SAN JUAN, Puerto Rico,
March 1, 2018 /PRNewswire/
-- Triple-S Management Corporation (NYSE: GTS), a leading
managed care company in Puerto
Rico, today announced its fourth quarter 2017
results.
Quarterly Consolidated and Other Highlights and Subsequent
Events
- Net income of $24.2 million, or
$1.03 per diluted share, versus net
income of $12.0 million, or
$0.50 per diluted share, in the
prior-year period;
- Adjusted net income of $22.1
million, or $0.94 per diluted
share, versus adjusted net income of $3.4
million, or $0.14 per diluted
share, a year ago, reflecting the ongoing improvements in the
Company's Managed Care operations and the estimated decrease in
utilization of medical services caused by Hurricanes Irma and
Maria. The net impact of the recent hurricanes represented
approximately $0.46 of the
improvement in the quarter's adjusted earnings per share;
- Operating revenues of $706.8
million, a 1.7% decrease from the prior-year period,
reflecting lower premiums in the Property & Casualty and
Managed Care segments;
- Consolidated operating income of $41.1
million compared to an operating loss of $1.5 million in the prior-year period;
- Consolidated loss ratio of 78.2%, driven primarily by lower
utilization in Managed Care with a medical loss ratio ("MLR") of
80.9%;
- The Company's Board authorized a $25.0
million expansion of its existing $30.0 million Class B share repurchase program.
Under the repurchase program, during the fourth quarter of 2017,
322,381 shares were repurchased at an aggregate cost of
$7.7 million. Thus far during 2018,
the Company has repurchased an additional 225,000 shares at an
aggregate cost of $5.3 million. As of
February 27, 2018, including the
expansion, $29.4 million of capacity
remain in the program.
"Our fourth quarter results benefited from lower claims in
Managed Care due primarily to the aftereffects of Hurricane Maria,
but was also characterized by continued progress of the ongoing
initiatives in our Managed Care operations," said Roberto Garcia-Rodriguez, President and Chief
Executive Officer. "We have made significant improvements to
our technology, claims processing and clinical operations. As
a result of our expanded relationship with Optum, we expect to
further improve our infrastructure throughout 2018, which should
ultimately provide our customers with upgraded service while
allowing us to achieve additional efficiencies and make our
products more competitive and attractive over the long-term."
"There has been significant progress with respect to
Puerto Rico's recovery from the
hurricanes over the past few months," continued Mr.
Garcia-Rodriguez. "As of late February, potable water was at 99% of
capacity, power generation stood at 84% of average, and
telecommunications bandwidth has been essentially repaired
throughout the island. While there is still work left to
return all Puerto Ricans to some sense of normalcy, we believe
Puerto Rico is much closer to
being fully operational once again and we continue to closely work
hand-in-hand with our providers to ensure they are fully
functional. We have also been encouraged by the recent
Congressional action to support the hurricane recovery with
$16 billion in overall federal
funding and address the Island's Medicaid cliff with $4.8 billion and a 2-year 100% FMAP federal
contribution."
"Although our providers continue to face certain operational
challenges, the vast majority of healthcare services now up and
running, so it has been back to the normal course of business for
Triple-S over the past couple of months," added Mr.
Garcia-Rodriguez. "Looking into 2018, as Puerto Rico's infrastructure is rebuilt, we
continue to take the steps necessary to stand out as the preeminent
healthcare company in Puerto Rico,
ensure that our Managed Care business once again drives our bottom
line and create long-term value for our shareholders."
Selected Consolidated Quarterly Details
- Consolidated premiums earned were $687.4
million, down 2.1% from the prior-year period. The decrease
reflects lower premiums in the Managed Care segment, primarily due
to the profit sharing accrual recorded in 2016 in the Medicaid
business and the suspension of the HIP fee pass-through, as well as
approximately $6.2 million of
estimated reinsurance related costs in the Company's Property and
Casualty segment, including estimates for catastrophe reinsurance
reinstatement costs for the remainder of 2017. The decrease was
partially offset by higher average premium rates in the Managed
Care segment's Commercial and Medicaid businesses.
- Consolidated claims incurred were $537.3
million, down 9.6% year over year, mostly due to lower
claims incurred across all businesses in the Managed Care segment,
driven mainly by favorable fluctuations in prior-period reserve
developments, the ongoing improvements in the Company's Managed
Care operations and the utilization decrease caused by Hurricanes
Irma and Maria. Consolidated loss ratio of 78.2% improved 650 basis
points from the prior-year period.
- Consolidated operating expenses of $128.4 million increased 1.6% from the prior-year
period, while the operating expense ratio increased 70 basis points
year over year to 18.6%. The increase in operating expenses
reflects higher personnel costs, business promotion and
hurricane-related expenses totaling approximately $12.8 million, partially offset by an
$11.1 million decrease in the HIP fee
due to the 2017 moratorium.
- Consolidated income tax expense was $17.9 million, an increase of $21.8 million from the prior-year period,
primarily reflecting a significant increase in the Managed Care
segment's taxable income, which has a higher effective tax rate
than the Company's other segments.
- As of December 31, 2017, the
consolidated balance sheet reflects approximately $605 million within claim liabilities of unpaid
estimated gross losses related to the hurricanes, as well as
$613 million within premiums and
other receivables of catastrophe-related losses recoverable from
the Property and Casualty reinsurance program.
Selected Managed Care Segment Quarterly Details
- Managed Care premiums earned were $633.8
million, down 0.9% year over year.
-
- Commercial premiums of $195.9
million declined 4.3% from the prior-year period, due to
lower fully-insured member month enrollment and the suspension of
$3.6 million in the HIP fee
pass-through in 2017, partially offset by higher average premium
rates.
- Medicare premiums of $246.8
million increased 5.2% year over year, largely reflecting an
increase in member month enrollment of 28,000 lives, offset, in
part, by a $3.8 million decline in
additional risk score revenue adjustments and a reduction in
Medicare reimbursement rates.
- Medicaid premiums declined 4.6% from the prior-year period to
$191.1 million, primarily reflecting
the 2.5% excess profit sharing accrual that increased 2016 premiums
by $6.3 million, a membership decline
of approximately 45,000 member months, and the suspension of
$2.7 million in the HIP fee
pass-through in 2017; offset in part by an average premium rate
increase of approximately 9% that became effective July 1, 2017, following the Medicaid contract
extension.
- Managed Care MLR of 80.9% improved 710 basis points from the
prior year, mostly reflecting the estimated decrease in utilization
caused by Hurricanes Irma and Maria and favorable prior-period
reserve developments. Excluding the impact of prior-period reserve
developments, and moving the Medicare risk score revenue
adjustments and other premium adjustments to the corresponding
period, the Managed Care MLR would have been 82.5%, 260 basis
points lower than the comparable metric a year ago. The estimated
decrease in utilization related to the hurricanes lowered the
segment's claims incurred and adjusted MLR by approximately
$27 million and 430 basis points,
respectively.
- Managed Care operating expenses were $95.2 million, down $0.7
million, or 0.7%, year over year, primarily reflecting the
HIP fee decrease and mostly offset by an increase in personnel
costs, hurricane-related expenses, provision for doubtful accounts
and other general and administrative expenses, as discussed
above.
Consolidated Year-End Recap
Consolidated operating revenues for the year ended December 31, 2017 decreased 2.1% year over year
to $2.9 billion, primarily reflecting
a $58.5 million decline in Managed
Care segment premiums due to lower membership in the segment's
Commercial and Medicaid businesses, the suspension of the HIP fee
pass-through, and lower Medicare risk score revenue adjustments.
Consolidated claims for the year were $2.4 billion, a 4.8% decline from the prior
year, mostly due to lower claims in the Managed Care segment that
were partially offset by increased claims in the Property and
Casualty segment. The decrease in Managed Care claims primarily
reflects lower claims incurred in all of the segment's businesses,
driven by an enrollment decline in the segment's Commercial and
Medicaid businesses and the decrease in utilization caused by the
two hurricanes, as well as favorable fluctuations in the
prior-period reserve developments in the Commercial and Medicare
businesses.
The Property and Casualty segment's estimated net retained
losses related to the hurricanes were approximately $14.8 million after the application of
reinsurance. The consolidated loss ratio for 2017 was 83.2%, a 230
basis point improvement primarily driven by an MLR for 2017 of
85.6%, a decline of 300 basis points from the prior year.
Consolidated operating expenses for the year ended December 31, 2017 were $477.2 million and the operating expense ratio
was 16.8%.
Adjusted net income for full year 2017 was $45.5 million, or $1.89 per diluted share, compared with adjusted
net income of $3.2 million, or
$0.13 per diluted share, in the prior
year.
2018 Outlook
As Puerto Rico continues to
rebuild, utilization patterns, outward migration and the impact of
reconstruction efforts remain somewhat unclear, and in February,
the Puerto Rico government issued
a request for proposal that will introduce significant changes to
the island's Medicaid model by the fourth quarter of 2018.
Given these market uncertainties, the Company believes
it is premature to provide comprehensive full-year guidance at this
time. Instead, it is providing full year 2018 directional
guidance regarding its Commercial, Medicare Advantage and ancillary
businesses, as well as operating expenses.
- In the Company's Commercial business, the Company expects
full-year at-risk member month enrollment to be between 3.7 million
and 3.8 million, and MLR for the full year is expected to be
between 80.5% and 82.5%.
- In the Company's Medicare Advantage business, the Company
anticipates full year member month enrollment to be between 1.35
million and 1.45 million, while MLR for 2018 is expected to be
between 85% and 87%.
- The Company's ancillary segments are expected to remain stable
in terms of premiums earned. Life insurance premiums earned for
2018 are expected to be between $160
million and $164 million,
while Property and Casualty premiums earned for 2018 are expected
to be between $76 million and
$80 million.
- Operating expenses for full year 2018 are expected to be
between $530 million and $545 million, primarily reflecting the
reinstatement of the HIP fee.
Conference Call and Webcast
Management will host a conference call and webcast today at
8:30 a.m. Eastern Time to discuss its
financial results for the three months and year ended December 31, 2017. To participate, callers within
the U.S. and Canada should dial
1-855-327-6837 and international callers should dial 1-631-891-4304
about five minutes before the call.
To listen to the webcast, participants should visit the
"Investor Relations" section of the Company's website at
www.triplesmanagement.com several minutes before the event is
broadcast and follow the instructions provided to ensure they have
the necessary audio application downloaded and installed. This
program is provided at no charge to the user. An archived version
of the call, also located on the "Investor Relations" section of
Triple-S Management's website, will be available about two hours
after the call ends and for at least the following two weeks. This
news release, along with other information relating to the call,
will be available on the "Investor Relations" section of the
website.
In addition, a replay will be available through March 15, 2018 by calling 1-844-512-2921 or
1-412-317-6671 and entering passcode 10004194. A replay will also
be available at www.triplesmanagement.com for 30
days.
About Triple-S Management Corporation
Triple-S Management Corporation is an independent licensee of
the Blue Cross Blue Shield Association. It is one of the leading
players in the managed care industry in Puerto Rico. Triple-S Management has the
exclusive right to use the Blue Cross Blue Shield name and mark
throughout Puerto Rico, the
U.S. Virgin Islands, and
Costa Rica. With more than 55
years of experience in the industry, Triple-S Management offers a
broad portfolio of managed care and related products in the
Commercial, Medicare Advantage, and Medicaid markets under the Blue
Cross Blue Shield marks. It also provides non-Blue Cross Blue
Shield branded life and property and casualty insurance in
Puerto Rico. For more information
about Triple-S Management, visit www.triplesmanagement.com or
contact investorrelations@ssspr.com.
Non-GAAP Financial Measures
This earnings release presents information about the Company's
adjusted net income, which is a non-GAAP financial metric provided
as a complement to the results provided in accordance with
accounting principles generally accepted in the United States of America (GAAP). A
reconciliation of adjusted net income to net income, the most
comparable GAAP financial measure, is provided in the accompanying
tables found at the end of this release.
Forward-Looking Statements
This document contains forward-looking statements, as defined in
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include information about possible or
assumed future sales, results of operations, developments,
regulatory approvals or other circumstances. Sentences that include
"believe", "expect", "plan", "intend", "estimate", "anticipate",
"project", "may", "will", "shall", "should" and similar
expressions, whether in the positive or negative, are intended to
identify forward-looking statements.
All forward-looking statements in this news release reflect
management's current views about future events and are based on
assumptions and subject to risks and uncertainties. Consequently,
actual results may differ materially from those expressed here as a
result of various factors, including all the risks discussed and
identified in public filings with the U.S. Securities and Exchange
Commission (SEC).
In addition, the Company operates in a highly competitive,
constantly changing environment, influenced by very large
organizations that have resulted from business combinations,
aggressive marketing and pricing practices of competitors, and
regulatory oversight. The following factors, if markedly different
from the Company's planning assumptions (either individually or in
combination), could cause Triple-S Management's results to differ
materially from those expressed in any forward-looking statements
shared here:
- Trends in health care costs and utilization rates
- Ability to secure sufficient premium rate increases
- Competitor pricing below market trends of increasing costs
- Re-estimates of policy and contract liabilities
- Changes in government laws and regulations of managed care,
life insurance or property and casualty insurance
- Significant acquisitions or divestitures by major
competitors
- Introduction and use of new prescription drugs and
technologies
- A downgrade in the Company's financial strength ratings
- A downgrade in the Government of Puerto Rico's debt
- Litigation or legislation targeted at managed care, life
insurance or property and casualty insurance companies
- Ability to contract with providers consistent with past
practice
- Ability to successfully implement the Company's disease
management, utilization management and Star ratings programs
- Ability to maintain Federal Employees, Medicare and Medicaid
contracts
- Volatility in the securities markets and investment losses and
defaults
- General economic downturns, major disasters, and epidemics
This list is not exhaustive. Management believes the
forward-looking statements in this release are reasonable. However,
there is no assurance that the actions, events or results
anticipated by the forward-looking statements will occur or, if any
of them do, what impact they will have on the Company's results of
operations or financial condition. In view of these uncertainties,
investors should not place undue reliance on any forward-looking
statements, which are based on current expectations. In addition,
forward-looking statements are based on information available the
day they are made, and (other than as required by applicable law,
including the securities laws of the
United States) the Company does not intend to update or
revise any of them in light of new information or future
events.
Readers are advised to carefully review and consider the various
disclosures in the Company's SEC reports.
Earnings Release
Schedules and Supplementary Information
|
|
|
|
Condensed
Consolidated Balance Sheets
|
Exhibit I
|
|
|
Condensed
Consolidated Statements of Earnings
|
Exhibit II
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
Exhibit
III
|
|
|
Segment Performance
Supplemental Information
|
Exhibit IV
|
|
|
Reconciliation of
Non-GAAP Financial Measures
|
Exhibit V
|
Exhibit I
|
|
Condensed
Consolidated Balance Sheets
|
(dollar amounts in
thousands)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
$
|
1,605,477
|
|
$
|
1,433,392
|
Cash and cash
equivalents
|
|
|
198,941
|
|
|
103,428
|
Premium and other
receivables, net
|
|
|
899,327
|
|
|
286,365
|
Deferred policy
acquisition costs and value of business acquired
|
|
|
200,788
|
|
|
194,787
|
Property and
equipment, net
|
|
|
74,716
|
|
|
66,369
|
Other
assets
|
|
|
137,516
|
|
|
134,658
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
3,116,765
|
|
$
|
2,218,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy liabilities
and accruals
|
|
$
|
1,761,553
|
|
$
|
1,102,237
|
Accounts payable and
accrued liabilities
|
|
|
410,457
|
|
|
219,191
|
Long-term
borrowings
|
|
|
32,073
|
|
|
35,085
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
2,204,083
|
|
|
1,356,513
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common
stock
|
|
|
23,578
|
|
|
24,272
|
|
Other stockholders'
equity
|
|
|
889,786
|
|
|
838,891
|
|
|
|
|
|
|
|
|
|
Total Triple-S
Management Corporation stockholders' equity
|
|
|
913,364
|
|
|
863,163
|
|
|
|
|
|
|
|
|
|
Non-controlling
interest in consolidated subsidiary
|
|
|
(682)
|
|
|
(677)
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
912,682
|
|
|
862,486
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
3,116,765
|
|
$
|
2,218,999
|
Exhibit II
|
|
Condensed
Consolidated Statements of Earnings
|
(dollar amounts in
thousands, except per share data)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums earned,
net
|
$
|
687,443
|
|
$
|
701,871
|
|
$
|
2,826,932
|
|
$
|
2,890,641
|
|
Administrative
service fees
|
|
4,196
|
|
|
4,094
|
|
|
16,514
|
|
|
17,843
|
|
Net investment
income
|
|
14,506
|
|
|
12,343
|
|
|
51,615
|
|
|
48,913
|
|
Other operating
revenues
|
|
633
|
|
|
863
|
|
|
3,660
|
|
|
3,461
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
revenues
|
|
706,778
|
|
|
719,171
|
|
|
2,898,721
|
|
|
2,960,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
investment gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
other-than-temporary impairment losses on securities
|
|
(49)
|
|
|
-
|
|
|
(49)
|
|
|
(1,434)
|
|
Net realized gains,
excluding other-than-temporary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
impairment losses on
securities
|
|
2,737
|
|
|
10,425
|
|
|
10,880
|
|
|
18,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized
investment gains on sale of securities
|
|
2,688
|
|
|
10,425
|
|
|
10,831
|
|
|
17,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
12
|
|
|
1,101
|
|
|
6,533
|
|
|
6,569
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
709,478
|
|
|
730,697
|
|
|
2,916,085
|
|
|
2,984,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims
incurred
|
|
537,316
|
|
|
594,241
|
|
|
2,353,101
|
|
|
2,472,191
|
|
Operating
expenses
|
|
128,402
|
|
|
126,396
|
|
|
477,213
|
|
|
493,894
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
costs
|
|
665,718
|
|
|
720,637
|
|
|
2,830,314
|
|
|
2,966,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
1,678
|
|
|
1,906
|
|
|
6,794
|
|
|
7,635
|
|
|
|
|
|
|
|
|
|
|
|
|
Total benefits and
expenses
|
|
667,396
|
|
|
722,543
|
|
|
2,837,108
|
|
|
2,973,720
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
42,082
|
|
|
8,154
|
|
|
78,977
|
|
|
11,086
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
17,874
|
|
|
(3,888)
|
|
|
24,496
|
|
|
(6,345)
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
24,208
|
|
|
12,042
|
|
|
54,481
|
|
|
17,431
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net loss
attributable to the non-controlling interest
|
|
3
|
|
|
1
|
|
|
5
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Triple-S Management Corporation
|
$
|
24,211
|
|
$
|
12,043
|
|
$
|
54,486
|
|
$
|
17,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Triple-S Management Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
$
|
1.03
|
|
$
|
0.50
|
|
$
|
2.27
|
|
$
|
0.71
|
|
Diluted net income
per share
|
$
|
1.03
|
|
$
|
0.50
|
|
$
|
2.26
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average of
common shares
|
|
23,459,879
|
|
|
24,215,544
|
|
|
23,996,503
|
|
|
24,454,435
|
|
Dilutive weighted
average of common shares
|
|
23,557,197
|
|
|
24,272,286
|
|
|
24,067,586
|
|
|
24,511,093
|
Exhibit
III
|
|
Condensed
Consolidated Statements of Cash Flows
|
(dollar amounts in
thousands)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year
Ended
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
288,918
|
|
$
|
6,471
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Proceeds from
investments sold or matured:
|
|
|
|
|
|
|
|
Securities available
for sale:
|
|
|
|
|
|
|
|
|
Fixed maturities
sold
|
|
463,232
|
|
|
400,848
|
|
|
|
Fixed maturities
matured/called
|
|
18,893
|
|
|
56,988
|
|
|
|
Equity securities
sold
|
|
59,963
|
|
|
109,049
|
|
|
Securities held to
maturity - fixed maturities matured/called
|
|
2,712
|
|
|
1,538
|
|
Acquisition of
investments:
|
|
|
|
|
|
|
|
Securities available
for sale:
|
|
|
|
|
|
|
|
|
Fixed
maturities
|
|
(560,304)
|
|
|
(482,252)
|
|
|
|
Equity
securities
|
|
(134,834)
|
|
|
(163,119)
|
|
|
Securities held to
maturity - fixed maturities
|
|
(2,197)
|
|
|
(1,445)
|
|
Increase in other
investments
|
|
(2,064)
|
|
|
(2,493)
|
|
Net disbursements for
policy loans
|
|
(513)
|
|
|
(663)
|
|
Net capital
expenditures
|
|
(21,359)
|
|
|
(4,750)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(176,471)
|
|
|
(86,299)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Change in outstanding
checks in excess of bank balances
|
|
12,683
|
|
|
12,250
|
|
Repayments of
long-term borrowings
|
|
(2,836)
|
|
|
(1,742)
|
|
Proceeds from
revolving line of credit
|
|
1,964
|
|
|
-
|
|
Repurchase and
retirement of common stock
|
|
(20,220)
|
|
|
(21,371)
|
|
Proceeds from
policyholder deposits
|
|
13,557
|
|
|
18,224
|
|
Surrender of
policyholder deposits
|
|
(22,082)
|
|
|
(21,923)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
(16,934)
|
|
|
(14,562)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
95,513
|
|
|
(94,390)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
103,428
|
|
|
197,818
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$
|
198,941
|
|
$
|
103,428
|
Exhibit IV
|
|
Segment
Performance Supplemental Information
|
|
(Unaudited)
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
(dollar amounts in
millions)
|
2017
|
2016
|
Percentage
Change
|
|
2017
|
2016
|
Percentage
Change
|
Premiums earned,
net:
|
|
|
|
|
|
|
|
|
Managed
Care:
|
|
|
|
|
|
|
|
|
|
Commercial
|
$
195.9
|
$
204.6
|
(4.3%)
|
|
$
803.3
|
$
841.4
|
(4.5%)
|
|
|
Medicare
|
246.8
|
234.5
|
5.2%
|
|
1,035.3
|
1,023.9
|
1.1%
|
|
|
Medicaid
|
191.1
|
200.4
|
(4.6%)
|
|
751.4
|
783.2
|
(4.1%)
|
|
|
|
Total Managed
Care
|
633.8
|
639.5
|
(0.9%)
|
|
2,590.0
|
2,648.5
|
(2.2%)
|
|
Life
Insurance
|
40.4
|
40.0
|
1.0%
|
|
161.8
|
156.9
|
3.1%
|
|
Property and
Casualty
|
13.8
|
23.0
|
(40.0%)
|
|
77.2
|
87.9
|
(12.2%)
|
|
Other
|
|
(0.6)
|
(0.6)
|
0.0%
|
|
(2.1)
|
(2.7)
|
22.2%
|
|
|
|
|
Consolidated premiums
earned, net
|
$
687.4
|
$
701.9
|
(2.1%)
|
|
$
2,826.9
|
$
2,890.6
|
(2.2%)
|
Operating revenues
(loss): 1
|
|
|
|
|
|
|
|
|
Managed
Care
|
$
643.6
|
$
648.6
|
(0.8%)
|
|
$
2,628.2
|
$
2,686.0
|
(2.2%)
|
|
Life
Insurance
|
46.7
|
46.2
|
1.1%
|
|
186.6
|
181.8
|
2.6%
|
|
Property and
Casualty
|
17.1
|
25.3
|
(32.4%)
|
|
86.7
|
96.8
|
(10.4%)
|
|
Other
|
|
(0.6)
|
(0.9)
|
33.3%
|
|
(2.8)
|
(3.7)
|
24.3%
|
|
|
|
|
Consolidated
operating revenues
|
$
706.8
|
$
719.2
|
(1.7%)
|
|
$
2,898.7
|
$
2,960.9
|
(2.1%)
|
Operating income
(loss): 2
|
|
|
|
|
|
|
|
|
Managed
Care
|
$
35.9
|
$
(10.3)
|
448.5%
|
|
$
55.0
|
$
(36.8)
|
249.5%
|
|
Life
Insurance
|
6.0
|
6.6
|
(9.1%)
|
|
19.4
|
21.5
|
(9.8%)
|
|
Property and
Casualty
|
(0.8)
|
2.6
|
(130.8%)
|
|
(6.0)
|
12.1
|
(149.6%)
|
|
Other
|
|
-
|
(0.4)
|
100.0%
|
|
-
|
(2.0)
|
100.0%
|
|
|
|
|
Consolidated
operating income (loss)
|
$
41.1
|
$
(1.5)
|
(2840.0%)
|
|
$
68.4
|
$
(5.2)
|
(1415.4%)
|
Operating margin:
3
|
|
|
|
|
|
|
|
|
Managed
Care
|
5.6%
|
(1.6%)
|
720 bp
|
|
2.1%
|
(1.4%)
|
350 bp
|
|
Life
Insurance
|
12.8%
|
14.3%
|
-150 bp
|
|
10.4%
|
11.8%
|
-140 bp
|
|
Property and
Casualty
|
(4.7%)
|
10.3%
|
-1,500 bp
|
|
(6.9%)
|
12.5%
|
-1,940 bp
|
|
Consolidated
|
5.8%
|
(0.2%)
|
600 bp
|
|
2.4%
|
(0.2%)
|
260 bp
|
Depreciation and
amortization expense
|
$
3.4
|
$
3.5
|
(2.9%)
|
|
$
13.2
|
$
14.1
|
(6.4%)
|
|
1
Operating revenues include premiums earned, net, administrative
service fees and net investment income.
2
Operating income or loss include operating revenues minus operating
costs. Operating costs include claims incurred and operating
expenses.
3
Operating margin is defined as operating income or loss divided by
operating revenues.
|
Managed Care
Additional Data
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
(Unaudited)
|
2017
|
2016
|
|
2017
|
2016
|
Member months
enrollment:
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
Fully-insured
|
972,095
|
1,010,374
|
|
3,981,347
|
4,209,920
|
|
|
Self-insured
|
463,385
|
526,721
|
|
1,967,668
|
2,144,621
|
|
|
|
Total
Commercial
|
1,435,480
|
1,537,095
|
|
5,949,015
|
6,354,541
|
|
Medicare
Advantage
|
362,277
|
334,570
|
|
1,457,363
|
1,394,272
|
|
Medicaid
|
1,150,791
|
1,195,700
|
|
4,631,316
|
4,829,729
|
|
|
|
|
Total member
months
|
2,948,548
|
3,067,365
|
|
12,037,694
|
12,578,542
|
Claim liabilities
(in millions)
|
|
|
|
$
367.4
|
$
349.0
|
Days claim
payable
|
|
|
|
60
|
54
|
Premium
PMPM:
|
|
|
|
|
|
|
Managed
Care
|
$
255.03
|
$
251.71
|
|
$
257.20
|
$
253.84
|
|
|
Commercial
|
201.52
|
202.50
|
|
201.77
|
199.86
|
|
|
Medicare
Advantage
|
681.25
|
700.90
|
|
710.39
|
734.36
|
|
|
Medicaid
|
166.06
|
167.60
|
|
162.24
|
162.16
|
Medical loss
ratio:
|
80.9%
|
88.0%
|
|
85.6%
|
88.6%
|
|
Commercial
|
72.5%
|
81.2%
|
|
77.5%
|
85.2%
|
|
Medicare
Advantage
|
82.3%
|
91.1%
|
|
87.7%
|
90.3%
|
|
Medicaid
|
87.6%
|
91.4%
|
|
91.5%
|
90.1%
|
Adjusted medical loss
ratio: 1
|
82.5%
|
85.1%
|
|
86.1%
|
87.7%
|
|
Commercial
|
74.5%
|
80.5%
|
|
77.9%
|
83.8%
|
|
Medicare
Advantage
|
82.9%
|
85.2%
|
|
88.4%
|
89.2%
|
|
Medicaid
|
90.4%
|
89.4%
|
|
91.8%
|
90.0%
|
Operating expense
ratio:
|
|
|
|
|
|
|
Consolidated
|
18.6%
|
17.9%
|
|
16.8%
|
17.0%
|
|
Managed
Care
|
14.9%
|
14.9%
|
|
13.6%
|
14.0%
|
|
1 The
adjusted medical loss ratio accounts for subsequent adjustments to
estimates, such as prior-period reserve developments and Medicare
premium adjustments, and presents them in the corresponding
period.
|
Managed Care
Membership by Segment
|
As of December
31,
|
|
|
|
|
|
2017
|
2016
|
Members:
|
|
|
|
|
Commercial:
|
|
|
|
|
Fully-insured
|
321,571
|
335,643
|
|
|
Self-insured
|
153,455
|
173,514
|
|
|
|
Total
Commercial
|
475,026
|
509,157
|
|
Medicare
Advantage
|
118,451
|
110,297
|
|
Medicaid
|
384,462
|
397,918
|
|
|
|
|
Total
members
|
977,939
|
1,017,372
|
Exhibit V
|
|
Reconciliation of
Non-GAAP Financial Measures
|
|
|
|
|
Adjusted Net
Income
|
(Unaudited)
|
Three months
ended
December 31,
|
Year ended
December 31,
|
(dollar amounts in
millions)
|
2017
|
2016
|
|
2017
|
2016
|
Net income
|
$
24.2
|
$
12.0
|
|
$
54.5
|
$
17.4
|
Less
adjustments:
|
|
|
|
|
|
|
Net realized
investment gains, net of tax
|
2.2
|
8.3
|
|
8.7
|
13.9
|
|
Private equity
investment (loss) income, net of tax
|
(0.1)
|
0.3
|
|
0.3
|
0.3
|
|
|
Adjusted net
income
|
$
22.1
|
$
3.4
|
|
$
45.5
|
$
3.2
|
|
|
Diluted adjusted net
income per share
|
$
0.94
|
$
0.14
|
|
$
1.89
|
$
0.13
|
|
Adjusted net income
is a non-GAAP financial metric and should not be considered a
substitute for, or superior to, financial measures calculated in
accordance with GAAP. Management believes that the use of this
adjusted net income and adjusted net income per share provides
investors and management useful information about the earnings
impact of realized investment gains and other non-recurring items
impacting the Company's results of operations. This non-GAAP metric
does not consider all of the items associated with the Company's
operations as determined in accordance with GAAP. As a result, one
should not consider these measures in isolation.
|
INVESTOR RELATIONS:
Mr. Garrett Edson
ICR
(787) 792-6488
View original
content:http://www.prnewswire.com/news-releases/triple-s-management-corporation-reports-fourth-quarter-2017-results-300606305.html
SOURCE Triple-S Management Corporation