TAMPA, Fla., Aug. 4, 2017 /PRNewswire/ -- WellCare Health
Plans, Inc. (NYSE: WCG) ("WellCare") today reported results for the
quarter ended June 30, 2017. As
determined under generally accepted accounting principles (GAAP),
net income for the second quarter of 2017 was $74.1 million, or $1.65 per diluted share. Adjusted net income for
the second quarter of 2017 was $113.4
million, or $2.52 per diluted
share.
"We produced substantial year-over-year premium growth in the
second quarter, coupled with strong margins," said Ken Burdick, WellCare's chief executive officer.
"All three lines of business contributed to year-over-year revenue
growth through a combination of organic growth and acquisitions.
While we are pleased to increase our 2017 adjusted earnings per
diluted share guidance, we are focused on 2018 and beyond."
|
Key
Metrics
|
2Q17
|
2Q16
|
|
Earnings per diluted
share (EPS) (GAAP)
|
$1.65
|
$2.04
|
|
Adjusted
EPS(1)
|
$2.52
|
$2.23
|
|
Net income margin
(GAAP)
|
1.7%
|
2.5%
|
|
Adjusted net income
margin(1)
|
2.7%
|
2.8%
|
|
|
|
|
Total Premium Revenue
(GAAP) ($ millions)
|
$4,293.6
|
$3,590.6
|
|
Adjusted Premium
Revenue(1) ($ millions)
|
$4,262.4
|
$3,504.7
|
|
|
|
|
Segment Premium
Revenue ($ millions):
|
|
|
|
Medicaid Health Plans
(GAAP)
|
$2,751.4
|
$2,378.4
|
|
Adjusted Medicaid
Health Plans(1)
|
$2,720.2
|
$2,292.5
|
|
Medicare Health
Plans
|
$1,316.6
|
$987.5
|
|
Medicare Prescription
Drug Plans (PDP)
|
$225.6
|
$224.7
|
|
|
|
|
Segment Medical
Benefits Ratios (MBR):
|
|
|
|
Medicaid Health Plans
(GAAP)
|
86.8%
|
83.6%
|
|
Adjusted Medicaid
Health Plans(1)
|
87.7%
|
86.7%
|
|
Medicare Health
Plans
|
86.4%
|
84.2%
|
|
Medicare Prescription
Drug Plans (PDP)
|
86.5%
|
75.1%
|
|
|
|
|
Selling, General and
Administrative (SG&A) Ratio (GAAP)
|
8.5%
|
7.7%
|
|
Adjusted SG&A
Ratio(1)
|
7.9%
|
7.7%
|
|
|
|
(1)
|
Refer to the
Basis of Presentation for a discussion of adjusted (non-GAAP)
financial measures.
|
Key Highlights
- GAAP and adjusted total premium revenue for the second quarter
of 2017 increased 19.6 percent and 21.6 percent, respectively,
compared with the second quarter of 2016.
- GAAP and adjusted Medicaid Health Plans premium revenue for the
second quarter of 2017 increased 15.7 percent and 18.7 percent,
respectively, compared with the second quarter of 2016.
- Medicare Health Plans premium revenue for the second quarter of
2017 increased 33.3 percent compared with the second quarter of
2016.
- As previously announced, WellCare completed its acquisition of
Universal American Corp. ("Universal American") on April 28, 2017. The company's consolidated
financial results for the second quarter of 2017 include the
results of Universal American since that date.
- On May 1, 2017, WellCare began
services under the MO HealthNet Managed Care (Medicaid) program's
statewide expansion. As of June 30,
2017, the company served approximately 298,000 Medicaid
members in Missouri.
- On May 1, 2017, WellCare
completed its previously announced acquisition of certain Arizona
Medicaid assets of Phoenix Health Plan ("PHP assets"). The
transaction included the transfer of PHP's Medicaid members to
Care1st Arizona Health Plan, Inc. ("Care1st Arizona"), a wholly owned subsidiary of
WellCare. As of June 30, 2017,
Care1st Arizona served
approximately 158,000 Medicaid members in Arizona.
2017 Financial Outlook
WellCare is increasing its full-year 2017 adjusted EPS guidance
to a range of $6.75 to $6.95 from its
previous guidance range of $6.55 to
$6.80 per diluted share. Please refer to the guidance table
included in this release for specific 2017 guidance metrics.
Consolidated Operations Results
GAAP net income for the second quarter of 2017 was $74.1 million, or $1.65 per diluted share, compared with GAAP net
income of $90.8 million, or
$2.04 per diluted share, for the
second quarter of 2016. The year-over-year decrease was primarily
the result of the $26.1 million,
pretax, or $0.37 per diluted share,
loss on extinguishment of debt related to the company's early
redemption, on April 7, 2017, of its
5.75% $900.0 million of senior notes
otherwise due 2020 ("2020 notes"), and one-time transaction and
integration costs of $25.6 million,
pretax, or $0.36 per diluted share,
related to the acquisition of Universal American, partially offset
by continued operational execution.
Adjusted net income for the second quarter of 2017 was
$113.4 million, or $2.52 per diluted share, compared with adjusted
net income of $99.5 million, or
$2.23 per diluted share, for the
second quarter of 2016. The year-over-year increase in adjusted net
income was primarily the result of premium revenue growth in the
company's Medicaid Health Plans and Medicare Health Plans segments
and continued operational execution.
GAAP net income margin for the second quarter of 2017 was 1.7
percent compared with 2.5 percent for the second quarter of 2016.
Adjusted net income margin for the second quarter of 2017 was 2.7
percent compared with 2.8 percent for the second quarter of
2016.
GAAP and adjusted total premium revenue of $4.3 billion for the second quarter of 2017
increased 19.6 percent and 21.6 percent, respectively, compared
with the second quarter of 2016. The year-over-year increases in
GAAP and adjusted total premium revenue were primarily the result
of the company's acquisitions of Universal American and Care1st
Arizona and organic growth across
all three lines of business.
GAAP SG&A expense was $365.5
million for the second quarter of 2017 compared with
$278.0 million for the second
quarter of 2016. The GAAP SG&A expense ratio was 8.5 percent
for the second quarter of 2017 compared with 7.7 percent for the
second quarter of 2016. The year-over-year increases were primarily
the result of the company's acquisitions of Universal American,
including one-time transaction and integration costs, and Care1st
Arizona as well as staffing and
infrastructure costs to support organic growth.
Adjusted SG&A expense was $336.7
million for the second quarter of 2017 compared with
$270.0 million for the second quarter
of 2016. The adjusted SG&A expense ratio was 7.9 percent for
the second quarter of 2017 compared with 7.7 percent for the second
quarter of 2016. The year-over-year increases were primarily the
result of the company's acquisitions of Universal American and
Care1st Arizona as well as
staffing and infrastructure costs to support organic growth.
Medicaid Health Plans Segment Results
The company's Medicaid Health Plans segment produced strong
growth in the second quarter of 2017 compared with the second
quarter of 2016. The launch of the company's expanded Missouri
Medicaid business, two acquisitions in Arizona and new Nebraska Medicaid business
were the primary drivers in the year-over-year increases in
Medicaid Health Plans membership as well as GAAP and adjusted
premium revenue as described below:
- Medicaid Health Plans membership was 2.8 million members at
June 30, 2017, and increased by
402,000 members, or 16.6 percent, compared with June 30, 2016. Medicaid Health Plans membership
increased sequentially by 205,000 members, or 7.8 percent, from
March 31, 2017.
- GAAP and adjusted Medicaid Health Plans premium revenue of
$2.8 billion and $2.7 billion, respectively, for the second
quarter of 2017 increased 15.7 percent and 18.7 percent,
respectively, compared with the second quarter of 2016.
The GAAP Medicaid Health Plans MBR was 86.8 percent for the
second quarter of 2017 compared with 83.6 percent for the second
quarter of 2016. The year-over-year increase was primarily due to
the effect of the ACA industry fee moratorium and, as a result, the
elimination of associated Medicaid reimbursement revenue, the
addition of new Medicaid businesses in Arizona and Nebraska, and new members from the statewide
expansion of the Missouri Medicaid program.
The adjusted Medicaid Health Plans MBR was 87.7 percent for the
second quarter of 2017 compared with 86.7 percent for the second
quarter of 2016. The year-over-year increase was primarily due to
the addition of new Medicaid businesses in Arizona and Nebraska and new members from the statewide
expansion of the Missouri Medicaid program.
Medicare Health Plans Segment Results
Medicare Health Plans membership was 484,000 members as of
June 30, 2017, and increased by
153,000 members, or 46.2 percent, compared with June 30, 2016, primarily as a result of the
company's acquisition of Universal American, 2017 bid positioning
and continued execution on sales and retention initiatives.
Sequentially, Medicare Health Plans membership increased by 128,000
members, or 36.0 percent, from March 31,
2017, primarily as a result of the company's acquisition of
Universal American.
Medicare Health Plans premium revenue of $1.3 billion for the second quarter of 2017
increased 33.3 percent compared with the second quarter of 2016.
The increase was primarily due to the company's acquisition of
Universal American and year-over-year organic membership
growth.
The Medicare Health Plans MBR for the second quarter of 2017 was
86.4 percent compared with 84.2 percent for the second quarter
of 2016. The 220 basis point increase is primarily the result of
the company's acquisition of Universal American and increased
investments in quality initiatives.
Medicare Prescription Drug Plans (PDP) Segment
Results
Medicare PDP membership was 1.1 million as of June 30, 2017, and increased by 104,000 members,
or 10.3 percent, compared with June 30,
2016, primarily as a result of the company's 2017 bid
positioning. Sequentially, Medicare PDP membership increased by
17,000 members, or 1.5 percent, from March 31, 2017.
Medicare PDP premium revenue of $225.6
million for the second quarter of 2017 was essentially flat
compared with the second quarter of 2016.
The Medicare PDP segment MBR for the second quarter of 2017 was
86.5 percent compared with 75.1 percent for the second quarter of
2016. The year-over-year increase was primarily the result of the
company's 2017 bid strategy.
Operating Cash Flow and Financial Condition
Net cash used by operating activities was $59.6 million for the three months ended
June 30, 2017, compared with net cash
provided by operating activities of $51.2
million for the three months ended June 30, 2016.
As of June 30, 2017, unregulated
cash and investments were approximately $298.6 million compared with $833.3 million as of June
30, 2016 and $1.9 billion as
of March 31, 2017. The
year-over-year decrease was primarily the result of the early
redemption in full of the 2020 notes and funding the acquisitions
of Universal American, Care1st Arizona and PHP assets, offset by the issuance
of 5.25% senior notes due 2025 in aggregate principal amount of
$1.2 billion. The sequential decrease
was due to the early redemption of the 2020 notes and the funding
of the Universal American and PHP assets acquisitions.
Days in claims payable (DCP) was 47.8 days as of June 30, 2017 compared with 46.2 days as of
March 31, 2017 and 49.3 days as
of June 30, 2016.
Conference Call and Webcast
A discussion of WellCare's second quarter 2017 results will be
available via a conference call and live webcast today at
9:00 a.m. EDT.
The conference call will be webcast live from the company's
website and will be available at the following link:
http://services.choruscall.com/links/wcg170804.html. The webcast
should be accessed a few minutes prior to the conference call start
time. A replay of the webcast will be available for one year
following the conclusion of the live broadcast and will be
accessible on the company's website at
http://ir.wellcare.com/Event/.
The conference call can also be accessed by pre-registering
using the following link: http://dpregister.com/10109673. Callers
who pre-register will be given dial-in instructions and a unique
PIN to gain immediate access to the call. Participants may
pre-register now, or at any time prior to the call, and will
receive simple instructions via email.
For those parties who do not have internet access or are unable
to pre-register, the conference call may be accessed by
calling:
|
Domestic participant
dial-in number
(toll-free):
|
1-844-492-3724
|
|
International
participant dial-in
number:
|
1-412-542-4185
|
A telephonic replay will be available until midnight EDT on Friday,
August 11, 2017. This replay may be accessed by dialing
either of the numbers below and entering the replay access code
10109673:
|
Domestic replay
(toll-free) number:
|
1-877-344-7529
|
|
International replay
number:
|
1-412-317-0088
|
About WellCare Health Plans, Inc.
Headquartered in Tampa, Fla.,
WellCare Health Plans, Inc. (NYSE: WCG) focuses exclusively on
providing government-sponsored managed care services, primarily
through Medicaid, Medicare Advantage and Medicare Prescription Drug
Plans, to families, children, seniors and individuals with complex
medical needs. The company served approximately 4.4 million members
nationwide as of June 30, 2017. For
more information about WellCare, please visit the company's website
at www.wellcare.com.
Basis of Presentation
Discontinued Operations
In 2016, Universal American completed the sale of its life
insurance business while retaining ownership of the life insurance
subsidiary. Universal American entered into a 100% quota-share
reinsurance treaty with the buyer which, among others, results in
the reinsurance of all of the life insurance policies underwritten
by the retained subsidiary. Accordingly, the discontinued business
did not materially affect WellCare's results of operations for the
three and six months ended June 30,
2017. For additional information, refer to Note
13–Discontinued Operations within the Condensed Consolidated
Financial Statements included in the company's Quarterly Report on
Form 10-Q for the period ended June 30,
2017, which will be filed within 40 days following the last
day of the quarter ended June 30,
2017.
Non-GAAP Financial Measures
In addition to results determined under GAAP, WellCare provides
certain non-GAAP financial measures that management believes are
useful in assessing the company's performance. Non-GAAP financial
measures should be considered in addition to, but not as a
substitute for, or superior to, financial measures prepared in
accordance with GAAP. The company has provided a reconciliation of
the historical non-GAAP financial measures with the most directly
comparable financial measure calculated in accordance with
GAAP.
Earnings per share, net income and, as noted below, other
specific operating and financial measures have been adjusted for
the effect of certain expenses, and as appropriate, the related tax
effect, related to previously disclosed government investigations
and related litigation and resolution costs ("investigation
costs"); amortization expense associated with acquisitions
("acquisition-related amortization expenses"); certain one-time
transaction costs related to the acquisition of Universal American
("Universal American-related transaction costs"); certain
one-time costs associated with the integration of Universal
American's operations expected to be incurred through 2019
("Universal American-related integration costs"); and the costs
associated with the redemption of the company's 2020 notes,
including the early redemption premium, write-off of associated
deferred financing costs and write-off of associated premiums paid
on the 2020 notes ("loss on extinguishment of debt"). In addition,
in 2016, these financial measures have been adjusted for the effect
of transitory costs related to the company's decision to change its
pharmacy benefit manager as of January 1,
2016 ("PBM transitory costs"); certain nonrecurring incurred
Iowa-related SG&A expenses
relating to readiness costs, certain wind-down costs of WellCare's
Iowa operations and certain legal
costs ("Iowa SG&A costs"); and costs related to the 2015
divestiture of Sterling Life Insurance Company ("Sterling
divestiture costs").
Although the excluded items may recur, WellCare believes that by
providing non-GAAP measures exclusive of these items, it
facilitates period-over-period comparisons and provides additional
clarity about events and trends affecting its core operating
performance, as well as providing comparability to competitor
results. The investigation costs are related to a discrete incident
which management does not expect to reoccur. WellCare has adjusted
for acquisition-related amortization expenses as these transactions
do not directly relate to the servicing of products for our
customers and are not directly related to the core performance of
its business operations. The other costs mentioned above are
related to specific 2016 and 2017 events, which do not reflect the
underlying ongoing performance of the business.
In addition, because reimbursements for Medicaid premium tax and
the ACA industry fee are both included in the premium rates or
reimbursement established in certain Medicaid contracts and also
recognized separately as a component of expense, the company
excludes these reimbursements from premium revenue when calculating
key ratios as the company believes that these components are not
indicative of operating performance.
The company is not able to project at the time of this news
release the amount of expenses associated with investigation costs
and Universal American-related integration costs to be to be
incurred during the remainder of 2017, and, therefore, cannot
reconcile projected non-GAAP measures affected by these items to
projected GAAP measures.
Following is a description of the adjustments made to GAAP
measures used to calculate the non-GAAP measures used in this news
release.
Adjusted premium revenue (non-GAAP) = Total premium
revenue (GAAP) less Medicaid premium taxes revenue and Medicaid
reimbursements of the ACA industry fee. The company's adjusted
Medicaid Health Plans segment premium revenue uses this non-GAAP
definition of adjusted premium revenue.
MBR (GAAP) = medical benefits expense divided by total
premium revenue (GAAP).
Adjusted MBR (non-GAAP) = medical benefits expense
divided by adjusted premium revenue. The company's adjusted
Medicaid Health Plans segment MBR uses this non-GAAP definition of
adjusted MBR.
SG&A expense ratio (GAAP) = SG&A expense (GAAP)
divided by total premium revenue (GAAP).
Adjusted SG&A expense (non-GAAP) = SG&A expense
(GAAP) less investigation costs, Universal American-related
transaction and integration costs, PBM transitory costs, Sterling
divestiture costs and Iowa SG&A costs.
Adjusted SG&A ratio (non-GAAP) = adjusted SG&A
expense divided by adjusted premium revenue.
Adjusted depreciation & amortization (non-GAAP) =
depreciation & amortization expense (GAAP) less
acquisition-related amortization expenses.
Adjusted income before taxes (non-GAAP) = income before
income taxes (GAAP) less investigation costs, acquisition-related
amortization expenses, Universal American-related transaction and
integration costs, PBM transitory costs, Sterling divestiture
costs, loss on extinguishment of debt and Iowa SG&A costs.
Adjusted income tax expense (non-GAAP) = income tax
associated with the applicable adjusted income before taxes, based
on the applicable effective income tax rate.
Adjusted effective income tax rate (non-GAAP) = adjusted
income tax expense divided by adjusted income before taxes.
Adjusted net income (non-GAAP) = adjusted income before
taxes less adjusted income tax expense.
Net income margin (GAAP) = net income (GAAP) divided by
total premium revenue (GAAP).
Adjusted net income margin (non-GAAP) = adjusted net
income divided by adjusted premium revenue.
Adjusted earnings per diluted share (non-GAAP) = Adjusted
net income divided by weighted average common shares outstanding on
a fully diluted basis.
Cautionary Statement Regarding Forward-Looking
Statements
This news release contains "forward-looking" statements that are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Statements that are
predictive in nature, that depend upon or refer to future events or
conditions, or that include words such as "expects," "anticipates,"
"intends," "plans," "believes," "estimates," and similar
expressions are forward-looking statements. For example, statements
regarding the company's financial outlook and the start date of new
Medicaid programs contain forward-looking statements.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause WellCare's actual future results to
differ materially from those projected or contemplated in the
forward-looking statements. These risks and uncertainties include,
but are not limited to, WellCare's progress on top priorities such
as integrating care management, advocating for our members,
building advanced relationships with providers and government
partners, ensuring a competitive cost position, and delivering
prudent, profitable growth, WellCare's ability to effectively
estimate and manage growth, WellCare's ability to effectively
execute and integrate acquisitions, potential reductions in
Medicaid and Medicare revenue, WellCare's ability to estimate and
manage medical benefits expense effectively, including through its
vendors, its ability to negotiate actuarially sound rates,
especially in new programs with limited experience, the
appropriation and payment by state governments of Medicaid premiums
receivable, the approval of Medicaid contracts by CMS, any changes
to the programs or contracts, WellCare's ability to address
operational challenges related to new business, and WellCare's
ability to meet the requirements of readiness reviews. Given the
risks and uncertainties inherent in forward-looking statements, any
of WellCare's forward-looking statements could be incorrect and
investors are cautioned not to place undue reliance on any of our
forward-looking statements.
Additional information concerning these and other important
risks and uncertainties can be found in the company's filings with
the U.S. Securities and Exchange Commission, included under the
captions "Forward-Looking Statements" and "Risk Factors" in the
company's Annual Report on Form 10-K for the year ended
December 31, 2016, and in the
company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2017, which contain
discussions of WellCare's business and the various factors that may
affect it. Subsequent events and developments may cause actual
results to differ, perhaps materially, from WellCare's
forward-looking statements. WellCare's forward-looking statements
speak only as of the date on which the statements are made.
WellCare undertakes no duty, and expressly disclaims any
obligation, to update these forward-looking statements to reflect
any future events, developments or otherwise.
2017 Financial Outlook
WellCare is increasing its full-year 2017 adjusted EPS guidance
to a range of $6.75 to $6.95 from its
previous guidance range of $6.55 to
$6.80.
|
Guidance
Metric
|
2017 Guidance
as of August 4, 2017
|
2017 Guidance
as of May 3, 2017
|
|
Segment premium
revenue:
|
|
|
|
GAAP Medicaid Health
Plans
|
$10.5B to
$10.7B
|
$10.5B to
$10.7B
|
|
Adjusted Medicaid
Health Plans(1)
|
$10.4B to
$10.6B
|
$10.4B to
$10.6B
|
|
Medicare Health
Plans
|
$5.20B to
$5.35B
|
$5.20B to
$5.35B
|
|
Medicare
PDP
|
$850M to
$900M
|
$850M to
$900M
|
|
Total GAAP premium
revenue
|
$16.55B to
$16.95B
|
$16.55B to
$16.95B
|
|
Total adjusted
premium revenue(1)
|
$16.45B to
$16.85B
|
$16.45B to
$16.85B
|
|
|
|
|
Investment &
other income*
|
$40M to
$45M
|
$40M to
$45M
|
|
|
|
|
Segment
MBR:
|
|
|
|
GAAP Medicaid Health
Plans
|
88.6% to
89.3%
|
88.6% to
89.6%
|
|
Adjusted Medicaid
Health Plans(1)
|
89.5% to
90.2%
|
89.5% to
90.5%
|
|
Medicare Health
Plans
|
85.50% to
86.75%
|
85.50% to
86.75%
|
|
Medicare
PDP
|
80.5% to
82.5%
|
80.5% to
82.5%
|
|
|
|
|
Adjusted SG&A
ratio(2)(7)
|
8.00% to
8.25%
|
7.95% to
8.20%
|
|
GAAP depreciation
& amortization
|
$119M to
$123M
|
---
|
|
Adjusted
depreciation & amortization(3)
|
$87M to
$91M
|
$87M to
$91M
|
|
Interest
expense
|
$68M to
$70M
|
$68M to
$70M
|
|
Adjusted effective
income tax rate(4)(7)
|
37.0% to
38.0%
|
37.5% to
38.5%
|
|
|
|
|
Adjusted earnings
per diluted share(5)(6)(7)
|
$6.75 to
$6.95
|
$6.55 to
$6.80
|
|
|
|
*Investment & other income primarily includes
investment income, specialty pharmacy business sold to nonmembers
and equity from earnings in unconsolidated subsidiaries. The
company presents equity from earnings in unconsolidated
subsidiaries as a separate line item in its statement of
comprehensive income as required under GAAP.
|
|
(1)Excludes an estimated $118.0 million to $123.0
million in Medicaid premium taxes.
|
|
(2)Excludes estimated Medicaid premium taxes;
investigation costs; Universal American-related integration costs
and approximately $30 million of Universal American-related
transaction costs.
|
|
(3)Excludes an estimated $31.0 million to $36.0 million
in acquisition-related amortization expenses.
|
|
(4)Excludes the estimated income tax effect associated
with the investigation costs, acquisition-related amortization
expenses, Universal American-related transaction and integration
costs, and loss on extinguishment of debt.
|
|
(5)
Excludes a one-time loss on
extinguishment of debt of approximately $26.1 million pre-tax, or
$0.37 per diluted share, primarily related to the early redemption
premium, write-off of associated deferred financing costs and
write-off of associated premiums paid on the 2020 notes recorded in
the second quarter of 2017.
|
|
(6)The
company estimates adjusted earnings per diluted share guidance by
adjusting net income for the estimated net-of-tax effect of
investigation costs, acquisition-related amortization expense,
Universal American-related transaction and integration costs and
loss on extinguishment of debt.
|
|
(7)WellCare is not able to estimate amounts associated
with the investigation costs, and Universal American-related
integration costs expected to be incurred in 2017 and, therefore,
cannot reconcile these metrics to total projected GAAP metrics.
WellCare estimates that $25 million to $30 million of Universal
American-related integration costs will be incurred through
2019.
|
|
WELLCARE HEALTH
PLANS, INC.
|
|
MEMBERSHIP
INFORMATION
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Change
from
|
|
|
|
|
|
|
|
March 31,
2017
|
|
June 30,
2016
|
|
June 30,
2017
|
|
March 31,
2017
|
|
June 30,
2016
|
|
Change
|
|
%
Change
|
|
Change
|
|
%
Change
|
|
Medicaid Health
Plans
Membership by
State:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Florida
|
768,000
|
|
|
776,000
|
|
|
773,000
|
|
|
(8,000)
|
|
|
(1.0)
|
%
|
|
(5,000)
|
|
|
(0.6)
|
%
|
|
Georgia
|
577,000
|
|
|
579,000
|
|
|
580,000
|
|
|
(2,000)
|
|
|
(0.3)
|
%
|
|
(3,000)
|
|
|
(0.5)
|
%
|
|
Kentucky
|
446,000
|
|
|
446,000
|
|
|
445,000
|
|
|
—
|
|
|
—
|
%
|
|
1,000
|
|
|
0.2
|
%
|
|
Missouri
|
298,000
|
|
|
123,000
|
|
|
117,000
|
|
|
175,000
|
|
|
142.3
|
%
|
|
181,000
|
|
|
154.7
|
%
|
|
Arizona
|
158,000
|
|
|
116,000
|
|
|
—
|
|
|
42,000
|
|
|
36.2
|
%
|
|
158,000
|
|
|
—
|
|
|
Illinois
|
145,000
|
|
|
156,000
|
|
|
168,000
|
|
|
(11,000)
|
|
|
(7.1)
|
%
|
|
(23,000)
|
|
|
(13.7)
|
%
|
|
New York
|
143,000
|
|
|
141,000
|
|
|
129,000
|
|
|
2,000
|
|
|
1.4
|
%
|
|
14,000
|
|
|
10.9
|
%
|
|
Other
states
|
293,000
|
|
|
286,000
|
|
|
214,000
|
|
|
7,000
|
|
|
2.4
|
%
|
|
79,000
|
|
|
36.9
|
%
|
|
Total Medicaid
Health Plans Membership (1)
|
2,828,000
|
|
|
2,623,000
|
|
|
2,426,000
|
|
|
205,000
|
|
|
7.8
|
%
|
|
402,000
|
|
|
16.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicaid Health
Plans
Membership by
Program:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TANF
|
2,370,000
|
|
|
2,176,000
|
|
|
2,018,000
|
|
|
194,000
|
|
|
8.9
|
%
|
|
352,000
|
|
|
17.4
|
%
|
|
SSI, ABD, Duals and
LTC
|
302,000
|
|
|
297,000
|
|
|
279,000
|
|
|
5,000
|
|
|
1.7
|
%
|
|
23,000
|
|
|
8.2
|
%
|
|
CHIP and
other
|
156,000
|
|
|
150,000
|
|
|
129,000
|
|
|
6,000
|
|
|
4.0
|
%
|
|
27,000
|
|
|
20.9
|
%
|
|
Total Medicaid
Health Plans Membership (1)
|
2,828,000
|
|
|
2,623,000
|
|
|
2,426,000
|
|
|
205,000
|
|
|
7.8
|
%
|
|
402,000
|
|
|
16.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare Health
Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare Advantage by
State:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas
|
106,000
|
|
|
34,000
|
|
|
34,000
|
|
|
72,000
|
|
|
211.8
|
%
|
|
72,000
|
|
|
211.8
|
%
|
|
Florida
|
100,000
|
|
|
99,000
|
|
|
92,000
|
|
|
1,000
|
|
|
1.0
|
%
|
|
8,000
|
|
|
8.7
|
%
|
|
New York
|
88,000
|
|
|
44,000
|
|
|
42,000
|
|
|
44,000
|
|
|
100.0
|
%
|
|
46,000
|
|
|
109.5
|
%
|
|
Georgia
|
45,000
|
|
|
44,000
|
|
|
38,000
|
|
|
1,000
|
|
|
2.3
|
%
|
|
7,000
|
|
|
18.4
|
%
|
|
Other
states
|
145,000
|
|
|
135,000
|
|
|
125,000
|
|
|
10,000
|
|
|
7.4
|
%
|
|
20,000
|
|
|
16.0
|
%
|
|
Total Medicare
Health Plans (1)
|
484,000
|
|
|
356,000
|
|
|
331,000
|
|
|
128,000
|
|
|
36.0
|
%
|
|
153,000
|
|
|
46.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare
Prescription Drug Plans
|
1,116,000
|
|
|
1,099,000
|
|
|
1,012,000
|
|
|
17,000
|
|
|
1.5
|
%
|
|
104,000
|
|
|
10.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Membership
|
4,428,000
|
|
|
4,078,000
|
|
|
3,769,000
|
|
|
350,000
|
|
|
8.6
|
%
|
|
659,000
|
|
|
17.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Medicaid Health
Plans and Medicare Health Plans membership includes members who are
dually-eligible and participate in both our Medicaid and Medicare
programs.
The dually-eligible membership was
51,000, 47,000 and 44,000 at June 30, 2017, March 31, 2017 and June
30, 2016, respectively.
|
|
WellCare Health
Plans, Inc.
|
|
|
Selected Data From
Consolidated Statements of Comprehensive Income
|
|
|
(Unaudited;
dollars in millions except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Premium
|
$
|
4,262.4
|
|
|
$
|
3,504.7
|
|
|
$
|
8,179.5
|
|
|
$
|
6,955.4
|
|
|
|
Medicaid premium
taxes
|
31.2
|
|
|
27.6
|
|
|
61.1
|
|
|
54.8
|
|
|
|
ACA industry fee
reimbursement
|
—
|
|
|
58.3
|
|
|
—
|
|
|
116.4
|
|
|
|
Total
premium
|
4,293.6
|
|
|
3,590.6
|
|
|
8,240.6
|
|
|
7,126.6
|
|
|
|
Investment and other
income
|
11.4
|
|
|
3.8
|
|
|
18.6
|
|
|
8.3
|
|
|
|
Total
revenues
|
4,305.0
|
|
|
3,594.4
|
|
|
8,259.2
|
|
|
7,134.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Medical
benefits
|
3,719.0
|
|
|
2,988.9
|
|
|
7,197.6
|
|
|
6,050.8
|
|
|
|
Selling, general and
administrative
|
365.5
|
|
|
278.0
|
|
|
667.9
|
|
|
546.9
|
|
|
|
ACA industry
fee
|
—
|
|
|
56.9
|
|
|
—
|
|
|
113.9
|
|
|
|
Medicaid premium
taxes
|
31.2
|
|
|
27.6
|
|
|
61.1
|
|
|
54.8
|
|
|
|
Depreciation and
amortization
|
29.3
|
|
|
21.7
|
|
|
53.2
|
|
|
42.5
|
|
|
|
Interest
|
18.1
|
|
|
14.6
|
|
|
34.3
|
|
|
30.4
|
|
|
|
Total
expenses
|
4,163.1
|
|
|
3,387.7
|
|
|
8,014.1
|
|
|
6,839.3
|
|
|
|
Income from
operations
|
141.9
|
|
|
206.7
|
|
|
245.1
|
|
|
295.6
|
|
|
|
Loss on
extinguishment of debt
|
26.1
|
|
|
—
|
|
|
26.1
|
|
|
—
|
|
|
|
Income before income
taxes and equity in losses of
unconsolidated subsidiaries
|
115.8
|
|
|
206.7
|
|
|
219.0
|
|
|
295.6
|
|
|
|
Equity in losses of
unconsolidated subsidiaries
|
(1.1)
|
|
|
—
|
|
|
(1.1)
|
|
|
—
|
|
|
|
Income before income
taxes
|
114.7
|
|
|
206.7
|
|
|
217.9
|
|
|
295.6
|
|
|
|
Income tax
expense
|
40.6
|
|
|
115.9
|
|
|
76.5
|
|
|
167.0
|
|
|
|
Net income
|
$
|
74.1
|
|
|
$
|
90.8
|
|
|
$
|
141.4
|
|
|
$
|
128.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.67
|
|
|
$
|
2.05
|
|
|
$
|
3.18
|
|
|
$
|
2.91
|
|
|
|
Diluted
|
$
|
1.65
|
|
|
$
|
2.04
|
|
|
$
|
3.15
|
|
|
$
|
2.89
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
44,498,610
|
|
|
44,260,767
|
|
|
44,432,299
|
|
|
44,212,984
|
|
|
|
Diluted
|
44,934,051
|
|
|
44,549,955
|
|
|
44,880,357
|
|
|
44,521,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WellCare Health
Plans, Inc.
|
|
Consolidated
Balance Sheets
|
|
(Unaudited;
dollars in millions except share data)
|
|
|
|
|
|
June 30,
2017
|
|
December 31,
2016
|
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
4,031.3
|
|
|
$
|
3,961.4
|
|
|
Short-term
investments
|
511.9
|
|
|
124.2
|
|
|
Premiums receivable,
net
|
1,076.3
|
|
|
498.6
|
|
|
Pharmacy rebates
receivable, net
|
341.6
|
|
|
278.0
|
|
|
Receivables from
government partners
|
100.8
|
|
|
—
|
|
|
Funds receivable for
the benefit of members
|
24.5
|
|
|
32.6
|
|
|
Prepaid expenses and
other current assets, net
|
260.5
|
|
|
224.8
|
|
|
Total current
assets
|
6,346.9
|
|
|
5,119.6
|
|
|
|
|
|
|
Property, equipment
and capitalized software, net
|
291.1
|
|
|
274.5
|
|
|
Goodwill
|
651.5
|
|
|
392.5
|
|
|
Other intangible
assets, net
|
384.5
|
|
|
74.1
|
|
|
Long-term
investments
|
404.0
|
|
|
57.3
|
|
|
Restricted
investments
|
213.6
|
|
|
234.3
|
|
|
Other
assets
|
3.5
|
|
|
0.5
|
|
|
Assets of
discontinued operations (1)
|
218.0
|
|
|
—
|
|
|
Total
Assets
|
$
|
8,513.1
|
|
|
$
|
6,152.8
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Medical benefits
payable
|
$
|
2,004.4
|
|
|
$
|
1,690.5
|
|
|
Unearned
premiums
|
539.6
|
|
|
3.3
|
|
|
Accounts payable and
accrued expenses
|
541.6
|
|
|
668.5
|
|
|
Funds payable for the
benefit of members
|
1,346.2
|
|
|
390.3
|
|
|
Other payables to
government partners
|
394.9
|
|
|
303.2
|
|
|
Total current
liabilities
|
4,826.7
|
|
|
3,055.8
|
|
|
|
|
|
|
Deferred income tax
liability
|
96.8
|
|
|
63.4
|
|
|
Long-term
debt
|
1,180.8
|
|
|
997.6
|
|
|
Other
liabilities
|
38.5
|
|
|
35.9
|
|
|
Liabilities of
discontinued operations (1)
|
218.0
|
|
|
—
|
|
|
Total
liabilities
|
6,360.8
|
|
|
4,152.7
|
|
|
|
|
|
|
Commitments and
contingencies
|
—
|
|
|
—
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Preferred stock,
$0.01 par value (20,000,000 authorized, no shares issued or
outstanding)
|
—
|
|
|
—
|
|
|
Common stock, $0.01
par value (100,000,000 authorized, 44,507,822 and 44,293,881
shares
issued and outstanding at June 30, 2017 and December 31, 2016,
respectively)
|
0.4
|
|
|
0.4
|
|
|
Paid-in
capital
|
556.8
|
|
|
546.9
|
|
|
Retained
earnings
|
1,595.2
|
|
|
1,453.8
|
|
|
Accumulated other
comprehensive loss
|
(0.1)
|
|
|
(1.0)
|
|
|
Total Stockholders'
Equity
|
2,152.3
|
|
|
2,000.1
|
|
|
Total Liabilities and
Stockholders' Equity
|
$
|
8,513.1
|
|
|
$
|
6,152.8
|
|
|
(a) Refer
to the basis of presentation for a discussion of discontinued
operations.
|
|
WellCare Health
Plans, Inc.
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited;
dollars in millions)
|
|
|
|
|
|
For the Six Months
Ended
June 30,
|
|
2017
|
|
2016
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
|
141.4
|
|
|
$
|
128.6
|
|
|
Adjustments to
reconcile net income to cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
53.2
|
|
|
42.5
|
|
|
Loss on extinguishment
of debt
|
26.1
|
|
|
—
|
|
|
Stock-based
compensation expense
|
23.5
|
|
|
15.0
|
|
|
Deferred taxes,
net
|
(34.5)
|
|
|
5.0
|
|
|
Other, net
|
7.3
|
|
|
8.9
|
|
|
Changes in operating
accounts, net of effects from acquisitions:
|
|
|
|
|
Premiums receivable,
net
|
(480.8)
|
|
|
(427.8)
|
|
|
Pharmacy rebates
receivable, net
|
(50.7)
|
|
|
(86.8)
|
|
|
Medical benefits
payable
|
186.4
|
|
|
82.7
|
|
|
Unearned
premiums
|
537.6
|
|
|
(24.0)
|
|
|
Other payables to
government partners
|
(20.7)
|
|
|
40.0
|
|
|
Accrued liabilities
and other, net
|
(53.9)
|
|
|
155.7
|
|
|
Net cash provided by
(used in) operating activities
|
334.9
|
|
|
(60.2)
|
|
|
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
Acquisitions and
acquisition-related settlements, net of cash acquired
|
(717.9)
|
|
|
(21.1)
|
|
|
Purchases of
investments
|
(801.8)
|
|
|
(194.1)
|
|
|
Proceeds from sales
and maturities of investments
|
341.3
|
|
|
223.7
|
|
|
Additions to property,
equipment and capitalized software, net
|
(54.4)
|
|
|
(37.6)
|
|
|
Net cash used in
investing activities
|
(1,232.8)
|
|
|
(29.1)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from issuance
of debt, net of financing costs paid
|
1,182.2
|
|
|
196.9
|
|
|
Payments on
debt
|
(1,026.1)
|
|
|
(300.0)
|
|
|
Repurchase and
retirement of shares to satisfy employee tax withholding
requirements
|
(13.6)
|
|
|
(5.6)
|
|
|
Funds received for the
benefit of members, net
|
834.4
|
|
|
318.3
|
|
|
Other, net
|
(9.1)
|
|
|
(3.2)
|
|
|
Net cash provided by
financing activities
|
967.8
|
|
|
206.4
|
|
|
|
|
|
|
Increase in cash and
cash equivalents
|
69.9
|
|
|
117.1
|
|
|
Balance at beginning
of period
|
3,961.4
|
|
|
2,407.0
|
|
|
Balance at end of
period
|
$
|
4,031.3
|
|
|
$
|
2,524.1
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
Cash paid
for taxes
|
$
|
94.9
|
|
|
$
|
69.6
|
|
|
Cash paid
for interest
|
$
|
22.5
|
|
|
$
|
28.7
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF NON-CASH TRANSACTIONS:
|
|
|
|
|
Non-cash additions to
property, equipment, and capitalized software
|
$
|
3.5
|
|
|
$
|
4.6
|
|
|
WELLCARE HEALTH
PLANS, INC.
|
|
SUPPLEMENTAL
INFORMATION
|
|
SELECTED SEGMENT
INFORMATION
|
|
(Unaudited;
dollars in millions)
|
|
|
|
|
|
For the Three
Months Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Medicaid Health
Plans Segment:
|
|
|
|
|
|
|
|
|
Adjusted premium
revenue (a)
|
$
|
2,720.2
|
|
|
$
|
2,292.5
|
|
|
5,274.5
|
|
|
4,518.9
|
|
|
Medicaid premium
taxes
|
31.2
|
|
|
27.6
|
|
|
61.1
|
|
|
54.8
|
|
|
ACA industry fee
reimbursement
|
—
|
|
|
58.3
|
|
|
—
|
|
|
116.4
|
|
|
Premium revenue
(GAAP)
|
2,751.4
|
|
|
2,378.4
|
|
|
5,335.6
|
|
|
4,690.1
|
|
|
|
|
|
|
|
|
|
|
Medical benefits
expense
|
2,386.9
|
|
|
1,988.1
|
|
|
4,697.5
|
|
|
3,990.0
|
|
|
|
|
|
|
|
|
|
|
Medical benefits
ratio (GAAP)
|
86.8
|
%
|
|
83.6
|
%
|
|
88.0
|
%
|
|
85.1
|
%
|
|
Adjusted medical
benefits ratio(a)
|
87.7
|
%
|
|
86.7
|
%
|
|
89.1
|
%
|
|
88.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare Health
Plans Segment (GAAP):
|
|
|
|
|
|
|
|
|
Premium
revenue
|
$
|
1,316.6
|
|
|
$
|
987.5
|
|
|
$
|
2,411.3
|
|
|
$
|
1,961.6
|
|
|
Medical benefits
expense
|
1,136.9
|
|
|
831.9
|
|
|
2,045.1
|
|
|
1,656.1
|
|
|
Medical benefits
ratio
|
86.4
|
%
|
|
84.2
|
%
|
|
84.8
|
%
|
|
84.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prescription Drug
Plans Segment (GAAP):
|
|
|
|
|
|
|
|
|
Premium
revenue
|
$
|
225.6
|
|
|
$
|
224.7
|
|
|
$
|
493.7
|
|
|
$
|
474.9
|
|
|
Medical benefits
expense
|
195.2
|
|
|
168.9
|
|
|
455.0
|
|
|
404.7
|
|
|
Medical benefits
ratio
|
86.5
|
%
|
|
75.1
|
%
|
|
92.2
|
%
|
|
85.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company:
|
|
|
|
|
|
|
|
|
Adjusted premium
revenue( a)
|
$
|
4,262.4
|
|
|
$
|
3,504.7
|
|
|
$
|
8,179.5
|
|
|
$
|
6,955.4
|
|
|
Medicaid premium
taxes
|
31.2
|
|
|
27.6
|
|
|
61.1
|
|
|
54.8
|
|
|
ACA industry fee
reimbursement
|
—
|
|
|
58.3
|
|
|
—
|
|
|
116.4
|
|
|
Premium revenue
(GAAP)
|
4,293.6
|
|
|
3,590.6
|
|
|
8,240.6
|
|
|
7,126.6
|
|
|
|
|
|
|
|
|
|
|
Medical benefits
expense
|
3,719.0
|
|
|
2,988.9
|
|
|
7,197.6
|
|
|
6,050.8
|
|
|
|
|
|
|
|
|
|
|
Medical benefits
ratio (GAAP)
|
86.6
|
%
|
|
83.2
|
%
|
|
87.3
|
%
|
|
84.9
|
%
|
|
Adjusted medical
benefits ratio(a)
|
87.3
|
%
|
|
85.3
|
%
|
|
88.0
|
%
|
|
87.0
|
%
|
|
|
|
|
|
|
|
|
|
(a) Refer
to the basis of presentation for a discussion of non-GAAP financial
measures.
|
|
WELLCARE HEALTH
PLANS, INC.
|
|
SUPPLEMENTAL
INFORMATION (Continued)
|
|
Reconciliation of
Selling, General and Administrative Expense Ratios
|
|
(Unaudited;
dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
The Company reports
its selling, general and administrative ("SG&A") expense ratio
on an adjusted or non-GAAP basis modified to exclude the revenue
effect of Medicaid premium taxes and ACA industry fee reimbursement
from premiums. The Adjusted SG&A expense ratio also excludes
the effect of investigation costs and Universal American-related
transaction and integration costs for 2017, and investigation,
Sterling divestiture, PBM transitory and Iowa SG&A costs for
2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Company premium
revenue:
|
|
|
|
|
|
|
|
|
As determined under
GAAP
|
$
|
4,293.6
|
|
|
$
|
3,590.6
|
|
|
$
|
8,240.6
|
|
|
$
|
7,126.6
|
|
|
Medicaid premium
taxes
|
(31.2)
|
|
|
(27.6)
|
|
|
(61.1)
|
|
|
(54.8)
|
|
|
ACA industry fee
reimbursement
|
—
|
|
|
(58.3)
|
|
|
—
|
|
|
(116.4)
|
|
|
Adjusted premium
revenue(a)
|
$
|
4,262.4
|
|
|
$
|
3,504.7
|
|
|
$
|
8,179.5
|
|
|
$
|
6,955.4
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
Expense:
|
|
|
|
|
|
|
|
|
As determined under
GAAP
|
$
|
365.5
|
|
|
$
|
278.0
|
|
|
$
|
667.9
|
|
|
$
|
546.9
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Investigation
costs
|
(3.2)
|
|
|
(6.0)
|
|
|
(6.3)
|
|
|
(12.5)
|
|
|
Transaction and
integration costs
|
(25.6)
|
|
|
—
|
|
|
(26.7)
|
|
|
—
|
|
|
Sterling divestiture
costs
|
—
|
|
|
(2.0)
|
|
|
—
|
|
|
(1.7)
|
|
|
PBM transitory
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.9)
|
|
|
Iowa SG&A
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.2)
|
|
|
Adjusted SG&A
Expense(a)
|
$
|
336.7
|
|
|
$
|
270.0
|
|
|
$
|
634.9
|
|
|
$
|
522.6
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A expense
ratio:
|
|
|
|
|
|
|
|
|
As determined under
GAAP
|
8.5
|
%
|
|
7.7
|
%
|
|
8.1
|
%
|
|
7.7
|
%
|
|
Effect of Medicaid
premium taxes
|
0.1
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
Effect of ACA
industry fee reimbursement
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
Effect of SG&A
expense adjustments above(a)
|
(0.7)
|
%
|
|
(0.2)
|
%
|
|
(0.4)
|
%
|
|
(0.4)
|
%
|
|
Adjusted SG&A
expense ratio(a)
|
7.9
|
%
|
|
7.7
|
%
|
|
7.8
|
%
|
|
7.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(a) Refer
to the basis of presentation for a discussion of non-GAAP financial
measures.
|
|
|
WELLCARE HEALTH
PLANS, INC.
|
|
SUPPLEMENTAL
INFORMATION (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Certain GAAP Financial Information
|
|
(Unaudited;
dollars in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company reports
adjusted operating results on a non-GAAP basis to exclude certain
expenses and other items that management believes are not
indicative of longer-term business trends and operations. The
following tables present applicable financial information, as
determined under GAAP, reconciled to the adjusted financial
information for the same periods. Refer to the basis of
presentation for a discussion of non-GAAP financial
measures.
|
|
|
|
|
|
|
|
For the Three
Months Ended
June 30, 2017
|
|
For the Three
Months Ended
June 30, 2016
|
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
$
|
365.5
|
|
|
$
|
(28.8)
|
|
(a)
|
$
|
336.7
|
|
|
$
|
278.0
|
|
|
$
|
(8.0)
|
|
(a)
|
$
|
270.0
|
|
|
Depreciation and
amortization
|
$
|
29.3
|
|
|
$
|
(8.3)
|
|
|
$
|
21.0
|
|
|
$
|
21.7
|
|
|
$
|
(2.6)
|
|
|
$
|
19.1
|
|
|
Loss on
extinguishment of debt
|
$
|
26.1
|
|
|
$
|
(26.1)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Income tax
expense
|
$
|
40.6
|
|
|
$
|
23.9
|
|
(b)
|
$
|
64.5
|
|
|
$
|
115.9
|
|
|
$
|
1.9
|
|
(b)
|
$
|
117.8
|
|
|
Effective tax
rate
|
35.4
|
%
|
|
0.9
|
%
|
(b)
|
36.3
|
%
|
|
56.1
|
%
|
|
(1.9)
|
%
|
(b)
|
54.2
|
%
|
|
Net income
|
$
|
74.1
|
|
|
$
|
39.3
|
|
|
$
|
113.4
|
|
|
$
|
90.8
|
|
|
$
|
8.7
|
|
|
$
|
99.5
|
|
|
Net income
margin
|
1.7
|
%
|
|
1.0
|
%
|
|
2.7
|
%
|
|
2.5
|
%
|
|
0.3
|
%
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.67
|
|
|
$
|
0.88
|
|
|
$
|
2.55
|
|
|
$
|
2.05
|
|
|
$
|
0.20
|
|
|
$
|
2.25
|
|
|
Diluted
|
$
|
1.65
|
|
|
$
|
0.87
|
|
|
$
|
2.52
|
|
|
$
|
2.04
|
|
|
$
|
0.19
|
|
|
$
|
2.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended
June 30, 2017
|
|
For the Six Months
Ended
June 30, 2016
|
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
$
|
667.9
|
|
|
$
|
(33.0)
|
|
(a)
|
$
|
634.9
|
|
|
$
|
546.9
|
|
|
$
|
(24.3)
|
|
(a)
|
$
|
522.6
|
|
|
Depreciation and
amortization
|
$
|
53.2
|
|
|
$
|
(11.5)
|
|
(b)
|
$
|
41.7
|
|
|
$
|
42.5
|
|
|
$
|
(5.1)
|
|
(b)
|
$
|
37.4
|
|
|
Loss on
extinguishment of debt
|
$
|
26.1
|
|
|
$
|
(26.1)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Income tax
expense
|
$
|
76.5
|
|
|
$
|
26.6
|
|
(c)
|
$
|
103.1
|
|
|
$
|
167.0
|
|
|
$
|
10.8
|
|
(c)
|
$
|
177.8
|
|
|
Effective tax
rate
|
35.1
|
%
|
|
0.6
|
%
|
(c)
|
35.7
|
%
|
|
56.5
|
%
|
|
(1.8)
|
%
|
(c)
|
54.7
|
%
|
|
Net income
|
$
|
141.4
|
|
|
$
|
44.0
|
|
|
$
|
185.4
|
|
|
$
|
128.6
|
|
|
$
|
18.6
|
|
(b)
|
$
|
147.2
|
|
|
Net income
margin
|
1.7
|
%
|
|
0.6
|
%
|
|
2.3
|
%
|
|
1.8
|
%
|
|
0.3
|
%
|
|
2.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
3.18
|
|
|
$
|
0.99
|
|
|
$
|
4.17
|
|
|
$
|
2.91
|
|
|
$
|
0.42
|
|
|
$
|
3.33
|
|
|
Diluted
|
$
|
3.15
|
|
|
$
|
0.98
|
|
|
$
|
4.13
|
|
|
$
|
2.89
|
|
|
$
|
0.42
|
|
|
$
|
3.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Comprised of investigation costs and Universal American-related
transaction and integration costs for 2017, and investigation,
Sterling divestiture, PBM transitory and Iowa SG&A costs for
2016, as disclosed in the "Reconciliation of Selling, General and
Administrative Expense Ratios" table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Based
on the effective income tax rates applicable to adjusted (non-GAAP)
results, the company estimated the effect on income tax expense and
the effective tax rate associated with the non-GAAP adjustments.
Refer to the basis of presentation for a discussion of non-GAAP
financial measures.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/wellcare-reports-second-quarter-2017-results-300499628.html
SOURCE WellCare Health Plans, Inc.