Original source text
INDIANAPOLIS--(BUSINESS WIRE)--Elevance Health, Inc. (NYSE: ELV) reported third quarter 2026 results ahead of expectations.
"Elevance Health's third quarter results reflect stronger execution across our diversified portfolio and underscore the earnings power of the business. We are raising our 2026 earnings outlook and remain confident in delivering at least 12% growth in adjusted diluted earnings per share in 2027 from our higher earnings baseline of at least $26.753. By bringing together the capabilities of our Health Benefits business and Carelon, we are improving the healthcare experience, strengthening our competitive advantage, and creating long-term value for our shareholders."
Gail K. Boudreaux
President and Chief Executive Officer
1. Earnings per diluted share ("EPS").
2. Refer to GAAP reconciliation tables for reconciliation of GAAP to adjusted measures.
3. FY 2026 earnings baseline excludes non-recurring net investment income and other non-operating items, as well as targeted one-time investments.
Elevance Health
Consolidated Enterprise Highlights
(Unaudited)
(In billions)
Three Months Ended
September 30,
2026
September 30,
2025
Operating Revenue1
$50.4
$50.1
Operating Gain1,2
$1.3
$1.3
Adjusted Operating Gain1,3
$1.3
$1.3
Operating Margin1
2.5 %
2.6 %
Adjusted Operating Margin1,3
2.7 %
2.7 %
1. See “Basis of Presentation.”
2. Operating Gain for the three months ended September 30, 2026 and September 30, 2025 includes items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation."
3. Adjusted Operating Gain for the three months ended September 30, 2026 and September 30, 2025 excludes items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation."
Operating revenue was $50.4 billion in the third quarter of 2026, an increase of $0.4 billion compared to the prior year quarter. This was driven by higher premium yields, increased CarelonRx product revenue, and growth in service fees, partially offset by lower Medicare Advantage, Medicaid, and Employer Group risk membership.
The benefit expense ratio of 90.6 percent improved 70 basis points, driven by better performance in Medicare Advantage and Individual ACA compared to the prior year.
Days in Claims Payable stood at 44.9 days as of September 30, 2026, an increase of 3.5 days year over year.
The operating expense ratio was 11.4 percent. The adjusted operating expense ratio was 11.3 percent, an increase of 90 basis points from the prior year. The increase principally reflected targeted, one-time investments in capabilities that support our long-term performance, along with spending to advance business growth and quality initiatives.
Cash Flow & Balance Sheet
Operating cash flow of $1.3 billion in the quarter increased $0.1 billion relative to the prior year, primarily reflecting favorable working capital dynamics. As of September 30, 2026, cash and investments at the parent company totaled approximately $2.4 billion.
During the third quarter of 2026, the Company repurchased 0.8 million shares of its common stock for $330 million, at a weighted average price of $398.75 per share, and paid a quarterly dividend of $1.72 per share, representing a distribution of cash totaling $373 million. As of September 30, 2026, the Company had approximately $5.0 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
September 30,
2026
September 30,
2025
Operating Revenue1
$43.4
$42.2
Operating Gain1
$0.4
$0.6
Operating Margin1
1.0 %
1.4 %
Health Benefits segment operating revenue was $43.4 billion in the third quarter of 2026, an increase of $1.1 billion, or 3 percent compared to the prior year quarter, driven primarily by higher premium yields and service fee revenue, partially offset by lower Medicare Advantage, Medicaid, and Employer Group risk membership.
Operating gain was $0.4 billion, a decline year over year, reflecting the impact of targeted investments to support our long-term operating model. This was partially offset by the improvement in our benefit expense ratio.
Medical membership of approximately 44.9 million as of September 30, 2026 decreased by 487 thousand compared to the prior year. The decline reflected lower enrollment in our Medicaid, Medicare Advantage, and Employer Group risk-based businesses, partially offset by growth in Commercial fee-based membership.
Carelon is comprised of CarelonRx and Carelon Services.
Carelon
Reportable Segment Highlights
(Unaudited)
(In billions)
Three Months Ended
September 30,
2026
September 30,
2025
Operating Revenue1
$19.3
$18.3
Operating Gain1
$0.9
$0.8
Operating Margin1
4.7 %
4.2 %
Operating revenue for Carelon was $19.3 billion in the third quarter of 2026, an increase of $1.0 billion, or 5 percent compared to the prior year quarter. Growth was driven by CarelonRx product revenue and continued expansion of Carelon Services risk-based solutions.
Operating gain for Carelon totaled $0.9 billion, an increase of 17 percent year over year, reflecting strong performance of Carelon Services risk-based solutions and the improved profitability of our specialty pharmacy.
Quarterly Dividend
On October 20, 2026, the Audit Committee of the Company's Board of Directors declared a fourth quarter 2026 dividend to shareholders of $1.72 per share. The fourth quarter dividend is payable on December 18, 2026 to shareholders of record at the close of business on December 4, 2026.
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 103 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 Daylight Time (“EDT”) to discuss the company’s third quarter results and outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers:
The access code for today's conference call is 3972058. There is no access code for the replay. The replay will be available from 11:30 a.m. EDT today, until the end of the day on November 20, 2026. 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-to-Date Ended September 30, 2026
Membership and Other Metrics Quarterly & Year-to-Date Consolidated Statements of Income Condensed Consolidated Balance Sheet Condensed Consolidated Statement of Cash Flows Supplemental Financial Information - Reportable Segments & Health Benefits Revenue Details Supplemental Financial Information - Reconciliation of Medical Claims Payable Reconciliation of Non-GAAP Financial Measures Elevance Health
Membership and Other Metrics
(Unaudited)
Change from
Medical Membership (in thousands)
September 30,
2026
September 30,
2025
June 30,
2026
September 30,
2025
June 30,
2026
Individual
1,348
1,354
1,317
(0.4) %
2.4 %
Employer Group Risk-Based
3,366
3,616
3,417
(6.9) %
(1.5) %
Commercial Risk-Based
4,714
4,970
4,734
(5.2) %
(0.4) %
BlueCard®
6,596
6,394
6,582
3.2 %
0.2 %
Employer Group Fee-Based
21,009
20,608
20,931
1.9 %
0.4 %
Commercial Fee-Based
27,605
27,002
27,513
2.2 %
0.3 %
Medicare Advantage
1,898
2,245
1,897
(15.5) %
0.1 %
Medicare Supplement
898
877
893
2.4 %
0.6 %
Total Medicare
2,796
3,122
2,790
(10.4) %
0.2 %
Medicaid
8,220
8,645
8,358
(4.9) %
(1.7) %
Federal Employee Program
1,547
1,630
1,554
(5.1) %
(0.5) %
Total Medical Membership
44,882
45,369
44,949
(1.1) %
(0.1) %
Other Metrics (in millions)
CarelonRx Quarterly Adjusted Scripts
82.6
85.0
80.9
(2.8) %
2.1 %
Carelon Services Consumers Served
91.0
97.6
92.4
(6.8) %
(1.5) %
Elevance Health
Consolidated Statements of Income
(Unaudited)
(In millions, except per share data)
Three Months Ended
September 30
Nine Months Ended
September 30
2026
2025
Change
2026
2025
Change
Revenues
Premiums
$
41,704
$
41,791
(0.2
)%
$
124,007
$
123,949
—
%
Product revenue
6,454
6,159
4.8
%
18,943
18,010
5.2
%
Service fees
2,282
2,137
6.8
%
6,810
6,314
7.9
%
Total operating revenue
50,440
50,087
0.7
%
149,760
148,273
1.0
%
Net investment income
1,037
625
65.9
%
2,506
1,701
47.3
%
Net losses on financial instruments
(48
)
(1
)
NM
(182
)
(596
)
NM
Total revenues
51,429
50,711
1.4
%
152,084
149,378
1.8
%
Expenses
Benefit expense
37,779
38,140
(0.9
)%
110,418
110,158
0.2
%
Cost of products sold
5,640
5,380
4.8
%
16,595
15,656
6.0
%
Operating expense
5,752
5,272
9.1
%
17,629
15,569
13.2
%
Interest expense
358
351
2.0
%
1,079
1,036
4.2
%
Amortization of other intangible assets
106
162
(34.6
)%
328
464
(29.3
)%
Total expenses
49,635
49,305
0.7
%
146,049
142,883
2.2
%
Income before income tax expense
1,794
1,406
27.6
%
6,035
6,495
(7.1
)%
Income tax expense
451
219
105.9
%
1,478
1,380
7.1
%
Net income
1,343
1,187
13.1
%
4,557
5,115
(10.9
)%
Net loss (gain) attributable to noncontrolling interests
22
2
NM
35
—
NM
Shareholders' net income
$
1,365
$
1,189
14.8
%
$
4,592
$
5,115
(10.2
)%
Shareholders' earnings per diluted share
$
6.27
$
5.32
17.9
%
$
21.01
$
22.67
(7.3
)%
Diluted shares
217.6
223.7
(2.7
)%
218.6
225.6
(3.1
)%
Benefit expense as a percentage of premiums
90.6
%
91.3
%
(70) bp
89.0
%
88.9
%
10 bp
Operating expense as a percentage of total operating revenue
11.4
%
10.5
%
90 bp
11.8
%
10.5
%
130 bp
Income before income tax expense as a percentage of total revenue
3.5
%
2.8
%
70 bp
4.0
%
4.3
%
(30) bp
"NM" = calculation not meaningful
Elevance Health
Condensed Consolidated Balance Sheet
(In millions)
September 30,
2026
December 31,
2025
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$10,348
$9,491
Fixed maturity and equity securities
27,498
26,624
Premium and other receivables
24,573
21,542
Other current assets
6,105
5,344
Total current assets
68,524
63,001
Long-term investments
12,719
11,960
Property and equipment, net
4,613
4,679
Goodwill and other intangible assets
39,220
39,544
Other noncurrent assets
2,725
2,310
Total assets
$127,801
$121,494
Liabilities and equity
Liabilities
Current liabilities:
Medical claims payable
$18,438
$17,084
Short-term borrowings
—
150
Current portion of long-term debt
375
1,099
Other current liabilities
27,849
22,702
Total current liabilities
46,662
41,035
Long-term debt, less current portion
30,382
30,797
Other noncurrent liabilities
5,963
5,636
Total liabilities
83,007
77,468
Total shareholders’ equity
44,681
43,882
Noncontrolling interests
113
144
Total equity
44,794
44,026
Total liabilities and equity
$127,801
$121,494
Elevance Health
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(In millions)
Nine Months Ended
September 30
2026
2025
Operating activities
Net income
$4,557
$5,115
Depreciation and amortization
1,083
1,140
Share-based compensation
210
246
Changes in operating assets and liabilities
2,784
(2,753)
Other non-cash items
(1,122)
458
Net cash provided by operating activities
7,512
4,206
Investing activities
Sales and maturities of investments, net of purchases (purchases of investments, net of sales and maturities)
(2,303)
(412)
Purchases of subsidiaries, net of cash acquired
2
55
Purchases of property and equipment
(789)
(823)
Other, net
(380)
(628)
Net cash used in investing activities
(3,470)
(1,808)
Financing activities
Net change in short-term and long-term borrowings
(900)
659
Repurchase and retirement of common stock
(1,688)
(2,134)
Cash dividends
(1,122)
(1,152)
Other, net
539
653
Net cash used in financing activities
(3,171)
(1,974)
Effect of foreign exchange rates on cash and cash equivalents
(14)
1
Change in cash and cash equivalents
857
425
Cash and cash equivalents at beginning of period
9,491
8,288
Cash and cash equivalents at end of period
$10,348
$8,713
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 Details
(Unaudited)
(In millions)
Three Months Ended September 30
Nine Months Ended September 30
2026
2025
Change
2026
2025
Change
Operating Revenue
Health Benefits
$43,357
$42,246
2.6 %
$128,567
$125,259
2.6 %
CarelonRx
11,599
10,997
5.5 %
33,449
31,756
5.3 %
Carelon Services
7,708
7,324
5.2 %
23,048
21,301
8.2 %
Corporate & Other
6
149
(96.0) %
16
546
(97.1) %
Eliminations
(12,230)
(10,629)
NM6
(35,320)
(30,589)
NM6
Total Operating Revenue1
$50,440
$50,087
0.7 %
$149,760
$148,273
1.0 %
Operating Gain (Loss)
Health Benefits
$436
$601
(27.5) %
$3,489
$4,378
(20.3) %
CarelonRx
616
556
10.8 %
1,780
1,694
5.1 %
Carelon Services
292
219
33.3 %
1,128
1,110
1.6 %
Corporate & Other2,3
(75)
(81)
NM6
(1,279)
(292)
NM6
Total Operating Gain1,4
$1,269
$1,295
(2.0) %
$5,118
$6,890
(25.7) %
Operating Margin
Health Benefits
1.0 %
1.4 %
(40) bp
2.7 %
3.5 %
(80) bp
CarelonRx
5.3 %
5.1 %
20 bp
5.3 %
5.3 %
— bp
Carelon Services
3.8 %
3.0 %
80 bp
4.9 %
5.2 %
(30) bp
Total Operating Margin1
2.5 %
2.6 %
(10) bp
3.4 %
4.6 %
(120) bp
Health Benefits Revenue Details
(In millions)
Three Months Ended September 30
Nine Months Ended September 30
2026
2025
Change
2026
2025
Change
Health Benefits Operating Revenue
Commercial
$13,343
$12,849
3.8 %
$40,142
$37,654
6.6 %
Individual5
2,514
2,358
6.6 %
7,774
7,047
10.3 %
Medicare
11,229
11,138
0.8 %
33,182
33,990
(2.4) %
Medicaid
14,979
14,166
5.7 %
43,703
42,120
3.8 %
Federal Employee Program
3,806
4,093
(7.0) %
11,540
11,495
0.4 %
Total Health Benefits Operating Revenue1
$43,357
$42,246
2.6 %
$128,567
$125,259
2.6 %
1. See “Basis of Presentation.”
2. Operating Gain for the three and nine months ended September 30, 2026 included $42 and $133 million, respectively, of transaction and integration related costs, $18 and $147 million, respectively, of business optimization charges, and $8 and $26 million, respectively, of litigation and settlement expenses. Operating Gain for the nine months ended September 30, 2026 also included $935 million for the Company's current best estimate of the identified potential exposure for certain historical Medicare Advantage risk adjustment data related to the CMS notice to the Company dated February 27, 2026. All adjustments for the three and nine month periods reside in the Corporate & Other reportable segment.
3. Operating Gain for the three and nine months ended September 30, 2025, included $49 and $182 million, respectively, of transaction and integration related costs, ($4) and ($4) million, respectively, of business optimization charges, and $4 and $19 million, respectively, of litigation and settlement expenses. All adjustments for the three and nine month periods reside in the Corporate & Other reportable segment.
4. Operating Gain for the three and nine months ended September 30, 2026, and September 30, 2025, include items excluded from adjusted shareholders' net income. See "GAAP Reconciliation."
5. The Individual business, including ACA products, is reported as part of Commercial Operating Revenue.
6. "NM" = calculation not meaningful.
Elevance Health
Reconciliation of Medical Claims Payable
Nine Months Ended September 30
Years Ended December 31
2026
2025
2025
2024
2023
(In millions)
(Unaudited)
(Unaudited)
Gross medical claims payable, beginning of period
$
16,829
$
15,580
$
15,580
$
15,865
$
15,348
Ceded medical claims payable, beginning of period
(48
)
(13
)
(13
)
(7
)
(6
)
Net medical claims payable, beginning of period
16,781
15,567
15,567
15,858
15,342
Business combinations and purchase adjustments
—
344
344
143
—
Net incurred medical claims:
Current year
108,608
108,423
145,566
125,370
121,798
Prior years redundancies1
(1,295
)
(1,266
)
(1,290
)
(1,731
)
(1,571
)
Total net incurred medical claims
107,313
107,157
144,276
123,639
120,227
Net payments attributable to:
Current year medical claims
92,416
93,545
130,265
110,930
107,146
Prior years medical claims
13,629
12,699
13,141
13,143
12,565
Total net payments
106,045
106,244
143,406
124,073
119,711
Net medical claims payable, end of period
18,049
16,824
16,781
15,567
15,858
Ceded medical claims payable, end of period
45
44
48
13
7
Gross medical claims payable, end of period2
$
18,094
$
16,868
$
16,829
$
15,580
$
15,865
Current year medical claims paid as a percentage of current year net incurred medical claims
85.1
%
86.3
%
89.5
%
88.5
%
88.0
%
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
8.4
%
8.9
%
9.0
%
12.3
%
11.4
%
Prior year redundancies in the current year as a percentage of prior year net incurred medical claims
0.9
%
1.0
%
1.0
% 1.4
%
1.4
% Elevance Health
GAAP Reconciliation
(Unaudited)
This document references non-GAAP measures, including “Adjusted Diluted EPS,” “Adjusted Operating Expense Ratio,” “Adjusted Operating Gain,” “Adjusted Operating Margin,” “Adjusted Shareholders’ Net Income,” and “Adjusted Operating Expense”. 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,” “Operating Gain/Loss,” and “Operating Margin”. 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 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.
Three Months Ended
September 30
Nine Months Ended
September 30
(In millions, except per share data)
2026
2025
Change
2026
2025
Change
Shareholders' net income
$
1,365
$
1,189
14.8
%
$
4,592
$
5,115
(10.2
)%
Add / (Subtract):
Amortization of other intangible assets
106
162
328
464
Net losses on financial instruments
48
1
182
596
Transaction and integration related costs1
42
49
133
182
Business optimization program charges1
18
(4
)
147
(4
)
Litigation and settlement expenses1
8
4
26
19
Accrual related to CMS notice1,2
—
—
935
—
Tax impact of non-GAAP adjustments
(67
)
(52
)
(427
)
(307
)
Net adjustment items
155
160
1,324
950
Adjusted shareholders' net income
$
1,520
$
1,349
12.7
%
$
5,916
$
6,065
(2.5
)%
Shareholders' earnings per diluted share
$
6.27
$
5.32
17.9
%
$
21.01
$
22.67
(7.3
)%
Add / (Subtract):
Amortization of other intangible assets
0.49
0.72
1.50
2.06
Net losses on financial instruments
0.22
—
0.83
2.64
Transaction and integration related costs1
0.19
0.22
0.61
0.81
Business optimization program charges1
0.08
(0.02
)
0.67
(0.02
)
Litigation and settlement expenses1
0.04
0.02
0.12
0.08
Accrual related to CMS notice1,2
—
—
4.28
—
Tax impact of non-GAAP adjustments
(0.31
)
(0.23
)
(1.95
)
(1.36
)
Net adjustment items
0.72
0.71
6.05
4.21
Adjusted shareholders' earnings per diluted share
$
6.99
$
6.03
15.9
%
$
27.06
$
26.88
0.7
%
Three Months Ended September 30
Nine Months Ended September 30
(In millions)
2026
2025
Change
2026
2025
Change
Income before income tax expense
$
1,794
$
1,406
27.6
%
$
6,035
$
6,495
(7.1
)%
Net investment income
(1,037
)
(625
)
(2,506
)
(1,701
)
Net losses on financial instruments
48
1
182
596
Interest expense
358
351
1,079
1,036
Amortization of other intangible assets
106
162
328
464
Reportable segments operating gain
$
1,269
$
1,295
(2.0
)%
$
5,118
$
6,890
(25.7
)%
Elevance Health
GAAP Reconciliation
(Unaudited)
Three Months Ended
September 30
Nine Months Ended
September 30
(In millions)
2026
2025
Change
2026
2025
Change
Reportable segments operating gain
$
1,269
$
1,295
(2.0
)%
$
5,118
$
6,890
(25.7
)%
Add / (Subtract):
Transaction and integration related costs1
42
49
133
182
Business optimization program charges1
18
(4
)
147
(4
)
Litigation and settlement expenses1
8
4
26
19
Accrual related to CMS notice1,2
—
—
935
—
Net adjustment items
68
49
1,241
197
Reportable segments adjusted operating gain
$
1,337
$
1,344
(0.5
)%
$
6,359
$
7,087
(10.3
)%
Operating revenue
$
50,440
$
50,087
0.7
%
$
149,760
$
148,273
1.0
%
Operating margin
2.5
%
2.6
%
(10) bp
3.4
%
4.6
%
(120) bp
Adjusted operating margin
2.7
%
2.7
%
— bp
4.2
%
4.8
%
(60) bp
Three Months Ended
September 30
Nine Months Ended
September 30
(In millions)
2026
2025
Change
2026
2025
Change
Operating expense
$
5,752
$
5,272
9.1
%
$
17,629
$
15,569
13.2
%
Add / (Subtract):
Transaction and integration related costs1
(42
)
(49
)
(133
)
(182
)
Business optimization program charges1
(18
)
4
(147
)
4
Litigation and settlement expenses1
(8
)
(4
)
(26
)
(19
)
Accrual related to CMS notice1,2
—
—
(935
)
—
Net adjustment items
(68
)
(49
)
(1,241
)
(197
)
Adjusted operating expense
$
5,684
$
5,223
8.8
%
$
16,388
$
15,372
6.6
%
Operating revenue
$
50,440
$
50,087
0.7
%
$
149,760
$
148,273
1.0
%
Operating expense ratio
11.4
%
10.5
%
90 bp
11.8
%
10.5
%
130 bp
Adjusted operating expense ratio
11.3
%
10.4
%
90 bp
10.9
%
10.4
%
50 bp
Full Year
2026 Outlook
Shareholders' earnings per diluted share
At least $22.00
Add / (Subtract):
Accrual related to CMS notice1,2
$
4.28
Amortization of other intangible assets3
$
2.02
Net losses on financial instruments3
$
1.16
Transaction and integration related costs1,3
$
0.91
Business optimization program charges1
$
0.67
Litigation and settlement expenses1,3
$
0.16
Tax impact of non-GAAP adjustments3
Approximately ($2.20)
Net adjustment items
$
7.00
Adjusted shareholders' earnings per diluted share
At least $29.00
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,” "potential," "predict" 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 or sentiment 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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