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VIEWS: 4 PAGES: 2

									            PACIFICARE HEALTH SYSTEMS, INC.




CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)                                                                            Three Months Ended June 30,          Six Months Ended June 30,
(In thousands, except per-share amounts)                                                 2001            2000 (1)             2001            2000 (1)
Revenue:
  Commercial premiums                                                              $      1,198,286    $   1,228,285    $     2,428,438    $    2,415,986
  Medicare premiums                                                                       1,703,704        1,590,647          3,436,139         3,171,432
  Other income                                                                               39,054           35,251             77,120            69,428
  Net investment income                                                                      32,682           24,404             62,728            49,512
    Total operating revenue                                                               2,973,726        2,878,587          6,004,425         5,706,358
Expenses:
Health care services:
  Commercial services                                                                     1,069,074        1,018,701          2,169,749         1,992,982
  Medicare services                                                                       1,538,904        1,400,399          3,110,842         2,782,658
     Total health care services                                                           2,607,978        2,419,100          5,280,591         4,775,640
Marketing, general and administrative expenses                                              294,088          296,790            587,007           596,508
Amortization of goodwill and intangible assets                                               20,693           20,927             41,610            41,383
Impairment, disposition, restructuring and other (credits) charges                             (295)           2,765             (1,223)            8,365
Office of Personnel Management credits                                                          -                -                  -              (2,964)
Operating income                                                                             51,262          139,005             96,440           287,426
Interest expense                                                                            (17,834)         (20,250)           (37,969)          (40,432)
Minority interest in consolidated subsidiary                                                    -                131                -                 131
Income before income taxes                                                                   33,428          118,886             58,471           247,125
Provision for income taxes                                                                   18,159           49,694             30,054           103,298
Net income                                                                         $         15,269 $         69,192    $        28,417 $         143,827
Weighted average common shares outstanding
  used to calculate basic earnings per share                                                  33,543          35,149             33,509            35,827
Basic earnings per share                                                           $            0.46   $        1.97    $          0.85    $         4.01
Weighted average common shares and equivalents outstanding
  used to calculate diluted earnings per share                                                33,838          35,305             33,824            35,939
Diluted earnings per share                                                         $            0.45   $        1.96    $          0.84    $         4.00
(1)
      Presentation changes have been made to June 30, 2000 to conform to 2001 presentation.

OPERATING STATISTICS
Medical care ratio (health care services as a percentage of premium revenue):
 Consolidated                                                                                  89.9%           85.8%              90.0%             85.5%
 Commercial                                                                                    89.2%           82.9%              89.3%             82.5%
 Medicare                                                                                      90.3%           88.0%              90.5%             87.7%
Marketing, general and administrative expenses as
  a percentage of operating revenue (excluding net investment income)                          10.0%           10.4%                9.9%            10.5%
Operating income as a percentage of operating revenue (excluding net                            0.6%            4.0%                0.6%             4.2%
  investment income)
Effective tax rate                                                                             54.3%           41.8%              51.4%             41.8%

                                                                                   - more -
            PACIFICARE HEALTH SYSTEMS, INC.


(Unaudited)                                                                            Three Months Ended June 30,          Six Months Ended June 30,
(In thousands)                                                                           2001            2000 (1)             2001            2000 (1)
OPERATING CASH FLOWS
Net income                                                                         $           15,269    $    69,192    $        28,417    $       143,827
Adjustments to reconcile net income to net
  cash (used in) provided by operating activities:
   Amortization of goodwill and intangible assets                                              20,693         20,927             41,610             41,383
   Depreciation and amortization                                                               15,680         11,409             30,810             22,069
   Provision for doubtful accounts                                                              2,613          1,773              4,104              2,731
   Unearned compensation amortization                                                           1,612            -                1,959                -
   Deferred income taxes                                                                        1,155         (1,902)            (1,541)              (883)
   Loss on disposal of property, plant and equipment                                              337            977              1,206              1,859
   Impairment, disposition, restructuring and other (credits) charges                            (295)         2,765             (1,223)             8,365
   Tax benefit realized upon exercise of stock options                                            -            1,440                  21             1,479
   Other non-cash items                                                                           -              333                -                  -
   Minority interest in consolidated subsidiary                                                   -             (131)               -                 (131)
   Office of Personnel Management credits                                                         -              -                  -               (2,964)
   Changes in assets and liabilities, net of effects from
    acquisitions and dispositions:
     Receivables, net                                                                           11,576        (1,071)             8,515            (87,868)
     Prepaid expenses and other assets                                                           1,819        (5,538)             3,321             (3,937)
     Medical claims and benefits payable                                                      (150,400)       32,202           (145,800)           103,162
     Accounts payable and accrued liabilities                                                   (9,597)      (10,470)             8,323              6,081
     Unearned premium revenue                                                                  (14,654)       (9,030)             4,921             11,266
Net cash flows (used in) provided by operating activities                          $          (104,192) $    112,876    $       (15,357) $         246,439

Unearned premium revenue - primarily CMS                                                        14,654         9,030             (4,921)           (11,266)
Pro forma net cash flows (used in) provided by operating activities                $           (89,538) $    121,906    $       (20,278) $         235,173
(1)
      Presentation changes have been made to June 30, 2000 to conform to 2001 presentation.
                                                                                                                                June 30,           June 30,
MEMBERSHIP DATA                                                                                                                    2001               2000
Commercial HMO                                                                                                                2,597,400          2,975,600
Employer self-funded                                                                                                             48,000             48,000
PPO and indemnity                                                                                                                42,900             43,000
Medicare supplement                                                                                                               6,000                -
 Total Commercial                                                                                                             2,694,300          3,066,600
 Total Medicare                                                                                                               1,002,100          1,015,200
Total Commercial and Medicare                                                                                                 3,696,400          4,081,800
Total pharmacy benefit management external                                                                                      857,700            711,000

BALANCE SHEET DATA                                                                                                              June 30,       December 31,
(in thousands)                                                                                                                     2001               2000
Assets:
  Cash and equivalents and marketable securities                                                                        $     2,004,166    $     2,115,648
  Receivables, net                                                                                                              398,075            410,694
  Property, plant and equipment, net                                                                                            230,541            225,551
  Goodwill and intangible assets, net                                                                                         2,221,192          2,261,637
  Other assets                                                                                                                  333,394            309,906
   Total assets                                                                                                         $     5,187,368    $     5,323,436
Liabilities and equity:
  Total medical claims and benefits payable                                                                             $     1,125,000    $     1,270,800
   Long-term debt, due within one year                                                                                          705,112                161
  Long-term debt, due after one year                                                                                            101,326            836,556
  Other liabilities                                                                                                           1,227,051          1,212,359
  Total stockholders' equity                                                                                                  2,028,879          2,003,560
   Total liabilities and equity                                                                                         $     5,187,368    $     5,323,436

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