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Universal American Corp. Reports 2012 Fourth Quarter And Full Year Results

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 Year Ended
December 31, December 31,

Consolidated Results

2012        

2011 (1)

 

2012        

2011 (1)

 

 
 
Net premiums and policyholder fees $ 504.8 $ 515.0 $ 1,989.8 $ 2,221.4
Net investment income 10.3 10.9 42.4 47.4
Other income 35.4 5.0 128.7 15.8
Realized gains/(losses) 3.7   (1.6 ) 16.6   0.8  
  Total revenues 554.2   529.3   2,177.5   2,285.4  
 
Policyholder benefits 394.9 407.5 1,597.3 1,812.0
Change in deferred acquisition costs 2.4 1.2 5.4 4.3
Amortization of present value of future profits 2.3 1.1 8.1 4.4
Restructuring costs - 22.0 - 22.0
Intangible asset impairment - 15.6 - 15.6
Commissions and general expenses, net of allowances 135.0   102.8   478.9   417.2  
Total benefits and expenses 534.6   550.2   2,089.7   2,275.5  
 
Income (loss) from continuing operations before equity in losses of unconsolidated subsidiaries 19.6 (20.9 ) 87.8 9.9
 
Equity in losses of unconsolidated subsidiaries (4.2 ) -   (10.2 ) -  

Income (loss) from continuing operations before income tax (benefit)

15.4 (20.9 ) 77.6 9.9
Income tax (benefit) (2) 0.4   (3.7 ) 24.6   7.2  
 
Income (loss) from continuing operations 15.0 (17.2 ) 53.0 2.7
 
Loss from discontinued operations -   (1.4 ) -   (50.9 )
 
Net income (loss) $ 15.0   $ (18.6 ) $ 53.0   $ (48.2 )
 

Per Share Data (Diluted)

Continuing operations $ 0.17 $ (0.21 ) $ 0.61 $ 0.03
Discontinued operations -   (0.02 ) -   (0.63 )
Net income (loss) $ 0.17   $ (0.23 ) $ 0.61   $ (0.60 )
 
Diluted weighted average shares outstanding 87.4   80.9   86.6   80.6  
 
Cash dividends per common share $ 1.00   $ -   $ 1.00   $ -  
 

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 Year Ended
December 31, December 31,

Income (Loss) before Taxes by Segment

2012        

2011 (1)

 

2012        

2011 (1)

 

 
Medicare Advantage $ 18.9 $ 19.8 $ 92.8 $ 72.7
Traditional Insurance 4.0 4.9 18.1 15.7
Corporate & Other (11.2 ) (44.0 ) (49.9 ) (79.3 )
Realized gains (losses) 3.7   (1.6 ) 16.6   0.8  
 
Income (loss) from continuing operations before taxes $ 15.4   $ (20.9 ) $ 77.6   $ 9.9  
 
BALANCE SHEET DATA       December 31, 2012
Total cash and investments $ 1,294.6
Total assets $ 2,533.0
Total policyholder related liabilities $ 1,153.8
Total reinsurance recoverable (ceded policyholder liabilities) $ 665.2
Outstanding bank debt $ 132.0
Mandatorily redeemable preferred shares $ 40.0
Total stockholders' equity $ 1,012.5
Diluted book value per common share $ 11.47
Diluted common shares outstanding at balance sheet date 88.3
 

Non-GAAP Financial Measures *

Total stockholders’ equity (excluding AOCI) * $ 983.4
Diluted book value per common share (excluding AOCI) * (3) $ 11.14
Diluted tangible book value per common share (excluding AOCI) * (4) $ 7.35
Debt to total capital ratio (excluding AOCI) * (5) 14.9 %
 
        Three Months Ended       Year Ended
December 31, December 31,
2012      

2011(1)

 

2012      

2011 (1)

 

 
Adjusted net income (6) $ 14.1 $ 11.8 $ 59.5 $ 32.7
Adjusted net income per share (diluted) $ 0.16 $ 0.15 $ 0.69 $ 0.40
 
*   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) As adjusted to reflect the implementation of ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts and other immaterial adjustments.
(2) The effective tax rate for continuing operations was 2.7% for the fourth quarter of 2012 compared to 17.9% for the fourth quarter of 2011. For the year ended December 31, 2012, the effective tax rate on continuing operations was 31.7%, compared with 72.6% for the same period of 2011. The effective rates include non-recurring tax benefits of $5.8 million for the quarter ended December 31, 2012 and non-recurring tax expense of $1.1 million for the same period of 2011 and non-recurring tax benefits of $7.3 million and $1.8 million for the years then ended, respectively. The higher effective rates in 2011 were also driven by the relative impact of permanent items in 2012 compared with 2011.
(3) 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.
(4) 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.
(5) The Debt to Total Capital Ratio (excluding AOCI) is calculated as the ratio of the Mandatorily Redeemable Preferred Shares to the sum of Stockholders’ Equity (excluding AOCI) plus the Mandatorily Redeemable Preferred Shares.
(6) Adjusted net income is calculated as net income (loss) excluding discontinued operations, pre Part D Transaction related stock-based compensation expenses, restructuring costs, net realized gains and losses, non-recurring tax benefits/expenses, ACO start-up costs, APS Healthcare transaction costs, and Medicare Advantage investment costs. All adjustments are calculated on an after-tax basis.

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.

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