RYE BROOK, N.Y.--(BUSINESS WIRE)--Jul. 25, 2012--
Universal American Corp. (NYSE: UAM) today announced financial results
for the quarter ended June 30, 2012.
Second Quarter 2012 Results
-
Net income was $4.7 million, or $0.05 per share.
-
Revenues were $542 million.
2012 Guidance
-
Universal American expects to earn approximately $0.64 to $0.68 per
diluted share for 2012, excluding any realized capital gains or losses
and investments in Accountable Care Organizations (ACOs), our Medicare
Advantage business and other growth opportunities.
Recent Developments
-
Universal American’s subsidiary, Collaborative Health Systems, has
partnered with physicians and other healthcare professionals to form
sixteen Accountable Care Organizations that were approved for
participation in the Medicare Shared Savings Program. We estimate that
these sixteen ACOs currently include approximately 1,700 participating
physicians covering approximately 150,000 Original Medicare
beneficiaries in eleven states, including Texas and upstate New York.
Results of Second Quarter 2012
We reported net income for the second quarter of 2012 of $4.7 million,
or $0.05 per share. Adjusted net income for the second quarter of 2012
was $8.2 million, or $0.09 per share, which excludes the following
after-tax items:
-
$3.6 million, or $0.04 per share, of ACO start-up costs;
-
$0.9 million, or $0.01 per share, of expenses related to the
accelerated vesting of options and restricted stock as part of the
Part D sale and APS Healthcare transaction costs;
-
$0.9 million, or $0.01 per share, of net realized investment gains; and
-
$0.1 million, or less than $0.01 per share of non-recurring tax
benefit.
The results for the second quarter included $1.8 million, or $0.02 per
share, after-tax, of favorable net prior period items.
Total revenues for the second quarter of 2012 were $542 million.
Six Months Ended June 30, 2012
We reported net income for the first half of 2012 of $25.4 million, or
$0.30 per share. Adjusted net income for the first six months of 2012
was $30.5 million, or $0.36 per share, which excludes the following
after-tax items:
-
$6.3 million, or $0.07 per share, of ACO start-up costs;
-
$4.3 million, or $0.05 per share, of expenses related to the
accelerated vesting of options and restricted stock as part of the
Part D sale and APS Healthcare transaction costs;
-
$5.4 million, or $0.06 per share, of net realized investment gains; and
-
$0.1 million, or less than $0.01 per share of non-recurring tax
benefit.
The results for the first six months of 2012 included $8.1 million, or
$0.09 per share, after-tax, of favorable net prior period items.
Total revenues for the first half of 2012 were approximately $1.1
billion.
Management Comments
Richard A. Barasch, Chairman and CEO commented, “Our Medicare Advantage
business continues to perform well. Our benefit ratios, after netting
out positive prior period items, remain in line with our expectations
and we are seeing the effect of reducing our cost structure. Building on
our successful Healthy Collaboration® model, we are partnering with
sixteen physician groups, including the Southeast Texas physicians who
have been the backbone of our success in Medicare Advantage, to
participate as ACOs in the Medicare Shared Savings Program. Helping to
create these ACOs demonstrates our ongoing commitment to working
collaboratively with healthcare professionals and the government to
improve the quality of care and manage healthcare costs for the benefit
of the Medicare program and its beneficiaries.
“Given our strong balance sheet, our expanded capabilities in medical
management for high-risk populations and our track record of working
collaboratively with physicians to improve quality and reduce cost, we
believe we are well positioned to participate in the emerging
opportunities in healthcare.”
Medicare Advantage
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Three Months Ended
June 30,
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Six Months Ended
June 30,
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Financial Performance ($ in millions)
|
|
|
|
2012
|
|
2011
|
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2012
|
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2011
|
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|
|
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Revenue
|
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$
|
397.3
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$
|
503.0
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$
|
823.4
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|
$
|
1,022.1
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|
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|
|
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|
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Operating Income
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$
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10.7
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$
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20.3
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$
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39.9
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$
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26.8
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The decline in operating income for the second quarter of 2012 as
compared to the second quarter 2011 was attributable to lower membership
and higher Member Benefit Ratio (MBR) partially offset by lower
administrative expenses.
In the second quarter of 2012, our Medicare Advantage MBR was 83.9% as
compared to 82.8% for the same period in 2011. Our Medicare Advantage
MBR for the second quarter of 2012 included favorable prior period items
of $2.3 million, pre-tax, compared to favorable prior period items of
$5.6 million, pre-tax, in the second quarter of 2011. Excluding these
prior period items, the MBR was 84.4% for the second quarter of 2012.
Operating expenses for the second quarter of 2012 included $5.3 million
of start-up expenses related to the development of our ACOs. The
administrative expense ratio in the second quarter of 2012, excluding
the ACO costs was 13.4% compared to 14.6% in the second quarter of 2011.
For the first six months of 2012, operating income increased compared to
the same period in 2011 due to an improved MBR, including the benefit of
positive prior period items, and lower administrative expenses driven by
the execution of the cost reduction initiatives.
In the first six months of 2012, our Medicare Advantage MBR was 82.5% as
compared to 83.9% for the same period in 2011. Our Medicare Advantage
MBR for the first half of 2012 included favorable prior period
adjustments of $11.6 million, pre-tax, compared to favorable prior
period items of $1.2 million, pre-tax, in the first half of 2011.
Excluding these prior period items, the MBR was 83.5% for the first half
of 2012.
Operating expenses for the first half of 2012 included $9.4 million of
start-up expenses related to the development of our ACOs. The
administrative expense ratio in the first half of 2012, excluding the
ACO costs was 12.9% compared to 15.0% in the first half of 2011.
Current Medicare Advantage membership is approximately 137,900.
Traditional Insurance
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Three Months Ended
June 30,
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Six Months Ended
June 30,
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Financial Performance ($ in millions)
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2012
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2011
|
|
2012
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2011
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Revenue
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$
|
66.7
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$
|
69.0
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$
|
136.8
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$
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143.9
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|
|
|
|
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Operating Income
|
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$
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5.4
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$
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1.6
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$
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9.8
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$
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2.2
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Our Traditional Insurance segment operating income for the three and six
months ended June 30, 2012 increased year-over-year due primarily to
improved Medicare supplement benefit ratios and improved expense ratios,
partially offset by lower profitability caused by lower in-force
membership from this closed block of business. As previously disclosed,
during 2012, the Company has discontinued new sales in this segment.
Operating income included favorable prior period adjustments of $0.7
million and $1.6 million for the three and six months ended June 30,
2012, respectively.
Corporate & Other
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Three Months Ended
June 30,
|
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Six Months Ended
June 30,
|
Financial Performance ($ in millions)
|
|
|
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2012
|
|
2011
|
|
2012
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|
2011
|
|
|
|
|
|
|
|
|
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Revenue
|
|
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$
|
76.7
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|
$
|
3.6
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|
$
|
105.4
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$
|
4.3
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|
|
|
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|
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Operating Loss
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$
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(8.9)
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$
|
(17.1)
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|
$
|
(14.9)
|
|
$
|
(24.0)
|
|
|
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Our Corporate & Other segment includes the results of APS Healthcare,
since its acquisition on March 2, 2012 as well as the operations of our
parent holding company, including debt service. Our segment operating
loss for the three and six month periods ended June 30, 2012 improved
year-over-year due primarily to $8.6 million of stock-based compensation
expense incurred in the second quarter of 2011 for the accelerated
vesting of equity awards in connection with the Part D Transaction and
reductions in 2012 other operating expenses, partially offset by $0.3
million and $3.7 million, respectively of 2012 transaction costs related
to our acquisition of APS Healthcare.
Investment Portfolio
Universal American's $1.5 billion portfolio of cash and invested assets,
as of June 30, 2012, had the following characteristics:
-
47% is invested in U.S. Government and agency securities;
-
The average credit quality of our total investment portfolio is AA; and
-
Less than 1% of the portfolio is non-investment grade.
A complete listing of our fixed income investment portfolio as of June
30, 2012 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 June 30, 2012, Universal American’s Balance Sheet had the
following characteristics:
-
Total cash and investments were $1.5 billion and total assets were
$2.7 billion;
-
Total policyholder liabilities were $1.1 billion and total liabilities
were $1.6 billion;
-
Stockholders’ equity was $1.1 billion and diluted book value per share
was $12.08;
-
Tangible book value per diluted common share (excluding accumulated
other comprehensive income, goodwill, amortizing intangibles and
deferred acquisition costs) was $8.02;
-
Unregulated cash of $148 million;
-
$139.1 million of bank debt; and
-
$40 million of mandatorily redeemable preferred stock, reported as a
liability, with an annual dividend rate of 8.5%.
The ratio of debt to total capital, excluding the effect of Accumulated
Other Comprehensive Income (Loss) and including Universal American’s
mandatorily redeemable preferred stock as debt was 14.5%.
Conference Call
Universal American will host a conference call at 9:00 a.m. Eastern Time
on Thursday, July 26, 2012, to discuss financial results and other
corporate developments. Interested parties may participate in the call
by dialing (201) 493-6744. Please call in 10 minutes before the
scheduled time and ask for the Universal American call. This conference
call will also be available live over the Internet and can be accessed
at Universal American’s website at www.UniversalAmerican.com,
and clicking on the “Investors” link in the upper right. To listen to
the live call on the website, please go to the website at least 15
minutes early to download and install any necessary audio software. A
replay of the call will be available on the investor relations section
of the Company’s website for approximately 60 days following the call.
Prior to the conference call, Universal American will make available on
its website a 2nd Quarter 2012 Investor Presentation and
supplemental financial data in connection with its quarterly earnings
release. You can access the 2nd Quarter 2012 Investor
Presentation and supplemental financial data at www.UniversalAmerican.com
in the “Investors” section under the “Presentations” and “Financial
Reports” sections.
About Universal American Corp.
Universal American (NYSE: UAM), through our family of healthcare
companies, provides health benefits to people covered by Medicare and/or
Medicaid. We are dedicated to working collaboratively with healthcare
professionals 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: we are subject to extensive government
regulation; the CMS sanction that suspended us from marketing to and
enrolling new members in our Medicare Advantage plans during the 2011
annual enrollment period had and may continue to have a material adverse
effect on the Medicare Advantage business, financial condition and
results of operations; the potential that CMS and/or other regulators
could impose significant fines, penalties or operating restrictions on
the Company; recently enacted healthcare legislation and subsequent
rules promulgated by CMS could have a material adverse effect on our
opportunities for growth and our financial results; we may continue to
experience membership losses in our Medicare Advantage business;
reductions in funding for Medicare programs could materially reduce our
profitability; we may invest significant capital and management
attention in new business opportunities that may not be successful;
failure to reduce our operating costs could have a material adverse
effect on our financial position, results of operations and cash flows;
we may not be able to improve our CMS star ratings which may cause
certain of our plans to be terminated or to receive less bonuses or
rebates than our competitors; we may experience higher than expected
loss ratios which could materially adversely affect our results of
operations; compliance with laws and regulations is complex and
expensive, and any violation of the laws and regulations applicable to
us could reduce our revenues and profitability and otherwise adversely
affect our operating results and/or impact our ability to participate in
government programs such as Medicare and Medicaid; changes in
governmental regulation or legislative reform could 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; we no longer
sell long-term care insurance and the premiums that we charge for the
long-term care policies that remain in force may not be adequate to
cover the claims expenses that we incur; 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; failure of the APS Healthcare business
to retain existing contracts or enter into new contracts; problems may
arise in successfully integrating the APS Healthcare business, including
failure to retain senior executives, which may result in Universal
American not operating as effectively and efficiently as expected or
failing to achieve the expected benefits of the transaction; Universal
American may be unable to achieve cost-cutting synergies arising out of
the transaction or it may take longer than expected to achieve those
synergies; the APS Healthcare transaction may involve unexpected costs
or unexpected liabilities; a substantial portion of APS Healthcare’s
revenues are tied to short-term customer contracts which generally can
be terminated without cause. 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)
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|
UNIVERSAL AMERICAN CORP. AND SUBSIDIARIES
|
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|
|
|
|
|
|
SELECTED CONSOLIDATED FINANCIAL DATA
|
In millions, except per share amounts
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
Consolidated Results
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums and policyholder fees
|
|
|
|
$
|
489.2
|
|
$
|
559.1
|
|
$
|
985.7
|
|
$
|
1,139.2
|
Net investment income
|
|
|
|
|
10.5
|
|
|
11.9
|
|
|
21.8
|
|
|
25.0
|
Other income
|
|
|
|
|
41.0
|
|
|
4.7
|
|
|
58.0
|
|
|
6.1
|
Realized gains
|
|
|
|
|
1.4
|
|
|
2.0
|
|
|
8.3
|
|
|
2.0
|
Total revenues
|
|
|
|
|
542.1
|
|
|
577.7
|
|
|
1,073.8
|
|
|
1,172.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policyholder benefits
|
|
|
|
|
407.6
|
|
|
459.7
|
|
|
809.7
|
|
|
948.8
|
Change in deferred acquisition costs
|
|
|
|
|
0.7
|
|
|
0.5
|
|
|
1.9
|
|
|
2.4
|
Amortization of present value of future profits
|
|
|
|
|
2.2
|
|
|
1.1
|
|
|
3.6
|
|
|
2.3
|
Commissions and general expenses, net of allowances
|
|
|
|
|
123.0
|
|
|
109.6
|
|
|
215.5
|
|
|
211.8
|
Total benefits and expenses
|
|
|
|
|
533.5
|
|
|
570.9
|
|
|
1,030.7
|
|
|
1,165.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
8.6
|
|
|
6.8
|
|
|
43.1
|
|
|
7.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes (1)
|
|
|
|
|
3.9
|
|
|
3.1
|
|
|
17.7
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
4.7
|
|
$
|
3.7
|
|
$
|
25.4
|
|
$
|
5.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
-
|
|
|
(8.8)
|
|
|
-
|
|
|
(41.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income / (loss)
|
|
|
|
$
|
4.7
|
|
$
|
(5.1)
|
|
$
|
25.4
|
|
$
|
(36.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data (Diluted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
$
|
0.05
|
|
$
|
0.05
|
|
$
|
0.30
|
|
$
|
0.06
|
Discontinued operations
|
|
|
|
|
-
|
|
|
(0.11)
|
|
|
-
|
|
|
(0.52)
|
Net income / (loss)
|
|
|
|
$
|
0.05
|
|
$
|
(0.06)
|
|
$
|
0.30
|
|
$
|
(0.46)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Weighted Avg. Shares Outstanding
|
|
|
|
|
87.6
|
|
|
80.2
|
|
|
85.8
|
|
|
80.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See following page for explanation of footnote.
|
|
|
|
|
|
|
|
|
UNIVERSAL AMERICAN CORP. AND SUBSIDIARIES
|
SELECTED CONSOLIDATED FINANCIAL DATA
|
In millions, except per share amounts
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
Income before Taxes from Continuing Operations
by Segment
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare Advantage
|
|
|
|
$
|
10.7
|
|
|
$
|
20.3
|
|
|
$
|
39.9
|
|
|
$
|
26.8
|
|
Traditional Insurance
|
|
|
|
|
5.4
|
|
|
|
1.6
|
|
|
|
9.8
|
|
|
|
2.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other
|
|
|
|
|
(8.9
|
)
|
|
|
(17.1
|
)
|
|
|
(14.9
|
)
|
|
|
(24.0
|
)
|
Realized Gains
|
|
|
|
|
1.4
|
|
|
|
2.0
|
|
|
|
8.3
|
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes from continuing operations
|
|
|
|
$
|
8.6
|
|
|
$
|
6.8
|
|
|
$
|
43.1
|
|
|
$
|
7.0
|
|
|
|
|
|
|
|
|
BALANCE SHEET DATA
|
|
|
|
June 30, 2012
|
|
Total cash and investments
|
|
|
|
$
|
1,478.2
|
|
|
Total assets
|
|
|
|
$
|
2,723.6
|
|
|
Total policyholder related liabilities
|
|
|
|
$
|
1,135.6
|
|
|
Total reinsurance recoverable (ceded policyholder liabilities)
|
|
|
|
$
|
666.9
|
|
|
Outstanding Bank Debt
|
|
|
|
$
|
139.1
|
|
|
Mandatorily Redeemable Preferred Shares
|
|
|
|
$
|
40.0
|
|
|
Total stockholders' equity
|
|
|
|
$
|
1,075.7
|
|
|
Diluted book value per common share
|
|
|
|
$
|
12.08
|
|
|
Diluted weighted average shares outstanding
|
|
|
|
|
89.1
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures *
|
|
|
|
|
|
|
Total stockholders’ equity (excluding AOCI) *
|
|
|
|
$
|
1,056.6
|
|
|
Diluted book value per common share (excluding AOCI) * (2)
|
|
|
|
$
|
11.87
|
|
|
Diluted tangible book value per common share (excluding AOCI) *
(3)
|
|
|
|
$
|
8.02
|
|
|
Debt to total capital ratio (excluding AOCI) * (4)
|
|
|
|
|
14.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (5)
|
|
|
|
$
|
8.2
|
|
|
$
|
7.6
|
|
|
$
|
30.5
|
|
|
$
|
8.5
|
|
Per share (diluted) – Adjusted net income
|
|
|
|
$
|
0.09
|
|
|
$
|
0.09
|
|
|
$
|
0.36
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
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 from continuing operations was 45.6% for
the second quarter of 2012 compared to 45.2% for the second
quarter of 2011. State income taxes and permanent items, primarily
relating to non-deductible executive compensation and
non-deductible interest on the mandatorily redeemable preferred
stock drove the effective rate in excess of the 35% federal rate.
The second quarter of 2012 and 2011 also included non-recurring
tax benefits of $0.1 million and $0.4 million, respectively,
related to state income tax refunds. For the six months ended June
30, 2012, the effective tax rate from continuing operations was
41.0%, compared with 28.7% for the same period of 2011. State
income taxes and permanent items, relating to non-deductible
executive compensation, APS Healthcare transaction costs and
non-deductible interest on the mandatorily redeemable preferred
stock drove the effective rate in excess of the 35% federal rate.
2012 and 2011 also included non-recurring tax benefits of $0.1
million and $0.8 million, respectively, related to state income
tax refunds.
|
(2)
|
|
Diluted book value per common share (excluding AOCI) represents
Total Stockholders’ Equity, excluding accumulated other
comprehensive income (loss) (“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 sum of the Outstanding Bank Debt and the
Mandatorily Redeemable Preferred Shares to the sum of
Stockholders’ Equity (excluding AOCI) plus Outstanding Bank Debt
plus the Mandatorily Redeemable Preferred Shares.
|
(5)
|
|
Adjusted net income is calculated as net income excluding
discontinued operations, pre Part D Transaction stock-based
compensation expenses, non-recurring tax benefits, APS Healthcare
transaction costs, ACO start-up costs and after-tax realized gains
and losses.
|
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. The key non-GAAP measures presented in our press
release, including reconciliation to GAAP measures, are set forth below.
|
|
|
|
|
|
|
|
|
Total Stockholders’ Equity (excluding AOCI)
|
|
|
|
|
June 30,
2012
|
|
|
December 31,
2011
|
Total stockholders’ equity
|
|
|
|
$
|
1,075.7
|
|
$
|
953.1
|
Less: Accumulated other comprehensive income
|
|
|
|
|
(19.1)
|
|
|
(11.2)
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity (excluding AOCI)
|
|
|
|
$
|
1,056.6
|
|
$
|
941.9
|
|
|
|
|
|
|
|
|
|
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 loss, do not relate to the
performance of Universal American’s core business operations.
|
|
|
|
|
|
|
|
|
Diluted Book Value per Common Share
|
|
|
|
|
June 30,
2012
|
|
|
December 31,
2011
|
Total stockholders’ equity
|
|
|
|
$
|
1,075.7
|
|
$
|
953.1
|
Proceeds from assumed exercises of vested options
|
|
|
|
|
0.7
|
|
|
-
|
|
|
|
|
$
|
1,076.4
|
|
$
|
953.1
|
Diluted common shares outstanding
|
|
|
|
|
89.1
|
|
|
81.5
|
|
|
|
|
|
|
|
|
|
Diluted book value per common share
|
|
|
|
$
|
12.08
|
|
$
|
11.70
|
Total stockholders’ equity (excluding AOCI)
|
|
|
|
$
|
1,056.6
|
|
$
|
941.9
|
Proceeds from assumed exercises of vested options
|
|
|
|
|
0.7
|
|
|
-
|
|
|
|
|
$
|
1,057.3
|
|
$
|
941.9
|
Diluted common shares outstanding
|
|
|
|
|
89.1
|
|
|
81.5
|
|
|
|
|
|
|
|
|
|
Diluted book value per common share (excluding AOCI)
|
|
|
|
$
|
11.87
|
|
$
|
11.56
|
|
|
|
|
|
|
|
|
|
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 loss, do not relate to the performance of Universal
American’s core business operations.
|
|
|
|
|
|
|
|
|
Tangible Book Value per Common Share
|
|
|
|
|
June 30,
2012
|
|
|
December 31,
2011
|
Total stockholders’ equity (excluding AOCI)
|
|
|
|
$
|
1,056.6
|
|
$
|
941.9
|
Less: intangible assets 1
|
|
|
|
|
(343.0)
|
|
|
(158.0)
|
Proceeds from assumed exercises of vested options
|
|
|
|
|
0.7
|
|
|
-
|
Total stockholders’ equity (excluding AOCI)
|
|
|
|
$
|
714.3
|
|
$
|
783.9
|
Diluted common shares outstanding
|
|
|
|
|
89.1
|
|
|
81.5
|
Tangible book value per common share
|
|
|
|
$
|
8.02
|
|
$
|
9.62
|
|
|
|
|
|
|
|
|
|
Universal American uses tangible book value per common share as a basis
for evaluating the value of the Company’s tangible net assets on a per
share basis.
|
|
|
|
|
|
|
|
|
UNIVERSAL AMERICAN CORP. AND SUBSIDIARIES
|
SUPPLEMENTAL FINANCIAL INFORMATION
|
NON-GAAP FINANCIAL MEASURES
|
In millions
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Debt to Total Capital Ratio
|
|
|
|
|
June 30,
2012
|
|
|
December 31,
2011
|
Outstanding bank debt
|
|
|
|
$
|
139.1
|
|
$
|
-
|
Mandatorily Redeemable Preferred Shares
|
|
|
|
|
40.0
|
|
|
40.0
|
Total outstanding debt
|
|
|
|
$
|
179.1
|
|
$
|
40.0
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
|
$
|
1,075.7
|
|
$
|
953.1
|
Outstanding bank debt
|
|
|
|
|
139.1
|
|
|
-
|
Mandatorily Redeemable Preferred Shares
|
|
|
|
|
40.0
|
|
|
40.0
|
Total capital
|
|
|
|
$
|
1,254.8
|
|
$
|
993.1
|
|
|
|
|
|
|
|
|
|
Debt to total capital ratio
|
|
|
|
|
14.3%
|
|
|
4.0%
|
Total stockholders’ equity (excluding AOCI)
|
|
|
|
$
|
1,056.6
|
|
$
|
941.9
|
Total outstanding bank debt
|
|
|
|
|
139.1
|
|
|
-
|
Mandatorily Redeemable Preferred Shares
|
|
|
|
|
40.0
|
|
|
40.0
|
Total capital
|
|
|
|
$
|
1,235.7
|
|
$
|
981.9
|
|
|
|
|
|
|
|
|
|
Debt to total capital ratio (excluding AOCI)
|
|
|
|
|
14.5%
|
|
|
4.1%
|
|
|
|
|
|
|
|
|
|
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.
Adjusted Net Income ($ in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income / (loss)
|
|
|
|
$
|
4.7
|
|
$
|
(5.1)
|
|
$
|
25.4
|
|
$
|
(36.9)
|
Discontinued operations, after-tax
|
|
|
|
|
-
|
|
|
8.8
|
|
|
-
|
|
|
41.9
|
Net realized gains, after-tax
|
|
|
|
|
(0.9)
|
|
|
(1.3)
|
|
|
(5.4)
|
|
|
(1.3)
|
Non-recurring tax benefit
|
|
|
|
|
(0.1)
|
|
|
(0.4)
|
|
|
(0.1)
|
|
|
(0.8)
|
ACO start-up, after-tax
|
|
|
|
|
3.6
|
|
|
-
|
|
|
6.3
|
|
|
-
|
Other non-recurring items, after-tax
|
|
|
|
|
0.9
|
|
|
5.6
|
|
|
4.3
|
|
|
5.6
|
Adjusted net income
|
|
|
|
$
|
8.2
|
|
$
|
7.6
|
|
$
|
30.5
|
|
$
|
8.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share (diluted):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income / (loss)
|
|
|
|
$
|
0.05
|
|
$
|
(0.06)
|
|
$
|
0.30
|
|
$
|
(0.46)
|
Discontinued operations, after-tax
|
|
|
|
|
-
|
|
|
0.11
|
|
|
-
|
|
|
0.52
|
Net realized gains, after-tax
|
|
|
|
|
(0.01)
|
|
|
(0.02)
|
|
|
(0.06)
|
|
|
(0.02)
|
Non-recurring tax benefit
|
|
|
|
|
(0.00)
|
|
|
(0.01)
|
|
|
(0.00)
|
|
|
(0.01)
|
ACO start-up, after-tax
|
|
|
|
|
0.04
|
|
|
-
|
|
|
0.07
|
|
|
-
|
Other non-recurring items, after-tax
|
|
|
|
|
0.01
|
|
|
0.07
|
|
|
0.05
|
|
|
0.07
|
Adjusted net income
|
|
|
|
$
|
0.09
|
|
$
|
0.09
|
|
$
|
0.36
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Universal American uses adjusted net income, calculated as net income
excluding after-tax net realized investment losses, discontinued
operations, non-recurring tax benefits, ACO start-up costs and other
non-recurring items (Part D Transaction-related stock-based compensation
and APS Healthcare transaction costs), as a basis for evaluating
operating results. Although the excluded items may recur, we believe
that realized gains and losses in our investment portfolio, special
items, non-recurring tax benefit, and goodwill impairment do not relate
to the performance of Universal American’s core business operations and
that adjusted net income provides a more useful comparison of our
business performance from period to period.
1 Intangible assets include goodwill ($247.2 million),
deferred acquisition costs, net of taxes ($67.9 million) and amortizing
intangible assets, net of taxes ($27.9 million).

Source: Universal American Corp.
Universal American Corp.
Robert A. Waegelein, 914-934-8820
Co-President
& Chief Financial Officer
or
Investor
Relations Counsel:
The Equity Group Inc.
www.theequitygroup.com
Linda
Latman, 212-836-9609