x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
Delaware
|
47-0937650
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
8725
Henderson Road, Renaissance One
Tampa,
Florida
|
33634
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(813)
290-6200
|
(Registrant’s
telephone number, including area
code)
|
Large
Accelerated Filer
|
x
|
Accelerated
Filer
|
o
|
Non-Accelerated
Filer
|
o
|
||||
Smaller
Reporting Company
|
o
|
(Do
not check if a smaller reporting
company)
|
Page
|
||
Part I
— FINANCIAL INFORMATION
|
||
Item
1.
|
Financial
Statements (unaudited)
|
|
Condensed
Consolidated Balance Sheets at June 30, 2009 and December 31,
2008
|
3
|
|
Condensed
Consolidated Statements of Operations for the three and six-months ended
June 30, 2009 and 2008
|
4
|
|
Condensed
Consolidated Statements of Cash Flows for the six months ended June 30,
2009 and 2008
|
5
|
|
Notes
to Condensed Consolidated Financial Statements
|
6
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
15
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
28
|
Item
4.
|
Controls
and Procedures
|
28
|
Part II
— OTHER INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
30
|
Item
1A.
|
Risk
Factors
|
32
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
34
|
Item
3.
|
Defaults
upon Senior Securities
|
35
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
35
|
Item
5.
|
Other
Information
|
35
|
Item
6.
|
Exhibits
|
35
|
Signatures
|
June
30,
|
December 31,
|
||||||
2009
|
2008
|
||||||
Assets
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
940,685
|
$
|
1,181,922
|
|||
Investments
|
73,956
|
70,112
|
|||||
Premium
and other receivables, net
|
378,023
|
215,525
|
|||||
Other
receivables from government partners, net
|
58,981
|
825
|
|||||
Funds
receivable for the benefit of members
|
38,460
|
86,542
|
|||||
Prepaid
expenses and other current assets, net
|
115,286
|
129,490
|
|||||
Deferred
income taxes
|
27,974
|
20,154
|
|||||
Total
current assets
|
1,633,365
|
1,704,570
|
|||||
Property,
equipment and capitalized software, net
|
63,856
|
66,588
|
|||||
Goodwill
|
111,131
|
111,131
|
|||||
Other
intangible assets, net
|
13,727
|
14,493
|
|||||
Long-term
investments
|
51,488
|
54,972
|
|||||
Restricted
investments
|
178,548
|
199,339
|
|||||
Deferred
tax asset
|
23,603
|
23,263
|
|||||
Other
assets
|
17,639
|
29,105
|
|||||
Total
Assets
|
$
|
2,093,357
|
$
|
2,203,461
|
|||
Liabilities
and Stockholders’ Equity
|
|||||||
Current
Liabilities:
|
|||||||
Medical
benefits payable
|
$
|
858,360
|
$
|
766,179
|
|||
Unearned
premiums
|
19,331
|
81,197
|
|||||
Accounts
payable
|
9,240
|
5,138
|
|||||
Other
accrued expenses and liabilities
|
206,063
|
288,340
|
|||||
Current
portion of amounts accrued related to investigation
resolution
|
37,298
|
50,000
|
|||||
Other
payables to government partners
|
24,959
|
8,100
|
|||||
Taxes
payable
|
49,065
|
12,187
|
|||||
Debt
|
|
152,741
|
|||||
Other
current liabilities
|
858
|
674
|
|||||
Total
current liabilities
|
1,205,174
|
1,364,556
|
|||||
Amounts
accrued related to investigation resolution
|
44,995
|
|
|||||
Other
liabilities
|
21,069
|
33,076
|
|||||
Total
liabilities
|
1,271,238
|
1,397,632
|
|||||
Commitments
and contingencies (see Note 7)
|
|
|
|||||
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,
42,229,522 and 42,261,345 shares issued and outstanding at June
30, 2009 and December 31, 2008, respectively)
|
422
|
423
|
|||||
Paid-in
capital
|
406,131
|
390,526
|
|||||
Retained
earnings
|
418,713
|
418,641
|
|||||
Accumulated
other comprehensive loss
|
(3,147
|
)
|
(3,761
|
)
|
|||
Total
stockholders’ equity
|
822,119
|
805,829
|
|||||
Total
Liabilities and Stockholders’ Equity
|
$
|
2,093,357
|
$
|
2,203,461
|
Three Months
Ended June 30,
|
Six Months
Ended June 30,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
Revenues:
|
|||||||||||||
Premium
|
$
|
1,787,851
|
$
|
1,636,019
|
$
|
3,579,778
|
$
|
3,257,393
|
|||||
Investment
and other income
|
3,427
|
9,399
|
6,761
|
24,946
|
|||||||||
Total
revenues
|
1,791,278
|
1,645,418
|
3,586,539
|
3,282,339
|
|||||||||
Expenses:
|
|||||||||||||
Medical
benefits
|
1,504,019
|
1,376,940
|
3,057,017
|
2,774,512
|
|||||||||
Selling,
general and administrative
|
214,906
|
233,783
|
486,427
|
461,519
|
|||||||||
Depreciation
and amortization
|
5,957
|
5,227
|
11,696
|
10,378
|
|||||||||
Interest
|
1,193
|
2,904
|
3,479
|
6,208
|
|||||||||
Total
expenses
|
1,726,075
|
1,618,854
|
3,558,619
|
3,252,617
|
|||||||||
Income
before income taxes
|
65,203
|
26,564
|
27,920
|
29,722
|
|||||||||
Income
tax expense
|
28,198
|
15,459
|
27,848
|
17,297
|
|||||||||
Net
income
|
$
|
37,005
|
$
|
11,105
|
$
|
72
|
$
|
12,425
|
|||||
Net
income per common share (see Note 1):
|
|||||||||||||
Basic
|
$
|
0.89
|
$
|
0.27
|
$
|
0.00
|
$
|
0.30
|
|||||
Diluted
|
$
|
0.88
|
$
|
0.26
|
$
|
0.00
|
$
|
0.30
|
Six Months Ended
June 30,
|
|||||||
2009
|
2008
|
||||||
Cash
from (used in) operating activities:
|
|||||||
Net
income
|
$
|
72
|
$
|
12,425
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Depreciation
and amortization
|
11,696
|
10,378
|
|||||
Equity-based
compensation expense
|
19,242
|
17,869
|
|||||
Incremental
tax benefit from stock-based compensation
|
|
(2,780
|
)
|
||||
Deferred
taxes, net
|
(12,025
|
)
|
(5,011
|
)
|
|||
Changes
in operating accounts:
|
|||||||
Premium
and other receivables, net
|
(162,498
|
)
|
58,280
|
||||
Other
receivables from government partners, net
|
(58,156
|
)
|
(10,565
|
)
|
|||
Prepaid
expenses and other, net
|
14,204
|
(20,164
|
)
|
||||
Medical
benefits payable
|
92,181
|
180,125
|
|||||
Unearned
premiums
|
(61,866
|
)
|
57,118
|
||||
Accounts
payables
|
4,102
|
6,176
|
|||||
Other
accrued expenses
|
(82,277
|
)
|
(7,190
|
)
|
|||
Other
payables to government partners
|
16,859
|
(94,805
|
)
|
||||
Amounts
accrued related to investigation resolution
|
32,293
|
|
|||||
Taxes,
net
|
36,875
|
17,080
|
|||||
Other,
net
|
(698
|
)
|
(39,985
|
)
|
|||
Net
cash (used in) provided by operating activities
|
(149,996
|
)
|
178,951
|
||||
Cash
from (used in) investing activities:
|
|||||||
Purchases
of investments
|
(19,066
|
)
|
(136,154
|
)
|
|||
Proceeds
from sale and maturities of investments
|
19,183
|
249,142
|
|||||
Purchases
of restricted investments
|
(26,813
|
)
|
(59,063
|
)
|
|||
Proceeds
from maturities of restricted investments
|
47,743
|
2,661
|
|||||
Additions
to property and equipment, and capitalized software, net
|
(8,198
|
)
|
(7,556
|
)
|
|||
Net
cash provided by investing activities
|
12,849
|
49,030
|
|||||
Cash
from (used in) financing activities:
|
|||||||
Proceeds
from option exercises and other
|
228
|
1,039
|
|||||
Incremental
tax benefit received for stock based compensation
|
|
2,780
|
|||||
Purchase
of treasury stock
|
|
(1,449
|
)
|
||||
Payments
on debt
|
(152,400
|
)
|
(1,200
|
)
|
|||
Funds
received for the benefits of members, net of disbursements
|
48,082
|
88,938
|
|||||
Net
cash (used in) provided by financing activities
|
(104,090
|
)
|
90,108
|
||||
Cash
and cash equivalents:
|
|||||||
(Decrease)
increase during the period
|
(241,237
|
)
|
318,089
|
||||
Balance
at beginning of year
|
1,181,922
|
1,008,409
|
|||||
Balance
at end of year
|
$
|
940,685
|
$
|
1,326,498
|
|||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
|||||||
Cash
paid for taxes
|
$
|
2,829
|
$
|
42,776
|
|||
Cash
paid for interest
|
$
|
2,642
|
$
|
5,492
|
1.
|
ORGANIZATION
AND BASIS OF PRESENTATION
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
Numerator:
|
|||||||||||||
Net
income — basic and diluted
|
$
|
37,005
|
$
|
11,105
|
$
|
72
|
$
|
12,425
|
|||||
Denominator:
|
|||||||||||||
Weighted-average
common shares outstanding — basic
|
41,794,997
|
41,300,102
|
41,731,915
|
41,213,293
|
|||||||||
Dilutive
effect of:
|
|||||||||||||
Unvested
restricted common shares and units
|
180,568
|
300,841
|
133,884
|
343,391
|
|||||||||
Stock
options
|
55,862
|
348,128
|
59,502
|
390,540
|
|||||||||
Weighted-average
common shares outstanding — diluted
|
42,031,427
|
41,949,071
|
41,925,301
|
41,947,224
|
|||||||||
Net
income per common share:
|
|||||||||||||
Basic
|
$
|
0.89
|
$
|
0.27
|
$
|
0.00
|
$
|
0.30
|
|||||
Diluted
|
$
|
0.88
|
$
|
0.26
|
$
|
0.00
|
$
|
0.30
|
Three Months
Ended
June 30,
|
Six Months
Ended
June 30,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
Medicaid
premium revenue
|
$
|
813,759
|
$
|
748,012
|
$
|
1,622,937
|
$
|
1,481,647
|
|||||
Medicare
premium revenue
|
974,092
|
888,007
|
1,956,841
|
1,775,746
|
|||||||||
Total
premium revenue
|
1,787,851
|
1,636,019
|
3,579,778
|
3,257,393
|
|||||||||
Other
income
|
3,427
|
9,399
|
6,761
|
24,946
|
|||||||||
Total
revenues
|
1,791,278
|
1,645,418
|
3,586,539
|
3,282,339
|
|||||||||
Medicaid
medical benefits expense
|
691,816
|
621,860
|
1,381,598
|
1,232,665
|
|||||||||
Medicare
medical benefits expense
|
812,203
|
755,080
|
1,675,419
|
1,541,847
|
|||||||||
Total
medical benefits expense
|
1,504,019
|
1,376,940
|
3,057,017
|
2,774,512
|
|||||||||
Other
expenses
|
222,056
|
241,914
|
501,602
|
478,105
|
|||||||||
Total
expenses
|
1,726,075
|
1,618,854
|
3,558,619
|
3,252,617
|
|||||||||
Income
before income taxes
|
$
|
65,203
|
$
|
26,564
|
$
|
27,920
|
$
|
29,722
|
Restricted
Stock
and
RSUs
|
Weighted
Average
Grant-Date
Fair
Value
|
Options
|
Weighted
Average
Exercise
Price
|
||||||
Outstanding
as of January 1, 2009
|
1,165,816
|
$ 50.53
|
4,278,118
|
$ 42.75
|
|||||
Granted
|
397,858
|
19.06
|
73,000
|
16.36
|
|||||
Exercised
|
|
|
(32,663
|
)
|
6.94
|
||||
Vested
|
(168,122
|
)
|
50.08
|
|
|
||||
Forfeited
and expired
|
(146,925
|
)
|
58.27
|
(827,943
|
)
|
46.14
|
|||
Outstanding
at June 30, 2009
|
1,248,627
|
39.67
|
3,490,512
|
41.73
|
|||||
Exercisable
at June 30, 2009
|
n/a
|
n/a
|
1,494,019
|
40.87
|
Fair
Value Measurements at June 30, 2009 Using:
|
||||||||
Quoted
Prices in
|
Significant
|
|||||||
Active
Markets for
|
Significant
Other
|
Unobservable
|
||||||
Identical
Assets
|
Observable
Inputs
|
Inputs
|
||||||
Description
|
June
30, 2009
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
||||
Investments:
|
||||||||
Available-for-sale
securities
|
||||||||
Certificates
of deposit
|
$
70,031
|
$
70,031
|
$
-
|
$ -
|
||||
Auction
rate securities
|
51,488
|
-
|
-
|
51,488
|
||||
Other
municipal variable rate bonds
|
3,925
|
3,925
|
-
|
-
|
||||
Total
investments
|
$
125,444
|
$
73,956
|
$
-
|
$
51,488
|
||||
Restricted
investments:
|
||||||||
Available-for-sale
securities
|
||||||||
Cash
|
$
5,403
|
$
5,403
|
$
-
|
$
-
|
||||
Certificates
of deposit
|
1,719
|
1,719
|
-
|
-
|
||||
U.S.
Government securities
|
20,169
|
20,169
|
-
|
-
|
||||
Money
market funds
|
151,257
|
151,257
|
-
|
-
|
||||
Total
restricted investments
|
$
178,548
|
$
178,548
|
$
-
|
$
-
|
||||
Amounts
accrued related to investigation
|
||||||||
resolution:(1)
|
$
54,992
|
$
-
|
$
54,992
|
$
-
|
(1)
|
These
amounts are included in the short- and long-term portions of Amounts
accrued related to investigation resolution line items in our Condensed
Consolidated Balance Sheets as of June 30,
2009.
|
Fair
Value Measurements at December 31, 2008 Using:
|
||||||||
Quoted
Prices in
|
Significant
|
|||||||
Active
Markets for
|
Significant
Other
|
Unobservable
|
||||||
December
31,
|
Identical
Assets
|
Observable
Inputs
|
Inputs
|
|||||
Description
|
2008
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
||||
Investments:
|
||||||||
Available-for-sale
securities
|
||||||||
Certificates
of deposit
|
$
66,187
|
$
66,187
|
$
-
|
$
-
|
||||
Auction
rate securities
|
54,972
|
-
|
-
|
54,972
|
||||
Other
municipal variable rate bonds
|
3,925
|
3,925
|
-
|
-
|
||||
Total
investments
|
$
125,084
|
$
70,112
|
$
-
|
$
54,972
|
||||
Restricted
investments
|
||||||||
Available-for-sale
|
||||||||
Cash
|
$
5,894
|
$
5,894
|
$
-
|
$
-
|
||||
Certificates
of deposit
|
1,713
|
1,713
|
-
|
-
|
||||
U.S.
Government securities
|
19,765
|
19,765
|
-
|
-
|
||||
Money
market funds
|
171,967
|
171,967
|
-
|
-
|
||||
Total
restricted investments
|
$
199,339
|
$
199,339
|
$
-
|
$
-
|
Fair
Value Measurements
|
||||
Using
Significant
|
||||
Unobservable
Inputs
|
||||
(Level
3)
|
||||
Three
months ended
|
Six
months ended
|
|||
June
30, 2009
|
June
30, 2009
|
|||
Beginning
balance
|
$
48,404
|
$
54,972
|
||
Realized
gains (losses) in earnings (or changes in net assets)
|
-
|
-
|
||
Unrealized
gains (losses) in other comprehensive income (a)
|
3,084
|
916
|
||
Purchases,
issuances and settlements
|
-
|
-
|
||
Transfers
in and/or out of Level 3 (b)
|
-
|
(4,400)
|
||
Ending
balance at June 30, 2009
|
$
51,488
|
$
51,488
|
(a)
|
As
a result of the increase in the fair value of our investments in auction
rate securities, we recorded a net unrealized gain of $3,084 to
Accumulated other comprehensive loss for the three months ended June 30,
2009. For the six months ended June 30, 2009, the net result is
an unrealized gain of $916 to Accumulated other comprehensive
loss. The increase in unrealized gain was driven by the
stabilization and improvement within the municipal bond market during the
second quarter of the 2009.
|
(b)
|
A
$4,400 auction rate security tranche was redeemed by the issuer at par in
February 2009. Accordingly, we recorded an adjustment to the
fair market valuation of the issuer’s auction rate securities during the
first quarter of 2009.
|
Fair
Value Measurements
|
||||
Using
Significant
|
||||
Unobservable
Inputs
|
||||
(Level
3)
|
||||
Three
months ended
|
Six
months ended
|
|||
June
30, 2008
|
June
30, 2008
|
|||
Beginning
balance
|
$
111,310
|
$
-
|
||
Realized gains
(losses) in earnings (or changes in net assets)
|
-
|
-
|
||
Unrealized
gains (losses) in other comprehensive income
|
(1,255)
|
(3,819)
|
||
Purchases,
issuances and settlements
|
(47,025)
|
(47,025)
|
||
Transfers
in and/or out of Level 3
|
-
|
113,874
|
||
Ending
balance at June 30, 2008
|
$
63,030
|
$
63,030
|
|
Medicaid
|
As
of June 30,
|
|||||
2009
|
2008
|
||||
Medicaid
|
|||||
TANF
|
1,076,000
|
1,006,000
|
|||
CHIP
|
162,000
|
186,000
|
|||
SSI
and ABD
|
83,000
|
73,000
|
|||
FHP
|
16,000
|
28,000
|
|||
1,337,000
|
1,293,000
|
||||
Medicare
|
|||||
MA
|
253,000
|
231,000
|
|||
PDP
|
798,000
|
999,000
|
|||
1,051,000
|
1,230,000
|
||||
Total
|
2,388,000
|
2,523,000
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||
2009
|
2008
|
2009
|
2008
|
||||||
Statement
of Operations Data:
|
|||||||||
Revenues:
|
|||||||||
Premium
|
99.8
|
%
|
99.4
|
%
|
99.8
|
%
|
99.2
|
%
|
|
Investment
and other income
|
0.2
|
%
|
0.6
|
%
|
0.2
|
%
|
0.8
|
%
|
|
Total
revenues
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|
Expenses:
|
|||||||||
Medical
benefits
|
84.0
|
%
|
83.7
|
%
|
85.2
|
%
|
84.5
|
%
|
|
Selling,
general and administrative
|
12.0
|
%
|
14.2
|
%
|
13.6
|
%
|
14.1
|
%
|
|
Depreciation
and amortization
|
0.3
|
%
|
0.3
|
%
|
0.3
|
%
|
0.3
|
%
|
|
Interest
|
0.1
|
%
|
0.2
|
%
|
0.1
|
%
|
0.2
|
%
|
|
Total
expenses
|
96.4
|
%
|
98.4
|
%
|
99.2
|
%
|
99.1
|
%
|
|
Income
before income taxes
|
3.6
|
%
|
1.6
|
%
|
0.8
|
%
|
0.9
|
%
|
|
Income
tax expense
|
1.6
|
%
|
0.9
|
%
|
0.8
|
%
|
0.5
|
%
|
|
Net
Income
|
2.0
|
%
|
0.7
|
%
|
0.0
|
%
|
0.4
|
%
|
Medicaid Revenues and Membership
|
|||||||||||||
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
(Dollars
in millions)
|
|||||||||||||
Revenues
|
$
|
813.8
|
$
|
748.0
|
$
|
1,622.9
|
$
|
1,481.6
|
|||||
%
of Total Premium Revenues
|
45.5
|
%
|
45.7
|
%
|
45.3
|
%
|
45.4
|
%
|
|||||
Membership
|
1,337,000
|
1,293,000
|
1,337,000
|
1,293,000
|
|||||||||
%
of Total Membership
|
56.0
|
%
|
51.2
|
%
|
56.0
|
%
|
51.2
|
%
|
Medicare Revenues and Membership
|
|||||||||||||
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
(Dollars
in millions)
|
|||||||||||||
Revenues
|
$
|
974.1
|
$
|
888.0
|
$
|
1,956.8
|
$
|
1,775.7
|
|||||
%
of Total Premium Revenues
|
54.5
|
%
|
54.3
|
%
|
54.7
|
%
|
54.5
|
%
|
|||||
Membership
|
1,051,000
|
1,230,000
|
1,051,000
|
1,230,000
|
|||||||||
%
of Total Membership
|
44.0
|
%
|
48.8
|
%
|
44.0
|
%
|
48.8
|
%
|
Medicaid Medical Benefits Expense
|
|||||||||||||
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
(Dollars
in millions)
|
|||||||||||||
Medicaid
Medical Benefits
Expense
|
$
|
691.8
|
$
|
621.9
|
$
|
1,381.6
|
$
|
1,232.7
|
|||||
MBR
|
85.0
|
%
|
83.1
|
%
|
85.1
|
%
|
83.2
|
%
|
Medicare Medical Benefits Expense
|
|||||||||||||
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
(Dollars
in millions)
|
|||||||||||||
Medicare
Medical Benefits
Expense
|
$
|
812.2
|
$
|
755.1
|
$
|
1,675.4
|
$
|
1,541.8
|
|||||
MBR
|
83.4
|
%
|
85.0
|
%
|
85.6
|
%
|
86.8
|
%
|
Selling, General and Administrative Expense
|
||||||||||||||
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||
(Dollars
in millions)
|
||||||||||||||
SG&A
|
$
|
214.9
|
$
|
233.8
|
$
|
486.4
|
$
|
461.5
|
||||||
SG&A expense to total
revenue ratio
|
12.0
|
%
|
14.2
|
%
|
13.6
|
%
|
14.1
|
%
|
Income Tax Expense
|
||||||||||||||
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||
(Dollars
in millions)
|
||||||||||||||
Income tax expense
|
$
|
28.2
|
$
|
15.5
|
$
|
27.8
|
|
$
17.3
|
||||||
Effective tax rate
|
43.2
|
%
|
58.2
|
%
|
99.7
|
%
|
58.2
|
%
|
Net Income
|
|||||||||||||
Three Months Ended
June
30,
|
Six Months Ended
June 30,
|
||||||||||||
2009
|
2008
|
2009
|
2008
|
||||||||||
(Dollars
in millions, except share data)
|
|||||||||||||
Net income
|
$
|
37.0
|
$
|
11.1
|
$
|
0.1
|
$
|
12.4
|
|||||
Net income per diluted share
|
$
|
0.88
|
$
|
0.26
|
$
|
0.00
|
$
|
0.30
|
Six Months Ended June
30,
|
|||||||
2009
|
2008
|
||||||
(In millions)
|
|||||||
Net cash (used in) provided by operating activities
|
$
|
(150.0
|
)
|
$
|
179.0
|
||
Net cash provided by investing activities
|
12.8
|
49.0
|
|||||
Net cash (used in) provided by financing activities
|
(104.1
|
)
|
90.1
|
|
·
|
leadership
transition underway;
|
|
·
|
expiration of
certain severance and retention
programs;
|
|
·
|
decline
of our stock price in light of the importance of equity in many of our
compensation packages;
|
|
·
|
uncertainty
about government health care policies and funding and the potential impact
on the organization;
|
|
·
|
uncertainty
about regulatory actions, including the CMS sanction;
and
|
|
·
|
uncertainty
surrounding ongoing governmental and Company
investigations.
|
Total
Number
|
Maximum
|
|||||||||||||||
of
Shares
|
Number
of
|
|||||||||||||||
Purchased
as
|
Shares
that
|
|||||||||||||||
Part
of
|
May
Yet Be
|
|||||||||||||||
Publicly
|
Purchased
|
|||||||||||||||
Total
Number
|
Average
|
Announced
|
Under
the
|
|||||||||||||
of
Shares
|
Price
Paid
|
Plans
or
|
Plans
or
|
|||||||||||||
Period
|
Purchased(1)
|
Per
Share(1)
|
Programs
|
Programs
|
||||||||||||
April 1,
2009 through April 30, 2009
|
9,260
|
13.41
|
(2)
|
N/A
|
N/A
|
|||||||||||
May 1,
2009 through May 31, 2009
|
2,087
|
17.55
|
(3)
|
N/A
|
N/A
|
|||||||||||
June 1,
2009 through June 30, 2009
|
1,171
|
18.21
|
(4)
|
N/A
|
N/A
|
|||||||||||
Total
during quarter ended June 30, 2009
|
12,518
|
16.02
|
(5)
|
N/A
|
N/A
|
(1)
|
The
number of shares purchased represents the number of shares of our common
stock deemed surrendered by our employees to satisfy their withholding tax
obligations due to the vesting of shares of restricted common
stock. For the purposes of this table, we determined the
average price paid per share based on the closing price of our common
stock as of the date of the determination of the withholding tax amounts
(i.e., the date that the shares of restricted stock vested). We
do not currently have a stock repurchase program. We did not
pay any cash consideration to repurchase these shares.
|
|
(2)
|
The
weighted average price paid per share during the period was
$13.18.
|
|
(3)
|
The
weighted average price paid per share during the period was
$18.34.
|
|
(4)
|
The
weighted average price paid per share during the period was
$18.07.
|
|
(5)
|
The
weighted average price paid per share during the period was
$14.01.
|
incorporated
by reference
|
||||
Exhibit
Number
|
Description
|
Form
|
Filing
Date
with SEC
|
Exhibit Number
|
2.1
|
Agreement
and Plan of Merger, dated as of February 12, 2004, between WellCare
Holdings, LLC and WellCare Group, Inc.
|
S-1/A
|
June
8, 2004
|
2.1
|
3.1
|
Amended
and Restated Certificate of Incorporation
|
10-Q
|
August
13, 2004
|
3.1
|
3.2
|
Amended
and Restated Bylaws of WellCare Health Plans, Inc.
|
10-Q
|
August
13, 2004
|
3.2
|
3.2.1
|
Amendment
No. 1 to the Amended and Restated Bylaws of WellCare Health Plans,
Inc.
|
8-K
|
January
31, 2008
|
3.2
|
4.1
|
Specimen
common stock certificate
|
S-1/A
|
June
29, 2004
|
4.1
|
10.1
|
Form
of Indemnification Agreement †
|
8-K
|
May
14, 2009
|
10.1
|
10.2
|
Indemnification
Agreement between the Registrant and Heath Schiesser †
|
8-K
|
May
14, 2009
|
10.2
|
10.3
|
Indemnification
Agreement between the Registrant and Charles Berg †
|
8-K
|
May
14, 2009
|
10.3
|
10.4
|
Form
of Restricted Stock Agreement under the Registrant’s 2004 Equity Incentive
Plan (associate version) †
|
8-K
|
June
3, 2009
|
10.1
|
10.5
|
Form
of Restricted Stock Agreement under the Registrant’s 2004 Equity Incentive
Plan (director version) †
|
8-K
|
June
3, 2009
|
10.2
|
10.6
|
Form
of Restricted Stock Unit Agreement under the Registrant’s 2004 Equity
Incentive Plan (associate) †
|
8-K
|
June
3, 2009
|
10.3
|
10.7
|
Form
of Stock Option Agreement under the Registrant’s 2004 Equity Incentive
Plan (associate) †
|
8-K
|
June
3, 2009
|
10.4
|
10.9
|
Amended
and Restated Employment Agreement effective as of June 3, 2009 by and
among the Registrant, Comprehensive Health Management, Inc. and Thomas F.
O’Neil III †
|
8-K
|
June
4, 2009
|
10.1
|
10.10
|
Non-Institutional
Medicaid Provider Agreement between WellCare of Florida, Inc. and the
Florida Agency for Health Care Administration
|
8-K
|
April
9, 2009
|
10.1
|
10.11
|
Notice
of 2009 renewal from the Centers for Medicare & Medicaid Services
regarding contract renewal for contract between the Centers for Medicare
& Medicaid Services (“CMS”) and WellCare of Ohio, Inc. (and form of
renewal of contracts between CMS and Harmony Health Plan of Illinois, Inc.
(d/b/a Harmony Health Plan of Indiana), Harmony Health Plan of Illinois,
Inc. (d/b/a Harmony Health Plan of Missouri) and WellCare Health Plans of
New Jersey, Inc.)
|
8-K
|
April
7, 2009
|
10.1
|
10.12
|
Plan
Benefit Package attachment to 2009 renewal of contract between CMS and
Harmony Health Plan of Illinois, Inc. (d/b/a Harmony Health Plan of
Indiana)
|
8-K
|
April
14, 2009
|
10.1
|
10.13
|
Plan
Benefit Package attachment to 2009 renewal of contract between CMS and
Harmony Health Plan of Illinois, Inc. (d/b/a Harmony Health Plan of
Missouri)
|
8-K
|
April
14, 2009
|
10.2
|
10.14
|
Plan
Benefit Package attachment to 2009 renewal of contract between CMS and
WellCare Health Plans of New Jersey, Inc.
|
8-K
|
April
14, 2009
|
10.3
|
10.16
|
Amendment
10 to Contract No. FA615 between the Agency for Health Care Administration
(“AHCA”) and WellCare of Florida, Inc. (d/b/a Staywell Health Plan of
Florida)
|
8-K
|
May
1, 2009
|
10.4
|
10.18
|
Amendment
8 to Contract No. FA619 between AHCA and HealthEase of Florida,
Inc.
|
8-K
|
May
1, 2009
|
10.3
|
10.20
|
Amendment
12 to Contract No. FAR001 between AHCA and HealthEase of Florida,
Inc.
|
8-K
|
May
1, 2009
|
10.1
|
10.22
|
Amendment
12 to Contract No. FAR009 between AHCA and WellCare of Florida, Inc.
(d/b/a Staywell Health Plan of Florida)
|
8-K
|
May
1, 2009
|
10.2
|
10.23
|
Deferred
Prosecution Agreement entered into May 5, 2009 among the Registrant,
certain subsidiaries and affiliates of the Registrant, the United States
Attorney’s Office for the Middle District of Florida and the Florida
Attorney General’s Office.
|
8-K
|
May
5, 2009
|
10.1
|
10.24
|
Consent
of Registrant dated May 13, 2009 with respect to Complaint filed by the
Securities and Exchange Commission and form of Final Judgment entered by
the court on June 1, 2009
|
8-K
|
May
18, 2009
|
10.1
|
*
Filed herewith
|
||||
†
Denotes a management contract or compensatory plan, contract or
arrangement
|
WELLCARE
HEALTH PLANS, INC.
|
||
By:
|
/s/
Heath Schiesser
|
|
Heath
Schiesser
|
||
President
and Chief Executive Officer
|
||
By:
|
/s/
Thomas L. Tran
|
|
Thomas
L. Tran
|
||
Senior
Vice President and Chief Financial
Officer
|
incorporated
by reference
|
||||
Exhibit
Number
|
Description
|
Form
|
Filing
Date
with SEC
|
Exhibit Number
|
2.1
|
Agreement
and Plan of Merger, dated as of February 12, 2004, between WellCare
Holdings, LLC and WellCare Group, Inc.
|
S-1/A
|
June
8, 2004
|
2.1
|
3.1
|
Amended
and Restated Certificate of Incorporation
|
10-Q
|
August
13, 2004
|
3.1
|
3.2
|
Amended
and Restated Bylaws of WellCare Health Plans, Inc.
|
10-Q
|
August
13, 2004
|
3.2
|
3.2.1
|
Amendment
No. 1 to the Amended and Restated Bylaws of WellCare Health Plans,
Inc.
|
8-K
|
January
31, 2008
|
3.2
|
4.1
|
Specimen
common stock certificate
|
S-1/A
|
June
29, 2004
|
4.1
|
10.1
|
Form
of Indemnification Agreement †
|
8-K
|
May
14, 2009
|
10.1
|
10.2
|
Indemnification
Agreement between the Registrant and Heath Schiesser †
|
8-K
|
May
14, 2009
|
10.2
|
10.3
|
Indemnification
Agreement between the Registrant and Charles Berg †
|
8-K
|
May
14, 2009
|
10.3
|
10.4
|
Form
of Restricted Stock Agreement under the Registrant’s 2004 Equity Incentive
Plan (associate version) †
|
8-K
|
June
3, 2009
|
10.1
|
10.5
|
Form
of Restricted Stock Agreement under the Registrant’s 2004 Equity Incentive
Plan (director version) †
|
8-K
|
June
3, 2009
|
10.2
|
10.6
|
Form
of Restricted Stock Unit Agreement under the Registrant’s 2004 Equity
Incentive Plan (associate) †
|
8-K
|
June
3, 2009
|
10.3
|
10.7
|
Form
of Stock Option Agreement under the Registrant’s 2004 Equity Incentive
Plan (associate) †
|
8-K
|
June
3, 2009
|
10.4
|
10.9
|
Amended
and Restated Employment Agreement effective as of June 3, 2009 by and
among the Registrant, Comprehensive Health Management, Inc. and Thomas F.
O’Neil III †
|
8-K
|
June
4, 2009
|
10.1
|
10.10
|
Non-Institutional
Medicaid Provider Agreement between WellCare of Florida, Inc. and the
Florida Agency for Health Care Administration
|
8-K
|
April
9, 2009
|
10.1
|
10.11
|
Notice
of 2009 renewal from the Centers for Medicare & Medicaid Services
regarding contract renewal for contract between the Centers for Medicare
& Medicaid Services (“CMS”) and WellCare of Ohio, Inc. (and form of
renewal of contracts between CMS and Harmony Health Plan of Illinois, Inc.
(d/b/a Harmony Health Plan of Indiana), Harmony Health Plan of Illinois,
Inc. (d/b/a Harmony Health Plan of Missouri) and WellCare Health Plans of
New Jersey, Inc.)
|
8-K
|
April
7, 2009
|
10.1
|
10.12
|
Plan
Benefit Package attachment to 2009 renewal of contract between CMS and
Harmony Health Plan of Illinois, Inc. (d/b/a Harmony Health Plan of
Indiana)
|
8-K
|
April
14, 2009
|
10.1
|
10.13
|
Plan
Benefit Package attachment to 2009 renewal of contract between CMS and
Harmony Health Plan of Illinois, Inc. (d/b/a Harmony Health Plan of
Missouri)
|
8-K
|
April
14, 2009
|
10.2
|
10.14
|
Plan
Benefit Package attachment to 2009 renewal of contract between CMS and
WellCare Health Plans of New Jersey, Inc.
|
8-K
|
April
14, 2009
|
10.3
|
10.16
|
Amendment
10 to Contract No. FA615 between the Agency for Health Care Administration
(“AHCA”) and WellCare of Florida, Inc. (d/b/a Staywell Health Plan of
Florida)
|
8-K
|
May
1, 2009
|
10.4
|
10.18
|
Amendment
8 to Contract No. FA619 between AHCA and HealthEase of Florida,
Inc.
|
8-K
|
May
1, 2009
|
10.3
|
10.20
|
Amendment
12 to Contract No. FAR001 between AHCA and HealthEase of Florida,
Inc.
|
8-K
|
May
1, 2009
|
10.1
|
10.22
|
Amendment
12 to Contract No. FAR009 between AHCA and WellCare of Florida, Inc.
(d/b/a Staywell Health Plan of Florida)
|
8-K
|
May
1, 2009
|
10.2
|
10.23
|
Deferred
Prosecution Agreement entered into May 5, 2009 among the Registrant,
certain subsidiaries and affiliates of the Registrant, the United States
Attorney’s Office for the Middle District of Florida and the Florida
Attorney General’s Office.
|
8-K
|
May
5, 2009
|
10.1
|
10.24
|
Consent
of Registrant dated May 13, 2009 with respect to Complaint filed by the
Securities and Exchange Commission and form of Final Judgment entered by
the court on June 1, 2009
|
8-K
|
May
18, 2009
|
10.1
|
*
Filed herewith
|
||||
†
Denotes a management contract or compensatory plan, contract or
arrangement
|