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Elevance Health Reports Fourth Quarter and Full Year 2024 Results; Sets Full Year 2025 Outlook

1. Elevance Health reported Q4 2024 operating revenue of $45.0 billion, up 6%. 2. The benefit expense ratio increased to 92.4%, impacting profitability metrics. 3. Carelon Services achieved 19% growth in Q4 2024 revenue, signaling strong segment dynamics. 4. Membership dropped by 2% primarily due to Medicaid attrition, affecting future growth. 5. The company repurchased shares worth $1.8 billion, boosting shareholder value.

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Why Neutral?

While revenue growth is positive, increased expenses and Medicaid attrition offset gains.

How important is it?

The article discusses key earnings results and strategic movements relevant to ELV.

Why Short Term?

Current operating metrics indicate immediate effects on stock performance due to earnings reactions.

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INDIANAPOLIS--(BUSINESS WIRE)--Elevance Health, Inc. (NYSE: ELV) reported fourth quarter and full year 2024 results. “As part of our commitment to elevating whole health and advancing health beyond healthcare, we deliver value to the members and care providers we serve by ensuring simple, affordable, and accessible care. Our fourth quarter results demonstrate tangible progress in improving our operations in response to the dynamic environment facing the industry. As we look to 2025, we remain resolute in our goal to simplify the healthcare experience, deepen the impact of Carelon, and deploy innovative care models, positioning us to achieve sustainable growth over the long run." Gail K. Boudreaux President and Chief Executive Officer 1. Earnings per diluted share ("EPS"). 2. Refer to GAAP reconciliation tables herein for reconciliation of GAAP to adjusted measures. Elevance Health Consolidated Enterprise Highlights (Unaudited) (In billions) Three Months Ended Twelve Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Operating Revenue1 $45.0 $42.5 $175.2 $170.2 Operating Gain1,2 $0.7 $1.3 $7.9 $8.5 Adjusted Operating Gain1,3 $1.0 $1.4 $9.3 $9.4 Operating Margin1 1.5 % 3.0 % 4.5 % 5.0 % Adjusted Operating Margin1 2.3 % 3.2 % 5.3 % 5.5 % 1. See “Basis of Presentation.” 2. Operating Gain for the three and twelve months ended December 31, 2024, and December 31, 2023, include items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation." 3. Adjusted Operating Gain for the three and twelve months ended December 31, 2024, and December 31, 2023, exclude items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation." Operating revenue was $45.0 billion in the fourth quarter of 2024, an increase of $2.5 billion, or 6 percent compared to the prior year quarter. Operating revenue was $175.2 billion in 2024, an increase of $5.0 billion, or 3 percent. The increase in revenue for the quarter and year was driven by higher premium yields in our Health Benefits segment, acquisitions completed in 2024, and growth in CarelonRx product revenue, partially offset by membership attrition in our Medicaid business. The benefit expense ratio was 92.4 percent in the fourth quarter, an increase of 320 basis points compared to the prior year period, and 88.5 percent for the full year, an increase of 150 basis points year over year. The increases were driven primarily by higher Medicaid medical cost trends. Days in Claims Payable was 42.9 days as of December 31, 2024, a slight increase of 0.1 days from September 30, 2024, and a decrease of 4.4 days compared to December 31, 2023. The operating expense ratio was 10.7 percent in the fourth quarter and 11.4 percent for the full year. On an adjusted basis, the corresponding operating expense ratios were 9.9 percent and 10.6 percent. The improvements in the adjusted operating expense ratio over prior year periods of 170 basis points and 70 basis points, respectively, reflect disciplined cost management and enhanced efficiency. Cash Flow & Balance Sheet Operating cash flow was $5.8 billion in 2024, approximately 1.0 times GAAP net income. As of December 31, 2024, cash and investments at the parent company totaled approximately $2.4 billion. During the fourth quarter of 2024, the Company repurchased 4.5 million shares of its common stock for $1.8 billion, at a weighted average price of $401.29, and paid a quarterly dividend of $1.63 per share, representing a distribution of cash totaling $373 million. As of December 31, 2024, the Company had approximately $9.3 billion of Board approved share repurchase authorization remaining. Health Benefits is comprised of Individual, Employer Group risk-based, Employer Group fee-based, BlueCard®, Medicare, Medicaid, and Federal Employee Program businesses. Health Benefits Reportable Segment Highlights (Unaudited) (In billions) Three Months Ended Twelve Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Operating Revenue1 $37.6 $36.5 $150.3 $148.6 Operating Gain1,2 $0.2 $0.8 $6.2 $6.9 Adjusted Operating Gain1,3 $0.3 $0.8 $6.3 $6.9 Operating Margin1 0.6 % 2.1 % 4.2 % 4.6 % Adjusted Operating Margin1 0.7 % 2.1 % 4.2 % 4.6 % 1. See “Basis of Presentation.” 2. Operating Gain for the three and twelve months ended December 31, 2024 include items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation." 3. Operating gain for both the three and twelve months ended December 31, 2024 includes $66 million of business dispositions and related items adjusted out of adjusted shareholders' net income for the Health Benefits segment Health Benefits segment operating revenue was $37.6 billion in the fourth quarter of 2024, an increase of $1.0 billion, or 3 percent compared to the fourth quarter of 2023. Operating revenue was $150.3 billion in 2024, an increase of $1.7 billion, or 1 percent. The increases for the quarter and year were driven primarily by higher premium yields, partially offset by membership attrition in our Medicaid business. Operating gain totaled $0.2 billion in the fourth quarter of 2024 and $6.2 billion for the full year. On an adjusted basis, operating gain was $0.3 billion in the fourth quarter of 2024 and $6.3 billion for the full year. Adjusted operating gain in both periods was impacted primarily by higher cost trend in Medicaid related to redeterminations. Medical membership totaled approximately 45.7 million as of December 31, 2024, a decrease of 1.1 million, or 2 percent year over year, driven by attrition in our Medicaid business, partially offset by growth in Employer Group fee-based and Affordable Care Act health plan membership. Carelon is comprised of CarelonRx and Carelon Services. Carelon Reportable Segment Highlights (Unaudited) (In billions) Three Months Ended Twelve Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Operating Revenue1,2 $14.7 $12.4 $53.9 $48.0 Operating Gain1 $0.6 $0.6 $2.9 $2.7 Adjusted Operating Gain1,3 $0.8 $0.6 $3.1 $2.7 Operating Margin1 3.9 % 4.8 % 5.4 % 5.5 % Adjusted Operating Margin1 5.3 % 4.8 % 5.8 % 5.5 % 1. See “Basis of Presentation.” 2. Operating revenue for both the three and twelve months ended December 31, 2024 includes $0.8 of revenue related to business dispositions and related items that have been excluded from adjusted operating gain. 3. Operating gain for both the three and twelve months ended December 31, 2024 includes $0.2 of business dispositions and related items adjusted out of adjusted shareholders' net income for the Carelon segment. Operating revenue for Carelon was $14.7 billion in the fourth quarter of 2024, an increase of $2.3 billion, or 19 percent compared to the prior year period. Operating revenue was $53.9 billion in 2024, an increase of $5.9 billion, or 12 percent. The increases for the quarter and the year were driven by the launch and growth of risk-based capabilities in Carelon Services and acquisitions completed in 2024. Operating gain for Carelon totaled $0.6 billion in the fourth quarter, effectively flat year over year; however, on an adjusted basis, operating gain was $0.8 billion, an increase of $0.2 billion, or 32 percent. The increase for the fourth quarter of 2024 was driven by higher pharmacy product revenue. On a full year basis, operating gain was $2.9 billion in 2024, an increase of $0.2 billion, or 9 percent. Similarly, on an adjusted basis, operating gain was $3.1 billion, an increase of $0.4 billion, or 17 percent. Quarterly Dividend On January 22, 2025, the Audit Committee of the Company's Board of Directors declared a first quarter 2025 dividend to shareholders of $1.71 per share. The first quarter dividend is payable on March 25, 2025, to shareholders of record at the close of business on March 10, 2025. About Elevance Health Elevance Health is a lifetime, trusted health partner whose purpose is to improve the health of humanity. The company supports consumers, families, and communities across the entire healthcare journey – connecting them to the care, support, and resources they need to lead better lives. Elevance Health’s companies serve approximately 112 million consumers through a diverse portfolio of industry-leading medical, pharmacy, behavioral, clinical, home health, and complex care solutions. For more information, please visit www.elevancehealth.com or follow us @ElevanceHealth on X and Elevance Health on LinkedIn. Conference Call and Webcast Management will host a conference call and webcast today at 8:30 a.m. Eastern Standard Time (“EST”) to discuss the company’s fourth quarter and full year 2024 results and 2025 outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers: 888-947-9963 (Domestic) 866-405-7292 (Domestic Replay) 312-470-0178 (International) 203-369-0604 (International Replay) The access code for today's conference call is 3972058. There is no access code for the replay. The replay will be available from 11:30 a.m. EST today, until the end of the day on February 21, 2025. The call will also be available through a live webcast at www.elevancehealth.com under the “Investors” link. A webcast replay will be available following the call. Basis of Presentation Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reporting segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and operating expense. It does not include net investment income, net gains/losses on financial instruments, interest expense, amortization of other intangible assets, gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management. Refer to the GAAP reconciliation tables. Operating margin is defined as operating gain divided by operating revenue. Elevance Health Earnings Release Financial Schedules and Supplementary Information Quarter & Year Ended December 31, 2024 Membership and Other Metrics Quarterly & Full Year Consolidated Statements of Income Condensed Consolidated Balance Sheet Condensed Consolidated Statement of Cash Flows Supplemental Financial Information - Reportable Segments Supplemental Financial Information - Reconciliation of Medical Claims Payable Reconciliation of Non-GAAP Financial Measures Financial Guidance Summary Membership Guidance Summary Elevance Health Membership and Other Metrics (Unaudited) Change from Medical Membership (in thousands) December 31, 2024 December 31, 2023 September 30, 2024 December 31, 2023 September 30, 2024 Individual 1,287 1,025 1,299 25.6 % (0.9) % Employer Group Risk-Based 3,713 3,756 3,672 (1.1) % 1.1 % Commercial Risk-Based 5,000 4,781 4,971 4.6 % 0.6 % BlueCard®1 6,630 6,706 6,677 (1.1) % (0.7) % Employer Group Fee-Based 20,569 20,227 20,589 1.7 % (0.1) % Commercial Fee-Based 27,199 26,933 27,266 1.0 % (0.2) % Medicare Advantage 2,066 2,047 2,047 0.9 % 0.9 % Medicare Supplement 891 923 894 (3.5) % (0.3) % Total Medicare 2,957 2,970 2,941 (0.4) % 0.5 % Medicaid 8,917 10,503 8,926 (15.1) % (0.1) % Federal Employee Program 1,661 1,642 1,656 1.2 % 0.3 % Total Medical Membership 45,734 46,829 45,760 (2.3) % (0.1) % Other Membership (in thousands) Dental Members 7,282 6,820 7,021 6.8 % 3.7 % Dental Administration Members 1,887 1,729 1,878 9.1 % 0.5 % Vision Members 10,419 9,944 10,382 4.8 % 0.4 % Medicare Part D Standalone Members 256 260 258 (1.5) % (0.8) % Other Metrics (in millions) CarelonRx Quarterly Adjusted Scripts 82.9 78.0 80.2 6.3 % 3.4 % Carelon Services Consumers Served 101.1 103.3 101.3 (2.1) % (0.2) % 1.   BlueCard® membership for the three months ended December 31, 2023, is restated to align to the Blue Cross Blue Shield Association reporting methodology. For the three months ended December 31, 2023, BlueCard® membership has been restated lower by 132. Elevance Health Consolidated Statements of Income (Unaudited) (In millions, except per share data) Three Months Ended December 31 Twelve Months Ended December 31 2024 2023 Change 2024 2023 Change Revenues Premiums $ 36,245 $ 35,138 3.2 % $ 144,166 $ 142,854 0.9 % Product revenue 6,714 5,394 24.5 % 22,630 19,452 16.3 % Service fees 2,030 1,922 5.6 % 8,408 7,903 6.4 % Total operating revenue 44,989 42,454 6.0 % 175,204 170,209 2.9 % Net investment income 527 529 (0.4 )% 2,051 1,825 12.4 % Net losses on financial instruments (74 ) (336 ) NM (445 ) (694 ) NM Gain on sale of business — — NM 201 — NM Total revenues 45,442 42,647 6.6 % 177,011 171,340 3.3 % Expenses Benefit expense 33,500 31,334 6.9 % 127,567 124,330 2.6 % Cost of products sold 6,012 4,837 24.3 % 19,750 17,293 14.2 % Operating expense 4,804 4,999 (3.9 )% 20,025 20,087 (0.3 )% Interest expense 340 259 31.3 % 1,185 1,030 15.0 % Amortization of other intangible assets 180 217 (17.1 )% 580 885 (34.5 )% Total expenses 44,836 41,646 7.7 % 169,107 163,625 3.4 % Income before income tax expense 606 1,001 (39.5 )% 7,904 7,715 2.4 % Income tax expense 193 170 13.5 % 1,933 1,724 12.1 % Net income 413 831 (50.3 )% 5,971 5,991 (0.3 )% Net loss (income) attributable to noncontrolling interests 5 25 NM 9 (4 ) NM Shareholders' net income $ 418 $ 856 (51.2 )% $ 5,980 $ 5,987 (0.1 )% Shareholders' earnings per diluted share $ 1.81 $ 3.63 (50.1 )% $ 25.68 $ 25.22 1.8 % Diluted shares 231.1 235.8 (2.0 )% 232.9 237.4 (1.9 )% Benefit expense as a percentage of premiums 92.4 % 89.2 % 320 bp 88.5 % 87.0 % 150 bp Operating expense as a percentage of total operating revenue 10.7 % 11.8 % (110) bp 11.4 % 11.8 % (40) bp Income before income tax expense as a percentage of total revenue 1.3 % 2.3 % (100) bp 4.5 % 4.5 % — bp   "NM" = calculation not meaningful   Elevance Health Condensed Consolidated Balance Sheet (In millions) December 31, 2024 December 31, 2023 Assets (Unaudited) Current assets: Cash and cash equivalents $8,288 $6,526 Fixed maturity and equity securities 26,393 29,843 Premium and other receivables 18,796 17,865 Other current assets 4,759 5,795 Assets held for sale 490 — Total current assets 58,726 60,029 Long-term investments 10,784 6,983 Property and equipment, net 4,652 4,359 Goodwill and other intangible assets 40,371 35,590 Other noncurrent assets 2,140 1,967 Total assets $116,673 $108,928 Liabilities and equity Liabilities Current liabilities: Medical claims payable $15,626 $16,111 Short-term borrowings 365 225 Current portion of long-term debt 1,649 1,649 Other current liabilities 22,572 23,806 Liabilities held for sale 153 — Total current liabilities 40,365 41,791 Long-term debt, less current portion 29,218 23,246 Other noncurrent liabilities 5,664 4,486 Total liabilities 75,247 69,523 Total shareholders’ equity 41,315 39,306 Noncontrolling interests 111 99 Total equity 41,426 39,405 Total liabilities and equity $116,673 $108,928 Elevance Health Condensed Consolidated Statement of Cash Flows (Unaudited) (In millions) Twelve Months Ended December 31 2024 2023 Operating activities Net income $ 5,971 $ 5,991 Depreciation and amortization 1,393 1,745 Share-based compensation 191 289 Changes in operating assets and liabilities (1,719 ) (534 ) Other non-cash items (28 ) 570 Net cash provided by operating activities 5,808 8,061 Investing activities Proceeds from sale/ (purchases) of investments, net of maturities 586 (2,700 ) Net purchases of subsidiaries, net of cash acquired/sold (4,446 ) (1,552 ) Purchases of property and equipment (1,256 ) (1,296 ) Other, net (51 ) (24 ) Net cash used in investing activities (5,167 ) (5,572 ) Financing activities Net change in short-term and long-term borrowings 6,200 626 Repurchase and retirement of common stock (2,900 ) (2,676 ) Cash dividends (1,508 ) (1,395 ) Other, net (599 ) 96 Net cash provided by (used in) financing activities 1,193 (3,349 ) Effect of foreign exchange rates on cash and cash equivalents (6 ) (1 ) Change in cash and cash equivalents 1,828 (861 ) Cash and cash equivalents at beginning of period 6,526 7,387 Less cash and equivalents included in assets held for sale at end of period (66 ) — Cash and cash equivalents at end of period $ 8,288 $ 6,526 REPORTABLE SEGMENTS   Elevance Health has four reportable segments: Health Benefits (comprised of Individual, Employer Group risk-based, Employer Group fee-based, BlueCard®, Medicare, Medicaid, and Federal Employee Program businesses); CarelonRx; Carelon Services; and Corporate & Other (comprised of businesses that do not individually meet the quantitative thresholds for an operating division as well as corporate expenses not allocated to our other reportable segments).   Elevance Health Reportable Segment Highlight Details (Unaudited) (In millions) Three Months Ended December 31 Twelve Months Ended December 31 2024 2023 Change 2024 2023 Change Operating Revenue Health Benefits $37,580 $36,547 2.8 % $150,275 $148,571 1.1 % CarelonRx 9,977 8,827 13.0 % 35,961 33,835 6.3 % Carelon Services 4,769 3,574 33.4 % 17,961 14,147 27.0 % Corporate & Other (14) 181 NM5 309 479 (35.5) % Eliminations (7,323) (6,675) 9.7 % (29,302) (26,823) 9.2 % Total Operating Revenue1 $44,989 $42,454 6.0 % $175,204 $170,209 2.9 % Operating Gain (Loss) Health Benefits2 $207 $767 (73.0) % $6,243 $6,888 (9.4) % CarelonRx 533 490 8.8 % 2,172 1,975 10.0 % Carelon Services2 35 102 (65.7) % 717 680 5.4 % Corporate & Other2,3 (102) (75) NM5 (1,270) (1,044) NM5 Total Operating Gain1,4 $673 $1,284 (47.6) % $7,862 $8,499 (7.5) % Operating Margin Health Benefits 0.6 % 2.1 % (150) bp 4.2 % 4.6 % (40) bp CarelonRx 5.3 % 5.6 % (30) bp 6.0 % 5.8 % 20 bp Carelon Services 0.7 % 2.9 % (220) bp 4.0 % 4.8 % (80) bp Total Operating Margin1 1.5 % 3.0 % (150) bp 4.5 % 5.0 % (50) bp 1.   See “Basis of Presentation.” 2.   Operating gain for the three and twelve months ended December 31, 2024 included $281 of business dispositions and related items excluded from adjusted shareholders' net income; including $215 for the Carelon Services segment; and $66 for the Health Benefits segment. Operating gain for the three and twelve months ended December 31, 2024 included $66 and $224, respectively, of transaction and integration related costs, all of which resides in the Corporate & Other reportable segment. Operating gain for the three and twelve months ended December 31, 2024 included $12 and $692, respectively, of litigation and settlement expenses, all of which resides in the Corporate & Other reportable segment. Operating gain for the twelve months ended December 31, 2024 included $268 of business optimization charges which reside in the Corporate & Other reportable segment. 3.   Operating gain for the three and twelve months ended December 31, 2023 included; $59 and $213, respectively, of transaction and integration related costs; $22 and $719, respectively, of business optimization charges; and ($7) and ($2), respectively, of litigation and settlement expenses. 4.   Operating Gain for the three and twelve months ended December 31, 2024, and December 31, 2023, included items excluded from adjusted shareholders' net income. See "GAAP Reconciliation." 5.   "NM" = calculation not meaningful. Elevance Health Reconciliation of Medical Claims Payable Years Ended December 31 2024 2023 2022 (In millions) (Unaudited) Gross medical claims payable, beginning of year $ 15,865 $ 15,348 $ 13,282 Ceded medical claims payable, beginning of year (7 ) (6 ) (21 ) Net medical claims payable, beginning of year 15,858 15,342 13,261 Business combinations and purchase adjustments 143 — 133 Net incurred medical claims: Current year 125,370 121,798 113,414 Prior years redundancies1 (1,731 ) (1,571 ) (869 ) Total net incurred medical claims 123,639 120,227 112,545 Net payments attributable to: Current year medical claims 111,051 107,146 98,997 Prior years medical claims 13,142 12,565 11,600 Total net payments 124,193 119,711 110,597 Net medical claims payable, end of year 15,447 15,858 15,342 Ceded medical claims payable, end of year 13 7 6 Gross medical claims payable, end of year2 $ 15,460 $ 15,865 $ 15,348 Current year medical claims paid as a percentage of current year net incurred medical claims 88.6 % 88.0 % 87.3 % Prior year redundancies in the current year as a percentage of prior year net medical claims payable less prior year redundancies in the current year 12.3 % 11.4 % 7.0 % Prior year redundancies in the current year as a percentage of prior year net incurred medical claims 1.4 % 1.4 % 0.9 % Negative amounts reported for net incurred medical claims related to prior years result from claims being settled for amounts less than originally estimated. Excludes insurance lines other than short duration. Elevance Health GAAP Reconciliation (Unaudited)   This document references non-GAAP measures, including “Adjusted Shareholders’ Net Income,” “Adjusted Shareholders’ Net Income Per Share,” “Adjusted EPS,” “Adjusted Operating Gain,” “Adjusted Operating Expense” and “Adjusted Operating Expense Ratio,” which are non-GAAP measures. These non-GAAP measures are intended to aid investors when comparing Elevance Health’s financial results among periods and are not intended to be alternatives to any measure calculated in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable measures calculated in accordance with GAAP are available below. In addition to these non-GAAP measures, references are made to the measures “Operating Revenue” and “Operating Gain/Loss,” “Operating Margin” and “Adjusted EPS”. Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reportable segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and operating expense. It does not include net investment income, net gains/losses on financial instruments, interest expense, amortization of other intangible assets and gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management. Each of these measures is provided to further aid investors in understanding and analyzing Elevance Health’s operating and financial results. A reconciliation of Operating Revenue to Total Revenue is set forth in the Consolidated Statements of Income herein. A reconciliation of the non-GAAP measures to the most directly comparable measures calculated in accordance with GAAP, together with a reconciliation of reportable segments operating gain to income before income tax expense, is provided below. Prior amounts may be grouped differently to conform to the current presentation. Net adjustment items per share may not sum due to rounding. A reconciliation of Operating Revenue to Total Revenue is set forth in the Consolidated Statements of Income herein.   Three Months Ended December 31 Twelve Months Ended December 31 (In millions, except per share data) 2024 2023 Change 2024 2023 Change Shareholders' net income $ 418 $ 856 (51.2 )% $ 5,980 $ 5,987 (0.1 )% Add / (Subtract): Business dispositions and related items1 281 — 281 — Amortization of other intangible assets 180 217 580 885 Net losses on financial instruments 74 336 445 694 Transaction and integration related costs2 66 59 224 213 Litigation and settlement expenses2 12 (7 ) 692 (2 ) Gain on sale of business — — (201 ) — Business optimization charges2 — 22 268 719 Tax impact of non-GAAP adjustments (143 ) (158 ) (575 ) (628 ) Net adjustment items 470 469 1,714 1,881 Adjusted shareholders' net income $ 888 $ 1,325 (33.0 )% $ 7,694 $ 7,868 (2.2 )% Shareholders' earnings per diluted share $ 1.81 $ 3.63 (50.1 )% $ 25.68 $ 25.22 1.8 % Add / (Subtract): Business dispositions and related items1 1.22 — 1.21 — Amortization of other intangible assets 0.78 0.92 2.49 3.73 Net losses on financial instruments 0.32 1.42 1.91 2.92 Transaction and integration related costs2 0.29 0.25 0.96 0.90 Litigation and settlement expenses2 0.05 (0.03 ) 2.97 (0.01 ) Gain on sale of business — — (0.86 ) — Business optimization charges2 — 0.09 1.15 3.03 Tax impact of non-GAAP adjustments (0.62 ) (0.67 ) (2.47 ) (2.65 ) Net adjustment items 2.03 1.99 7.36 7.92 Adjusted shareholders' earnings per diluted share $ 3.84 $ 5.62 (31.7 )% $ 33.04 $ 33.14 (0.3 )% Three Months Ended December 31 Twelve Months Ended December 31 (In millions) 2024 2023 Change 2024 2023 Change Income before income tax expense $ 606 $ 1,001 (39.5 )% $ 7,904 $ 7,715 2.4 % Net investment income (527 ) (529 ) (2,051 ) (1,825 ) Gain on sale of business — — (201 ) — Net losses on financial instruments 74 336 445 694 Interest expense 340 259 1,185 1,030 Amortization of other intangible assets 180 217 580 885 Reportable segments operating gain $ 673 $ 1,284 (47.6 )% $ 7,862 $ 8,499 (7.5 )% 1.   Adjustment item resides in the Health Benefits and Carelon Services reportable segments. 2.   Adjustment item resides in the Corporate & Other reportable segment. Elevance Health GAAP Reconciliation (Unaudited)   Three Months Ended December 31 Twelve Months Ended December 31 (In millions) 2024 2023 Change 2024 2023 Change Reportable segments operating gain $ 673 $ 1,284 (47.6 )% $ 7,862 $ 8,499 (7.5 )% Add / (Subtract): Business dispositions and related items1 281 — 281 — Transaction and integration related costs2 66 59 224 213 Litigation and settlement expenses2 12 (7 ) 692 (2 ) Business optimization charges2 — 22 268 719 Net adjustment items 359 74 1,465 930 Reportable segments adjusted operating gain $ 1,032 $ 1,358 (24.0 )% $ 9,327 $ 9,429 (1.1 )% Three Months Ended December 31 Twelve Months Ended December 31 (In millions) 2024 2023 Change 2024 2023 Change Operating expense $ 4,804 $ 4,999 (3.9 )% $ 20,025 $ 20,087 (0.3 )% Add / (Subtract): Business dispositions and related items1 (281 ) — (281 ) — Transaction and integration related costs2 (66 ) (59 ) (224 ) (213 ) Litigation and settlement expenses2 (12 ) 7 (692 ) 2 Business optimization charges2 — (22 ) (268 ) (719 ) Net adjustment items (359 ) (74 ) (1,465 ) (930 ) Adjusted operating expense $ 4,445 $ 4,925 (9.7 )% $ 18,560 $ 19,157 (3.1 )% Operating revenue $ 44,989 $ 42,454 6.0 % $ 175,204 $ 170,209 2.9 % Operating expense ratio 10.7 % 11.8 % (110) bp 11.4 % 11.8 % (40) bp Adjusted operating expense ratio 9.9 % 11.6 % (170) bp 10.6 % 11.3 % (70) bp Full Year 2025 Outlook Shareholders' earnings per diluted share $30.40 to $31.10 Add / (Subtract): Amortization of other intangibles3 $2.57 Net losses on financial instruments3 $1.12 Transaction and integration related costs2,3 $1.11 Litigation and settlement expenses2,3 $0.04 Tax impact of non-GAAP adjustments3 Approximately ($1.09) Net adjustment items $3.75 Adjusted shareholders' earnings per diluted share $34.15 to $34.85 1.   Adjustment item resides in the Health Benefits and Carelon Services reportable segments. 2.   Adjustment item resides in the Corporate & Other reportable segment. 3.   Adjustment item represents the midpoint of a projected range and serves as the estimated full year adjustment amount. Elevance Health Financial Guidance Summary (Unaudited) Full Year 2024 Actual Full Year 2025 Outlook Premium Revenue $144.2 billion Low double digit growth Product Revenue $22.6 billion Low single digit growth Service Fees $8.4 billion Approximately flat Total Operating Revenue $175.2 billion High single to low double digit growth Benefit Expense Ratio 88.5% 89.1% +/- 50 bps Adjusted Operating Expense Ratio 10.6% 10.4% +/- 50 bps Adjusted Operating Gain $9.3 billion $9.55 - $9.85 billion Other Pre-Tax Items: Net Investment income $2,051 million $1,875 million Interest Expense ($1,185) million ($1,475) million Amortization of Intangible Assets ($580) million ($580) million Net Pre-Tax Income (Expense) $286 million ($180) million Adjusted Effective Tax Rate 24.6% 22.0% - 24.0% GAAP Diluted EPS $25.68 $30.40 - $31.10 Adjusted Diluted EPS $33.04 $34.15 - $34.85 Diluted Shares 232.9 million 225 - 226 million Operating Cash Flow $5.8 billion Approximately $8.0 billion Segment Level Guidance Metrics Operating Revenue Growth Rate Health Benefits $150.3 billion High single digit growth CarelonRx $36.0 billion Mid teens growth Carelon Services $18.0 billion Greater than 50% growth GAAP Operating Margin vs. 2024 Health Benefits 4.2% (50) - (25) bps CarelonRx 6.0% 0 - 20 bps Carelon Services 4.0% (100) - (50) bps Elevance Health Membership Guidance Summary (Unaudited) Full Year 2024 Actual Full Year 2025 Outlook Year-End Medical Enrollment (in 000s) Commercial Fee-Based 27,199 27,300 - 27,600 Commercial Risk-Based 5,000 5,150 - 5,350 Medicaid 8,917 8,600 - 8,900 Medicare Advantage 2,066 2,200 - 2,250 Medicare Supplement 891 Approximately 850 Federal Employee Program 1,661 Approximately 1,650 Fee-Based 27,199 27,300 - 27,600 Risk-Based 18,535 18,450 - 19,000 Total 45,734 45,750 - 46,600 Forward-Looking Statements This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our views about future events and financial performance and are generally not historical facts. Words such as “expect,” “feel,” “believe,” “will,” “may,” “should,” “anticipate,” “intend,” “estimate,” “project,” “forecast,” “plan” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to: financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. You are also urged to carefully review and consider the various risks and other disclosures discussed in our reports filed with the U.S. Securities and Exchange Commission from time to time, which attempt to advise interested parties of the factors that affect our business. Except to the extent required by law, we do not update or revise any forward-looking statements to reflect events or circumstances occurring after the date hereof. These risks and uncertainties include, but are not limited to: trends in healthcare costs and utilization rates; reduced enrollment; our ability to secure and implement sufficient premium rates; the impact of large scale medical emergencies, such as public health epidemics and pandemics, and other catastrophes; the impact of new or changes in existing federal, state and international laws or regulations, including laws and regulations impacting healthcare, insurance, pharmacy services and other diversified products and services, or their enforcement or application; the impact of cyber-attacks or other privacy or data security incidents or our failure to comply with any privacy, data or security laws or regulations, including any investigations, claims or litigation related thereto; failure to effectively maintain and modernize our information systems, or failure of our information systems or technology, including artificial intelligence, to operate as intended; failure to effectively maintain the availability and integrity of our data; changes in economic and market conditions, as well as regulations that may negatively affect our liquidity and investment portfolios; competitive pressures and our ability to adapt to changes in the industry and develop and implement strategic growth opportunities; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations imposed thereon; our ability to maintain and achieve improvement in Centers for Medicare and Medicaid Services Star Ratings and other quality scores and funding risks with respect to revenue received from participation therein; a negative change in our healthcare product mix; costs and other liabilities associated with litigation, government investigations, audits or reviews; our ability to contract with providers on cost-effective and competitive terms; risks associated with providing healthcare, pharmacy and other diversified products and services, including medical malpractice or professional liability claims and non-compliance by any party with the pharmacy services agreement between us and CaremarkPCS Health, L.L.C.; the effects of any negative publicity related to the health benefits industry in general or us in particular; risks associated with mergers, acquisitions, joint ventures and strategic alliances; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; possible restrictions in the payment of dividends from our subsidiaries and increases in required minimum levels of capital; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; the potential negative effect from our substantial amount of outstanding indebtedness and the risk that increased interest rates or market volatility could impact our access to or further increase the cost of financing; a downgrade in our financial strength ratings; events that may negatively affect our licenses with the Blue Cross and Blue Shield Association; intense competition to attract and retain employees; risks associated with our international operations; and various laws and provisions in our governing documents that may prevent or discourage takeovers and business combinations.

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