Universal American Corp. (NYSE:UAM) today announced financial
results for the quarter and year ended December 31, 2016.
WellCare Transaction Update
- As previously announced, on November
17, 2016, Universal American entered into a definitive agreement
with WellCare Health Plans, Inc. (“WellCare”) under which WellCare
will acquire Universal American in an all cash transaction valued
at $10.00 per share of common stock (the “WellCare
Transaction”).
- On January 4, 2017, Universal American
and WellCare announced the early termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act.
- On February 16. 2017, Universal
American stockholders approved the WellCare Transaction with more
than 99% of the shares represented in person or by proxy voting to
approve the acquisition, which represented approximately 89% of
Universal American’s total outstanding shares of common stock as of
the January 13, 2017 record date.
- The WellCare Transaction is expected to
close in the second quarter of 2017, subject to the receipt of
regulatory approvals and other customary closing conditions.
Universal American and WellCare are pursuing the remaining
regulatory approvals from regulatory agencies in Texas and New
York.
Full Year 2016
Universal American’s reported net income for the full year 2016
was $55.4 million, or $0.78 per share. Adjusted net income for the
full year 2016 was $1.6 million, or $0.02 per share, which excludes
the following after-tax items:
- $6.2 million, or $0.09 per share, of
losses associated with our Management Services Organization (MSO)
segment which includes our Accountable Care Organization (ACO)
business;
- $1.5 million, or $0.02 per share, of
net realized investment gains;
- $1.4 million, or $0.02 per share, of
non-cash interest on our Convertible Notes;
- $0.6 million, or $0.01 per share, of
tax benefit;
- $61.7 million or $0.87 per share of
income from discontinued operations, including our Traditional
Insurance and Total Care Medicaid businesses, which were sold in
August 2016, and the APS Healthcare businesses, which were sold in
2015; and
- $2.4 million or $0.03 per share, of
development-related transaction costs, including the pending
WellCare Transaction.
Total revenues from continuing operations for full year 2016
were approximately $1.4 billion.
Fourth Quarter 2016
Universal American’s reported net loss for the fourth quarter of
2016 was $18.5 million, or $0.33 per share. Adjusted net loss for
the fourth quarter of 2016 was $7.8 million, or $0.14 per share,
which excludes the following after-tax items:
- $8.8 million, or $0.16 per share, of
losses associated with our MSO segment, which includes our ACO
business;
- $0.7 million, or $0.01 per share, of
non-cash interest on our Convertible Notes;
- $0.3 million, or less than $0.01 per
share, of tax benefits;
- $1.1 million, or $0.02 per share, of
losses from discontinued operations, including our Traditional
Insurance and Total Care Medicaid businesses, which were sold in
August 2016, and the APS Healthcare businesses, which were sold in
2015; and
- $0.4 million or $0.01 per share, of
development-related transaction costs, including the pending
WellCare Transaction.
Total revenues from continuing operations for the fourth quarter
of 2016 were approximately $341 million.
Management Comments
Richard A. Barasch, Chairman and CEO, commented, “2016 was a
successful year for Universal American, culminating with the
signing of a definitive contract to sell the company to WellCare.
Everyone associated with Universal American has worked tirelessly
to bring vibrancy to the Healthy Collaboration® model in which we
work closely with our physician partners to improve quality and
lower costs for Medicare beneficiaries. Through this acquisition,
WellCare is demonstrating its commitment to this model.
“Most important was the improvement in the operating results of
our Medicare Advantage business, driven by the continued success of
our flagship HMO in Southeast Texas and the return to profitability
of our plans in the Northeast. We were especially pleased with the
increase in our overall Stars rating, including achieving 4.5 Stars
in Southeast Texas.
“Looking forward, we believe we are well-positioned for a
successful 2017 given the stability of our medical loss ratios in
2016, our 2017 bids, and membership growth during the 2017 AEP.
“We also achieved a significant increase in the revenues from
our MSO/ACO segment. We are encouraged by the progress in cost and
quality shown by our physician partners and by the positive
regulatory changes in the MSSP program.”
2017 Membership (as of January 31,
2017)
- Medicare Advantage:
- 72,100 members in Texas
- 47,400 members in upstate New York and
Maine
- Management Services Organization:
- 47,700 Medicare beneficiaries in our
two Next Generation ACOs in Houston, Texas and
Maryland/Virginia
- 26,900 Medicare beneficiaries in three
ACOs that have selected Track 2 (2-sided risk) in the Medicare
Shared Savings Program (MSSP)
- 147,200 Medicare beneficiaries in 13
ACOs that have selected Track 1 (1-sided risk) in the MSSP
Medicare Advantage
Three Months Ended
December 31, 2016
Year Ended
December 31, 2016
Financial
Performance ($ in millions)
Net premiums (1) $ 337.5 $ 1,366.7 Net
investment income & other income 2.4 9.7 Revenue
339.9 1,376.4 Quality initiatives 6.9 2.0 % 24.2 1.8 %
Medical benefits 278.8 82.6 % 1,129.6 82.6 % Total
benefits 285.7 84.6 % 1,153.8 84.4 % Admin expenses 48.0
14.2 % 152.5 11.2 % ACA fee 5.4 21.7 Segment
income before income taxes $ 0.8 $ 48.4
Reported Recast** Reported Recast**
Texas HMOs Medical Benefit Ratio
* 81.9 % 82.2 % 82.5 % 83.0
% Upstate New York/Maine Medical Benefit Ratio
* 84.1 % 83.7
% 83.3 % 83.1 % (1) Effective January 1, 2016, we changed
the way in which we estimate changes in risk-adjusted premiums
receivable from CMS, which resulted in the accelerated recognition
of additional current year premium revenue of $9.2 million for the
year ended December 31, 2016. * Excluding quality initiatives. **
Recast excludes the impact of prior period items.
The Medicare Advantage segment pre-tax operating income for full
year 2016 was $48.4 million, an increase of $27.0 million compared
to full year 2015. Full year 2016 included $7.6 million of net
favorable prior year items compared to $4.0 million of net
favorable items for full year 2015.
The Medicare Advantage segment pre-tax operating income for
fourth quarter 2016 was $0.8 million, a decrease of $2.1 million
compared to fourth quarter 2015. The fourth quarter includes
seasonally high sales and marketing expenses to support the Annual
Election Period (AEP). Fourth quarter 2016 included $0.6 million of
net favorable prior period items compared to $0.3 million of net
unfavorable prior period items in fourth quarter 2015.
Texan Plus®, a 4.5-Star plan, is the largest Medicare HMO in
Southeast Texas. Texan Plus® now has 69,200 members. Virtually all
of our members in this plan are in value-based payment
arrangements. For the fourth quarter of 2016, the reported Medical
Benefit Ratio (MBR) in our Texas HMOs was 81.9%. Excluding positive
prior period items, the MBR was 82.2% for the fourth quarter. For
full year 2016, the reported MBR in our Texas HMOs was 82.5% and
83.0% excluding prior period items.
Our Northeast markets added approximately 2,000 members during
the 2017 AEP and we now have more than 47,400 members with a large
concentration in upstate New York. For fourth quarter 2016, the
reported MBR was 84.1% and 83.7% excluding prior period items. For
full year 2016, the reported MBR in our Northeast markets was 83.3%
and 83.1% excluding prior period items.
Our administrative expense ratio increased to 11.2% for full
year 2016 compared to 10.8% for the same period in 2015 largely due
to higher sales and marketing costs. For fourth quarter 2016, our
administrative expense ratio increased to 14.2% compared to 13.1%
for the same period in 2015. Our administrative expense ratio is
typically higher in the fourth quarter as a result of sales and
marketing costs incurred in that period.
Medicare Advantage 2017 Stars
As previously announced, the enrollment-weighted Star rating for
Universal American’s Medicare Advantage membership increased from
3.98 in 2016 to 4.15 Stars in 2017 reflecting the quality of care
delivered to our enrolled Medicare beneficiaries. Approximately 70%
of our members are currently enrolled in plans awarded 4 Stars or
higher. A summary of these ratings is presented below:
2017 Universal
American Medicare Advantage Plans Contract
Plan Name Location
January 2017 Members
2016 Star Rating
2017 Star Rating
H4506 Texan Plus® HMO Southeast Texas 69,200
4.0 4.5 H2775 Today’s Options PPO
Northeast 19,800 4.0 4.0 H0174 Texan
Plus® D-SNP Southeast Texas 500 4.0 4.0
H2816 Today’s Options Network PFFS Northeast
27,600 4.0 3.5 H5656 Texan Plus® HMO
North Texas (Dallas) 2,400 3.0 3.0
Management Services Organization
(MSO)
Financial
Performance ($ in millions)
Three Months Ended
December 31,
Year Ended
December 31,
2016
2015
2016
2015
MSSP Shared Savings Revenue: Gross Shared Savings $ - $ - $ 39.8 $
26.9 ACO Partner Share - - (10.6
) (6.0 ) Net MSSP Shared Savings Revenue - - 29.2 20.9 Next
Generation ACO estimated loss 2.9 - 1.7 - Other operating income
and expenses 10.7 10.6 37.0
41.0 Segment loss before income taxes $ (13.6
) $ (10.6 ) $ (9.5 ) $ (20.1 )
The MSO segment includes our ACO business, in which we
collaborate with primary care physicians and other healthcare
professionals to operate ACOs under the Medicare Shared Savings
Program (MSSP) and the Next Generation ACO model. In 2017, we will
have 14 MSSP ACOs and two Next Generation ACOs with approximately
221,800 assigned Medicare fee-for-service beneficiaries.
As previously announced, on July 29, 2016, the Centers for
Medicare & Medicaid Services (CMS) informed us that our
Medicare Shared Savings Program (MSSP) ACOs generated $97 million
in gross savings for program year 2015. This compared to $80
million in gross savings for program year 2014. Ten of our ACO’s
qualified for shared savings payments in program year 2015,
compared to nine in program year 2014, and received gross shared
savings payments of $39.8 million, compared to $26.9 million in
program year 2014. Our share of these payments, after payments to
our physician partners increased to $28.5 million from $20.9
million in the prior year, and is reflected in equity in (losses)
earnings of unconsolidated subsidiaries in our consolidated
statements of operations. We received these payments during the
third quarter of 2016. Quality scores improved for all of our ACOs
with start dates prior to 2015, indicating an improvement in
healthcare management resulting from enhanced physician
engagement.
The ten ACOs that qualified for shared savings payments for
program year 2015 met quality standards and savings thresholds
established by Medicare. In addition to the ten ACOs that received
shared savings, eight other ACOs achieved savings but did not
exceed the minimum savings threshold in order to qualify for a
shared savings payment. Together, these eighteen ACOs generated $97
million in total savings for the Medicare program.
Effective January 1, 2017, our new Maryland/Virginia-based ACO
formed in partnership with high-performing primary care physicians
was selected by CMS to become a Next Generation ACO, a value-based
payment model that encourages providers to assume greater risk and
reward in coordinating the healthcare of Medicare Fee-For-Service
(FFS) beneficiaries. This Next Generation ACO has approximately
28,100 beneficiaries as of January 1, 2017.
Our MSO segment generated a pre-tax loss of $9.5 million for the
year ended 2016 compared to a loss of $20.1 million in the same
period of 2015. The Next Generation ACO in Texas recorded an
estimated loss of $1.7 million in 2016 based on information
provided by CMS. Operating expenses for the year ended December 31,
2016 were $37.0 million compared to $40.9 million for the year
ended December 31, 2015, reflecting fewer active ACOs in 2016.
Corporate & Other
Three Months Ended
December 31,
Year Ended
December 31,
Financial
Performance ($ in millions)
2016
2015
2016
2015
Revenue $ 0.9 $ 0.3 $ 2.3 $ 7.2
Segment loss before income taxes $ (10.8 ) $ (11.0 ) $ (37.4
) $ (40.2 )
Our Corporate & Other segment reflects the activities of our
parent holding company, debt service and other ancillary
operations, including support services provided to the buyers of
the Traditional Insurance business, Total Care Medicaid Plan and
the APS Healthcare businesses, through Transition Services
Agreements.
Dividends on our Preferred Stock were $0.9 million and $3.4
million for the three and twelve month periods ended December 31,
2016, respectively. Interest expense on our Convertible Notes,
which were issued in June 2016, was $2.2 million and $4.5 million,
respectively, for the three and twelve month periods ended December
31, 2016, including $1.0 million and $2.1 million, respectively, of
non-cash interest expense.
Discontinued Operations
Discontinued Operations includes our Traditional Insurance
business and the Total Care Medicaid Plan, which were sold in
August 2016, and the APS Healthcare businesses, which were sold in
2015.
The following table presents the components comprising the
(loss) income from discontinued operations before income taxes:
Financial
Performance ($ in millions)
Three Months Ended
December 31,
Year Ended
December 31,
2016
2015
2016
2015
Total Care Medicaid: Operating results $ (0.1 ) $ 1.0 $ (4.2
) $ 0.1 Gain on Sale - - 20.4 - Total
Medicaid (0.1 ) 1.0 16.2 0.1
Traditional Insurance:
Operating results 1.6 (23.7 ) 10.9 (16.3 ) Realized gains - - 0.2
0.1 (Loss) gain on Sale (2.3 ) (149.2 ) 0.5 (149.2 ) Total
Traditional (0.7 ) (172.9 ) 11.6 (165.4 )
APS
Healthcare: Total APS Healthcare (1) 0.4 (1.4 ) 39.9
(23.1 ) (Loss) income before income taxes $ (0.4 ) $
(173.3 ) $ 67.7 $ (188.4 ) (1) 2016 amounts include earn-out
revenues and litigation settlement, while 2015 amounts include
initial loss on sale of APS Healthcare.
Investment Portfolio
As of December 31, 2016, Universal American had $356.0 million
of cash and invested assets as follows:
- 50% is invested in U.S. Government and
agency securities;
- The average credit quality of the
investment portfolio is AA-; and
- Less than 1% of the investment
portfolio is non-investment grade.
A complete listing of our fixed income investment portfolio as
of December 31, 2016 is available for review in the financial
supplement located in the Investors – Financial Reports section of
our website, www.UniversalAmerican.com.
Balance Sheet and Liquidity
As of December 31, 2016, Universal American’s Balance Sheet had
the following characteristics:
- Unregulated cash and investments of
$102.9 million;
- Total cash and investments were $356.0
million and total assets were $785.6 million, including $229.8
million in assets of discontinued operations;
- Total policyholder liabilities were
$82.9 million and total liabilities were $516.2 million, including
$237.8 million in liabilities of discontinued operations;
- Stockholders’ equity was $269.4 million
and book value was $4.57 per diluted common share;
- Tangible book value per diluted common
share (excluding accumulated other comprehensive income, goodwill
and amortizing intangibles) was $3.39;
- $115 million of convertible senior
notes with a carrying value of $96.5 million which bear cash
interest of 4.0% per annum and an annual effective interest rate of
8.5%; and
- $40.0 million of mandatorily redeemable
preferred stock, reported as a liability, with an annual dividend
rate of 8.5%, which will mature in May 2017.
As of December 31, 2016, the ratio of debt to total capital,
excluding the effect of AOCI and including Universal American’s
convertible senior notes and mandatorily redeemable preferred stock
as debt, was 38.1%.
Conference Call
Given the pending transaction with WellCare, Universal American
is not hosting a conference call in conjunction with this earnings
release and does not expect to do so for future quarters.
About Universal American Corp.
Universal American (NYSE: UAM), through our family of healthcare
companies, provides health benefits to people covered by Medicare.
We are dedicated to working collaboratively with healthcare
professionals, especially primary care physicians, in order to
improve the health and well-being of those we serve and reduce
healthcare costs. For more information on Universal American,
please visit our website at www.UniversalAmerican.com.
Forward Looking Statements
This news release and oral statements made from time to time by
our executive officers may contain "forward-looking" statements
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and the Private Securities Litigation Reform Act
of 1995, known as the PSLRA. Such statements that are not
historical facts are hereby identified as forward-looking
statements and intended to be covered by the safe harbor provisions
of the PSLRA and can be identified by the use of the words
"believe," "expect," "predict," "project," "potential," "estimate,"
"anticipate," "should," "intend," "may," "will," and similar
expressions or variations of such words, or by discussion of future
financial results and events, strategy or risks and uncertainties,
trends and conditions in our business and competitive strengths,
all of which involve risks and uncertainties.
Where, in any forward-looking statement, we or our management
expresses an expectation or belief as to future results or actions,
there can be no assurance that the statement of expectation or
belief will result or be achieved or accomplished. Our actual
results may differ materially from our expectations, plans or
projections. We warn you that forward-looking statements are only
predictions and estimates, which are inherently subject to risks,
trends and uncertainties, many of which are beyond our ability to
control or predict with accuracy and some of which we might not
even anticipate. We give no assurance that we will achieve our
expectations and we do not assume responsibility for the accuracy
and completeness of the forward-looking statements. Future events
and actual results, financial and otherwise, may differ materially
from the results discussed in the forward-looking statements as a
result of many factors, including the risk factors described in the
risk factor section of our SEC reports.
A summary of the information set forth in the "Risk Factors"
section of our SEC reports and other risks includes, but is not
limited to the following: the risk that the WellCare Transaction
may not be completed in a timely manner or at all, which may
adversely affect our business and the price of our common stock;
the failure to satisfy the conditions to the consummation of the
WellCare Transaction, including the receipt of certain governmental
and regulatory approvals; the occurrence of any event, change or
other circumstance that could give rise to the termination of the
merger agreement with WellCare; the effect of the announcement or
pendency of the WellCare Transaction on our business relationships,
operating results, and business generally, including risks related
to the WellCare Transaction disrupting current plans and operations
and potential difficulties in employee retention as a result of the
transaction; risks related to diverting management’s attention from
our ongoing business operations; we are subject to extensive
government regulation and frequent audit and the potential that CMS
and/or other regulators could impose significant fines, penalties
or operating restrictions on Universal American, including with
respect to CMS audits, False Claims Act matters or Risk Adjustment
Data Validation (“RADV”) audits; the Affordable Care Act, including
efforts to repeal and replace the Affordable Care Act, could have a
material adverse effect on our opportunities for growth and our
financial results; we are investing significant capital and
management attention in new and unproven business opportunities,
including our Accountable Care Organizations (“ACOs”), where we
take two-sided risk , that may not be profitable; the impact of the
Centers for Medicare and Medicaid Services’ (“CMS”) Advance Notice
regarding Medicare Advantage reimbursement rates for calendar year
2018 could have a material adverse effect on Universal American’s
MA business; we may experience higher than expected medical loss
ratios or lower revenues, especially with our new members in our
Northeast markets, which could materially adversely affect our
results of operations; If we are unable to develop and maintain
satisfactory relationships with the providers of care to our
members and ACO beneficiaries, our business and overall
profitability could be materially adversely affected; if we fail to
design and price our products properly and competitively or if the
premiums and fees we charge are insufficient to cover the cost of
health care services delivered to our members, our profitability
may be materially adversely affected; our significant shareholders
may have interests that are different than other shareholders and
may sell or distribute their stock which could cause the price of
our stock to decline; changes in governmental regulation or
legislative reform could increase our costs of doing business and
adversely affect our profitability; reductions in funding for
Medicare programs could materially reduce our profitability;
failure to reduce our operating and corporate costs could have a
material adverse effect on our financial position, results of
operations and cash flows; we may not be able to maintain or
improve our CMS Star ratings which may cause certain of our plans
to receive less bonuses or rebates than our competitors; changes in
governmental regulation or legislative reform, including the impact
of Sequestration, could reduce our revenues, increase our costs of
doing business and adversely affect our profitability; a
substantial portion of our revenues are tied to our Medicare
businesses and regulated by CMS and if our government contracts are
not renewed or are terminated, our business could be substantially
impaired; any failure by us to manage our operations or to
successfully complete or integrate acquisitions, dispositions and
other significant transactions could harm our financial results,
business and prospects; we could be subject to a cyber-attack or
similar network breach that could damage our reputation and have a
material adverse effect. Other unknown or unpredictable factors
could also have material adverse effects on future results,
performance or achievements of Universal American.
All forward-looking statements included in this release are
based upon information available to Universal American as of the
date of the release, and we assume no obligation to update or
revise any such forward-looking statements.
(Tables to follow)
UNIVERSAL AMERICAN CORP. AND
SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA In
millions, except per share amounts (Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
Consolidated
Results
2016 2015
2016 2015
Net premiums $ 337.6 $ 321.8 $ 1,366.7 $ 1,246.0 Net
investment income 2.3 2.2 8.6 12.0 Other income 1.0 0.3 2.9 4.5
Realized gains - 5.3 1.4 38.9 Total
revenues 340.9 329.6 1,379.6 1,301.4
Policyholder benefits 285.7 272.6 1,153.8 1,074.5
Amortization of intangible assets 0.2 0.5 0.9 2.1 Affordable Care
Act fee 5.4 6.4 21.7 25.5 Commissions and general expenses, net of
allowances 63.6 55.0 205.1 189.6 Total
benefits and expenses 354.9 334.5 1,381.5
1,291.7 (Loss) income before equity in (losses)
earnings of unconsolidated subsidiaries (14.0 ) (4.9 ) (1.9 ) 9.7
Equity in (losses) earnings of unconsolidated subsidiaries
(9.6 ) (8.5 ) 5.0 (9.6 )
(Loss) income from continuing operations
before income taxes
(23.6 ) (13.4 ) 3.1 0.1 Income tax (benefit) expense (1) (6.2 )
(3.8 ) 9.4 (3.8 )
Net loss from continuing
operations (17.4 ) (9.6 )
(6.3 ) (3.7 )
Discontinued
operations
(Loss) income from
discontinued operations before income taxes
(0.4 ) (173.3 ) 67.7 (188.4 )
Income tax expense (benefit)
0.7 (21.3 ) 6.0 (28.1 )
(Loss) income from discontinued
operations
(1.1 ) (152.0 ) 61.7 (160.3 )
Net (loss)
income $ (18.5 ) $ (161.6
) $ 55.4 $ (164.0
)
Per Share Data
(Diluted)
Continuing operations
$ (0.31 ) $ (0.12 ) $ (0.09 ) $ (0.04
) Discontinued operations (0.02 ) (1.84 ) 0.87 (1.95 )
Net (loss) income $ (0.33 )
$ (1.96 ) $ 0.78 $
(1.99 ) Diluted weighted average shares
outstanding 56.6 82.6 70.7 82.4
UNIVERSAL AMERICAN CORP. AND
SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA In
millions, except per share amounts (Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
Income (loss)
before income taxes by Segment
2016
2015
2016
2015
Medicare Advantage $ 0.8 $ 2.9 $ 48.4 $ 21.5 MSO (13.6 )
(10.6 ) (9.5 ) (20.1 ) Corporate & Other (10.8 ) (11.0 ) (37.4
) (40.2 ) Realized gains - 5.3 1.4 38.9
(Loss) income before income taxes – continuing operations $
(23.6 ) $ (13.4 ) $ 3.1 $ 0.1
BALANCE SHEET DATA
December 31,
2016
Total cash and investments $ 356.0 Total assets $ 785.6 Total
policyholder related liabilities $ 82.9 Total reinsurance
recoverable (ceded policyholder liabilities) $ 1.1 Convertible
senior notes due 2021* - principal balance $ 115.0 Mandatorily
redeemable preferred shares* - principal balance $ 40.0 Total
stockholders' equity $ 269.4 Diluted book value per common share $
4.57 Diluted common shares outstanding at balance sheet date 58.9
Non-GAAP
Financial Measures *
Total stockholders’ equity (excluding AOCI) * $ 269.8 Diluted book
value per common share (excluding AOCI) * (2) $ 4.58 Diluted
tangible book value per common share (excluding AOCI) * (3) $ 3.39
Debt to total capital ratio (excluding AOCI) * (4) 38.1%
Three Months Ended
December 31,
Year Ended
December 31,
2016
2015
2016
2015
Adjusted net (loss) income(5) $ (7.8 ) $ (5.9 ) $ 1.6 $
(16.6 ) Adjusted net (loss) income per share (diluted) $ (0.14 ) $
(0.07 ) $ 0.02 $ (0.20 ) * Non-GAAP Financial Measures - See
supplemental tables on the following pages of this release for a
reconciliation of these items to financial measures calculated
under U.S. generally accepted accounting principles (GAAP). (1) The
effective tax rate on continuing operations was 26.0% for the
fourth quarter of 2016 compared to 28.6% for the fourth quarter of
2015. For each of the years ended December 31, 2016 and 2015, the
effective tax rate on continuing operations was a provision in
excess of 100%. The effective rate in 2016 and 2015 differs from
the expected benefit of the 35% federal rate due to permanent
items, primarily the ACA fee and preferred dividends, as well as
state income taxes, net of non-recurring tax benefits. Non
recurring tax benefits included in income taxes amounted to $0.6
million and $6.4 million for the years ended December 31, 2016 and
2015, respectively. The 2016 benefit relates primarily to release
of a reserve on foreign tax credits. The 2015 benefit primarily
relates to $4.3 million in foreign tax credit carryforwards created
in connection with the February 2015 sale of APS Puerto Rico, net
of valuation allowance and a $2.4 million net capital loss created
in connection with the Traditional Insurance business fair value
adjustment, net of valuation allowance. Any utilization of these
tax benefits in the future will require sufficient taxable income,
of the appropriate character, from continuing sources;
consequently, they are included in continuing operations. (2)
Diluted book value per common share (excluding AOCI) represents
Total Stockholders’ Equity, excluding accumulated other
comprehensive income (“AOCI”), plus assumed proceeds from the
exercise of vested, in-the-money options, divided by the total
shares outstanding plus the shares assumed issued from the exercise
of vested, in-the-money options. (3) Tangible book value per common
share represents Total Stockholders’ Equity, excluding AOCI and
intangible assets plus assumed proceeds from the exercise of
vested, in-the-money options, divided by the total shares
outstanding plus the shares assumed issued from the exercise of
vested, in-the-money options. (4) The Debt to Total Capital Ratio
(excluding AOCI) is calculated as the ratio of the principal
balance of our Convertible senior notes and Mandatorily Redeemable
Preferred Shares to the sum of Stockholders’ Equity (excluding
AOCI) plus the principal balance of our Convertible senior notes
and Mandatorily Redeemable Preferred Shares reported as
liabilities. (5) Adjusted net (loss) income is calculated as net
loss excluding the following items on after-tax basis: ACO results,
net realized gains, non-recurring tax benefit, discontinued
operations, non-cash interest and development-related transaction
costs.
UNIVERSAL AMERICAN CORP. AND
SUBSIDIARIES SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP FINANCIAL MEASURES In millions, except per share
amounts (Unaudited)
Universal American uses both GAAP and non-GAAP financial
measures to evaluate the Company’s performance for the periods
presented in this press release. You should not consider non-GAAP
measures to be an alternative to measurements required by GAAP.
Because Universal American’s calculation of these measures may
differ from the calculation of similar measures used by other
companies, investors should be careful when comparing Universal
American’s non-GAAP financial measures to those of other companies.
We have not included a reconciliation of projected earnings per
diluted share because projections for some components of this
reconciliation are not possible to forecast at this time. The key
non-GAAP measures presented in our press release, including
reconciliation to GAAP measures, are set forth below.
Adjusted Net (Loss) Income ($ in millions, except per share
amounts)
Three Months Ended
December 31,
Year Ended
December 31,
2016 2015
2016 2015 Net
(loss) income $ (18.5 ) $ (161.6 ) $ 55.4 $ (164.0 ) ACO results,
after-tax 8.8 7.0 6.2 13.0 Net realized gains, after-tax - (4.0 )
(1.5 ) (25.3 ) Non-recurring tax benefit (0.3 ) (1.3 ) (0.6 ) (6.5
) Discontinued operations, after-tax 1.1 152.0 (61.7 ) 160.3
Non-cash interest, after-tax 0.7 - 1.4 - Transaction costs,
after-tax 0.4 2.0 2.4 5.9 Adjusted net
(loss) income $ (7.8 ) $ (5.9 ) $ 1.6 $ (16.6 ) Per
share (diluted) Net (loss) income $ (0.33 ) $ (1.96 ) $ 0.78 $
(1.99 ) ACO results, after-tax 0.16 0.09 0.09 0.16 Net realized
gains, after-tax - (0.05 ) (0.02 ) (0.31 ) Non-recurring tax
benefit (0.01 ) (0.01 ) (0.01 ) (0.08 ) Discontinued operations,
after-tax 0.02 1.84 (0.87 ) 1.95 Non-cash interest, after-tax 0.01
- 0.02 - Transaction costs, after-tax 0.01 0.02 0.03
0.07 Adjusted net (loss) income $ (0.14 ) $ (0.07 ) $
0.02 $ (0.20 )
Universal American uses adjusted net (loss) income, calculated
as net (loss) income excluding the after-tax impact of ACO results,
net realized gains, non-recurring tax benefit, discontinued
operations, non-cash interest and transaction costs as a basis for
evaluating operating results. Although the excluded items may
recur, we believe that the excluded items do not relate to the
performance of Universal American’s core business operations and
that adjusted net (loss) income provides a more useful comparison
of our business performance from period to period.
UNIVERSAL AMERICAN CORP. AND
SUBSIDIARIES SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP FINANCIAL MEASURES In millions, except per share
amounts (Unaudited)
Total Stockholders’ Equity (excluding
AOCI)
December 31,
2016
December 31,
2015
Total stockholders’ equity $ 269.4 $ 382.4 Less: Accumulated other
comprehensive income 0.4 (2.7 )
Total stockholders’
equity (excluding AOCI) $ 269.8
$
379.7
Universal American uses total stockholders’ equity (excluding
AOCI), as a basis for evaluating growth in equity on both an
absolute dollar basis and on a per share basis, as well as in
evaluating the ratio of debt to total capitalization. We believe
that fluctuations in stockholders’ equity that arise from changes
in unrealized appreciation or depreciation on investments, as well
as changes in the other components of accumulated other
comprehensive income or loss, do not relate to the performance of
Universal American’s core business operations.
Diluted Book Value per Common
Share December 31,
2016
December 31,
2015
Total stockholders’ equity $ 269.4 $ 382.4 Proceeds from assumed
exercises of vested options - - $ 269.4 $ 382.4 Diluted common
shares outstanding 58.9 84.9
Diluted book value per
common share $ 4.57 $ 4.51 Total stockholders’ equity
(excluding AOCI) $ 269.8 $ 379.7 Proceeds from assumed exercises of
vested options - - $ 269.8 $ 379.7 Diluted common shares
outstanding 58.9 84.9
Diluted book value per common share
(excluding AOCI) $ 4.58 $ 4.47
As noted above, Universal American uses total stockholders’
equity (excluding AOCI), as a basis for evaluating growth in equity
on a per share basis. We believe that fluctuations in stockholders’
equity that arise from changes in unrealized appreciation or
depreciation on investments, as well as changes in the other
components of accumulated other comprehensive income, do not relate
to the performance of Universal American’s core business
operations.
Tangible Book Value per Common
Share
December 31,
2016
December 31,
2015
Total stockholders’ equity (excluding AOCI) $ 269.8 $ 379.7 Less:
intangible assets (1) (70.0) (73.1) Proceeds from assumed exercises
of vested options - -
Tangible Book Value $ 199.8 $ 306.6
Diluted common shares outstanding 58.9 84.9
Tangible book
value per common share $ 3.39 $ 3.61
Universal American uses Tangible book value per common share as
a basis for evaluating the value of the Company’s tangible net
assets.
(1) Intangible assets include the following at December 31,
2016 and December 31, 2015, respectively: goodwill ($68.4 million)
and amortizing intangible assets, net of taxes ($1.6 million and
$4.7 million).
UNIVERSAL AMERICAN CORP. AND
SUBSIDIARIES
SUPPLEMENTAL FINANCIAL
INFORMATION
NON-GAAP FINANCIAL MEASURES
In millions, except per share
amounts
(Unaudited)
Debt to Total Capital Ratio December 31,
2016
December 31,
2015
Convertible senior notes – principal balance $ 115.0 $ -
Mandatorily redeemable preferred shares – principal balance 40.0
40.0 Total outstanding debt $ 155.0 $ 40.0
Total stockholders’ equity $ 269.4 $ 382.4
Convertible senior notes – principal balance reported as liability
(1) 96.5 - Mandatorily redeemable preferred shares – principal
balance 40.0 40.0 Total capital $ 405.9 $
422.4
Debt to total capital ratio 38.2 % 9.5 %
Total stockholders’ equity (excluding AOCI) $ 269.8 $ 379.7 Total
outstanding bank debt 96.5 - Mandatorily redeemable preferred
shares 40.0 40.0 Total capital $ 406.3 $ 419.7
Debt to total capital ratio (excluding AOCI)
38.1 % 9.5 % (1) The
principal balance of the convertible senior notes has been
allocated between its liability and equity components, as required
under GAAP. At December 31, 2016, $96.5 million was recorded as a
liability and the balance was reflected in equity in additional
paid-in-capital ($20.6 million) net of amortization expense
recorded in retained deficit ($2.1 million).
As noted above, Universal American uses total stockholders’
equity (excluding AOCI), as a basis for evaluating the ratio of
debt to total capital. We believe that fluctuations in
stockholders’ equity that arise from changes in unrealized
appreciation or depreciation on investments, as well as changes in
the other components of accumulated other comprehensive income, do
not relate to the performance of Universal American’s core business
operations.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170228006849/en/
Universal American Corp.Adam C. Thackery, (914) 597-2939Chief
Financial OfficerorInvestor Relations Counsel:The Equity
Group Inc.www.theequitygroup.comFred Buonocore, (212) 836-9607Kevin
Towle, (212) 836-9620
Universal American Corp. New (delisted) (NYSE:UAM)
過去 株価チャート
から 12 2024 まで 1 2025
Universal American Corp. New (delisted) (NYSE:UAM)
過去 株価チャート
から 1 2024 まで 1 2025
