WELLCARE HEALTH PLANS TAMPA, Fla., Aug. 5, 2015 /PRNewswire/ -- WellCare Health Plans, Inc. (NYSE: WCG) today reported results for the quarter ended June 30, 2015. As determined under generally accepted accounting principles (GAAP), net income for the second quarter of 2015 was $51.7 million, or $1.17 per diluted share. Adjusted net income for the second quarter of 2015 was $59.5 million, or $1.34 per diluted share.
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"We are pleased with our strong performance in the second quarter of 2015, which reflects our focus on disciplined execution and delivering consistent results," said Kenneth A. Burdick, WellCare's chief executive officer. "As a result of this performance and our confidence for the remainder of the year, we are raising our 2015 adjusted earnings per diluted share guidance to a range of $3.30 to $3.45."
Key Metric 2Q15
---------- ----
Adjusted earnings per diluted share* $1.34
----------------------------------- -----
Premium Revenue* ($ millions) $3,404.4
---------------------------- --------
Segment Premium Revenue ($ millions):
-------------------------------------
Medicaid Health Plans* $2,176.8
--------------------- --------
Medicare Health Plans $992.6
--------------------- ------
Medicare Prescription Drug Plans (PDP) $235.0
------------------------------------- ------
Segment Medical Benefits Ratios (MBR):
--------------------------------------
Medicaid Health Plans* 88.8%
--------------------- ----
Medicare Health Plans 86.4%
--------------------- ----
Medicare Prescription Drug Plans 79.2%
-------------------------------- ----
Adjusted selling, general and
administrative (SG&A) ratio* 7.3%
----------------------------- ---
* Refer to the basis of
presentation for a discussion
of non-GAAP financial
measures.
Highlights from the quarter include:
-- Medicaid Health Plans membership grew to approximately 2.4 million
members at June 30, 2015, an increase of 233,000 members from June 30,
2014, and 43,000 members from March 31, 2015.
-- Premium revenue increased 10.3 percent compared with the second quarter
of 2014, primarily as a result of membership growth in the company's
Medicaid Health Plans segment.
-- The adjusted Medicaid Health Plans MBR of 88.8 percent improved 470
basis points compared with the second quarter of 2014 and 130 basis
points compared with the first quarter of 2015.
-- The Medicare Health Plans MBR of 86.4 percent improved 190 basis points
compared with the second quarter of 2014, reflecting better performance
as a result of bid actions for the Medicare 2015 plan year.
-- The Medicare PDP MBR improved from 92.6 percent in the second quarter of
2014 to 79.2 percent in the second quarter of 2015 as a result of bid
positioning for the 2015 plan year and the effect of improved pharmacy
rebate management.
-- The New York State Department of Health renewed WellCare of New York's
contract to continue serving New York's Medicaid Managed Care program
across 11 counties. The new contract runs through February 2019 and does
not require annual renewals.
-- WellCare of Kentucky was selected to continue serving Medicaid
recipients participating in the Commonwealth's Medicaid Managed Care
program. The new one-year contract begins July 1, 2015, and has four
additional one-year renewal options.
-- WellCare's Staywell Health Plan was selected by the Florida Healthy Kids
Corporation ("FHKC") to continue providing managed care services for
children as part of the Florida Healthy Kids program in nine regions,
including Pensacola, Tallahassee, Gainesville, Jacksonville, Fort
Lauderdale, Fort Myers and Miami metropolitan areas. Pending execution,
the two-year contract will begin on Oct. 1, 2015, and may be extended
for two additional one-year terms at FHKC's discretion.
-- On July 1, 2015, WellCare completed the sale of Sterling Life Insurance
Company ("Sterling"), the Medicare supplement business that the company
acquired as part of the Windsor Health Group transaction in January
2014.
-- On June 1, 2015, WellCare successfully completed the issuance of an
additional $300 million aggregate principal amount of the company's
5.75% senior unsecured notes due 2020.
Consolidated Operations Results
GAAP net income for the second quarter of 2015 was $51.7 million, or $1.17 per diluted share, compared with a GAAP net loss of
$7.5 million, or $0.17 per diluted share, for the second quarter of 2014.
Adjusted net income for the second quarter of 2015 was $59.5 million, or $1.34 per diluted share, compared with an adjusted net loss of $3.1 million, or $0.07 per diluted share, for the second quarter of 2014. The year-over-year improvement in adjusted net income is the result of operating improvement in all three of the company's business segments, with significant improvement in the Medicaid Health Plans and Medicare Prescription Drug Plans segments.
Premium revenue for the second quarter of 2015 increased 10.3 percent year over year to $3.4 billion primarily as a result of Medicaid membership growth and changes in membership mix.
GAAP SG&A expense was $255.5 million in the second quarter of 2015 compared with $228.9 million for the same period in 2014. Adjusted SG&A expense was $247.8 million in the second quarter of 2015, an increase of 13 percent from $219.9 million in the second quarter of 2014. The increase was driven primarily by increased membership.
The adjusted SG&A ratio was 7.3 percent in the second quarter of 2015 compared with 7.1 percent for the same period in 2014.
Medicaid Health Plans Segment Results
The company's Medicaid Health Plans segment membership increased by 233,000, or 10.8 percent year over year, to 2.4 million members as of June 30, 2015. The increase resulted primarily from membership growth in Florida, Illinois, and Kentucky and the inclusion of membership from the company's New Jersey acquisition that was completed on July 1, 2014. The company also noted that its Medicaid Health Plans segment membership grew 1.8 percent sequentially from March 31, 2015, reflecting growth in most of its Medicaid states.
Medicaid Health Plans segment premium revenue was $2.2 billion for the second quarter of 2015, an increase of 20.1 percent year over year, and was driven by the increase in membership and changes in the demographic mix of membership.
The Medicaid Health Plans segment MBR was 88.8 percent for the second quarter of 2015, an improvement of 470 basis points from the second quarter of 2014 and 130 basis points sequentially. The year-over-year improvement was primarily the result of better operating performance in most of the company's markets. Sequentially, the MBR improved due primarily to better execution and operating performance across the segment.
Medicare Health Plans Segment Results
The company's Medicare Health Plans segment membership as of June 30, 2015, decreased by 1.8 percent year over year to 388,000 members. The decrease was primarily the result of Medicare bid positioning for 2015. In addition, the company noted that as of June 30, 2015, membership in its Medicare Advantage Health Plans segment grew 2.0 percent sequentially from March 31, 2015.
Segment premium revenue in the second quarter of 2015 grew 1.5 percent year over year to $992.6 million. The increase was the result of 2015 bid results and higher premium yields.
The Medicare Health Plans segment MBR in the second quarter of 2015 was 86.4 percent, an improvement of 190 basis points compared with the second quarter of 2014 and 70 basis points compared with the first quarter of 2015, reflecting improved operating performance as a result of bid actions for the 2015 plan year.
Medicare Prescription Drug Plans (PDP) Segment Results
The company's Medicare PDP segment produced substantial improvement in the second quarter of 2015 compared with the second quarter of 2014, primarily driven by its 2015 bid strategy, operational execution and improved pharmacy rebate management.
The Medicare PDP segment MBR in the second quarter of 2015 was 79.2 percent, a decrease from 92.6 percent in the second quarter of 2014 and 99.5 percent in the first quarter of 2015. The year-over-year decrease resulted from bid actions for the 2015 plan year and the effect from the improved rebate contract. The sequential improvement was primarily driven by the seasonality of the PDP benefit design.
The company's Medicare PDP segment membership as of June 30, 2015, decreased 273,000 year over year, or 20.7 percent, to approximately 1.05 million members. The year-over-year decline in membership was primarily the result of the 2015 bid and was in-line with the company's expectations.
Premium revenue for the second quarter of 2015 was $235.0 million, a 20.9 percent decrease from the second quarter of 2014. The decrease was primarily due to the decline in membership resulting from the outcome of the 2015 Medicare PDP bids.
Operating Cash Flow and Financial Condition
Net cash provided by operating activities was $25.2 million for the three months ended June 30, 2015, compared with net cash used in operating activities of $232.7 million for the three months ended June 30, 2014.
For the six months ended June 30, 2015, net cash used in operating activities was $74.7 million compared with net cash used in operating activities of $246.6 million for six months ended June 30, 2014. The improvement in operating cash flow was primarily the result of improved year-over-year operating performance in all segments.
As of June 30, 2015, unregulated cash and investments were approximately $369.9 million compared with $92.6 million as of March 31, 2015. The increase was primarily the result of the additional $300 million senior notes issuance that the company completed in June 2015.
Days in claims payable (DCP) was 43 days as of June 30, 2015, compared with 43 days as of March 31, 2015, and 44 days as of June 30, 2014.
2015 Financial Outlook
WellCare is updating its full-year 2015 adjusted earnings per diluted share guidance to a range of $3.30 to $3.45 from a range of $3.15 to $3.40 per diluted share.
The following table provides guidance ranges for specific financial metrics.
Guidance Metric 2015 Guidance 2015 Guidance
as of August 5, 2015 as of May 6, 2015
--- -------------------- -----------------
Segment premium revenue:
------------------------
Medicaid Health Plans(1) $8.65B to $8.75B $8.5B to $8.7B
----------------------- ---------------- --------------
Medicare Health Plans $3.9B to $4.0B $3.95B to $4.05B
--------------------- -------------- ----------------
Medicare PDP $950M to $1.0B $1.0B to $1.1B
------------ -------------- --------------
Premium revenue(1) $13.5B to $13.75B $13.5B to $13.8B
----------------- ----------------- ----------------
Segment MBR:
------------
Medicaid Health Plans(1) 89.75% to 90.25% 89.5% to 90.5%
----------------------- --------------- -------------
Medicare Health Plans 86.50% to 87.00% 85.5% to 86.5%
--------------------- --------------- -------------
Medicare PDP 81.75% to 82.25% 84.0% to 85.0%
------------ --------------- -------------
Investment & other income $13M to $16M $15M to $20M
------------------------- ------------ ------------
Adjusted SG&A ratio(1)(2) 7.7% to 7.8% 7.9% to 8.0%
------------------------ ----------- -----------
ACA industry fee expense $229M to $231M $230M to $235M
------------------------ -------------- --------------
Depreciation and amortization $71M to $73M $70M to $72M
----------------------------- ------------ ------------
Interest expense $53M to $55M $46M to $48M
---------------- ------------ ------------
Effective income tax rate 60.0% to 62.0% 61.0% to 63.0%
------------------------- ------------- -------------
Adjusted earnings per diluted share(1)(2) $3.30 to $3.45 $3.15 to $3.40
---------------------------------------- -------------- --------------
(1) Refer to the basis of presentation
for a discussion of non-GAAP
financial measures.
(2) These metrics do not include
certain SG&A expenses related to
previously disclosed government
investigations and related
litigation costs, any transitory
costs incurred in 2015 related to
the company's decision to change
pharmacy benefit managers as of
January 1, 2016, and an expected
gain on transaction and
associated costs related to
divestiture of Sterling.
Conference Call and Webcast
A discussion of WellCare's second quarter 2015 results will be available via a conference call and live webcast today at 8.30 a.m. Eastern time.
The conference call will be webcast live from the company's website and be accessible in the Investor Relations section at www.wellcare.com. A replay of the webcast will be available for 30 days and can be accessed approximately one hour following the conclusion of the conference call.
The conference call also can be accessed by pre-registering using the following link: http://dpregister.com/10068675. 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 (toll
free): 1-888-317-6016
International participant dial in: 1-412-317-6016
A telephonic replay will be available until midnight ET on Wednesday, August 12, 2015. This replay may be accessed by dialing one of the numbers below and entering the replay access code of 10068675:
Domestic replay (toll free): 1-877-344-7529
International replay: 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 3.8 million members nationwide as of June 30, 2015. For more information about WellCare, please visit the Company's website at www.wellcare.com.
Basis of Presentation
In addition to results determined under GAAP, WellCare provides certain non-GAAP measurements that management believes are useful in assessing the Company's performance. Following is a description of the calculation of important GAAP and non-GAAP measures used in this news release.
Premium revenue, as used in this press release and the basis of presentation below = GAAP total premium revenue - (Medicaid state premium taxes revenue + Medicaid state reimbursements of the ACA industry fee).
MBR (non-GAAP) = medical benefits expense / premium revenue. The Company's Medicaid MBR guidance uses this non-GAAP definition of MBR.
MBR (GAAP) = medical benefits expense / GAAP total premium revenue.
Net income and certain other operating results are reported after adjustment for certain SG&A expenses related to previously disclosed government investigations and related litigation and resolution costs, as well as Sterling divestiture-related costs. Management believes these items are not indicative of long-term business operations performance.
Adjusted SG&A expense (non-GAAP) = SG&A expense - (certain SG&A expenses related to previously disclosed government investigations and related litigation and resolution costs, as well as Sterling divestiture-related costs).
The adjusted administrative expense ratio (non-GAAP) = adjusted SG&A expense / (total revenues - Medicaid state premium taxes revenue - Medicaid state ACA industry fee reimbursements revenue). The administrative expense ratio (GAAP) = SG&A expense / total revenues.
Please refer to the schedules in this news release that provide supplemental information that reconcile results determined under GAAP to non-GAAP results.
The schedules contained in this news release may contain totals that do not foot due to rounding.
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 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 improving health care quality and access, ensuring a competitive cost position, and delivering prudent, profitable growth, WellCare's ability to effectively estimate and manage growth, WellCare's ability to address operational challenges relating to new business, 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 and WellCare's ability to comply with the terms of the Corporate Integrity Agreement. 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 ("SEC"), 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, 2014, and the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2015, and other filings by WellCare with the SEC, 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 undertakes no duty to update these forward-looking statements to reflect any future events, developments, or otherwise.
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 For the Six Months
Ended June 30, Ended June 30,
-------------- --------------
2015 2014 2015 2014
---- ---- ---- ----
Revenues:
Premium $3,404.4 $3,087.7 $6,796.2 $6,021.8
Medicaid premium taxes 20.3 18.6 40.2 35.7
ACA industry fee reimbursement 53.8 33.2 108.2 57.2
---- ---- ----- ----
Total premium 3,478.5 3,139.5 6,944.6 6,114.7
Investment and other income 4.0 12.4 7.8 22.9
--- ---- --- ----
Total revenues 3,482.5 3,151.9 6,952.4 6,137.6
Expenses:
Medical benefits 2,977.1 2,834.3 6,029.3 5,464.2
Selling, general and administrative 255.5 228.9 512.4 474.2
ACA industry fee 58.3 36.3 116.6 68.6
Medicaid premium taxes 20.3 18.6 40.2 35.7
Depreciation and amortization 18.1 15.0 34.9 29.6
Interest 12.5 9.3 23.9 18.5
Impairment and other charges - 24.1 - 24.1
--- ---- --- ----
Total expenses 3,341.8 3,166.5 6,757.3 6,114.9
------- ------- ------- -------
Income (loss) from operations 140.7 (14.6) 195.1 22.7
Bargain purchase gain - 11.1 - 39.4
--- ---- --- ----
Income (loss) before income taxes 140.7 (3.5) 195.1 62.1
Income tax expense 89.0 4.0 125.9 25.5
---- --- ----- ----
Net income (loss) $51.7 $(7.5) $69.2 $36.6
===== ===== ===== =====
Earnings (loss) per common share:
Basic $1.17 $(0.17) $1.57 $0.83
Diluted $1.17 $(0.17) $1.56 $0.83
Weighted average common shares outstanding:
Basic 44,054,778 43,867,449 44,018,377 43,834,748
Diluted 44,358,313 43,867,449 44,331,159 44,123,050
WELLCARE HEALTH PLANS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited; dollars in millions except share data)
June 30, Dec. 31,
2015 2014
---- ----
Assets
Current Assets:
Cash and cash equivalents $1,339.5 $1,313.5
Investments 220.8 172.8
Premiums receivable, net 973.0 609.0
Pharmacy rebates receivable 315.1 358.9
Receivables from government
partners 62.3 83.0
Funds receivable for the
benefit of members 913.2 781.5
Deferred ACA industry fee 116.2 -
Prepaid expenses and other
current assets, net 102.0 170.5
Deferred income tax asset 32.2 37.1
---- ----
Total current assets 4,074.3 3,526.3
Property, equipment and
capitalized software, net 220.9 187.1
Goodwill 263.2 263.2
Other intangible assets, net 95.4 101.0
Long-term investments 155.8 257.3
Restricted investments 198.9 150.3
Other assets 12.3 9.8
---- ---
Total Assets $5,020.8 $4,495.0
======== ========
Liabilities and Stockholders' Equity
Current Liabilities:
Medical benefits payable $1,405.5 $1,483.8
Unearned premiums 7.8 86.9
ACA industry fee liability 232.8 -
Accounts payable 27.1 18.9
Other accrued expenses and
liabilities 306.7 294.7
Current portion of amount
payable related to
investigation resolution - 35.2
Income taxes payable 18.8 1.9
Other payables to government
partners 44.1 14.3
---- ----
Total current liabilities 2,042.8 1,935.7
Deferred income tax liability 76.7 48.4
Long-term debt 1,213.3 900.0
Other liabilities 18.9 15.0
---- ----
Total liabilities 3,351.7 2,899.1
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,
44,071,136 and 43,914,106
shares issued and outstanding
at June 30, 2015 and December
31, 2014, respectively) 0.4 0.4
Paid-in capital 507.5 503.0
Retained earnings 1,162.3 1,093.1
Accumulated other
comprehensive loss (1.1) (0.6)
---- ----
Total Stockholders' Equity 1,669.1 1,595.9
------- -------
Total Liabilities and
Stockholders' Equity $5,020.8 $4,495.0
======== ========
WELLCARE HEALTH PLANS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; dollars in millions)
For the Six Months
Ended June 30,
--------------
2015 2014
---- ----
Cash used in operating activities:
Net income $69.2 $36.6
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation and amortization 34.9 29.6
Stock-based compensation expense 8.7 6.2
Bargain purchase gain - (39.4)
Deferred ACA fee amortization 116.6 68.6
Asset impairment and other
charges - 24.1
Incremental tax benefit from
stock-based compensation (1.4) (0.3)
Deferred taxes, net 33.6 (3.2)
Provision for doubtful
receivables 7.2 7.8
Changes in operating accounts, net of effects from acquisitions:
Premiums receivable (371.2) (395.5)
Pharmacy rebates receivable 43.8 (93.6)
Prepaid expenses and other
current assets, net 69.3 (7.8)
Medical benefits payable (71.4) 306.9
Unearned premiums (79.1) 7.7
Accounts payable and other
accrued expenses 26.7 (6.6)
Other payables to government
partners 50.5 (131.9)
Amount payable related to
investigation resolution (35.2) (35.7)
Income taxes receivable/payable,
net 20.6 (20.5)
Other, net 2.5 0.4
--- ---
Net cash used in operating
activities (74.7) (246.6)
Cash (used in) provided by investing activities:
Acquisitions and acquisition-
related settlements, net of cash
acquired (17.2) 137.2
Purchases of investments (86.3) (329.5)
Proceeds from sale and maturities
of investments 90.3 266.0
Additions to property, equipment
and capitalized software, net (63.6) (27.9)
----- -----
Net cash (used in) provided by
investing activities (76.8) 45.8
Cash provided by (used in) financing activities:
Proceeds from issuance of debt,
net of financing costs paid 308.9 -
Proceeds from exercises of stock
options 0.3 0.2
Incremental tax benefit from
stock-based compensation 1.4 0.3
Repurchase and retirement of
shares to satisfy employee tax
withholding requirements (5.9) (2.4)
Payments on capital leases (0.1) (0.7)
Funds paid for the benefit of
members, net (127.1) (164.9)
------ ------
Net cash provided by (used in)
financing activities 177.5 (167.5)
----- ------
Increase (decrease) in cash and
cash equivalents 26.0 (368.3)
Balance at beginning of period 1,313.5 1,482.5
------- -------
Balance at end of period $1,339.5 $1,114.2
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for taxes $69.9 $49.1
===== =====
Cash paid for interest $21.4 $17.8
===== =====
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
Non-cash additions to property,
equipment, and capitalized
software $11.2 $1.3
===== ====
WELLCARE HEALTH PLANS, INC.
SUPPLEMENTAL INFORMATION
MEMBERSHIP INFORMATION
(Unaudited)
Change From
-----------
March 31, 2015 June 30, 2014
-------------- -------------
June 30, March 31, June 30, Change % Change Change % Change
2015 2015 2014
---- ---- ----
Medicaid Health Plans
Membership by State:
Florida 773,000 761,000 681,000 12,000 1.6% 92,000 13.5%
Georgia 594,000 593,000 617,000 1,000 0.2% (23,000) (3.7)%
Kentucky 429,000 441,000 392,000 (12,000) (2.7)% 37,000 9.4%
Illinois 180,000 153,000 132,000 27,000 17.6% 48,000 36.4%
New York 118,000 117,000 108,000 1,000 0.9% 10,000 9.3%
Missouri 112,000 106,000 97,000 6,000 5.7% 15,000 15.5%
Other states 188,000 180,000 134,000 8,000 4.4% 54,000 40.3%
------- ------- ------- ----- --- ------ ----
Total Medicaid Health Plans Membership (1) 2,394,000 2,351,000 2,161,000 43,000 1.8% 233,000 10.8%
========= ========= ========= ====== === ======= ====
Medicaid Health Plans Membership by Program:
TANF 1,949,000 1,907,000 1,680,000 42,000 2.2% 269,000 16.0%
SSI, ABD, Duals and LTC 277,000 275,000 246,000 2,000 0.7% 31,000 12.6%
CHIP and other 168,000 169,000 235,000 (1,000) (0.6)% (67,000) (28.5)%
------- ------- ------- ------ ----- ------- ------
Total Medicaid Health Plans Membership (1) 2,394,000 2,351,000 2,161,000 43,000 1.8% 233,000 10.8%
========= ========= ========= ====== === ======= ====
Medicare Health Plans:
Medicare Advantage by State:
Florida 107,000 106,000 85,000 1,000 0.9% 22,000 25.9%
New York 46,000 46,000 51,000 - 0.0% (5,000) (9.8)%
California 33,000 34,000 62,000 (1,000) (2.9)% (29,000) (46.8)%
Georgia 34,000 32,000 29,000 2,000 6.3% 5,000 17.2%
Texas 33,000 31,000 27,000 2,000 6.5% 6,000 22.2%
Other states 96,000 93,000 95,000 3,000 3.2% 1,000 1.1%
------ ------ ------ ----- --- ----- ---
Total Medicare Advantage Health Plans 349,000 342,000 349,000 7,000 2.0% - 0.0%
Medicare Supplement Insurance 39,000 40,000 46,000 (1,000) (2.5)% (7,000) (15.2)%
------ ------ ------ ------ ----- ------ ------
Total Medicare Health Plans (1) 388,000 382,000 395,000 6,000 1.6% (7,000) (1.8)%
Medicare Prescription Drug Plans 1,045,000 1,089,000 1,318,000 (44,000) (4.0)% (273,000) (20.7)%
--------- --------- --------- ------- ----- -------- ------
Total Membership 3,827,000 3,822,000 3,874,000 5,000 0.1% (47,000) (1.2)%
========= ========= ========= ===== === ======= =====
(1) Medicaid Health Plans and Medicare
Health Plans membership includes
members who are dually-eligible
and participate in both of the
company's Medicaid and Medicare
programs. This membership as of
March 31 and June 30, 2015 was
44,000 and 47,000, respectively.
This membership as of March 31,
June 30, September 30 and
December 31, 2014 was 28,000,
29,000, 31,000 and 32,000,
respectively.
WELLCARE HEALTH PLANS, INC.
SUPPLEMENTAL INFORMATION
SELECTED SEGMENT INFORMATION
(Unaudited; dollars in millions)
For the Three Months For the Six Months Ended
Ended June 30, June 30,
-------------- --------
2015 2014 2015 2014
---- ---- ---- ----
Medicaid Health Plans Segment:
Premium revenue by state, excluding Medicaid premium taxes and ACA industry fee reimbursements:
Kentucky $635.0 $565.2 $1,261.3 $1,054.4
Florida 553.5 386.5 1,088.9 688.3
Georgia 376.8 391.3 764.4 749.4
Other states 611.5 469.7 1,191.1 918.3
----- ----- ------- -----
Premium revenue excluding Medicaid premium taxes and ACA
industry fee reimbursements $2,176.8 $1,812.7 $4,305.7 $3,410.4
Medicaid premium taxes 20.3 18.6 40.2 35.7
ACA industry fee reimbursement 53.8 33.2 108.2 57.2
---- ---- ----- ----
Premium revenue (GAAP) 2,250.9 1,864.5 4,454.1 3,503.3
Medical benefits expense 1,933.3 1,695.2 3,850.9 3,084.5
Medical benefits ratio:
Total premium revenues (GAAP) 85.9% 90.9% 86.5% 88.0%
Excluding Medicaid premium taxes and Medicaid ACA industry fee
reimbursements (non-GAAP) 88.8% 93.5% 89.4% 90.4%
Medicare Health Plans Segment:
Premium revenue $992.6 $977.9 $1,976.0 $1,941.3
Medical benefits expense 857.6 864.0 1,714.0 1,715.5
Medical benefits ratio 86.4% 88.3% 86.7% 88.4%
Prescription Drug Plans Segment:
Premium revenue $235.0 $297.1 $514.5 $670.1
Medical benefits expense 186.2 275.1 464.4 664.2
Medical benefits ratio 79.2% 92.6% 90.3% 99.1%
Total Company:
Premium revenue excluding Medicaid premium taxes and ACA
industry fee reimbursements $3,404.4 $3,087.7 $6,796.2 $6,021.8
Medicaid premium taxes 20.3 18.6 40.2 35.7
ACA industry fee reimbursement 53.8 33.2 108.2 57.2
---- ---- ----- ----
Premium revenue (GAAP) 3,478.5 3,139.5 6,944.6 6,114.7
Medical benefits expense 2,977.1 2,834.3 6,029.3 5,464.2
Medical benefits ratio:
Total premium revenues (GAAP) 85.6% 90.3% 86.8% 89.4%
Excluding Medicaid premium taxes and Medicaid ACA industry fee
reimbursements (non-GAAP) 87.4% 91.8% 88.7% 90.7%
WELLCARE HEALTH PLANS, INC.
SUPPLEMENTAL INFORMATION
Reconciliation of Administrative Expense Ratios
(Unaudited; dollars in millions)
The Company reports adjusted operating results on a non-GAAP basis to exclude certain expenses that management believes are not indicative of longer-term business trends and operations. Following is certain financial information, as determined under GAAP, reconciled to
the adjusted financial information for the same periods.
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2015 2014 2015 2014
---- ---- ---- ----
Company premium revenue:
As determined under GAAP $3,478.5 $3,139.5 $6,944.6 $6,114.7
Medicaid premium taxes (20.3) (18.6) (40.2) (35.7)
ACA industry fee reimbursement (53.8) (33.2) (108.2) (57.2)
----- ----- ------ -----
Total premium revenue net of premium taxes and ACA industry fee reimbursement $3,404.4 $3,087.7 $6,796.2 $6,021.8
======== ======== ======== ========
SG&A Expense:
As determined under GAAP $255.5 $228.9 $512.4 $474.2
Investigation and divestiture-related costs (7.7) (9.0) (15.8) (18.6)
---- ---- ----- -----
Total SG&A net of investigation and divestiture-related costs $247.8 $219.9 $496.6 $455.6
====== ====== ====== ======
Administrative expense ratio:
As determined under GAAP 7.4% 7.3% 7.4% 7.8%
Effect of Medicaid premium taxes 0.0% 0.0% 0.0% 0.0%
Effect of ACA industry fee reimbursement 0.1% 0.1% 0.1% 0.0%
Selling, general and administrative expense adjustments (a) (0.2)% (0.3)% (0.2)% (0.3)%
----- ----- ----- -----
Adjusted (Non-GAAP) 7.3% 7.1% 7.3% 7.5%
=== === === ===
(a) Results from expenses
associated with government
investigation and divestiture-
related costs.
WELLCARE HEALTH PLANS, INC.
SUPPLEMENTAL INFORMATION
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 that management believes are not indicative of longer-term business trends and operations. Following is certain financial information, as determined under GAAP, reconciled to the adjusted financial information for
the same periods.
For the Three Months Ended For the Three Months Ended
June 30, 2015 June 30, 2014
------------- -------------
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
(Non-GAAP)
(Non-GAAP)
--- ----------
Selling, general, and administrative expense (a) $255.5 $(7.7) $247.8 $228.9 $(9.0) $219.9
Income tax expense (b) $89.0 $(0.1) $88.9 $4.0 $4.6 $8.6
Net income (loss) $51.7 $7.8 $59.5 $(7.5) $4.4 $(3.1)
Earnings (loss) per share:
Basic $1.17 $0.18 $1.35 $(0.17) $0.10 $(0.07)
Diluted $1.17 $0.17 $1.34 $(0.17) $0.10 $(0.07)
For the Six Months Ended For the Six Months Ended
June 30, 2015 June 30, 2014
------------- -------------
GAAP Adjustments Adjusted (Non-GAAP) GAAP Adjustments Adjusted
(Non-GAAP)
--- ----------
Selling, general, and administrative expense (a) $512.4 $(15.8) $496.6 $474.2 $(18.6) $455.6
Income tax expense (b) $125.9 $3.8 $129.7 $25.5 $8.6 $34.1
Net income $69.2 $12.0 $81.2 $36.6 $10.0 $46.6
Earnings per share:
Basic $1.57 $0.27 $1.84 $0.83 $0.23 $1.06
Diluted $1.56 $0.27 $1.83 $0.83 $0.23 $1.06
(a) Expenses associated with the
government investigation and
divestiture-related costs
amounted to $7.7 million and
$9.0 million for the three
months ended June 30, 2015 and
2014, respectively, and $15.8
million and $18.6 million for
the six months ended June 30,
2015 and 2014, respectively.
(b) These estimates are based on the
effective income tax rates
applicable to adjusted (non-
GAAP) results. The amounts are
based on the annual estimated
effective income tax rate, and
the company estimates that
income tax expense would have
increased or decreased as shown
in the table above.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wellcare-reports-second-quarter-2015-results-300123765.html
SOURCE WellCare Health Plans, Inc.
