of June 30, 2025 and December 31, 2024.

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, 2025 and December 31, 2024, the remaining contractual maturities of our securities lending transactions included overnight and continuous transactions of cash for $ 2,402 and $ 2,115 , respectively, United States Government securities for $ 194 and $ 176 , respectively, and residential mortgage-backed securities for $ 0 and $ 14 , respectively.

At June 30, 2025 and December 31, 2024, the remaining contractual maturities of our securities lending transactions included overnight and continuous transactions of cash for $ 2,377 and $ 2,115 , respectively, United States Government securities for $ 393 and $ 176 , respectively, and residential mortgage-backed securities for $ 2 and $ 14 , respectively.

Derivative Financial Instruments

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We also enter into master netting agreements, which reduce credit risk by permitting net settlement of transactions.

At March 31, 2025 and December 31, 2024, we had posted collateral of $ 14 and $ 142 , respectively, related to our derivative financial instruments.

We received collateral of $ 56 and posted collateral of $ 142 related to our derivative financial instruments at June 30, 2025 and December 31, 2024, respectively.

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.

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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, as applicable.

The unrecognized loss for all expired and terminated cash flow hedges included in accumulated other comprehensive loss, net of tax, was $ 199 and $ 201 at March 31, 2025 and December 31, 2024, respectively.

During the three months ended March 31, 2025 , we recognized net gains of $ 1 and net losses of $( 3 ), respectively, on non-hedging derivatives.

During the three months ended March 31, 2024 , we recognized net gains of $ 11 and net losses of $( 6 ) on non-hedging derivatives, respectively.

In connection with our equity investment in Mosaic Health (see Note 5, “Investments”), we entered into a limited partnership and related agreements with the majority owners that provides for certain rights and obligations of each party, including certain put, call, and purchase price true-up options.

The unrecognized loss, net of tax, for all expired and terminated interest rate cash flow hedges included in the consolidated statements of comprehensive income within the change in net unrealized gains (losses) on cash flow hedges was $ 196 and $ 201 at June 30, 2025 and December 31, 2024, respectively.

During the three and six months ended June 30, 2025 , we recognized net gains of $ 0 and net losses of $ 2 , respectively, on non-hedging derivatives.

During the three and six months ended June 30, 2024 , we recognized net gains of $ 2 and $ 7 on non-hedging derivatives, respectively.

In connection with our equity investment in Mosaic Health (see Note 5, “Investments”), we entered into a limited partnership and related agreements with the majority owners that provide for certain rights and obligations of each party, including certain put, call, and purchase price true-up options.

These options, if exercised, will result in our purchase of the units held by the majority owners as early as 2028 but no later than 2030 at a price based on certain multiples of revenue and earnings of Mosaic Health businesses, subject to various adjustments and qualifications.

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Significant changes in assumptions could result in significantly lower or higher fair value measurements.

The net put option’s estimated fair value liability of $ 1,330 , which is a non-cash item measured at the date of our initial investment, is included under the caption “Other noncurrent liabilities” in our consolidated balance sheets as of March 31, 2025 and December 31, 2024.

The carrying value of the net put option of $ 1,330 , which is a non-cash item measured at fair value at the date of our initial investment, is included under the caption “Other noncurrent liabilities” in our consolidated balance sheets as of June 30, 2025 and December 31, 2024.

We have elected to not mark the net put option to market, as it is an option on large blocks of equity securities, and the carrying value of the net put option will remain on the consolidated balance sheets until it is exercised or expires.

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On March 28, 2025, the terms of the put and call options were substantially amended.

The previous net put option liability of $ 85 at December 31, 2024 was extinguished and we recognized a new net put option liability at its estimated fair value of $ 396 which is included under the caption “Other noncurrent liabilities” in our consolidated balance sheets as of March 31, 2025.

The change in value was recognized through net losses on financial instruments in our consolidated statement of income.

The previous net put option liability of $ 85 at December 31, 2024 was extinguished and we recognized a new net put option liability at its estimated fair value on March 28, 2025 of $ 396 , which is included under the caption “Other noncurrent liabilities” in our consolidated balance sheet as of June 30, 2025.

The change in value was recognized through net losses on financial instruments in our consolidated statements of income.

For additional information relating to the fair value of our derivative assets and liabilities, see Note 7, “Fair Value,” included in this Quarterly Report on Form 10-Q.

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For a description of the methods and assumptions that are used to estimate and determine the fair value hierarchy classification for each class of financial instruments, see Note 7, “Fair Value,” to our audited consolidated financial statements as of and for the year ended December 31, 2024 included in Part II, Item 8 of our 2024 Annual Report on Form 10-K.

A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at March 31, 2025 and December 31, 2024 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, 2025 and December 31, 2024 is as follows:

Level I Level II Level III Total

March 31, 2025

June 30, 2025

Cash equivalents $ 4,134 $ — $ — $ 4,134

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Total liabilities $ — $ ( 150 ) $ — $ ( 150 )

There were no individually material transfers into or out of Level III during the three months ended March 31, 2025 or 2024.

There were no adjustments to quoted market prices obtained from the pricing services during the three months ended March 31, 2025 or 2024.

There were no individually material transfers into or out of Level III during the three and six months ended June 30, 2025 or 2024.

There were no adjustments to quoted market prices obtained from the pricing services during the three and six months ended June 30, 2025 or 2024.

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 Centers and CareBridge in December 2024 and Paragon in March 2024.

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

As disclosed in Note 3, “Business Acquisitions and Divestitures,” we completed our acquisition of Centers and CareBridge in December 2024.

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

The majority of tangible assets acquired and liabilities assumed were recorded at their carrying values as of the acquisition date, as their carrying values approximated their fair values due to their short-term nature.

The initial fair values of goodwill and other intangible assets acquired in our acquisitions of Centers and CareBridge were internally estimated based on the income approach.

The fair values of goodwill and other intangible assets acquired in our acquisitions of Centers and CareBridge were valued based on the income approach.

The income approach estimates fair value based on the present value of the cash flows that the assets could be expected to generate in the future.

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

The fair values of goodwill and other intangible assets acquired in our acquisition of Paragon were finalized as of March 31, 2025 and were calculated based on the income approach.

In 2024, we entered into a limited partnership and related agreements which included certain put and call options on our minority interest ownership of Mosaic Health.

Also, in 2023, we entered into a limited liability company agreement which included certain put and call options on our minority interest ownership of Liberty Dental.The net put option liabilities were recorded at their fair value measured at the date of acquisition using Level III inputs based on a Monte Carlo simulation, which relies on assumptions including cash flow projections, risk-free rates, volatility and details specific to the options.

We have elected to not mark the net put options to market.

As discussed in Note 6, “Derivatives”, on March 28, 2025, the terms of the Liberty Dental put and call options were substantially amended.

The previous net put option liability was extinguished and we recognized a new net put option liability at its estimated fair value of $ 396 .

The extinguished net put option estimated fair value was $ 543 at December 31, 2024.

Other than the assets acquired and liabilities assumed in our acquisitions of Centers, CareBridge and Paragon and the net put options on Mosaic Health and Liberty Dental, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2025 or 2024.

As discussed in Note 6, “Derivatives”, in August 2024, we entered into certain put, call, and purchase price true-up options in connection with our investment in Mosaic Health.

The net put option estimated fair value was $ 1,400 and $ 1,330 at June 30, 2025 and December 31, 2024, respectively.

As discussed in Note 6, “Derivatives”, in March 2025, we amended certain put, and call options in connection with our investment in Liberty Dental.

The net put option estimated fair value was $ 420 and $ 543 at June 30, 2025 and December 31, 2024, respectively.

Other than the assets acquired and liabilities assumed in our acquisitions of Centers and CareBridge and the net put options on Mosaic Health and Liberty Dental, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the three and six months ended June 30, 2025 or 2024.

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.

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See Note 7, “Fair Value,” to our audited consolidated financial statements as of and for the year ended December 31, 2024 included in Part II, Item 8 of our 2024 Annual Report on Form 10-K for details on the methods and assumptions used to estimate the fair value for each class of financial instruments that are recorded at their carrying value in our consolidated balance sheets.

A summary of the estimated fair values by level for each class of financial instruments that is recorded at its carrying value on our consolidated balance sheets at March 31, 2025 and December 31, 2024 is as follows:

A summary of the estimated fair values by level for each class of financial instruments that is recorded at its carrying value on our consolidated balance sheets at June 30, 2025 and December 31, 2024 is as follows:

Value Estimated Fair Value

Level I Level II Level III Total

March 31, 2025

June 30, 2025

Other invested assets $ 651 $ — $ — $ 627 $ 627

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1,415 — — 1,873 1,873

During the three months ended March 31, 2025 and 2024, we recognized income tax expense of $ 613 an d $ 690 , respectively, which represent effective income tax rates of 21.9 % and 23.5 %, respectively.

The decrease in our effective income tax rate from the three months ended March 31, 2024 was primarily due to favorable resolutions of uncertain tax positions and certain investment credits.

We recognized income taxes receivable of $ 63 and $ 213 as an asset under the caption “Other current assets” and income taxes payable of $ 267 and $ 75 as a liability under the caption “Other current liabilities” in our consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively.

During the three months ended June 30, 2025 and 2024, we recognized income tax expense of $ 548 an d $ 685 , respectively, which represent effective income tax rates of 23.9 % and 22.9 %, respectively.

During the six months ended June 30, 2025 and 2024, we recognized income tax expense of $ 1,161 an d 1,375 , respectively, which represent effective income tax rates of 22.8 % and 23.2 %, respectively.

The increase in our effective income tax rate from the three months ended June 30, 2024 was primarily due to non-recurrence of a favorable resolution of an uncertain tax position recognized during the three months ended June 30, 2024.

The decrease in our effective income tax rate from the six months ended June 30, 2024 was primarily due to the impact of certain investment credits, partially offset by the non-recurrence of a favorable resolution of an uncertain tax position recognized during the prior period.

We recognized income taxes receivable of $ 200 and $ 213 as an asset under the caption “Other current assets” and income taxes payable of $ 665 and $ 75 as a liability under the caption “Other current liabilities” in our consolidated balance sheets as of June 30, 2025 and December 31, 2024, respectively.

Medical Claims Payable

A reconciliation of the beginning and ending balances for medical claims payable for the three months ended March 31, 2025 and 2024 is as follows:

A reconciliation of the beginning and ending balances for medical claims payable for the six months ended June 30, 2025 and 2024 is as follows:

Gross medical claims payable, beginning of period $ 15,580 $ 15,865

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Gross medical claims payable, end of period $ 16,871 $ 15,067

At March 31, 2025, the total of net incurred but not reported liabilities plus expected development on reported claims was $ 11,835 , $ 3,979 and $ 701 for the claim years 2025, 2024, and 2023 and prior, respectively.

The favorable development recognized in the three months ended March 31, 2025 resulted from faster than expected development of completion factors from the latter part of 2024 as well as smaller but significant contribution from trend factors in late 2024 developing more favorably than originally expected.

The favorable development recognized in the three months ended March 31, 2024 resulted from faster than expected development of completion factors during the latter part of 2023, as well as trend factors in late 2023 developing more favorably than originally expected.

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for the three months ended March 31, 2025 and 2024 is as follows:

At June 30, 2025, the total of net incurred but not reported liabilities plus expected development on reported claims was $ 14,154 , $ 2,247 and $ 454 for the claim years 2025, 2024, and 2023 and prior, respectively.

The favorable development recognized in the six months ended June 30, 2025 resulted from trend factors in late 2024 developing more favorably than originally expected as well as a smaller contribution from faster than expected development of completion factors from the latter part of 2024.

The favorable development recognized in the six months ended June 30, 2024 resulted from faster than expected development of completion factors during the latter part of 2023, as well as trend factors in late 2023 developing more favorably than originally expected.

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for the six months ended June 30, 2025 and 2024 is as follows:

Net incurred medical claims with medical claims payable

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Net incurred medical claims under certain performance-based risk arrangements that include gain or loss sharing components do not require a medical claim payable liability.

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 sheets, as of March 31, 2025 is as follows:

Net medical claims payable, end of period $ 16,855

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

At March 31, 2025 and December 31, 2024, we had $ 29,728 and $ 30,842 , respectively, outstanding under these notes.

We have an unsecured surplus note with an outstanding principal balance of $ 25 at both March 31, 2025 and December 31, 2024.

At June 30, 2025 and December 31, 2024, we had $ 29,801 and $ 30,842 , respectively, outstanding under these notes.

On January 15, 2025, we repaid, at maturity, the $ 1,250 outstanding balance of our 2.375 % unsecured notes.

We have an unsecured surplus note with an outstanding principal balance of $ 25 at both June 30, 2025 and December 31, 2024.

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

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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, 2025, our debt-to-capital ratio, as defined and calculated under the 5 -Year Facility, was 41.3 %.

As of June 30, 2025, our debt-to-capital ratio, as defined and calculated under the 5 -Year Facility, was 40.8 %.

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

As of March 31, 2025, 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, 2025 or during the year ended December 31, 2024.

As of June 30, 2025, 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, 2025 or during the year ended December 31, 2024.

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

We had no amounts outstanding under this program at both March 31, 2025 and December 31, 2024.

We had no amounts outstanding under this program at both June 30, 2025 and December 31, 2024.

We are a member, through certain subsidiaries, of the Federal Home Loan Bank of Indianapolis, the Federal Home Loan Bank of Cincinnati, the Federal Home Loan Bank of Atlanta and the Federal Home Loan Bank of New York (collectively, the “FHLBs”).

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

We had $ 250 and $ 365 of outstanding short-term borrowings from the FHLBs at March 31, 2025 and December 31, 2024, respectively.

We had $ 360 and $ 365 of outstanding short-term borrowings from the FHLBs at June 30, 2025 and December 31, 2024, respectively.

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

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The cases were brought by two putative nationwide classes of plaintiffs, health plan subscribers and providers.

The BCBSA and Blue plans approved a settlement agreement and release with the subscriber plaintiffs (the “Subscriber Settlement Agreement”), which agreement required the Court’s approval to become effective.

The Subscriber Settlement Agreement requires the defendants to make a monetary settlement payment and contains certain terms imposing non-monetary obligations including (i) eliminating the “national best efforts” rule in the BCBSA license agreements (which rule limits the percentage of non-Blue revenue permitted for each Blue plan) and (ii) allowing for some large national employers with self-funded benefit plans to request a bid for insurance coverage from a second Blue plan in addition to the local Blue plan.

In November 2020, the Court issued an order preliminarily approving the Subscriber Settlement Agreement, following which members of the subscriber class were provided notice of the Subscriber Settlement Agreement and an opportunity to opt out of the class.

A small number of subscribers submitted valid opt-outs by the opt-out deadline.

In August 2022, the Court issued a final order approving the Subscriber Settlement Agreement (the “Final Approval Order”).

The Court amended its Final Approval Order in September 2022, further clarifying the injunctive relief that may be available to subscribers who submitted valid opt-outs.

The ultimate amount paid by us under the Subscriber Settlement Agreement was $ 604 .

The BCBSA and Blue plans approved a settlement agreement and release with the subscriber plaintiffs (the “Subscriber Settlement Agreement”), which received final approval by the Court in September 2022.

The Subscriber Settlement Agreement and the defendants' payment and non-monetary obligations under the Subscriber Settlement Agreement became effective in June 2024, with the request for second Blue plan bid provisions effective in September 2024.

The funds held in escrow will be distributed in accordance with the Subscriber Settlement Agreement.

A number of follow-on cases involving entities that opted out of the Subscriber Settlement Agreement have been filed.

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and VHS Liquidating Trust v.

Blue Cross of California, et al.

Blue Cross of

California, et al.

RG21106600 (Cal.

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In January 2024, the Court issued orders (i) denying defendants’ motion for summary judgment on (a) all claims by certain hospital providers and (b) any claims based on the Blue system's rules other than exclusive serviced areas or BlueCard and (ii) denying provider plaintiffs’ motion for partial summary judgment on defendants’ common law trademark claims.

I n the third quarter of 2024, the BCBSA, along with the individually named Blue plans approved a settlement agreement and release (the “Provider Settlement Agreement”) with the provider plaintiffs, and in October 2024 the provider plaintiffs filed a motion for preliminary approval with the Court.

In the third quarter of 2024, the BCBSA, along with the individually named Blue plans, approved a settlement agreement and release (the “Provider Settlement Agreement”) with the provider plaintiffs, and in October 2024 the provider plaintiffs filed a motion for preliminary approval with the Court.

The Court granted preliminary approval of the provider settlement on December 4, 2024.

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In March 2023, discovery commenced, and an initial case management conference was held in April 2023.

Fact discovery is ongoing.

In December 2024, the District Court issued a scheduling order setting the deadlines for the completion of fact discovery in August 2025 and April 2026 for the completion of expert discovery.

Fact discovery is ongoing with a current deadline of October 9, 2025.

We expect that deadline to be extended.

The final expert discovery deadline is currently June 18, 2026.

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

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We can elect to have CVS continue to provide services to us for a three-year extension period on the same terms and conditions as in the current CVS Agreement in the event of a termination or non-renewal by either party.

We have financial guarantees related to standby letters of credit and surety bonds related to certain contractual commitments, which totaled $ 894 as of March 31, 2025.

We have financial guarantees related to standby letters of credit and surety bonds related to certain contractual commitments, which totaled $ 966 as of June 30, 2025.

We do not believe such obligations will materially affect our financial position, results of operations, or cash flows.

We have unfunded loan commitments to certain equity investees of $ 501 at March 31, 2025.

We have unfunded loan commitments to certain equity investees of $ 501 at June 30, 2025.

We do not believe such obligations will materially affect our financial position, results of operations, or cash flows.

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Concentrations of credit risk with respect to premium receivables are limited due to the large number of employer groups that constitute our customer base in the states in which we conduct business.

As of March 31, 2025, there were no significant concentrations of financial instruments in a single investee, industry or geographic location.

As of June 30, 2025, there were no significant concentrations of financial instruments in a single investee, industry or geographic location.

Capital Stock

Stock Incentive Plan s

A summary of stock option activity for the three months ended March 31, 2025 is as follows:

A summary of stock option activity for the six months ended June 30, 2025 is as follows:

Shares Weighted-

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Exercised ( 0.2 ) 217.35

Outstanding at March 31, 2025 3.4 371.80 6.28 $ 264

Exercisable at March 31, 2025 2.2 339.92 4.92 $ 239

A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the three months ended March 31, 2025 is as follows:

Outstanding at June 30, 2025 3.3 372.63 6.00 $ 169

Exercisable at June 30, 2025 2.2 341.60 4.66 $ 169

A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the six months ended June 30, 2025 is as follows:

and Units Weighted-

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Vested ( 0.4 ) 467.06

Nonvested at March 31, 2025 1.2 442.07

During the three months ended March 31, 2025, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three-year period from 2025 to 2027.

Forfeited ( 0.1 ) 454.44

Nonvested at June 30, 2025 1.1 440.25

During the six months ended June 30, 2025, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three-year period from 2025 to 2027.

These grants have been included in the activity shown above but will be subject to adjustment at the end of 2027 based on results during 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, 2024 included in Part II, Item 8 of our 2024 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, 2025 and 2024:

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, 2025 and 2024:

Six Months Ended June 30

Risk-free interest rate 4.29 % 4.28 %

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Weighted-average expected life (years) 4.45 4.40

The following weighted-average fair values per option or share were determined for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31

The following weighted-average fair values per option or share were determined for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30

Options granted during the period $ 107.38 $ 134.57

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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, 2025 and 2024 is as follows:

A summary of our cash dividend activity for the six months ended June 30, 2025 and 2024 is as follows:

Declaration Date Record Date Payment Date Cash

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

January 22, 2025 March 10, 2025 March 25, 2025 $ 1.71 $ 386

Three Months Ended March 31, 2024

April 16, 2025 June 10, 2025 June 25, 2025 $ 1.71 $ 385

Six Months Ended June 30, 2024

January 23, 2024 March 8, 2024 March 22, 2024 $ 1.63 $ 379

On April 16, 2025, our Audit Committee declared a second quarter 2025 dividend to shareholders of $ 1.71 per share, payable on June 25, 2025 to shareholders of record at the close of business on June 10, 2025.

April 16, 2024 June 10, 2024 June 25, 2024 $ 1.63 $ 378

On July 16, 2025, our Audit Committee declared a third quarter 2025 dividend to shareholders of $ 1.71 per share, payable on September 25, 2025 to shareholders of record at the close of business on September 10, 2025.

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

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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, 2025 and 2024 is as follows:

Three Months Ended March 31

A summary of common stock repurchases for the six months ended June 30, 2025 and 2024 is as follows:

Six Months Ended June 30

Shares repurchased 3.2 2.0

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Accumulated Other Comprehensive (Loss) Income

A reconciliation of the components of accumulated other comprehensive (loss) income at March 31, 2025 and 2024 is as follows:

A reconciliation of the components of accumulated other comprehensive (loss) income at June 30, 2025 and 2024 is as follows:

Three Months Ended

Six Months Ended

2025 2024 2025 2024

Net unrealized investment (losses) gains:

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Other comprehensive income (loss) before reclassifications, net of tax (expense) benefit of ($ 33 ), $ 26 , ($ 93 ), and $ 75 , respectively

111 ( 82 ) 303 ( 245 )

Amounts reclassified from accumulated other comprehensive income, net of tax expense of ($ 12 ), ($ 17 ), ($ 25 ) and ($ 49 ), respectively

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

( 1 ) — ( 2 ) —

End of period balance ( 142 ) ( 714 ) ( 142 ) ( 714 )

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Beginning of period balance ( 1 ) ( 3 ) ( 2 ) ( 3 )

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

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

( 3 ) — ( 2 ) —

End of period balance ( 4 ) ( 3 ) ( 4 ) ( 3 )

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Beginning of period balance ( 404 ) ( 455 ) ( 399 ) ( 459 )

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

Other comprehensive income (loss), net of tax expense of ($ 1 ), ($ 1 ), ($ 9 ), and ($ 2 ), respectively

End of period balance ( 402 ) ( 451 ) ( 402 ) ( 451 )

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Beginning of period balance 8 8 8 10

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

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

End of period balance 9 9 9 9

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Beginning of period balance ( 23 ) ( 18 ) ( 24 ) ( 18 )

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

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

1 ( 5 ) 2 ( 5 )

End of period balance ( 22 ) ( 23 ) ( 22 ) ( 23 )

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Total other comprehensive income (loss), net of tax (expense) benefit of ($ 46 ), $ 7 , ($ 130 ), and $ 22 , respectively

152 ( 22 ) 389 ( 74 )

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

( 1 ) — ( 2 ) —

Total end of period accumulated other comprehensive loss $ ( 760 ) $ ( 1,387 ) $ ( 760 ) $ ( 1,387 )

Shareholders' Earnings per Share

The denominator for basic and diluted shareholders' earnings per share for the three months ended March 31, 2025 and 2024 is as follows:

The denominator for basic and diluted shareholders' earnings per share for the three and six months ended June 30, 2025 and 2024 is as follows:

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Denominator for basic shareholders' earnings per share – weighted-average shares

225.2 232.2 225.8 232.4

Effect of dilutive securities – employee stock options, non-vested restricted stock awards and convertible debentures

0.6 1.2 0.7 1.4

Denominator for diluted shareholders' earnings per share

During the three months ended March 31, 2025 and 2024, weighted-average shares related to certain stock options of 1.5 and 0.6 , respectively, were excluded from the denominator for diluted shareholders' earnings per share because the stock options were anti-dilutive.

225.8 233.4 226.5 233.8

During the three months ended June 30, 2025 and 2024, weighted-average shares related to certain stock options of 1.9 and 0.5 , respectively, were excluded from the denominator for diluted shareholders' earnings per share because the stock options were anti-dilutive.

During the six months ended June 30, 2025 and 2024, weighted-average shares related to certain stock options of 1.7 and 0.6 , respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive.

We have issued approximately 0.6 cumulative restricted stock units under our stock incentive plans, of which vesting is contingent upon us meeting specified annual earnings targets.

20 unchanged sentences

We define operating revenues to include premiums, product revenue and service fees.

Operating revenues are derived from premiums and fees received, primarily from the sale and administration of health benefits and pharmacy products and

Operating revenues are derived from premiums and fees received, primarily from the sale and administration of health benefits and pharmacy products and services.

Operating gain is calculated as total operating revenue less benefit expense, cost of products sold and operating expense.

9 unchanged sentences

The CODM uses operating gain or loss, developed during the annual budget process, and updated during the periodic forecasting process, as a basis to assess performance and allocate operating and capital resources to each segment.

Financial data by reportable segment for the three months ended March 31, 2025 and 2024 is as follows:

Financial data by reportable segment for the three and six months ended June 30, 2025 and 2024 is as follows:

Benefits CarelonRx Carelon

1 unchanged sentence

& Other Eliminations Total

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Premiums $ 39,710 $ — $ 1,863 $ 1,863 $ — $ ( 302 ) $ 41,271

11 unchanged sentences

Operating gain (loss) $ 1,560 $ 536 $ 400 $ 936 $ ( 71 ) $ — $ 2,425

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Premiums $ 35,096 $ — $ 794 $ 794 $ — $ ( 474 ) $ 35,416

11 unchanged sentences

Operating gain (loss) $ 2,145 $ 497 $ 208 $ 705 $ ( 85 ) $ — $ 2,765

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, 2025 and 2024 is as follows:

Benefits CarelonRx Carelon

Services Total Corporate

& Other Eliminations Total

Six Months Ended June 30, 2025

Premiums $ 79,298 $ — $ 3,363 $ 3,363 $ — $ ( 503 ) $ 82,158

Product revenue — 11,851 — 11,851 — — 11,851

Service fees 3,715 7 455 462 — — 4,177

Operating revenue - unaffiliated 83,013 11,858 3,818 15,676 — ( 503 ) 98,186

Operating revenue - affiliated — 8,901 10,159 19,060 397 ( 19,457 ) —

Operating revenue - total $ 83,013 $ 20,759 $ 13,977 $ 34,736 $ 397 $ ( 19,960 ) $ 98,186

Benefit expense

$ 69,880 $ — $ 11,609 $ 11,609 $ 18 $ ( 9,489 ) $ 72,018

Cost of products sold

— 19,168 — 19,168 — ( 8,892 ) 10,276

Operating expense

9,356 453 1,477 1,930 590 ( 1,579 ) 10,297

Operating gain (loss) $ 3,777 $ 1,138 $ 891 $ 2,029 $ ( 211 ) $ — $ 5,595

Six Months Ended June 30, 2024

Premiums $ 70,478 $ — $ 1,202 $ 1,202 $ — $ ( 568 ) $ 71,112

Product revenue — 10,029 — 10,029 — — 10,029

Service fees 3,939 2 393 395 21 — 4,355

Operating revenue - unaffiliated 74,417 10,031 1,595 11,626 21 ( 568 ) 85,496

Operating revenue - affiliated — 6,810 6,959 13,769 228 ( 13,997 ) —

Operating revenue - total $ 74,417 $ 16,841 $ 8,554 $ 25,395 $ 249 $ ( 14,565 ) $ 85,496

Benefit expense

$ 60,937 $ — $ 6,642 $ 6,642 $ 10 $ ( 6,471 ) $ 61,118

Cost of products sold

— 15,413 — 15,413 — ( 6,768 ) 8,645

Operating expense

9,048 408 1,414 1,822 408 ( 1,326 ) 9,952

Operating gain (loss) $ 4,432 $ 1,020 $ 498 $ 1,518 $ ( 169 ) $ — $ 5,781

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, 2025 and 2024 is as follows:

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Reportable segments’ operating revenue $ 49,421 $ 43,223 $ 98,186 $ 85,496

1 unchanged sentence

Net losses on financial instruments ( 131 ) ( 85 ) ( 595 ) ( 246 )

Gain on sale of business

Total revenues $ 49,776 $ 43,886 $ 98,667 $ 86,463

A reconciliation of reportable segments' operating gain to income before income tax expense included in our consolidated statements of income for the three months ended March 31, 2025 and 2024 is as follows:

A reconciliation of reportable segments' operating gain to income before income tax expense included in our consolidated statements of income for the three and six months ended June 30, 2025 and 2024 is as follows:

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Income before income tax expense $ 2,292 $ 2,986 $ 5,089 $ 5,925

1 unchanged sentence

Net losses on financial instruments 131 85 595 246

Gain on sale of business

— ( 240 ) — ( 240 )

Interest expense 341 280 685 545

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements