Exhibit 99.1

 

·	For 2014, premium revenue grew to over $12.8 billion, an increase of 36% compared with 2013, driven by increases in premium revenue for each of the Company’s three segments.

·

In 2014, WellCare was awarded a contract for the Florida Medicaid Managed Medical Assistance program (MMA) in 8 out of the 11 regions in Florida.  WellCare has a #1 market share and has grown from 394,000 members in the prior Medicaid program at year-end 2013 to over 650,000 in the Florida MMA program at December 31, 2014.

·

As of January 2015, the Company’s Medicare Advantage membership stood at 337,000 members.  The approximate decrease of 37,000 members was driven by the bid actions and county withdrawals in California designed to improve the performance of Easy Choice (resulting in a 28,000 member decrease in California) as well as the Company’s exit of the Arizona, Missouri, and Ohio markets representing 8,000 members as of year-end 2014. For 2015, WellCare offers Medicare Advantage plans in 15 states.

·

As of January 2015, the Company’s PDP segment membership stood at 1.1 million compared to 1.4 million in December 2014 due to the actions the Company took in its 2015 bids submitted in June of 2014. For 2015, WellCare's PDP bids were below the benchmarks in 13 of the 33 CMS regions and within the de minimis range for 9 additional regions.

·

The fourth quarter of 2014 included favorable prior period reserve development in the amount of $15.9 million.  Medical benefits payable remained at $1.5 billion as of December 31, 2014, compared with September 30, 2014.  Days in claims payable (DCP) were 46 days as of December 31, 2014, compared with 45 days as of September 30, 2014, and 42 days as of December 31, 2013.

 

 

·	Premium revenue is expected to be between $13.5 and $13.8 billion.

·	Premium revenues and MBRs for each of the Company’s segments are anticipated as follows:

	Segments	Premium Revenue	MBRs
	Medicaid	$8.5 to $8.7 billion	89.25% to 90.25%
	Medicare Health Plans	$3.95 to $4.05 billion	85.00% to 86.50%
	Medicare PDP	$1.0 to $1.1 billion	85.50% to 87.00%

 

·	The adjusted administrative expense ratio is expected to be between 8.0% and 8.2%.

 

 

·	The ACA fee expense is expected to be between $230 and $235 million.  This amount does not reflect the anticipated reimbursement by state Medicaid government customers.

o	Similar to 2014, WellCare expects 100% of its Medicaid states to reimburse for the Medicaid portion of the ACA fee, grossed up for taxes;  this is expected to be between $215 million and $219 million

·	Depreciation and amortization expense is expected to be between $70 and $72 million

·	Interest expense is anticipated to be between $47 and $49 million

·	The effective income tax rate is expected to be between 60.25% and 62.25%

·	Capital expenditures are expected to be between $110 million and $120 million in 2015

·	Adjusted Earnings will exclude the impact of:

o	Certain SG&A expenses related to previously disclosed government investigations and related litigation and resolution costs; and

 

o	Any transitory costs incurred in 2015 related to the Company’s decision to change pharmacy benefit managers as of January 1, 2016

 

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 and reimbursement of the ACA industry fee by state Medicaid programs 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.

		For the Three Months Ended December 31,								For the Year Ended December 31,
		2014				2013				2014				2013
Revenues:
Premium		$	3,354.3			$	2,417.2			$	12,714.4			$	9,433.4
Medicaid premium taxes			19.5				16.6				76.5				75.7
ACA industry fee reimbursement			30.7				–				124.6				–
Total premium			3,404.5				2,433.8				12,915.5				9,509.1
Investment and other income			10.3				5.0				44.4				18.8
Total revenues			3,414.8				2,438.8				12,959.9				9,527.9
Expenses:
Medical benefits			2,994.4				2,110.7				11,455.2				8,258.6
Selling, general and administrative			283.0				218.9				1,018.8				856.5
ACA industry fee			34.4				–				137.7				–
Medicaid premium taxes			19.5				16.6				76.5				75.7
Depreciation and amortization			16.0				12.3				59.9				44.1
Interest			11.4				6.1				39.4				11.9
Impairment and other charges			–				–				24.1				–
Total expenses			3,358.7				2,364.6				12,811.6				9,246.8
Income from operations			56.1				74.2				148.3				281.1
Bargain purchase gain			(2.1	)			–				29.5				–
Loss on extinguishment of debt			–				(2.8	)			–				(2.8	)
Income before income taxes			54.0				71.4				177.8				278.3
Income tax expense			46.3				28.5				114.1				103.0
Net income		$	7.7			$	42.9			$	63.7			$	175.3
Net income per common share:
Basic		$	0.18			$	0.98			$	1.45			$	4.03
Diluted		$	0.18			$	0.97			$	1.44			$	3.98
Weighted average common shares outstanding:
Basic			43,902,192				43,731,435				43,864,367				43,535,927
Diluted			44,222,272				44,084,916				44,163,601				44,000,563

		Dec. 31, 2014				Dec. 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents		$	1,313.5			$	1,482.5
Investments			172.8				314.7
Premiums receivable, net			609.0				490.7
Pharmacy rebates receivable, net			358.9				165.5
Receivables from government partners			83.0				–
Funds receivable for the benefit of members			781.5				93.5
Income taxes receivable			–				7.1
Prepaid expenses and other current assets, net			170.5				115.0
Deferred income tax asset			37.1				23.7
Total current assets			3,526.3				2,692.7
Property, equipment and capitalized software, net			187.1				147.4
Goodwill			263.2				236.8
Other intangible assets, net			101.0				66.5
Long-term investments			257.3				80.4
Restricted investments			150.3				82.5
Other assets			9.8				144.4
Total Assets		$	4,495.0			$	3,450.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Medical benefits payable		$	1,483.8			$	953.4
Unearned premiums			86.9				0.2
Accounts payable			18.9				22.3
Other accrued expenses and liabilities			294.7				187.7
Current portion of amount payable related to investigation resolution			35.2				36.2
Income taxes payable			1.9				–
Other payables to government partners			14.3				37.3
Total current liabilities			1,935.7				1,237.1
Deferred income tax liability			48.4				55.4
Amount payable related to investigation resolution			–				34.1
Long-term debt			900.0				600.0
Other liabilities			15.0				6.2
Total liabilities			2,899.1				1,932.8
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, 43,914,106 and 43,766,645 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively)			0.4				0.4
Paid-in capital			503.0				489.4
Retained earnings			1,093.1				1,029.4
Accumulated other comprehensive loss			(0.6	)			(1.3	)
Total stockholders' equity			1,595.9				1,517.9
Total Liabilities and Stockholders' Equity		$	4,495.0			$	3,450.7

		For the Year Ended December 31,
		2014				2013
Cash provided by operating activities:
Net income		$	63.7			$	175.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			59.9				44.1
Equity-based compensation expense			15.7				12.5
Bargain purchase gain			(29.5	)			–
Impairment and other charges			24.1				9.0
Loss on extinguishment of debt			–				2.8
Incremental tax benefit from equity-based compensation			(0.6	)			(3.6	)
Deferred taxes, net			(6.8	)			15.5
Provision for doubtful receivables			15.2				10.6
Changes in operating accounts, net of effects from acquisitions:
Premiums receivable, net			(46.2	)			(77.3	)
Pharmacy rebates receivable, net			(161.2	)			(38.7	)
Prepaid expenses and other current assets, net			(31.8	)			(13.7	)
Medical benefits payable			423.4				148.8
Unearned premiums			82.4				0.1
Accounts payable and other accrued expenses			10.1				(30.8	)
Other payables to government partners			(106.0	)			(51.0	)
Amount payable related to investigation resolution			(35.1	)			(35.2	)
Income taxes receivable/payable, net			9.5				9.8
Other, net			12.5				0.7
Net cash provided by operating activities			299.3				178.9
Cash used in investing activities:
Acquisitions, net of cash acquired			48.0				(40.5	)
Cash advanced for acquisitions			–				(133.6	)
Purchases of investments			(346.7	)			(416.7	)
Proceeds from sale and maturities of investments			359.2				375.8
Purchases of restricted investments			(70.0	)			(45.8	)
Proceeds from maturities of restricted investments			8.7				32.3
Additions to property, equipment and capitalized software, net			(74.8	)			(62.0	)
Net cash used in investing activities			(75.6	)			(290.5	)
Cash (used in) provided by financing activities:
Proceeds from debt, net of financing costs paid			298.6				816.4
Proceeds from exercises of stock options			0.5				10.3
Incremental tax benefit from equity-based compensation			0.6				3.6
Repurchase and retirement of shares to satisfy tax withholding requirements			(3.1	)			(4.1	)
Payments on debt			–				(365.0	)
Payments on capital leases			(1.4	)			(1.6	)
Funds (paid) received for the benefit of members, net			(687.9	)			34.0
Net cash (used in) provided by financing activities			(392.7	)			493.6
(Decrease) increase in cash and cash equivalents			(169.0	)			382.0
Balance at beginning of period			1,482.5				1,100.5
Balance at end of period		$	1,313.5			$	1,482.5
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for taxes		$	100.9			$	80.5
Cash paid for interest		$	36.9			$	6.3
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
Non-cash additions to property, equipment, and capitalized software		$	11.7			$	2.9

		As of December 31,
		2014				2013
Medicaid Health Plans Membership by State:
Florida			722,000				486,000
Georgia			604,000				540,000
Kentucky			420,000				292,000
Illinois			161,000				141,000
New York			116,000				98,000
All other States			287,000				202,000
Total Medicaid Health Plans Membership by State			2,310,000				1,759,000
Medicaid Health Plans Membership by Program:
TANF			1,863,000				1,317,000
CHIP			178,000				212,000
SSI, ABD and Other			263,000				206,000
FHP and Georgia Family Planning			6,000				24,000
Total Medicaid Health Plans Membership by Program			2,310,000				1,759,000
Medicare Health Plans:
Medicare Advantage Health Plans			374,000				290,000
Medicare Supplement Insurance			43,000				–
Total Medicare Health Plans			417,000				290,000
Medicare Prescription Drug Plans			1,392,000				797,000
Total Membership			4,119,000				2,846,000

		For the Three Months Ended December 31,								For the Year Ended December 31,
		2014				2013				2014				2013
Total premium revenue:
Medicaid Health Plans:
Kentucky		$	615.9			$	366.5			$	2,287.3			$	1,318.3
Georgia			430.8				370.8				1,624.3				1,513.5
Florida			535.3				294.7				1,744.2				1,109.3
Other states			541.1				427.9				2,041.6				1,644.4
Medicaid premium taxes			19.5				16.6				76.5				75.7
Total Medicaid Health Plans			2,142.6				1,476.5				7,773.9				5,661.2
Medicare Health Plans:
Medicare Advantage Health plans			986.1				784.7				3,866.1				3,071.0
Medicare Supplement			23.6				-				97.1				-
Total Medicare Health Plans			1,009.7				784.7				3,963.2				3,071.0
Prescription Drug Plans			252.2				172.6				1,178.4				776.9
Total Premium Revenue		$	3,404.5			$	2,433.8			$	12,915.5			$	9,509.1

		For the Three Months Ended December 31,								For the Year Ended December 31,
		2014				2013				2014				2013
Medicaid Health Plans Segment:
Total premium revenue		$	2,142.6			$	1,476.5			$	7,773.9			$	5,661.2
Medicaid state premium taxes			19.5				16.6				76.5				75.7
Premium revenue excluding Medicaid state premium taxes			2,123.1				1,459.9				7,697.4				5,585.5
Medical benefits expense			1,919.6				1,291.1				6,853.1				4,927.4
Subtotal			203.5				168.8				844.3				658.1
ACA industry fee expense			21.0				–				81.6				–
Gross margin		$	182.5			$	168.8			$	762.7			$	658.1
Gross margin rate			8.6	%			11.6	%			9.9	%			11.8	%
Premium revenue excluding Medicaid state premium taxes		$	2,123.1			$	1,459.9			$	7,697.4			$	5,585.5
Medicaid state ACA industry fee reimbursements			30.7				–				124.6				–
Premium revenue excluding Medicaid state premium taxes and ACA industry fee reimbursements		$	2,092.4			$	1,459.9			$	7,572.8			$	5,585.5
Medical benefits ratio:
Total premium revenues (GAAP)			89.6	%			87.4	%			88.2	%			87.0	%
Excluding Medicaid state premium taxes and Medicaid state ACA industry fee reimbursements (non-GAAP)			91.7	%			88.4	%			90.5	%			88.2	%
Medicare Health Plans Segment:
Premium revenue		$	1,009.7			$	784.7			$	3,963.2			$	3,071.0
Medical benefits expense			873.5				690.9				3,506.9				2,659.5
Subtotal			136.2				93.8				456.3				411.5
ACA industry fee expense			10.6				–				44.7				–
Gross margin		$	125.6			$	93.8			$	411.6			$	411.5
Gross margin rate			12.4	%			12.0	%			10.4	%			13.4	%
Medical benefits ratio			86.5	%			88.0	%			88.5	%			86.6	%
Prescription Drug Plans Segment:
Premium revenue		$	252.2			$	172.6			$	1,178.4			$	776.9
Medical benefits expense			201.4				128.7				1,095.2				671.7
Subtotal			50.8				43.9				83.2				105.2
ACA industry fee expense			2.7				–				11.4				–
Gross margin		$	48.1			$	43.9			$	71.8			$	105.2
Gross margin rate			19.1	%			25.4	%			6.1	%			13.5	%
Medical benefits ratio			79.8	%			74.6	%			92.9	%			86.5	%

		For the Three Months Ended December 31,								For the Year Ended December 31,
		2014				2013				2014				2013
Company:
Total premium revenue		$	3,404.5			$	2,433.8			$	12,915.5			$	9,509.1
Medicaid state premium taxes			19.5				16.6				76.5				75.7
Premium revenue excluding Medicaid state premium taxes			3,385.0				2,417.2				12,839.0				9,433.4
Medical benefits expense			2,994.4				2,110.7				11,455.2				8,258.6
Subtotal			390.6				306.5				1,383.8				1,174.8
ACA industry fee expense			34.4				–				137.7				–
Gross margin		$	356.2			$	306.5			$	1,246.1			$	1,174.8
Gross margin rate			10.5	%			12.7	%			9.7	%			12.5	%
Total premium revenues (GAAP)		$	3,404.5			$	2,433.8			$	12,915.5			$	9,509.1
less: Medicaid state premium taxes			19.5				16.6				76.5				75.7
less: Medicaid state ACA industry fee reimbursements			30.7				–				124.6				–
Premium revenue net of Medicaid state premium taxes and Medicaid state ACA industry fee reimbursements		$	3,354.3			$	2,417.2			$	12,714.4			$	9,433.4
Medical benefits ratio:
Total premium revenues (GAAP)			88.0	%			86.7	%			88.7	%			86.9	%
Excluding Medicaid state premium taxes and Medicaid state ACA industry fee reimbursements (non-GAAP)			89.3	%			87.3	%			90.1	%			87.5	%

		For the Three Months Ended December 31,								For the Year Ended December 31,
		2014				2013				2014				2013
Company premium revenue:
As determined under GAAP		$	3,404.5			$	2,433.8			$	12,915.5			$	9,509.1
Medicaid premium taxes			(19.5	)			(16.6	)			(76.5	)			(75.5	)
ACA industry fee reimbursement			(30.7	)			–				(124.6	)			–
Total premium revenue net of premium taxes and ACA industry fee reimbursement		$	3,354.3			$	2,417.2			$	12,714.4			$	9,433.4
Administrative expense ratio:
As determined under GAAP			8.3	%			9.0	%			7.9	%			9.0	%
Impact of Medicaid premium taxes			0.1	%			0.1	%			0.0	%			0.1	%
Impact of ACA industry fee reimbursement			0.1	%			0.0	%			0.1	%			0.0	%
Selling, general and administrative expense adjustments(a)			(0.3	%)			(0.4	%)			(0.3	%)			(0.6	%)
Adjusted (Non-GAAP)			8.2	%			8.7	%			7.7	%			8.5	%

(a)	Results from expenses associated with government investigation-related legal, accounting, and other costs, as well as liabilities for litigation resolution for each of the respective periods, which dollar amounts are disclosed on the schedules below.