Elevance Health (ELV) 10-Q 29 Jul 09 2009 Q2 Quarterly report Financial data

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	1724.6	2183.9
Investments available-for-sale, at fair value:
Fixed maturity securities (amortized cost of $14,825.4 and $1,538.6)	14765.9	1564.8
Equity securities (cost of $829.6 and $1,293.0)	851.1	1,088
Other invested assets, current	17.1	23.6
Accrued investment income	168.8	172.8
Premium and self-funded receivables	3457.9	3042.9
Other receivables	515.3	597.5
Income tax receivable	59.1	159.9
Securities lending collateral	325.2	529
Deferred tax assets, net	681.6	766.6
Other current assets	1141.9	1,141
Current assets held for sale	1292.9	1193.3
Total current assets	25001.4	12463.3
Long-term investments available-for-sale, at fair value:
Fixed maturity securities (amortized cost of $232.0 and $12,401.3)	238.8	11808.4
Equity securities (cost of $33.1 and $34.7)	29.9	30.7
Other invested assets, long-term	749.5	703.2
Property and equipment, net	1038.2	1016.5
Goodwill	13308.9	13296.2
Other intangible assets	8612.8	8697.6
Other noncurrent assets	364.8	387.3
Total assets	49344.3	48403.2
Policy liabilities:
Medical claims payable	5905.5	6184.7
Reserves for future policy benefits	61.3	64.5
Other policyholder liabilities	1549.5	1626.8
Total policy liabilities	7516.3	7,876
Unearned income	1066.9	1080.8
Accounts payable and accrued expenses	2,754	2856.5
Security trades pending payable	54	5.8
Securities lending payable	330.9	529
Short-term borrowings	100	98
Current portion of long-term debt	558.1	909.7
Other current liabilities	1687.8	1340.3
Current liabilities held for sale	274.3	374.4
Total current liabilities	14342.3	15070.5
Long-term debt, less current portion	8513.7	7833.9
Reserves for future policy benefits, noncurrent	659.9	664.7
Deferred tax liabilities, net	2302.2	2051.3
Other noncurrent liabilities	1273.3	1351.1
Total liabilities	27091.4	26971.5
Commitments and contingencies - Note 9	0	0
Shareholders' equity
Preferred stock, without par value, shares authorized - 100,000,000; shares issued and outstanding - none	0	0
Common stock, par value $0.01, shares authorized - 900,000,000; shares issued and outstanding: 477,268,311 and 503,230,575	4.8	5
Additional paid-in capital	16031.9	16,843
Retained earnings	6639.5	5479.4
Accumulated other comprehensive loss	-423.3	-895.7
Total shareholders' equity	22252.9	21431.7
Total liabilities and shareholders' equity	49344.3	48403.2

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions, except Share data	Jun. 30, 2009	Dec. 31, 2008
Fixed maturity securities, amortized cost	14825.4	1538.6
Equity securities, cost	829.6	1,293
Fixed maturity securities, amortized cost	232	12401.3
Equity securities, cost	33.1	34.7
Preferred stock, par value	$0	$0
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	0.01	0.01
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	477,268,311	503,230,575
Common stock, shares outstanding	477,268,311	503,230,575

Statement Of Income Insurance B

Statement Of Income Insurance Based Revenue (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Revenues
Premiums	14123.3	14344.9	28326.5	28579.3
Administrative fees	976.8	966	1918.3	1935.6
Other revenue	165.7	166.1	319.7	328.7
Total operating revenue	15265.8	15,477	30564.5	30843.6
Net investment income	205.7	217.6	402.8	450.3
Net realized gains (losses) on investments	15.7	93.2	-31.8	124.5
Other-than-temporary impairment losses on investments:
Total other-than-temporary impairment losses on investments	-107.8	(121)	-412.8	-197.9
Portion of other-than-temporary impairment losses recognized in other comprehensive income	33.8	0	33.8	0
Other-than-temporary impairment losses recognized in income	(74)	(121)	(379)	-197.9
Total revenues	15413.2	15666.8	30556.5	31220.5
Expenses
Benefit expense	11712.3	11955.6	23300.5	24072.1
Selling, general and administrative expense:
Selling expense	421.2	445.1	853.2	889.4
General and administrative expense	1922.3	1773.5	3855.4	3577.8
Total selling, general and administrative expense	2343.5	2218.6	4708.6	4467.2
Cost of drugs	121.3	118.5	233.7	237.4
Interest expense	117	116.5	233.1	235.5
Amortization of other intangible assets	66.6	71.6	134.5	143.1
Total expenses	14360.7	14480.8	28610.4	29155.3
Income before income tax expense	1052.5	1,186	1946.1	2065.2
Income tax expense	359	435.5	672.2	726.6
Net income	693.5	750.5	1273.9	1338.6
Net income per share
Basic	1.44	1.44	2.6	2.52
Diluted	1.43	1.44	2.59	2.5

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect Investment Based Operations (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Operating activities
Net income	1273.9	1338.6
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized losses (gains) on investments	31.8	-124.5
Other-than-temporary impairment losses recognized in income	379	197.9
Loss on disposal of assets	0.9	0.5
Deferred income taxes	18.1	26
Amortization, net of accretion	225	238.2
Depreciation expense	52.3	51.9
Share-based compensation	76.7	89.5
Excess tax benefits from share-based compensation	-1.7	-13.6
Changes in operating assets and liabilities, net of effect of business combinations:
Receivables, net	-376.5	-612.9
Other invested assets	(19)	6.5
Other assets	33.3	-94.9
Policy liabilities	-367.3	269
Unearned income	-14.1	-59.8
Accounts payable and accrued expenses	28.3	-196.2
Other liabilities	135.2	64.2
Income taxes	93	-35.1
Other, net	0.7	14.1
Net cash provided by operating activities	1569.6	1159.4
Investing activities
Purchases of fixed maturity securities	-4174.6	-4000.4
Proceeds from fixed maturity securities:
Sales	2221.3	3732.8
Maturities, calls and redemptions	785.3	1142.9
Purchases of equity securities	-160.3	-1049.8
Proceeds from sales of equity securities	420.1	792.8
Purchases of other invested assets	(24)	-88.7
Proceeds from sales of other invested assets	2.2	20.8
Changes in securities lending collateral	198.1	138.7
Purchases of subsidiaries, net of cash acquired	-66.3	-106.5
Proceeds from sales of subsidiaries, net of cash sold	0	5
Purchases of property and equipment	-157.9	(156)
Proceeds from sales of property and equipment	0.4	11.3
Other, net	-3.2	0
Net cash (used in) provided by investing activities	-958.9	442.9
Financing activities
Net (repayments of) proceeds from commercial paper borrowings	-249.4	196.2
Repayment of long-term borrowings	-393.2	-5.9
Proceeds from long-term borrowings	990.3	525
Net proceeds from short-term borrowings	2	0
Changes in securities lending payable	-198.1	-138.7
Changes in bank overdrafts	-149.6	104.5
Repurchase and retirement of common stock	-1118.2	-2875.2
Proceeds from exercise of employee stock options and employee stock purchase plan	43.3	84.1
Excess tax benefits from share-based compensation	1.7	13.6
Net cash used in financing activities	-1071.2	-2096.4
Effect of foreign exchange rates on cash and cash equivalents	1.2	0
Change in cash and cash equivalents	-459.3	-494.1
Cash and cash equivalents at beginning of period	2183.9	2767.9
Cash and cash equivalents at end of period	1724.6	2273.8

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions		Common Stock Par Value	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income [Member]	Total
Beginning Balance at Dec. 31, 2007		5.6	18441.1	4387.6	156.1	22990.4
Beginning Balance at Dec. 31, 2007	556.2
Net income				1338.6		1338.6
Change in net unrealized gains/losses on investments					-380.4	-380.4
Change in net unrealized losses on cash flow hedges					-0.3	-0.3
Change in net periodic pension and postretirement costs					-1.6	-1.6
Repurchase and retirement of common stock	-46.5
Repurchase and retirement of common stock		-0.5	-1546.6	-1328.1		-2875.2
Issuance of common stock under employee stock plans, net of related tax benefits	2.4
Issuance of common stock under employee stock plans, net of related tax benefits			184.3			184.3
Adoption of EITF 06-4				-1.3		-1.3
Ending Balance at Jun. 30, 2008	512.1
Ending Balance at Jun. 30, 2008		5.1	17078.8	4396.8	-226.2	21254.5
Beginning Balance at Dec. 31, 2008		5	16,843	5479.4	-895.7	21431.7
Beginning Balance at Dec. 31, 2008	503.2
Cumulative effect of adoption of FSP FAS 115-2 and FAS 124-2, net of taxes				88.9	-88.9	0
Net income				1273.9		1273.9
Change in net unrealized gains/losses on investments					583.1	583.1
Non-credit component of other-than-temporary impairment losses on investments, net of taxes					-21.3	-21.3
Change in net unrealized losses on cash flow hedges					-2.1	-2.1
Change in net periodic pension and postretirement costs					-0.4	-0.4
Foreign currency translation adjustments					2	2
Repurchase and retirement of common stock	-27.4
Repurchase and retirement of common stock		-0.2	-915.3	-202.7		-1118.2
Issuance of common stock under employee stock plans, net of related tax benefits	1.5
Issuance of common stock under employee stock plans, net of related tax benefits			104.2			104.2
Ending Balance at Jun. 30, 2009	477.3
Ending Balance at Jun. 30, 2009		4.8	16031.9	6639.5	-423.3	22252.9

Notes to Financial Statements

Notes to Financial Statements
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1. Organization	1.Organization References to the terms we, our, us, WellPoint or the Company used throughout these Notes to Consolidated Financial Statements refer to WellPoint, Inc., an Indiana corporation, and unless the context otherwise requires, its direct and indirect subsidiaries. We are the largest health benefits company in terms of medical membership in the United States, serving 34.2 medical members as of June30, 2009. We offer a broad spectrum of network-based managed care plans to large and small employer, individual, Medicaid and senior markets. Our managed care plans include preferred provider organizations, or PPOs; health maintenance organizations, or HMOs; point-of-service, or POS, plans; traditional indemnity plans and other hybrid plans, including consumer-driven health plans, or CDHPs; hospital only and limited benefit products. In addition, we provide a broad array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. We also provide an array of specialty and other products and services such as life and disability insurance benefits, pharmacy benefit management, or PBM, specialty pharmacy, dental, vision, behavioral health benefit services, radiology benefit management, analytics-driven personal health care guidance, long-term care insurance and flexible spending accounts. We are licensed to conduct insurance operations in all 50 states through our subsidiaries. We are an independent licensee of the Blue Cross and Blue Shield Association, or BCBSA, an association of independent health benefit plans. We serve our members as the Blue Cross licensee for California and as the Blue Cross and Blue Shield, or BCBS, licensee for: Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as the BCBS licensee in 10 New York City metropolitan and surrounding counties, and as the Blue Cross or BCBS licensee in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.) and Wisconsin. In a majority of these service areas we do business as Anthem Blue Cross, Anthem Blue Cross Blue Shield or Empire Blue Cross Blue Shield (in our New York service areas). We also serve customers throughout the country as UniCare.
2. Basis of Presentation	2.Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three and six months ended June30, 2009 and 2008 have been recorded. The results of operations for the three and six months ended June30, 2009 are not necessarily indicative of the results that may be expected for the full year ending December31, 2009. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December31, 2008 included in our Form 10-K. Certain of our subsidiaries operate outside of the United States and have functional currencies other than the U.S. dollar, or USD. We translate the assets and liabilities of those subsidiaries to USD using the exchange rate in effect at the end of the period. We translate the revenues and expenses of those subsidiaries to USD using the average exchange rates in effect during the period. The net effect of these translation adjustments is included in Foreign currency translation adjustments in our consolidated statements of shareholders equity. Certain prior year amounts have been reclassified to conform to the current year presentation.
3. Investments	3.Investments In April 2009, the Financial Accounting Standards Board, or FASB, issued FASB Staff Position, or FSP, No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, or the FSP. The FSP applies to fixed maturity securities only and provides new guidance on the recognition and presentation of other-than-temporary impairments. In addition, the FSP requires additional disclosures related to other-than-temporary impairments. Under this revised guidance, if a fixed maturity security is in an unrealized loss position and we have the intent to sell the fixed maturity security, or it is more likely than not that we will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to other-than-temporary impairment losses recognized in income in our consolidated income statements. For impaired fixed maturity securities that we do not intend to sell or it is more likely than not that we will not have to sell such securities, but we expect that we will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in other-than-temporary impairment losses recognized in income in our consolidated income statements and the non-credit component of the other-than-temporary impairment is recognized in other comprehensive income. The credit component of an other-than temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security. The net present value is calculated by discounting our best estimate of projected future cash flows at the effective interest rate implicit in the fixed maturity security at the date of acquisition. For mortgage-backed and asset-backed securities, cash flow estimates are based on assumptions regarding the underlying collateral including prepayment speeds, vintage, type of underlying asset, geographic concentrations, default rates, recoveries and changes in value. For all other debt securities, cash flow estimates are driven by assumptions regarding probability of default, including changes in credit ratings, and estimates regarding timing and amount of recoveries associated with a default. Furthermore, unrealized losses entirely caused by non-credit related factors related to fixed maturity securities for which we expect to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income. Upon adoption of the FSP on April1, 2009, we recorded a cumulative-effect adjustment, net of taxes, of $88.9 as of the beginning of the period of adoption, April1, 2009, to reclassify the non-credit component of previously recognized other-than-temporary impairments from retained earnings to accumulated other comprehensive income. In accordance with Statement of Financial Accounting Standards, or FAS, No.115, Accounting for Certain Investments in Debt and Equity Securities, we classify the fixed maturity and equity securities in our investment portfolio as available-for-sale or trading and report thos
4. Fair Value	4.Fair Value Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level inputs, as defined by FAS No.157, Fair Value Measurements, are as follows: LevelInput: Input Definition: LevelI Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. LevelII Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date. LevelIII Unobservable inputs that reflect managements best estimate of what market participants would use in pricing the asset or liability at the measurement date. A summary of fair value measurements by level for assets measured at fair value on a recurring basis is as follows: Level I Level II LevelIII Total June30, 2009: Cash equivalents $ 1,398.7 $ $ $ 1,398.7 Investments available-for-sale: Fixed maturity securities 370.6 14,317.1 317.0 15,004.7 Equity securities 822.8 52.7 5.5 881.0 Other invested assets, current 17.1 17.1 Securities lending collateral 141.6 183.6 325.2 Derivatives ($0.9 reported with other current assets and $86.3 reported with other noncurrent assets) 87.2 87.2 Total $ 2,750.8 $ 14,640.6 $ 322.5 $ 17,713.9 December31, 2008: Cash equivalents $ 1,544.0 $ $ $ 1,544.0 Investments available-for-sale: Fixed maturity securities 309.9 12,716.8 346.5 13,373.2 Equity securities 1,029.7 77.8 11.2 1,118.7 Other invested assets, current 23.6 23.6 Securities lending collateral 235.5 293.5 529.0 Derivatives (reported with other noncurrent assets) 122.1 122.1 Total $ 3,142.7 $ 13,210.2 $ 357.7 $ 16,710.6 A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the three months ended June30, 2009 and 2008 is as follows: Level III Fair Value Measurements Fixed Maturity Securities Equity Securities Total Three Months Ended June30, 2009: Beginning balance at April1, 2009 $ 316.8 $ 6.6 $ 323.4 Total gains (losses): Recognized in net income (13.1 ) (0.1 ) (13.2 ) Recognized in accumulated other comprehensive income 26.5 (0.8 ) 25.7 Purchases, sales, issuances and settlements, net (5.5 ) (1.1 ) (6.6 ) Transfers into Level III 1.3 0.9 2.2 Transfers out of Level III (9.0 ) (9.0 ) Ending balance at June30, 2009
5. Income Taxes	5.Income Taxes As of June30, 2009, as further described below, certain of our tax years are being examined by the Internal Revenue Service, or IRS, and various state and local authorities. In addition, we continue to discuss certain industry issues with the IRS. As of June30, 2009, the examinations of our 2008, 2007, 2006, 2005 and 2004 tax years are nearing conclusion. In addition, there are several years with ongoing disputes related to pre-acquisition companies that are nearing conclusion. Many of the issues in open tax years have been resolved; however, several of the examinations still require approval from the Joint Committee on Taxation before they can be finalized. During the three months ended June30, 2009 and 2008, we recognized income tax expense of $359.0 and $435.5, respectively, which represents effective tax rates of 34.1% and 36.7%, respectively. During the six months ended June30, 2009 and 2008, we recognized income tax expense of $672.2 and $726.6, respectively, which represents effective tax rates of 34.5% and 35.2%, respectively. The 260 basis point decrease in the effective tax rate during the three months ended June30, 2009 was primarily due to a decrease in our overall state taxes and the volatility on tax sensitive investments. The 70 basis point decrease in the effective tax rate during the six months ended 2009 was primarily due to the volatility on certain tax sensitive investments.
6. Derivative Instruments and Hedging Activities	6.Derivative Instruments and Hedging Activities In March 2008, the FASB issued FAS No.161, Disclosures about Derivative Instruments and Hedging Activities, or FAS 161. FAS 161 requires expanded disclosures regarding the location and amounts of derivative instruments in an entitys financial statements, how derivative instruments and related hedged items are accounted for under FAS No.133, Accounting for Derivative Instruments and Hedging Activities, or FAS 133, and how derivative instruments and related hedged items affect an entitys financial position, operating results and cash flows. We adopted FAS 161 on January1, 2009. The adoption of FAS 161 did not have an impact on our consolidated financial position and results of operations. In accordance with FAS 133, all investments in derivatives are recorded as assets or liabilities at fair value. A derivative is defined as an instrument whose value is derived from an underlying instrument, index or rate, has a notional amount, requires little or no initial investment and can be net settled. We typically invest in the following types of derivative financial instruments: interest rate swaps, forward contracts, call options, credit default swaps, embedded derivatives and warrants. Derivatives embedded within non-derivative instruments (such as options embedded in convertible fixed maturity securities) are bifurcated from the host instrument when the embedded derivative is not clearly and closely related to the host instrument. Our use of derivatives is limited by statutes and regulations promulgated by the various regulatory bodies to which we are subject, and by our own derivative policy. We have exposure to economic losses due to interest rate risk arising from changes in the level or volatility of interest rates. We attempt to mitigate our exposure to interest rate risk through active portfolio management, which includes rebalancing our existing portfolios of assets and liabilities, as well as changing the characteristics of investments to be purchased or sold in the future. In addition, derivative financial instruments are used to modify the interest rate exposure of certain liabilities or forecasted transactions. These strategies include the use of interest rate swaps and forward contracts, which are used to lock-in interest rates or to hedge (on an economic basis) interest rate risks associated with variable rate debt. We have used these types of instruments as designated hedges against specific liabilities. If certain correlation, hedge effectiveness and risk reduction criteria are met, a derivative may be specifically designated as a hedge of exposure to changes in fair value or cash flow. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the nature of any hedge designation thereon. Amounts excluded from the assessment of hedge effectiveness, if any, as well as the ineffective portion of the gain or loss, are reported in results of operations immediately. If the derivative is not designated as a hedge, the gain or loss resulting from the change in the fair value of the derivative is recognized in results of opera
7. Retirement Benefits	7.Retirement Benefits The components of net periodic benefit (credit) cost included in the consolidated statements of income for the three months ended June30, 2009 and 2008 are as follows: PensionBenefits Other Benefits 2009 2008 2009 2008 Service cost $ 5.9 $ 7.6 $ 1.8 $ 1.4 Interest cost 23.0 25.0 8.0 8.2 Expected return on assets (35.9 ) (38.7 ) (0.7 ) (0.9 ) Recognized actuarial loss 0.5 1.8 1.3 Amortization of prior service credit (0.2 ) (0.2 ) (2.5 ) (2.4 ) Curtailment gain (1.4 ) Net periodic benefit (credit) cost $ (6.7 ) $ (7.7 ) $ 8.4 $ 7.6 The components of net periodic benefit (credit) cost included in the consolidated statements of income for the six months ended June30, 2009 and 2008 are as follows: PensionBenefits OtherBenefits 2009 2008 2009 2008 Service cost $ 11.4 $ 15.2 $ 3.6 $ 2.9 Interest cost 45.7 49.9 15.9 16.4 Expected return on assets (71.4 ) (77.4 ) (1.3 ) (1.8 ) Recognized actuarial loss 1.1 3.5 2.6 Amortization of prior service credit (0.4 ) (0.4 ) (4.9 ) (4.8 ) Curtailment gain (1.4 ) Net periodic benefit (credit) cost $ (13.6 ) $ (14.1 ) $ 16.8 $ 15.3 For the year ending December31, 2009, no material contributions are expected to be necessary to meet the Employee Retirement Income Security Act, or ERISA, required funding levels; however, we may elect to make discretionary contributions up to the maximum amount deductible for income tax purposes. A contribution of $0.3 was made to our retirement benefit plans during the three and six months ended June30, 2009.
8. Debt	8.Debt In May 2009 and March 2009, we repurchased $300.0 and $400.0, respectively, of our $1,090.0 face value due at maturity zero coupon notes. The notes were issued in August 2007 in a private placement transaction. We paid cash totaling $351.1 to repurchase the notes, which had a remaining carrying value of $193.4 at June30, 2009 and were classified in current portion of long-term debt. In July 2009, we paid cash of $195.9 to repurchase the remaining balance of the notes. On February5, 2009, we issued $400.0 of 6.000% notes due 2014 and $600.0 of 7.000% notes due 2019 under our shelf registration statement. The proceeds from this debt issuance have been used for general corporate purposes, including, but not limited to, repayment of current maturities of long-term debt and repurchasing shares of our common stock. The notes have a call feature that allows us to repurchase the notes at any time at our option and a put feature that allows a note holder to require us to repurchase the notes upon the occurrence of both a change of control event and a downgrade of the notes. We have a senior revolving credit facility, or the facility, with certain lenders for general corporate purposes. The facility, as amended, provides credit up to $2,392.0, which matures on September30, 2011. The interest rate on this facility is based on either (i)the LIBOR rate plus a predetermined percentage rate based on our credit rating at the date of utilization, or (ii)a base rate as defined in the facility agreement. Our ability to borrow under this facility is subject to compliance with certain covenants. There were no amounts outstanding under this facility as of June30, 2009 or during the three or six months then ended. At June30, 2009, we had $2,392.0 available under this facility. We have an authorized commercial paper program of up to $2,500.0, the proceeds of which may be used for general corporate purposes. At June30, 2009, we had $648.2 outstanding under this program. Commercial paper borrowings have been classified as long-term debt at June30, 2009 and December31, 2008 in accordance with FAS No.6, Classification of Short-Term Obligations Expected to be Refinanced, as our practice and intent is to replace short-term commercial paper outstanding at expiration with additional short-term commercial paper for an uninterrupted period extending for more than one year or our ability to redeem our commercial paper with borrowings under the senior credit facility described above. We are a member of the Federal Home Loan Bank of Indianapolis and the Federal Home Loan Bank of Cincinnati, collectively, the FHLBs, and as a member we have the ability to obtain cash advances subject to certain requirements. In order to obtain cash advances, we are required to pledge securities as collateral to the FHLBs, initially equal to a certain percentage of the cash borrowings, depending on the type of securities pledged as collateral. The market value of the collateral is monitored daily by the FHLBs, and if it falls below the required percentage of the cash borrowings, we are required to pledge additional securities as collateral or repay a portion of the outstand
9. Commitments and Contingencies	9.Commitments and Contingencies Litigation In July 2005, we entered into a settlement agreement with representatives of more than 700,000 physicians nationwide to resolve certain cases brought by physicians. The cases resolved were known as the CMA Litigation, the Shane Litigation, the Thomas Litigation (Kenneth Thomas, M.D., et al. vs. Blue Cross Blue Shield Association, et al.) and certain other similar cases brought by physicians. Final monetary payments were made in October 2006. Following its acquisition in 2005, WellChoice Inc., or WellChoice, was merged with and into a wholly-owned subsidiary of WellPoint. Since the WellChoice transaction closed on December28, 2005, after we reached settlement with the plaintiffs, WellChoice continued to be a defendant in the Thomas (now known as Love) Litigation and was not affected by the prior settlement between us and plaintiffs. The Love Litigation alleged that the BCBSA and the Blue Cross and Blue Shield plans violated the Racketeer Influenced and Corrupt Organizations Act, or RICO. On April27, 2007, we, along with 22 other Blue Cross and Blue Shield plans and the BCSBA, announced a settlement of the Love Litigation. The Court granted final approval of the settlement on April20, 2008. The appeal of the settlement was dismissed on June19, 2009. We tendered final payment under the settlement agreement on June26, 2009. The settlement did not have a material effect on our consolidated financial position or results of operations. Prior to the acquisition of WellPoint Health Networks Inc., or WHN, the group benefit operations, or GBO, of John Hancock Mutual Life Insurance Company, or John Hancock, entered into a number of reinsurance arrangements, including with respect to personal accident insurance and the occupational accident component of workers compensation insurance, a portion of which was originated through a pool managed by Unicover Managers,Inc. Under these arrangements, John Hancock assumed risks as a reinsurer and transferred certain of such risks to other companies. Similar reinsurance arrangements were entered into by John Hancock following WHNs acquisition of the GBO of John Hancock. These various arrangements have become the subject of disputes, including a number of legal proceedings to which John Hancock is a party. We were in arbitration with John Hancock regarding these arrangements. The arbitration panels Phase I ruling addressed liability. In April 2007, the arbitration panel issued a Phase II ruling stating the amount we owe to John Hancock for losses and expenses John Hancock paid through June30, 2006. The panel further outlined a process for determining our liability for losses and expenses paid after June30, 2006, which liability has not yet been determined. We filed a Petition to Confirm, which was granted by the Court. John Hancock filed a notice of appeal with the Seventh Circuit Court of Appeals. The matter has been fully briefed and is pending before the Seventh Circuit Court of Appeals. We believe that the liability that may result from this matter is unlikely to have a material adverse effect on our consolidated financial condition or results of operations.
10. Capital Stock	10.Capital Stock Stock Repurchase Program Under our Board of Directors authorization, we maintain a common stock repurchase program. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are effected from time to time in the open markets through negotiated transactions and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. During the six months ended June30, 2009, we repurchased and retired approximately 27.4 shares at an average per share price of $40.77, for an aggregate cost of $1,118.2. During the six months ended June30, 2008, we repurchased and retired approximately 46.5 shares at an average per share price of $61.86, for an aggregate cost of $2,875.2. The excess of cost of the repurchased shares over par value is charged on a pro rata basis to additional paid-in capital and retained earnings. On March5, 2009, our Board of Directors authorized an increase of $1,500.0 in our stock repurchase program. As of June30, 2009, $1,404.0 remained authorized for future repurchases. Subsequent to June30, 2009, we repurchased and retired approximately 2.3 shares for an aggregate cost of approximately $116.8, leaving approximately $1,287.2 for authorized future repurchases at July22, 2009. 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. Stock Incentive Plans A summary of stock option activity for the six months ended June30, 2009 is as follows: Number ofShares Weighted- Average OptionPrice per Share Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at January1, 2009 24.2 $ 62.36 Granted 6.8 30.27 Exercised (0.6 ) 25.16 Forfeited or expired (0.8 ) 66.04 Outstanding at June30, 2009 29.6 55.60 5.6 $ 235.5 Exercisable at June30, 2009 17.8 60.61 5.0 $ 91.9 A summary of the status of nonvested restricted stock activity, including restricted stock units, for the six months ended June30, 2009 is as follows: Restricted StockShares And Units Weighted- Average GrantDate Fair Value perShare Nonvested at January 1, 2009 1.3 $ 71.15 Granted 3.9 30.38 Vested (0.5 ) 75.06 Forfeited (0.1 ) 57.32 Nonvested at June 30, 2009 4.6 36.62
11. Earnings per Share	11.Earnings per Share The denominator for basic and diluted earnings per share for the three and six months ended June30, 2009 and 2008 is as follows: ThreeMonthsEnded June30 SixMonthsEnded June30 2009 2008 2009 2008 Denominator for basic earnings per share weighted average shares 482.5 519.7 489.2 531.2 Effect of dilutive securities employee and director stock options and non-vested restricted stock awards 3.8 2.9 3.0 3.9 Denominator for diluted earnings per share 486.3 522.6 492.2 535.1 During the three months ended June30, 2009 and 2008, weighted average shares related to certain stock options of 17.5 and 18.9, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive. During the six months ended June30, 2009 and 2008, weighted average shares related to certain stock options of 19.3 and 15.3, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive. During the six months ended June30, 2009, we issued approximately 3.9 restricted stock units under our stock incentive plans, 0.7 of whose vesting is contingent upon us meeting specified annual operating gain targets for 2009. The 0.7 restricted stock units have been excluded from the denominator for diluted earnings per share and will be included only if and when the contingency is met.
12. Segment Information	12.Segment Information Our organizational structure, is comprised of three reportable segments: Commercial, Consumer and Other. Our Commercial and Consumer segments both offer a diversified mix of managed care products, including PPOs, HMOs, traditional indemnity benefits and POS plans, as well as a variety of hybrid benefit plans, including CDHPs, hospital only and limited benefit products. Our Commercial segment includes Local Group (including UniCare), National Accounts and certain other ancillary business operations (dental, vision, life and disability and workers compensation). Business units in the Commercial segment offer fully-insured products and provide a broad array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. Our Consumer segment includes Senior, State-Sponsored and Individual business. Senior business includes services such as Medicare Part D, Medicare Advantage, and Medicare Supplement, while State-Sponsored business includes our managed care alternatives for the Medicaid and State Childrens Health Insurance Plan programs. Our Other segment includes the Comprehensive Health Solutions Business unit, or CHS, that brings together our resources focused on optimizing the quality of health care and cost of care management. CHS includes provider relations, care and disease management, employee assistance programs, including behavioral health, radiology benefit management, analytics-driven personal health care guidance and our PBM business, which includes NextRx, and our specialty pharmacy, PrecisionRx Specialty Solutions. Our Other segment also includes results from our Federal Government Solutions, or FGS, business. FGS business includes the Federal Employee Program and National Government Services, Inc., which acts as a Medicare contractor in several regions across the nation. The Other segment also includes other businesses that do not meet the quantitative thresholds for an operating segment as defined in FAS No.131, Disclosures about Segments of an Enterprise and Related Information, as well as intersegment sales and expense eliminations and corporate expenses not allocated to the other reportable segments. On April13, 2009 we announced that we entered into a definitive agreement to sell our NextRx subsidiaries, or PBM business, to Express Scripts, Inc., or Express Scripts, one of the largest PBM companies in North America, for $4,675.0, consisting of at least $3,275.0 in cash, subject to customary working capital and indebtedness adjustments, and the balance in Express Scripts common stock. In connection with the agreement, at closing, we will enter into a 10-year contract for Express Scripts to provide PBM services to us following the close of the transaction. The transaction is expected to close in the second half of 2009, subject to customary closing conditions and any required regulatory approvals. As a result of our decision to sell our PBM business, we determined that the plan of sale criteria i
13. Comprehensive Income	13.Comprehensive Income The components of comprehensive income for the three and six months ended June30, 2009 and 2008 are as follows: ThreeMonthsEnded June30 Six Months Ended June30 2009 2008 2009 2008 Net income $ 693.5 $ 750.5 $ 1,273.9 $ 1,338.6 Change in net unrealized losses on investments 430.5 (219.1 ) 583.1 (380.4 ) Non-credit component of other-than-temporary impairment losses on investments (21.3 ) (21.3 ) Change in net unrealized losses on cash flow hedges 0.1 (0.2 ) (2.1 ) (0.3 ) Change in net periodic pension and postretirement costs (0.2 ) (0.8 ) (0.4 ) (1.6 ) Foreign currency translation adjustments 2.0 2.0 Comprehensive income $ 1,104.6 $ 530.4 $ 1,835.2 $ 956.3
14. Subsequent Events	14.Subsequent Events In May 2009, the FASB issued FAS No.165, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. We have evaluated subsequent events for recognition or disclosure through the time of filing these consolidated financial statements on Form 10-Q with the U.S. Securities and Exchange Commission on July29, 2009.

Document Information

Document Information
	6 Months Ended Jun. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Amendment Description	N.A.
Document Period End Date	2009-06-30

Entity Information

Entity Information (USD $)
	6 Months Ended Jun. 30, 2009	Jul. 22, 2009	Jun. 30, 2008
Entity [Text Block]
Trading Symbol	WLP
Entity Registrant Name	WELLPOINT INC
Entity Central Index Key	0001156039
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		475,057,412
Entity Public Float			$24,364,451,185