Elevance Health, Inc. · NYSE:ELV
Elevance Health — Wellpoint — Merger or Acquisition (July 2012)
24 slides from Elevance Health's merger presentation, Jul 9, 2012
Slide 1: WellPoint and Amerigroup: Leadership in High Growth Government Managed Care
Exhibit 99.2 WellPoint and Amerigroup: Leadership in High Growth Government Managed Care July 9, 2012
Slide 2: Agenda
Agenda Angela Braly, Chair, President & CEO, WellPoint, Inc. • Transaction overview • Strategic rationale Jim Carlson, Chairman & CEO, Amerigroup Corp. • Benefits of WellPoint-Amerigroup combination Wayne DeVeydt, Executive Vice President & CFO, WellPoint, Inc. • Financial review • Q&A Jim Truess, E
Slide 3: Safe Harbor Statement
Safe Harbor Statement Cautionary Statement Regarding Forward-Looking Statements • This communication contains certain “forward-looking” statements as that term is defined by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Sta
Slide 4: Safe Harbor Statement: Additional Information and Where to Find It
Safe Harbor Statement Additional Information and Where to Find It • This communication is being made in respect of the proposed transaction involving Amerigroup and WellPoint. The proposed transaction will be submitted to the stockholders of Amerigroup for their consideration. In connection with the
Slide 5: Advancing Our Future Growth Potential
Advancing Our Future Growth Potential • Acquiring a leading company in the high growth government-sponsored marketplace • Broadens Medicaid footprint to include 19 states that have nearly 60% of nation’s Medicaid enrollment • Establishes presence in 13 states with significant dual eligible opportuni
Slide 6: Key Transaction Terms
Key Transaction Terms • $92.00 per share in cash to acquire all outstanding Amerigroup shares Price • Transaction value of approximately $4.9 billion • Financed through cash on hand, commercial paper and debt issuance • Amerigroup shareholder vote Path to • Regulatory approvals including Hart-Scott-
Slide 7: Now is the Right Time for this Highly Compelling Opportunity
Now is the Right Time for this Highly Compelling Opportunity Right deal, Eyes wide open Right time • Recognized issues • Compelling opportunity • Medicaid MCOs are • Significant growth trading at a premium to opportunities ahead historical levels • Managed care is a solution to • With political and
Slide 8: Medicaid Managed Care is Underpenetrated and Poised for Growth
Medicaid Managed Care is Underpenetrated and Poised for Growth Current Future (2014) 29M 24M 27M 41M (45%) (60%) Total Beneficiaries: 53 million Total Beneficiaries: 68 million $98B $184B (21%) (31%) $359B $403B Total Expenditures: $457 billion Total Expenditures: $587 billion Unmanaged Comprehensiv
Slide 9: Outsized Growth Potential
Outsized Growth Potential 2012 – 2014 2012 – 2020 2013 – 2022 RFP Pipeline – Long-term Dual Eligibles ~$50 Billion Services and Support 9
Slide 10: Dual Eligible Opportunity
Dual Eligible Opportunity Duals are managed through government programs and account for $300 billion growing to $700 billion in 10 years 37 million people 51 million people Dual Eligibles 9 million people $300 billion opportunity 20% of Medicare 15% of Medicaid population population 31 % of costs 39
Slide 11: Adjacent Growth: Long-Term Services and Support (LTSS)
Adjacent Growth: Long-Term Services and Support (“LTSS”) LTSS model of care is scalable, cost efficient and synergistic with CareMore LTSS Opportunity Positioning to Capture Market Share Significant and broad growth opportunity in Medicaid (~15 million lives today) High-cost populations in every sta
Slide 12: Government Business Expected to Increase
Government Business Expected to Increase Income Distribution By State State % of 2010 state population California 32 11 24 33 Approximately 29% of the Colorado 24 9 27 40 population in our Blue markets have incomes that Connecticut 19 9 26 46 would make them eligible Georgia 33 10 26 31 for Medicaid
Slide 13: Amerigroup is Exceptionally Attractive
Amerigroup is Exceptionally Attractive • Superior pure-play government managed care platform and management team • Leader in serving high needs populations • 40% of revenues from SPD, LTSS, MA and dual members* • Disciplined approach to growth – thoughtfulness in selecting markets • Well-positioned
Slide 14: Geographic Breadth and Diversification
Geographic Breadth and Diversification Pro Forma Combination 2014 Duals Combined Opportunity • 19 combined Medicaid states (excludes OH) • Presence in 13 states with near-term dual • 17 primarily fully insured eligible opportunities • 2 ASO (SC, MA) • Potential for nearly $16 billion of revenue* • 3
Slide 15: Large and Attractive Government Managed Care Presence
Large and Attractive Government Managed Care Presence WellPoint becomes a leader in the four largest dual spending states • 19 combined states comprise more than $180 billion of the nation’s $300 billion dual spending ($ in millions, lives in thousands) Medicaid Dual ABD Uninsured Duals enrollment e
Slide 16: Similar cultures and organizational values
Similar cultures and organizational values • Track records of excellent customer service, strong clinical care management and deep provider collaboration • Strong and valued relationships with federal, state and local governments • Focus on access, affordability and consumer experience • Commitment
Slide 17: Proven Management Team
Proven Management Team Years with Remaining with Name Role Age Amerigroup Company? Jim Carlson Chairman and CEO 60 9 Jim Truess Executive Vice President and CFO 46 6 Richard Zoretic Executive Vice President and COO 54 9 • Amerigroup has approximately 6,600 associates in total 17
Slide 18: Furthers WellPoint's Leadership in Government Managed Care
Furthers WellPoint’s Leadership in Government Managed Care Creates Market Leader in the Medicaid Space • Pro forma Medicaid membership of more than 4.5 million lives • Pro forma 2012E Medicaid revenue of more than $12 billion* (# of Medicaid members in thousands) 4,525 3,590 2,658 2,150 1,867 1,825
Slide 19: Doubles Proportion of State Sponsored Membership
Doubles Proportion of State Sponsored Membership Current WellPoint Business Mix Pro forma Business Mix FEP State Senior FEP 4% State Senior Sponsored 4% Individual 4% Sponsored 4% Individual 12% 5% 6% 6% National Accounts 20% National Accounts 21% Local Group 44% BlueCard Local Group BlueCard 15% 41
Slide 20: Pro Forma Financial Data & Synergies
Pro Forma Financial Data & Synergies* Medical 2012E Financial Annual Members Revenue Metrics Synergies 36.4 million in total Total revenue: Fully integrated: Low SG&A More than 4.5 More than More than $70 billion expense ratio million Medicaid $125 million Investment income 1 in 9 Americans & Medica
Slide 21: Financially Compelling
Financially Compelling* • No change to 2012 guidance • Accretive in 2013, including one time transaction EPS and integration costs • Increasing accretion in 2014, exceeding $1.00 per share by 2015 ROI • Double-digit long-term cash on cash return • Mid-teens IRR Balance • Pro forma debt to capital ra
Slide 22: Continued Commitment to Delivering Shareholder Value
Continued Commitment to Delivering Shareholder Value Share Buybacks Invest in Core Business Capital Allocation Strategy Invest in Future Growth Dividends Opportunities 22
Slide 23: A Compelling Combination
A Compelling Combination • Furthers our objective of creating the best health care value in the industry • Advances leadership in government sponsored managed care • Enhances future growth potential in multiple market segments • Strong long-term return on investment for shareholders* • Retains prove
Slide 24: WellPoint. Health. Care. Value.
—— WELLPOINT. Health. Care. Value: