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10-Q Capital Stock
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Banking Regulation, Total Capital [Abstract]    
Capital Stock Capital Stock
Use of Capital – Dividends and Stock Repurchase Program
We regularly review the appropriate use of capital, including acquisitions, common stock and debt security repurchases and dividends to shareholders. 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 nine months ended September 30, 2023 and 2022 is as follows: 
Declaration DateRecord DatePayment Date
Cash
Dividend
per Share
Total
Nine Months Ended September 30, 2023
January 24, 2023March 10, 2023March 24, 2023$1.48$351 
April 18, 2023June 9, 2023June 23, 2023$1.48$350 
July 18, 2023September 8, 2023September 22, 2023$1.48$348 
Nine Months Ended September 30, 2022
January 25, 2022March 10, 2022March 25, 2022$1.28$309 
April 19, 2022June 10, 2022June 24, 2022$1.28$309 
July 19, 2022September 9, 2022September 23, 2022$1.28$306 
On October 17, 2023, our Audit Committee declared a fourth quarter 2023 dividend to shareholders of $1.48 per share, payable on December 21, 2023 to shareholders of record at the close of business on December 6, 2023.
Under our Board of Directors’ authorization, we maintain a common stock repurchase program. On January 24, 2023, our Audit Committee, pursuant to authorization granted by the Board of Directors, authorized a $5,000 increase to the common stock repurchase program. No duration has been placed on the common stock repurchase program, and we reserve the right to discontinue the program at any time. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are affected from time to time in the open market, through negotiated transactions, including accelerated share repurchase agreements, and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Our stock repurchase program is discretionary, as we are under no obligation to repurchase shares. We repurchase shares under the program when we believe it is a prudent use of capital. 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 nine months ended September 30, 2023 and 2022 is as follows:
Nine Months Ended September 30
 20232022
Shares repurchased3.8 3.7 
Average price per share$462.42 $473.36 
Aggregate cost$1,748 $1,748 
Authorization remaining at the end of the period$5,128 $2,444 
For additional information regarding the use of capital for debt security repurchases, see Note 10, “Debt,” included in this Quarterly Report on Form 10-Q and Note 13, “Debt,” to our audited consolidated financial statements as of and for the year ended December 31, 2022 included in Exhibit 99.1 to this Quarterly Report on Form 10-Q.
Stock Incentive Plans
A summary of stock option activity for the nine months ended September 30, 2023 is as follows:
Number of
Shares		Weighted-
Average
Option Price
per Share		Weighted-
Average
Remaining
Contractual
Life (Years)		Aggregate
Intrinsic
Value
Outstanding at January 1, 20232.8 $293.28 
Granted0.6 468.92 
Exercised(0.2)265.25 
Forfeited or expired(0.1)399.28 
Outstanding at September 30, 20233.1 324.74 6.25$370 
Exercisable at September 30, 20232.0 266.01 5.07$346 
A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the nine months ended September 30, 2023 is as follows:
Restricted
Stock Shares
and Units		Weighted-
Average
Grant Date
Fair Value
per Share
Nonvested at January 1, 20231.2 $357.21 
Granted0.6 469.30 
Vested(0.6)301.90 
Forfeited(0.1)413.59 
Nonvested at September 30, 20231.1 423.34 
During the nine months ended September 30, 2023, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three-year period from 2023 to 2025. These grants have been included in the activity shown above but will be subject to adjustment at the end of 2025 based on results in the three-year period.
Fair Value
We use a binomial lattice valuation model to estimate the fair value of all stock options granted. 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, 2022 included in Exhibit 99.1 to this Quarterly Report on Form 10-Q.
The following weighted-average assumptions were used to estimate the fair values of options granted during the nine months ended September 30, 2023 and 2022:
Nine Months Ended September 30
20232022
Risk-free interest rate3.95 %1.97 %
Volatility factor29.00 %29.00 %
Quarterly dividend yield0.316 %0.282 %
Weighted-average expected life (years)4.405.10
The following weighted-average fair values per option or share were determined for the nine months ended September 30, 2023 and 2022: 
Nine Months Ended September 30
20232022
Options granted during the period$127.08 $116.85 
Restricted stock awards granted during the period469.30 453.16 
 Capital Stock
Stock Incentive Plans
Our Board of Directors has adopted the 2017 Elevance Health Incentive Compensation Plan, formerly known as the 2017 Anthem Incentive Compensation Plan (“2017 Incentive Plan”), which has been approved by our shareholders. The term of the 2017 Incentive Plan is such that no awards may be granted on or after May 18, 2027. The 2017 Incentive Plan gives authority to the Compensation Committee of the Board of Directors to make incentive awards to our non-employee directors, employees and consultants, consisting of stock options, stock, restricted stock, restricted stock units, cash-based awards, stock appreciation rights, performance shares and performance units. The 2017 Incentive Plan limits the number of available shares for issuance to 37.5 shares, subject to adjustment as set forth in the 2017 Incentive Plan.
Stock options are granted for a fixed number of shares with an exercise price at least equal to the fair value of the shares at the grant date. Stock options vest over three years in equal annual installments and generally have a term of ten years from the grant date.
Certain option grants contain provisions whereby the employee continues to vest in the award subsequent to termination due to retirement. Our attribution method for newly granted awards considers all vesting and other provisions, including retirement eligibility, in determining the requisite service period over which the fair value of the awards will be recognized.
Awards of restricted stock or restricted stock units are issued at the fair value of the stock on the grant date and may also include one or more performance measures that must be met for the award to vest. For restricted stock or restricted stock units without performance measures, the restrictions lapse in three equal annual installments. Restricted stock or restricted stock units with performance measures vest in three year installments. Performance units issued in 2022 will vest in 2025, based on certain revenue and earnings targets over the three year period of 2022 to 2024. Performance units issued in 2021 will vest in 2024, based on certain revenue and earnings targets over the three year period of 2021 to 2023. Performance units issued in 2020 will vest in 2023, based on certain revenue and earnings targets over the three year period of 2020 to 2022.
For the years ended December 31, 2022, 2021 and 2020, we recognized share-based compensation expense of $264, $255 and $283, respectively, as well as related tax benefits of $66, $65 and $74, respectively.
A summary of stock option activity for the year ended December 31, 2022 is as follows:
Number of
Shares		Weighted-Average
Option Price
per Share		Weighted-Average
Remaining
Contractual Life
(Years)		Aggregate
Intrinsic
Value
Outstanding at January 1, 20222.9 $255.50 
Granted0.5 452.67 
Exercised(0.5)242.79 
Forfeited or expired(0.1)339.20 
Outstanding at December 31, 20222.8 293.28 6.35$622 
Exercisable at December 31, 20221.6 239.89 5.14$448 
The intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 amounted to $120, $121 and $147, respectively. We recognized tax benefits of $31, $32 and $40 during the years ended December 31, 2022, 2021 and 2020, respectively, from option exercises and disqualifying dispositions. During the years ended December 31, 2022, 2021 and 2020, we received cash of $120, $148 and $129, respectively, from exercises of stock options.
The total fair value of restricted stock awards that vested during the years ended December 31, 2022, 2021 and 2020 was $261, $287 and $335, respectively.
A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the year ended December 31, 2022 is as follows:
Restricted
Stock Shares
and Units		Weighted-Average
Grant Date
Fair Value
per Share
Nonvested at January 1, 20221.3 $299.65 
Granted0.6 453.70 
Vested(0.6)301.89 
Forfeited(0.1)347.73 
Nonvested at December 31, 20221.2 357.21 
During the year ended December 31, 2022, we granted approximately 0.2 restricted stock units that are contingent upon us achieving certain revenue and earnings targets over the three year period of 2022 to 2024. These grants have been included in the activity shown above, but will be subject to adjustment at the end of 2024, based on results in the three year period.
As of December 31, 2022, the total remaining unrecognized compensation expense related to nonvested stock options and restricted stock, including restricted stock units and performance units, amounted to $35 and $176, respectively, which will be amortized over the weighted-average remaining requisite service periods of 9 months and 12 months, respectively.
As of December 31, 2022, there were approximately 14.0 shares of common stock available for future grants under the 2017 Incentive Plan.
 Fair Value
We use a binomial lattice valuation model to estimate the fair value of all stock options granted. Expected volatility assumptions used in the binomial lattice model are based on an analysis of implied volatility of publicly traded options on our stock and historical volatility of our stock price. The risk-free interest rate is derived from the U.S. Treasury strip rates at the time of the grant. The expected term of the options was derived from the outputs of the binomial lattice model, which incorporates post-vesting forfeiture assumptions based on an analysis of historical data. The dividend yield was based on our estimate of future dividend yields. Similar groups of employees that have dissimilar exercise behavior are considered separately for valuation purposes. We utilize the multiple-grant approach for recognizing compensation expense associated with each separately vesting portion of the share-based award.
The following weighted-average assumptions were used to estimate the fair values of options granted during the years ended December 31, 2022, 2021 and 2020:
202220212020
Risk-free interest rate1.97 %1.44 %1.30 %
Volatility factor29.00 %30.00 %26.00 %
Dividend yield (annual)1.10 %1.50 %1.40 %
Weighted-average expected life (years)5.105.504.30
The following weighted-average fair values were determined for the years ending December 31, 2022, 2021 and 2020:
202220212020
Options granted during the year$116.92 $79.91 $54.05 
Restricted stock awards granted during the year453.70 317.70 272.37 
The binomial lattice option-pricing model requires the input of subjective assumptions including the expected stock price volatility. Because our stock option grants have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in our opinion, existing models do not necessarily provide a reliable single measure of the fair value of our stock option grants.
Employee Stock Purchase Plan
We have registered 14.0 shares of common stock for the Employee Stock Purchase Plan (the “Stock Purchase Plan”), which is intended to provide a means to encourage and assist employees in acquiring a stock ownership interest in Elevance Health. Pursuant to the terms of the Stock Purchase Plan, an eligible employee is permitted to purchase no more than $25,000 (actual dollars) worth of stock in any calendar year, based on the fair value of the stock at the end of each plan quarter. Employees become participants by electing payroll deductions from 1% to 15% of gross compensation. Once purchased, the stock is accumulated in the employee’s investment account. The Stock Purchase Plan allows participants to purchase shares of our common stock at a discounted price per share of 90% of the fair value of a share of common stock on the lower of the first or last trading day of the plan quarter purchase period. The Stock Purchase Plan discount was recognized as compensation expense for the year ended December 31, 2022, based on GAAP guidance. During the years ended December 31, 2022, 2021 and 2020, we issued 0.1, 0.1 and 0.2 shares, respectively, under the Stock Purchase Plan, and we received cash of $62, $55 and $47, respectively, for such shares. As of December 31, 2022, 4.3 shares were available for issuance under the Stock Purchase Plan.
Use of Capital and Stock Repurchase Program
We regularly review the appropriate use of capital, including acquisitions, common stock and debt security repurchases and dividends to shareholders. 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 the cash dividend activity for the years ended December 31, 2022 and 2021 is as follows: 
Declaration DateRecord DatePayment DateCash Dividend
per Share		Total
Year ended December 31, 2022
January 25, 2022March 10, 2022March 25, 2022$1.28 $309 
April 19, 2022June 10, 2022June 24, 20221.28 309 
July 19, 2022September 9, 2022September 23, 20221.28 306 
October 18, 2022December 5, 2022December 21, 20221.28 305 
Year ended December 31, 2021
January 26, 2021March 10, 2021March 25, 2021$1.13 $277 
April 20, 2021June 10, 2021June 25, 20211.13 278 
July 20, 2021September 10, 2021September 24, 20211.13 276 
October 19, 2021December 3, 2021December 21, 20211.13 273 
On January 24, 2023, our Audit Committee declared a quarterly cash dividend to shareholders of $1.48 per share on the outstanding shares of our common stock. This quarterly dividend is payable on March 24, 2023 to the shareholders of record as of March 10, 2023.
Under our Board of Directors’ authorization, we maintain a common stock repurchase program. On January 26, 2021, our Audit Committee, pursuant to authorization granted by the Board of Directors, authorized a $5,000 increase to our common stock repurchase program. On January 24, 2023, our Audit Committee, pursuant to authorization granted by the Board of Directors, authorized a $5,000 increase to our common stock repurchase program. No duration has been placed on our common stock repurchase program, and we reserve the right to discontinue the program at any time. We intend to utilize this authorization over a multi-year period, subject to market and industry conditions. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are affected from time to time in the open market, through negotiated transactions, including accelerated share repurchase agreements, and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Our stock repurchase program is discretionary, as we are under no obligation to repurchase shares. We repurchase shares under the program when we believe it is a prudent use of capital. 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 years ended December 31, 2022 and 2021 is as follows:
Years Ended December 31
 20222021
Shares repurchased4.8 5.1 
Average price per share$478.99 $371.46 
Aggregate cost$2,316 $1,900 
Authorization remaining at end of year$1,876 $4,192 
We expect to utilize the remaining authorized amount over a multi-year period, subject to market and industry conditions.
For additional information regarding the use of capital for debt security repurchases, see Note 13, “Debt.”