Cobalt Corporation Reports Profits.Business Editors MILWAUKEE Milwaukee (mĭlwŏk`ē), city (1990 pop. 628,088), seat of Milwaukee co., SE Wis., at the point where the Milwaukee, Menominee, and Kinnickinnic rivers enter Lake Michigan; inc. 1846. , Wis adv. 1. Certainly; really; indeed. v. t. 1. To think; to suppose; to imagine; - used chiefly in the first person sing. present tense, I wis. See the Note under Ywis. .--(BUSINESS WIRE)--Feb. 14, 2002 Cobalt Corporation Reports Profits -- Continued Improvement in Medical Loss Ratio -- Write Down AMZ Holdings to Market -- Focus on Core Blue Business Cobalt Corporation (NYSE NYSE See: New York Stock Exchange :CBZ CBZ Carbamazepine CBZ Carbobenzoxy CBZ Centrale Burgerlijke Ziekeninrichting (Dutch) ) reported fourth quarter profits prior to its equity interest in American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Medical Security Group, Inc. (NYSE:AMZ AMZ see australian Milking Zebu. ) of $2.3 million or $0.06 per share on 40.6 million shares outstanding. This compares with a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma loss prior to equity interest of AMZ of $10.3 million in the fourth quarter of 2000. For the year, the company's pro forma profits before its equity in AMZ were $1.4 million for 2001 compared with a pro forma loss of $65.3 million for 2000. Revenues for the quarter were $420.0 million, an eight percent increase over revenues for the same quarter of 2000. "These earnings reflect a significant turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. on Cobalt's business exclusive of its investment in AMZ," said Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs R. Hefty heft·y adj. heft·i·er, heft·i·est 1. Of considerable weight; heavy. 2. Rugged and powerful. See Synonyms at heavy. 3. , Cobalt Corporation president, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . The loss ratio on Cobalt's medical business improved to 90.1 percent in the fourth quarter of 2001 compared with 91.5 percent for the same quarter of 2000. For the quarter, the administrative expense ratio for insured medical business improved from 10.7 percent in 2000 to 9.7 percent in 2001. American Medical Security Group, Inc. of Green Bay, Wis., reported earnings of $0.30 per share for the quarter. This translates into $0.05 per share of earnings for Cobalt Corporation's 45 percent ownership of AMZ common stock. Also, at year-end 2001, Cobalt reduced its carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of AMZ common stock to market value as of December 31, 2001 of $12.45 per share. This resulted in a write down of $25.2 million. The net effect on Cobalt of the write down of AMZ's value partially offset by AMZ's quarterly earnings was $23.2 million or $0.57 per every Cobalt share. "It was prudent to reduce the value of our AMZ holdings to market as of December 31, 2001 because AMZ is no longer a strategic asset for the company," Hefty said. Cobalt Corporation previously announced in its filing of a Securities and Exchange Commission Form 13D that it planned an orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. reduction of its AMZ holdings. "Cobalt continues to comply with statutory capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. as of year-end 2001 after the write down in the value of AMZ," Hefty said. In December 2001, the company provided 2002 earnings guidance totaling $0.50 per share on Cobalt's business before its equity interest in AMZ earnings. Including equity in AMZ earnings as, forecast by AMZ in its February 4 earnings release, Cobalt Corporation's earnings guidance increases to $0.68 to $0.69 per share. "The Blue brand is increasingly valuable as consumers are given a choice in their health care coverage. Cobalt Corporation's goal is to focus on its core medical Blue-branded business. As the company focuses on its core businesses, improvements in the company's performance may accelerate," Hefty said. Cobalt Corporation is the Blue Cross and Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. for the state of Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee . It is one of the leading, publicly traded health care companies in the nation, offering a diverse portfolio of complementary insurance and managed care products to employer, individual, insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. and government customers. Headquartered in Milwaukee and formed by the combination of Blue Cross & Blue Shield United of Wisconsin and United Wisconsin Services, Inc., Cobalt Corporation (NYSE: CBZ) serves 2.9 million lives in 50 states. For more information, visit our Web site at www.cobaltcorporation.com. Cautionary Statement: This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. with respect to the financial condition, results of operations and business of Cobalt Corporation. Such forward-looking statements are subject to inherent risks and uncertainties that may cause actual results or events to differ materially from those contemplated by such forward-looking statements. Factors that may cause actual results or events to differ materially from those contemplated by such forward-looking statements include rising health care costs, business conditions, competition in the managed care industry, developments in health care reform and other regulatory issues.
COBALT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
PRO FORMA (1)
Three months ended Three months ended
December 31, December 31,
2001 2000
------------------ ------------------
(In thousands, except share data)
Health services revenues
and premium equivalents: $ 553,965 $ 517,557
========== ============
Revenues:
Health services revenues:
Premium $ 371,110 $ 348,722
Government contract
fees 28,365 20,395
Other 17,083 16,764
Investment results 3,478 2,935
---------- ------------
Total revenues 420,036 388,816
Expenses:
Medical and other
benefits 326,154 312,397
Selling, general,
administrative
and other 90,781 84,280
Profit sharing on joint
ventures 67 40
Interest 120 202
Amortization of goodwill 2,183 1,674
---------- ------------
Total expenses 419,305 398,593
---------- ------------
Operating income (loss) 731 (9,777)
Equity in net loss of affiliates,
net of tax (2) (23,112) (255)
---------- ------------
Pre-tax loss (22,381) (10,032)
Income tax expense (benefit) (1,531) 177
---------- ------------
Net loss $ (20,850) $ (10,209)
========== ============
Earnings per share (3):
Diluted EPS from Cobalt
operations $ 0.06 $ (0.25)
========== ============
Diluted EPS from Equity
in AMZ $ (0.57) $ 0.00
========== ============
Diluted EPS $ (0.51) $ (0.25)
========== ============
Weighted average shares
outstanding:
Basic and diluted (3) 40,548,560 40,412,393
========== ============
(1) Includes the operations of the former UWS and BCBSUW with
elimination of intercompany transactions, the recording of
purchase accounting adjustments and the amortization of
goodwill calculated as if the transaction was completed at the
beginning of the reporting period.
(2) In 2001, includes a writedown to market value of $12.45 per
share on the Investment in AMZ.
(3) When a net loss is reported, potentially dilutive securities
are not included in the calculation of earnings per share
because their inclusion would have an antidilutive effect.
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