To our shareholders, customers and communities:

WellPoint, Inc. was launched on November 30, 2004, when we completed the merger of Anthem, Inc. and WellPoint Health Networks Inc. Now we are moving forward to achieve our full potential as the nation’s leading health benefits company.

We are building an organization that will be a recognized leader in improving the quality of health care, introducing innovative products, and delivering world-class customer service. We will define a new role for health benefits companies to help meet the challenges facing the American health care system.

Building the New WellPoint

We are quickly integrating the tremendous resources that we have brought together. We have put in place the structure and leadership of the new organization. By adopting best practices and realizing synergies, we fully expect to build upon our outstanding results of recent years and achieve even greater competitive advantage.

We’ve made a commitment to synergies of $150 million for 2005 and $250 million for 2006, and we’re on track to meet that commitment. In addition, we will seize opportunities created by the merger to increase our value to customers.

We are also committed to further reductions in administrative expenses as a percentage of revenue. The size and scale of our new company allows us to spread administrative costs over a much larger membership base, helping keep premiums affordable for our members. We continue to invest in sophisticated tools that reduce administrative expense while improving customer service.

Innovation to Reach New Customers

WellPoint, Inc. unites two companies that have led the industry in attracting new members over the past eight years. In 2004, our combined membership grew by almost 1.7 million medical members, or by 6.4 percent on a comparable basis to 2003.

Helping to drive our growth are innovative products that make coverage affordable, available and attractive to more people and to companies of all sizes. One example is our new Tonik suite of products, which is featured in this report. Approximately 70 percent of Tonik members are in the targeted 19- to 29-year-old age range, and 70 percent were previously uninsured.

Our Blue Access Economy plan, introduced in December 2004, is designed to provide a solid foundation of basic health coverage, including a range of deductible options, a prescription drug card and office visit co-payments. To date, 45 percent of new members in this plan had been uninsured.

We are also attracting new members through our consumer-directed health plans, which are integrated into tax-advantaged Health Savings Accounts, or HSAs. We support our HSA products with Internet-based tools that help our members make informed decisions. One such tool helps members estimate and compare the likely total cost for different treatment plans.

Additionally, we are offering new Medicare products, such as SmartValue—the first Medicare Advantage private fee-for-service plan in California. SmartValue is unique among Medicare Advantage plans because enrollees may choose any doctor or specialist who accepts Medicare payment and agrees to the terms and conditions of the plan.

Our merger expands our opportunities to implement innovative products in our markets across the country, based on our strong local presence and knowledge of local customer needs. Clearly, product innovation provides a great growth opportunity for us to develop better health care options for more Americans.