Company: ELV
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001156039-25-000010
Chunk: 182

Company: Elevance Health, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 8
Chunk 182
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,” in January 2023, we made an equity investment that resulted in our minority interest ownership of Liberty Dental. As part of the Liberty Dental transaction, we entered into a shareholders’ agreement with the majority owners that provides for certain rights and obligations of each party, including certain put and call options. These options could result in our purchase of the units held by the majority owners in 2026 and 2027. We have calculated the fair value of the net put option, which is a Level III measurement (see Note 7, “Fair Value”), using a Monte Carlo simulation, which relies on assumptions, including cash flow projections, risk-free rates, volatility and details specific to the put and call options. Significant changes in assumptions could result in significantly lower or higher fair value measurements. The net put option’s fair value liability of $85 determined as of December 31, 2023 is included under the caption “Other noncurrent liabilities” in our consolidated balance sheets as of December 31, 2024 and 2023. We have elected to not mark the net put option to market, and the carrying value of the net put option will remain on the consolidated balance sheets until it is exercised or expires.

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Elevance Health, Inc.Notes to Consolidated Financial Statements (continued)

7. 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 FASB guidance for fair value measurements and disclosures, are as follows:Level Input: Input Definition:Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.Level II 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.Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.The following methods, assumptions and inputs were used to determine the fair value of each class of the following assets and liabilities recorded at fair value in the consolidated balance sheets:Cash equivalents: Cash equivalents primarily consist of highly rated money market funds with maturities of three months or less and are purchased daily at par value with specified yield rates. Due to the short-term nature of the funds, we designate all cash equivalents as Level I.Fixed maturity securities, available-for-sale: Fair values of available-for-sale fixed