Stock Analysis on Net
Stock Analysis on Net

Elevance Health Inc. (NYSE:ELV)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Elevance Health Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Federal 1,899 1,469 1,467 1,724 1,019
Foreign (including Puerto Rico) 95 98 18 7 —
State and local 420 179 165 461 84
Current tax expense 2,414 1,746 1,650 2,192 1,103
Deferred tax expense (benefit) (690) 4 180 (526) 75
Income tax expense 1,724 1,750 1,830 1,666 1,178

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Current tax expense Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Elevance Health Inc. current tax expense increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax expense (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Elevance Health Inc. deferred tax expense (benefit) decreased from 2021 to 2022 and from 2022 to 2023.
Income tax expense Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Elevance Health Inc. income tax expense decreased from 2021 to 2022 and from 2022 to 2023.

Effective Income Tax Rate (EITR)

Elevance Health Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Statutory federal income tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
State and local income taxes net of federal tax expense/benefit 1.60% 3.00% 3.30% 3.80% 2.30%
Tax exempt interest and dividends received deduction -0.20% -0.20% -0.30% -0.40% -0.40%
Change in valuation allowance 1.10% 0.00% 0.00% 0.00% 0.00%
HIP fee 0.00% 0.00% 0.00% 5.30% 0.00%
Basis adjustments from recent acquisitions 0.00% 0.00% 0.00% -1.80% 0.00%
Other, net -1.20% -1.30% -0.90% -1.20% -3.20%
Effective income tax rate 22.30% 22.50% 23.10% 26.70% 19.70%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Elevance Health Inc. effective income tax rate decreased from 2021 to 2022 and from 2022 to 2023.

Components of Deferred Tax Assets and Liabilities

Elevance Health Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Accrued expenses 553 379 511 588 331
Bad debt reserves 415 301 246 143 89
Insurance reserves 178 147 156 187 139
Lease liabilities 172 200 216 204 180
Retirement liabilities 132 173 170 205 216
Deferred compensation 44 34 35 31 28
Federal and state carryforwards 455 208 201 274 124
Investment basis 31 340 — — —
Other 166 267 207 113 71
Deferred income tax assets, before valuation allowance 2,146 2,049 1,742 1,745 1,178
Valuation allowance (271) (203) (212) (84) (45)
Deferred income tax assets 1,875 1,846 1,530 1,661 1,133
U.S. federal and state intangible assets (2,070) (2,059) (2,071) (2,073) (1,999)
Foreign (including Puerto Rico) intangible assets (330) (380) (452) — —
Capitalized software (485) (601) (777) (670) (554)
Depreciation and amortization (54) (62) (45) (37) (62)
Investment basis — — (295) (407) (230)
Retirement assets (319) (317) (314) (260) (249)
Lease right-of-use assets (110) (123) (126) (131) (164)
Prepaid expenses (249) (201) (152) (102) (102)
Deferred income tax liabilities (3,617) (3,743) (4,232) (3,680) (3,360)
Net deferred income tax assets (liabilities) (1,742) (1,897) (2,702) (2,019) (2,227)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred income tax assets, before valuation allowance Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Elevance Health Inc. deferred income tax assets, before valuation allowance increased from 2021 to 2022 and from 2022 to 2023.
Deferred income tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Elevance Health Inc. deferred income tax assets increased from 2021 to 2022 and from 2022 to 2023.
Net deferred income tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Elevance Health Inc. net deferred income tax assets (liabilities) increased from 2021 to 2022 and from 2022 to 2023.

Deferred Tax Assets and Liabilities, Classification

Elevance Health Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Deferred tax asset (under the caption Other noncurrent assets) 228 137 103 — —
Deferred tax liabilities, net 1,970 2,034 2,805 2,019 2,227

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred tax asset (under the caption Other noncurrent assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Elevance Health Inc. deferred tax asset (under the caption Other noncurrent assets) increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax liabilities, net Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Elevance Health Inc. deferred tax liabilities, net decreased from 2021 to 2022 and from 2022 to 2023.

Adjustments to Financial Statements: Removal of Deferred Taxes

Elevance Health Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 108,928 102,772 97,460 86,615 77,453
Less: Noncurrent deferred tax assets, net 228 137 103 — —
Total assets (adjusted) 108,700 102,635 97,357 86,615 77,453
Adjustment to Total Liabilities
Total liabilities (as reported) 69,523 66,378 61,332 53,416 45,725
Less: Noncurrent deferred tax liabilities, net 1,970 2,034 2,805 2,019 2,227
Total liabilities (adjusted) 67,553 64,344 58,527 51,397 43,498
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 39,306 36,307 36,060 33,199 31,728
Less: Net deferred tax assets (liabilities) (1,742) (1,897) (2,702) (2,019) (2,227)
Shareholders’ equity (adjusted) 41,048 38,204 38,762 35,218 33,955
Adjustment to Shareholders’ Net Income
Shareholders’ net income (as reported) 5,987 6,025 6,104 4,572 4,807
Add: Deferred income tax expense (benefit) (690) 4 180 (526) 75
Shareholders’ net income (adjusted) 5,297 6,029 6,284 4,046 4,882

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Elevance Health Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Elevance Health Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 3.52% 3.87% 4.46% 3.78% 4.66%
Adjusted net profit margin 3.11% 3.87% 4.59% 3.35% 4.73%
Total Asset Turnover
Reported total asset turnover 1.56 1.51 1.41 1.39 1.33
Adjusted total asset turnover 1.57 1.52 1.41 1.39 1.33
Financial Leverage
Reported financial leverage 2.77 2.83 2.70 2.61 2.44
Adjusted financial leverage 2.65 2.69 2.51 2.46 2.28
Return on Equity (ROE)
Reported ROE 15.23% 16.59% 16.93% 13.77% 15.15%
Adjusted ROE 12.90% 15.78% 16.21% 11.49% 14.38%
Return on Assets (ROA)
Reported ROA 5.50% 5.86% 6.26% 5.28% 6.21%
Adjusted ROA 4.87% 5.87% 6.45% 4.67% 6.30%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Elevance Health Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Elevance Health Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Elevance Health Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Elevance Health Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Elevance Health Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Elevance Health Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Shareholders’ net income 5,987 6,025 6,104 4,572 4,807
Operating revenue 170,209 155,660 136,943 120,808 103,141
Profitability Ratio
Net profit margin1 3.52% 3.87% 4.46% 3.78% 4.66%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted shareholders’ net income 5,297 6,029 6,284 4,046 4,882
Operating revenue 170,209 155,660 136,943 120,808 103,141
Profitability Ratio
Adjusted net profit margin2 3.11% 3.87% 4.59% 3.35% 4.73%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Shareholders’ net income ÷ Operating revenue
= 100 × 5,987 ÷ 170,209 = 3.52%

2 Adjusted net profit margin = 100 × Adjusted shareholders’ net income ÷ Operating revenue
= 100 × 5,297 ÷ 170,209 = 3.11%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Elevance Health Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Operating revenue 170,209 155,660 136,943 120,808 103,141
Total assets 108,928 102,772 97,460 86,615 77,453
Activity Ratio
Total asset turnover1 1.56 1.51 1.41 1.39 1.33
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Operating revenue 170,209 155,660 136,943 120,808 103,141
Adjusted total assets 108,700 102,635 97,357 86,615 77,453
Activity Ratio
Adjusted total asset turnover2 1.57 1.52 1.41 1.39 1.33

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Operating revenue ÷ Total assets
= 170,209 ÷ 108,928 = 1.56

2 Adjusted total asset turnover = Operating revenue ÷ Adjusted total assets
= 170,209 ÷ 108,700 = 1.57

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Elevance Health Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 108,928 102,772 97,460 86,615 77,453
Shareholders’ equity 39,306 36,307 36,060 33,199 31,728
Solvency Ratio
Financial leverage1 2.77 2.83 2.70 2.61 2.44
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 108,700 102,635 97,357 86,615 77,453
Adjusted shareholders’ equity 41,048 38,204 38,762 35,218 33,955
Solvency Ratio
Adjusted financial leverage2 2.65 2.69 2.51 2.46 2.28

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 108,928 ÷ 39,306 = 2.77

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 108,700 ÷ 41,048 = 2.65

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Elevance Health Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Shareholders’ net income 5,987 6,025 6,104 4,572 4,807
Shareholders’ equity 39,306 36,307 36,060 33,199 31,728
Profitability Ratio
ROE1 15.23% 16.59% 16.93% 13.77% 15.15%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted shareholders’ net income 5,297 6,029 6,284 4,046 4,882
Adjusted shareholders’ equity 41,048 38,204 38,762 35,218 33,955
Profitability Ratio
Adjusted ROE2 12.90% 15.78% 16.21% 11.49% 14.38%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Shareholders’ net income ÷ Shareholders’ equity
= 100 × 5,987 ÷ 39,306 = 15.23%

2 Adjusted ROE = 100 × Adjusted shareholders’ net income ÷ Adjusted shareholders’ equity
= 100 × 5,297 ÷ 41,048 = 12.90%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Elevance Health Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Shareholders’ net income 5,987 6,025 6,104 4,572 4,807
Total assets 108,928 102,772 97,460 86,615 77,453
Profitability Ratio
ROA1 5.50% 5.86% 6.26% 5.28% 6.21%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted shareholders’ net income 5,297 6,029 6,284 4,046 4,882
Adjusted total assets 108,700 102,635 97,357 86,615 77,453
Profitability Ratio
Adjusted ROA2 4.87% 5.87% 6.45% 4.67% 6.30%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Shareholders’ net income ÷ Total assets
= 100 × 5,987 ÷ 108,928 = 5.50%

2 Adjusted ROA = 100 × Adjusted shareholders’ net income ÷ Adjusted total assets
= 100 × 5,297 ÷ 108,700 = 4.87%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Elevance Health Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.