WellPoint Inc. (WLP, Financial) filed Quarterly Report for the period ended 2009-09-30.
WellPoint Inc. is the largest publicly traded commercial health benefits company in terms of membership in the United States. WellPoint Inc. is an independent licensee of the Blue Cross and Blue Shield Association and serves its members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado Connecticut Georgia Indiana Kentucky Maine Missouri Nevada New Hampshire Ohio Virginia (excluding the Northern Virginia suburbs of Washington D.C.) Wisconsin; and through HealthLink and UniCare. Wellpoint Inc. has a market cap of $22.19 billion; its shares were traded at around $46.7 with a P/E ratio of 7.8 and P/S ratio of 0.4. Wellpoint Inc. had an annual average earning growth of 20.8% over the past 5 years.
Net income for the nine months ended September 30, 2009 was $2.0 billion, a decrease of $155.2 million, or 7%, as compared to the nine months ended September 30, 2008. The declines in net income were primarily driven by increased income tax expense, partially due to IRS settlements in 2008, increased administrative expenses, reduced operating revenue, decreased net realized gains on investments and increased intangible asset impairments, partially offset by lower benefit expense and lower other-than-temporary impairment losses recognized in income.
Our fully-diluted earnings per share, or EPS, was $1.53 for the three months ended September 30, 2009, which included $0.03 income per share of net realized gains on investments and other-than-temporary impairment losses recognized in income and $0.28 loss per share from intangible asset impairments, and was a 4% decrease from the EPS of $1.60 for the three months ended September 30, 2008, which included $0.90 per share income from tax benefits, primarily from settlements with the IRS, $0.71 loss per share in net realized losses on investments and other-than-temporary impairment losses recognized in income, and $0.17 per share loss from intangible asset impairments. The decrease in EPS resulted primarily from lower net income partially offset by the lower number of shares outstanding in 2009 due to share buy back activity under our share repurchase program.
Our fully-diluted EPS was $4.12 for the nine months ended September 30, 2009, which included $0.52 loss per share of net realized gains on investments and other-than-temporary impairment losses recognized in income and $0.28 loss per share from intangible asset impairments, and was a 1% increase over the EPS of $4.09 for the nine months ended September 30, 2008, which included $0.90 per share income from tax benefits, primarily from settlements with the IRS, $0.78 loss per share in net realized losses on investments and other-than-temporary impairment losses recognized in income, and $0.17 per share loss from intangible asset impairments. The increase in EPS resulted primarily from the lower number of shares outstanding in 2009 due to share buy back activity under our stock repurchase program, partially offset by lower net income.
On April 13, 2009, we announced that we entered into a definitive agreement to sell our NextRx subsidiaries to Express Scripts, Inc., or Express Scripts, one of the largest PBM companies in North America, for $4.675 billion, consisting of at least $3.275 billion in cash, subject to customary working capital and indebtedness adjustments. We expect to use the net after-tax proceeds from the sale for a variety of purposes, including share repurchases, repayment of current maturities of long-term debt and other general corporate purposes. In connection with the agreement, at closing, we will enter into a 10-year contract for Express Scripts to provide PBM services to us following the close of the Express Scripts transaction. The Express Scripts transaction is expected to close in the fourth quarter of 2009, subject to customary closing conditions and any required regulatory approvals.
We regularly review the appropriate use of capital. Accordingly, under our Board of Directors authorization, we maintain a common stock repurchase program. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are effected from time to time in the open markets through negotiated transactions and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or Exchange Act. During the nine months ended September 30, 2009, we repurchased and retired approximately 40.8 million shares at an average per share price of $44.38, for an aggregate cost of $1.8 billion. On March 5, 2009, our Board of Directors authorized an increase of $1.5 billion in our stock repurchase program. As of September 30, 2009, $0.7 billion remained authorized for future repurchases. Subsequent to September 30, 2009, we repurchased and retired approximately 6.7 million shares for an aggregate cost of approximately $0.3 billion, leaving approximately $0.4 billion for authorized future repurchases at October 23, 2009. Our stock repurchase program is discretionary as we are under no obligation to repurchase shares. We repurchase shares under the program when we believe it is a prudent use of capital. On October 23, 2009, our Board of Directors authorized an increase of $0.5 billion in our stock repurchase program, subject to completion of the Express Scripts transaction and pending current market conditions, including the possible impact of health care reform. If approved by our Board of Directors, we may utilize further proceeds from the Express Scripts transaction for share repurchases.
Read the The complete ReportWLP is in the portfolios of Bruce Berkowitz of Fairholme Capital Management, Wallace Weitz of Weitz Wallace R & Co, Dodge & Cox, Richard Pzena of Pzena Investment Management LLC, Edward Owens of Vanguard Health Care Fund, Tweedy Browne of Tweedy Browne CO LLC, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Lee Ainslie of Maverick Capital, Donald Yacktman of Yacktman Asset Management Co., Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, Warren Buffett of Berkshire Hathaway, George Soros of Soros Fund Management LLC, David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC.
WellPoint Inc. is the largest publicly traded commercial health benefits company in terms of membership in the United States. WellPoint Inc. is an independent licensee of the Blue Cross and Blue Shield Association and serves its members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado Connecticut Georgia Indiana Kentucky Maine Missouri Nevada New Hampshire Ohio Virginia (excluding the Northern Virginia suburbs of Washington D.C.) Wisconsin; and through HealthLink and UniCare. Wellpoint Inc. has a market cap of $22.19 billion; its shares were traded at around $46.7 with a P/E ratio of 7.8 and P/S ratio of 0.4. Wellpoint Inc. had an annual average earning growth of 20.8% over the past 5 years.
Highlight of Business Operations:
Net income for the three months ended September 30, 2009 was $730.2 million, a decrease of $90.5 million, or 11%, compared to the three months ended September 30, 2008. The declines in net income were primarily driven by increased income tax expense, partially due to Internal Revenue Service, or IRS, settlements in 2008, increased administrative expenses, reduced operating revenue and increased intangible asset impairments, partially offset by lower other-than-temporary impairment losses recognized in income and lower benefit expense.Net income for the nine months ended September 30, 2009 was $2.0 billion, a decrease of $155.2 million, or 7%, as compared to the nine months ended September 30, 2008. The declines in net income were primarily driven by increased income tax expense, partially due to IRS settlements in 2008, increased administrative expenses, reduced operating revenue, decreased net realized gains on investments and increased intangible asset impairments, partially offset by lower benefit expense and lower other-than-temporary impairment losses recognized in income.
Our fully-diluted earnings per share, or EPS, was $1.53 for the three months ended September 30, 2009, which included $0.03 income per share of net realized gains on investments and other-than-temporary impairment losses recognized in income and $0.28 loss per share from intangible asset impairments, and was a 4% decrease from the EPS of $1.60 for the three months ended September 30, 2008, which included $0.90 per share income from tax benefits, primarily from settlements with the IRS, $0.71 loss per share in net realized losses on investments and other-than-temporary impairment losses recognized in income, and $0.17 per share loss from intangible asset impairments. The decrease in EPS resulted primarily from lower net income partially offset by the lower number of shares outstanding in 2009 due to share buy back activity under our share repurchase program.
Our fully-diluted EPS was $4.12 for the nine months ended September 30, 2009, which included $0.52 loss per share of net realized gains on investments and other-than-temporary impairment losses recognized in income and $0.28 loss per share from intangible asset impairments, and was a 1% increase over the EPS of $4.09 for the nine months ended September 30, 2008, which included $0.90 per share income from tax benefits, primarily from settlements with the IRS, $0.78 loss per share in net realized losses on investments and other-than-temporary impairment losses recognized in income, and $0.17 per share loss from intangible asset impairments. The increase in EPS resulted primarily from the lower number of shares outstanding in 2009 due to share buy back activity under our stock repurchase program, partially offset by lower net income.
On April 13, 2009, we announced that we entered into a definitive agreement to sell our NextRx subsidiaries to Express Scripts, Inc., or Express Scripts, one of the largest PBM companies in North America, for $4.675 billion, consisting of at least $3.275 billion in cash, subject to customary working capital and indebtedness adjustments. We expect to use the net after-tax proceeds from the sale for a variety of purposes, including share repurchases, repayment of current maturities of long-term debt and other general corporate purposes. In connection with the agreement, at closing, we will enter into a 10-year contract for Express Scripts to provide PBM services to us following the close of the Express Scripts transaction. The Express Scripts transaction is expected to close in the fourth quarter of 2009, subject to customary closing conditions and any required regulatory approvals.
We regularly review the appropriate use of capital. Accordingly, under our Board of Directors authorization, we maintain a common stock repurchase program. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are effected from time to time in the open markets through negotiated transactions and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or Exchange Act. During the nine months ended September 30, 2009, we repurchased and retired approximately 40.8 million shares at an average per share price of $44.38, for an aggregate cost of $1.8 billion. On March 5, 2009, our Board of Directors authorized an increase of $1.5 billion in our stock repurchase program. As of September 30, 2009, $0.7 billion remained authorized for future repurchases. Subsequent to September 30, 2009, we repurchased and retired approximately 6.7 million shares for an aggregate cost of approximately $0.3 billion, leaving approximately $0.4 billion for authorized future repurchases at October 23, 2009. Our stock repurchase program is discretionary as we are under no obligation to repurchase shares. We repurchase shares under the program when we believe it is a prudent use of capital. On October 23, 2009, our Board of Directors authorized an increase of $0.5 billion in our stock repurchase program, subject to completion of the Express Scripts transaction and pending current market conditions, including the possible impact of health care reform. If approved by our Board of Directors, we may utilize further proceeds from the Express Scripts transaction for share repurchases.
Read the The complete ReportWLP is in the portfolios of Bruce Berkowitz of Fairholme Capital Management, Wallace Weitz of Weitz Wallace R & Co, Dodge & Cox, Richard Pzena of Pzena Investment Management LLC, Edward Owens of Vanguard Health Care Fund, Tweedy Browne of Tweedy Browne CO LLC, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Lee Ainslie of Maverick Capital, Donald Yacktman of Yacktman Asset Management Co., Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, Warren Buffett of Berkshire Hathaway, George Soros of Soros Fund Management LLC, David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC.
