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iPMI Magazine provides premium and freemium content delivery solutions specifically tailored to the international private medical insurance market.

Using the latest technology, iPMI Magazine delivers critical iPMI business communications to an eclectic worldwide readership, from international medical payor to global service provider. 

iPMI Magzine News classifications include:

Write to ipmi[at]ipmimagazine.com to learn more, or to submit content. 

About iPMI Magazine

Due to the nomadic nature of the international private medical insurance (IPMI) industry, iPMI Magazine is an internet based news service for worldwide insurance and assistance professionals who need to understand the impacts of insurance and healthcare policy, regulatory, and legislative developments.

Over 40,000 senior level business decision makers, in over 120 countries, rely on iPMI Magazine to stay 1 step ahead of the risk and on the inside track of international PMI. Covering business travellers, high net worth individuals, expatriate and leisure travel markets, iPMI Magazine is the only international news source covering the most exciting sector of international health insurance: international private medical insurance.

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How To Submit News, Articles and Case Studies To iPMI Magazine

iPMI Magazine provides premium and freemium content delivery solutions specifically tailored to the international private medical insurance market.

Using the latest technology iPMI Magazine can deliver critical business communications to an eclectic worldwide readership from international medical payor to provider. 

News classifications include:

Write to ipmi[at]ipmimagazine.com to learn more or to submit content. 

About iPMI Magazine

Due to the nomadic nature of the international private medical insurance (IPMI) industry, iPMI Magazine is an internet based news service for worldwide insurance and assistance professionals who need to understand the impacts of insurance and healthcare policy, regulatory, and legislative developments. Over 40,000 senior level business decision makers, in over 120 countries, rely on iPMI Magazine to stay 1 step ahead of the risk and on the inside track of international PMI. Covering business travellers, high net worth individuals, expatriate and leisure travel markets, iPMI Magazine is the only international news source covering the most exciting sector of international health insurance: international private medical insurance.

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HCA Reports Second Quarter 2017 Results

HCA Healthcare, Inc. (NYSE: HCA) today announced financial and operating results for the second quarter ended June 30, 2017.

Key second quarter metrics (all percentage changes compare 2Q 2017 to 2Q 2016 unless noted):

  • Revenues increased 4.0 percent to $10.733 billion
  • Net income attributable to HCA Healthcare, Inc. totaled $657 million, or $1.75 per diluted share
  • Adjusted EBITDA totaled $2.090 billion
  • Cash flows from operations totaled $1.404 billion
  • Same facility equivalent admissions increased 1.3 percent while same facility admissions increased 0.8 percent
  • Same facility revenue per equivalent admission increased 2.0 percent

Revenues in the second quarter increased to $10.733 billion, compared to $10.319 billion in the second quarter of 2016. Net income attributable to HCA Healthcare, Inc. totaled $657 million, or $1.75 per diluted share, compared to $658 million, or $1.65 per diluted share, in the second quarter of 2016. The Company recognized tax benefits of $9 million, or $0.02 per diluted share, and $44 million, or $0.11 per diluted share, for the second quarters of 2017 and 2016, respectively, related to the recording of excess tax benefits for employee equity award settlements as a component of the provision for income taxes. Adjusted EBITDA totaled $2.090 billion compared to $2.052 billion in the second quarter of 2016. Adjusted EBITDA is a non-GAAP financial measure. A table reconciling net income attributable to HCA Healthcare, Inc. to Adjusted EBITDA is included in this release.

The second quarter 2016 results included gains on sales of facilities of $6 million, or $0.01 per diluted share, and legal claim costs of $10 million, or $0.02 per diluted share.

Same facility admissions for the second quarter of 2017 increased 0.8 percent, while same facility equivalent admissions increased 1.3 percent compared to the prior year period. Same facility emergency room visits for the second quarter of 2017 increased 0.4 percent from the prior year’s second quarter. Same facility inpatient surgeries were unchanged, while same facility outpatient surgeries declined 1.2 percent compared to the second quarter of 2016.

During the second quarter of 2017, salaries and benefits, supplies and other operating expenses totaled $8.656 billion, or 80.6 percent of revenues, compared to $8.277 billion, or 80.2 percent of revenues, in the second quarter of 2016.

Six Months Ended June 30, 2017

Revenues for the six months ended June 30, 2017 totaled $21.356 billion compared to $20.579 billion in the same period of 2016. Net income attributable to HCA Healthcare, Inc. was $1.316 billion, or $3.48 per diluted share, compared to $1.352 billion, or $3.34 per diluted share, for the first six months of 2016. Results for the six months ended June 30, 2017 include a $76 million tax benefit, or $0.20 per diluted share, compared to $118 million, or $0.29 per diluted share, for the same period of 2016, related to the recording of excess tax benefits for employee equity award settlements as a component of the provision for income taxes. Results for the six months ended June 30, 2016 also included legal claim costs of $22 million, or $0.03 per diluted share.

Balance Sheet and Cash Flows from Operations

As of June 30, 2017, HCA Healthcare, Inc.’s balance sheet reflected cash and cash equivalents of $705 million, total debt of $31.661 billion, and total assets of $34.566 billion. During the second quarter of 2017, capital expenditures totaled $733 million, excluding acquisitions. Cash flows provided by operating activities in the quarter totaled $1.404 billion compared to $1.349 billion in the second quarter of 2016.

As of June 30, 2017, HCA’s leverage ratio as measured by Total Debt/Adjusted EBITDA was 3.83x, compared to 3.82x as of December 31, 2016.

During the second quarter of 2017, the Company repurchased 6.4 million shares of its common stock at a cost of $542 million, and during the six months ended June 30, 2017, repurchased 11.5 million shares of its common stock at a cost of $966 million. The Company had $887 million remaining under its existing repurchase authorization as of June 30, 2017.

As of June 30, 2017, HCA operated 172 hospitals and 119 freestanding surgery centers.

Updated 2017 Guidance

The 2017 guidance ranges for the year have been updated from our fourth quarter and first quarter releases and are as follows:

                   

2017 Updated Guidance Ranges

Revenues                   $43.0 to $44.0 billion
Adjusted EBITDA                   $8.35 to $8.50 billion
EPS (diluted)                   $7.00 to $7.30 per diluted share
Capital Expenditures                   Approximately $2.9 billion
                     

The Company’s 2017 updated guidance contains a number of assumptions, including:

  • 2017 guidance for EPS (diluted) now includes an estimated $100 million income tax benefit, or $0.27 per diluted share, related to the accounting standard which requires the recording of excess tax benefits related to employee equity award settlements as a component of the provision for income taxes. The timing and amounts related to employee equity award settlements are difficult to project and may vary from this estimate.
  • 2017 guidance includes full-year earnings for the Company’s Oklahoma facilities which are under agreement to be sold. The Company cannot at this time estimate a closing date.
  • 2017 guidance excludes the impact of items such as, but not limited to, acquisitions completed to date in 2017, gains or losses on sales of facilities, losses on retirement of debt, legal claim costs and impairments of long-lived assets.

Adjusted EBITDA is a non-GAAP financial measure. A table reconciling net income attributable to HCA Healthcare, Inc. to Adjusted EBITDA is included in this release.

The Company’s updated guidance is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks, including those set forth below in the Company’s “Forward-Looking Statements.”

Earnings Conference Call

HCA will host a conference call for investors at 9:00 a.m. Central Daylight Time today. All interested investors are invited to access a live audio broadcast of the call via webcast. The broadcast also will be available on a replay basis beginning this afternoon. The webcast can be accessed at: https://event.webcasts.com/starthere.jsp?ei=1117292 or through the Company’s Investor Relations web page, www.hcahealthcare.com.

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Anthem Reports Second Quarter 2017 Results

Anthem, Inc. has announced that second quarter 2017 net income was $855.3 million, or $3.16 per share. These results included net negative adjustment items of $0.21 per share. Net income in the second quarter of 2016 was $780.6 million, or $2.91 per share, which included net negative adjustment items of $0.42 per share.

Excluding the items noted in each period, adjusted net income was $3.37 per share in the second quarter of 2017 compared to the adjusted net income of $3.33 per share in the prior year quarter (refer to the GAAP reconciliation table for the most directly comparable measure calculated in accordance with U.S. generally accepted accounting principles, or “GAAP”).

“I am pleased with our second quarter 2017 results, carrying forward our operating momentum. Our commitment to improving the quality and affordability of health care for our customers is resonating in the marketplace and benefiting our shareholders," said Joseph Swedish, president and chief executive officer. “Our solid second quarter financial results reflect solid performance across our various business segments, which is reflected in our updated 2017 outlook,” said John Gallina, executive vice president and chief financial officer.

CONSOLIDATED HIGHLIGHTS

Membership: Medical enrollment totaled approximately 40.4 million members at June 30, 2017, an increase of 0.6 million members, or 1.6 percent, from 39.8 million at June 30, 2016. Commercial & Specialty Business enrollment increased by 389 thousand medical members as the Company experienced growth in both fully insured and self-funded Local Group businesses, partially offset by a decline in membership in the National Account and Individual businesses. Enrollment also grew by 193 thousand in the Medicaid business and 58 thousand in the Medicare business.

Medical enrollment increased by 468 thousand during the first six months of 2017. Enrollment gains were primarily in the Local Group, Individual, and Medicare businesses.

Operating Revenue: Operating revenue was $22.2 billion in the second quarter of 2017, an increase of $0.9 billion, or 4.3 percent, versus the $21.3 billion in the prior year quarter. The growth in revenue reflected premium rate increases to cover overall cost trends across our business. Additionally, the increase was driven by higher enrollment in the Local Group insured and self-funded businesses, as well as in Medicaid and Medicare. These increases were partially offset by the impact of the one year waiver of the health insurance tax in 2017 and less favorable adjustments to the prior year risk adjustment estimates.

Benefit Expense Ratio: The benefit expense ratio was 86.1 percent in the second quarter of 2017, an increase of 190 basis points from 84.2 percent in the prior year quarter. The increase, as expected, was largely driven by the impact of the one year waiver of the health insurance tax in 2017 and less favorable adjustments to the prior year risk adjustment estimates. The increase was partially offset by improved medical cost performance in the Local Group and Individual businesses.

Medical claims reserves established at December 31, 2016 developed moderately better than the Company’s expectation during the first six months of 2017.

Medical Cost Trend: For the full year 2017, the Company continues to expect underlying Local Group medical cost trend to be in the range of 6.5% - 7.0%.

Days in Claims Payable: Days in Claims Payable (“DCP”) was 40.5 days as of June 30, 2017, a decrease of 0.1 days from 40.6 days as of March 31, 2017.

SG&A Expense Ratio: The SG&A expense ratio was 13.8 percent in the second quarter of 2017, a decrease of 20 basis points from 14.0 percent in the second quarter of 2016. The decrease, as expected, was primarily driven by the impact of the one year waiver of the health insurance tax in 2017, the impact of operating expense efficiency initiatives taken by the company, and fixed cost leverage on operating revenue growth. The decrease was partially offset by higher performance-based incentive compensation accruals and the 2015 cyber attack litigation settlement recorded during the quarter.

Operating Cash Flow: Operating cash flow was $393 million, or 0.5 times net income in the second quarter of 2017, and approximately $3.1 billion, or 1.7 times net income for the first six months of 2017. The Company continues to expect its full year 2017 operating cash flow to be greater than $3.5 billion.

Share Repurchase Program: During the second quarter of 2017, the Company repurchased 2.5 million shares of its common stock for $0.5 billion, or a weighted-average price of $182.83. During the first six months of 2017, the Company repurchased 2.8 million shares of its common stock for $0.5 billion, or a weighted average price of $180.37. As of June 30, 2017, the Company had approximately $3.7 billion of Board-approved share repurchase authorization remaining.

Cash Dividend: During the second quarter of 2017, the Company paid a quarterly dividend of $0.65 per share, representing a distribution of cash totaling $171.8 million.

On July 25, 2017, the Audit Committee declared a third quarter 2017 dividend to shareholders of $0.70 per share, an increase of $0.05 per share from the second quarter dividend. On an annualized basis, this equates to a dividend of $2.80 per share. The third quarter dividend is payable on September 25, 2017 to shareholders of record at the close of business on September 8, 2017.

Investment Portfolio & Capital Position: During the second quarter of 2017, the Company recorded net realized gains on financial instruments totaling $16.2 million and other-than-temporary impairment losses totaling $7.2 million. During the second quarter of 2016, the Company recorded net realized gains of $12.5 million and other-than-temporary impairment losses totaling $25.7 million.

As of June 30, 2017, the Company’s net unrealized gain position in the investment portfolio was $846.3 million, consisting of net unrealized gains on equity and fixed maturity securities totaling $450.5 and $395.8 million, respectively. As of June 30, 2017 cash and investments at the parent company totaled approximately $2.8 billion.

REPORTABLE SEGMENTS

Anthem, Inc. has three reportable segments: Commercial & Specialty Business (comprised of the Local Group, National Accounts, Individual and Specialty businesses); Government Business (comprised of the Medicaid and Medicare businesses, National Government Services, and the Federal Employee Program); and Other (comprised of unallocated corporate expenses and certain other businesses that do not meet the quantitative thresholds for separate reportable segment disclosure).

                               
  Anthem, Inc.
  Reportable Segment Highlights
  (Unaudited)
                               
  (In millions)   Three Months Ended June 30   Six Months Ended June 30
      2017   2016   Change   2017   2016   Change
  Operating Revenue                            
  Commercial & Specialty Business   $10,308.8     $9,898.3     4.1 %   $20,598.4     $19,408.1     6.1 %
  Government Business   11,883.4     11,371.1     4.5 %   23,909.1     22,165.0     7.9 %
  Other   5.8     5.1     13.7 %   10.0     10.8     (7.4 )%
  Total Operating Revenue1   $22,198.0     $21,274.5     4.3 %   $44,517.5     $41,583.9     7.1 %
                               
  Operating Gain / (Loss)                            
  Commercial & Specialty Business   $967.9     $1,075.3     (10.0 )%   $2,270.3     $2,368.3     (4.1 )%
  Government Business   293.3     450.5     (34.9 )%   611.9     775.5     (21.1 )%
  Other   (34.2 )   (25.6 )  

NM

2

  (69.8 )   (73.2 )  

NM

2

  Total Operating Gain1   $1,227.0     $1,500.2     (18.2 )%   $2,812.4     $3,070.6     (8.4 )%
                               
  Operating Margin                            
  Commercial & Specialty Business   9.4 %   10.9 %  

(150)

bp

  11.0 %   12.2 %  

(120)

bp

  Government Business   2.5 %   4.0 %  

(150)

bp

  2.6 %   3.5 %  

(90)

bp

  Total Operating Margin1   5.5 %   7.1 %  

(160)

bp

  6.3 %   7.4 %  

(110)

bp

                                       

(1)

See “Basis of Presentation.”

(2)

"NM" = calculation not meaningful.

                                       

Commercial & Specialty Business: Operating gain in the Commercial & Specialty Business segment totaled $967.9 million in the second quarter of 2017, a decrease of $107.4 million, or 10.0 percent, from $1,075.3 million in the second quarter of 2016. The decrease was driven by less favorable adjustments to the prior year risk adjustment estimates, the one year waiver of the health insurance tax in 2017, and higher performance-based incentive compensation accruals. The decrease was partially offset by improved medical cost performance in the Local Group and Individual businesses.

Government Business: Operating gain in the Government Business segment was $293.3 million in the second quarter of 2017, a decrease of $157.2 million, or 34.9 percent, from $450.5 million in the second quarter of 2016. The decrease reflected higher performance-based incentive compensation accruals and the impact of the one year waiver of the health insurance tax in 2017.

Other: The Company reported an operating loss of $34.2 million in the Other segment for the second quarter of 2017, compared with an operating loss of $25.6 million in the prior year quarter.

OUTLOOK

Full Year 2017*:

  • Net income is expected to be greater than $10.35 per share, including approximately $1.35 per share of net unfavorable items. Excluding these items, adjusted net income is now expected to be greater than $11.70 (refer to the GAAP reconciliation table).
  • Medical membership is expected to be in the range of 40,200,000 - 40,400,000. Fully insured membership is now expected to be in the range of 15,200,000 - 15,300,000 and self-funded membership is expected to be in the range of 25,000,000 - 25,100,000.
  • Operating revenue is now expected to be in the range of $88.5 - $89.5 billion.
  • Benefit expense ratio is expected to be in the range of 87.0% plus or minus 30 basis points.
  • SG&A ratio is expected to be in the range of 13.6% plus or minus 30 basis points.
  • Operating cash flow is expected to be greater than $3.5 billion.

* This outlook includes the impact of the Penn Treaty assessments, 2015 cyber attack litigation settlement, and terminated Cigna acquisition transaction costs incurred during the first half of 2017, but does not include any transaction or legal costs associated with the terminated Cigna acquisition beyond those incurred in the first half of 2017.

Basis of Presentation

  1. Operating revenue and operating gain are the key measures used by management to evaluate performance in each of its reporting segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain is calculated as total operating revenue less benefit expense and selling, general and administrative expense. It does not include net investment income, net realized gains/losses on financial instruments, other-than-temporary impairment losses recognized in income, interest expense, amortization of other intangible assets, gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management (refer to the GAAP reconciliation tables).
  2. Operating margin is defined as operating gain divided by operating revenue.
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Marsh & McLennan Companies Reports Second Quarter 2017 Results

Marsh & McLennan Companies, Inc. has reported financial results for the second quarter ended June 30, 2017.

Dan Glaser, President & CEO, said, "In the second quarter, on a consolidated basis, we generated solid underlying revenue growth of 3% with continued earnings growth and margin expansion. Underlying revenue increased across all four operating companies, with 2% growth in Risk & Insurance Services and 4% in Consulting. Earnings per share increased 7% to $0.96, while adjusted EPS rose 10% to $1.00."

"With a strong first half of 2017, we believe the Company is well positioned to deliver underlying revenue growth, margin expansion in both segments, and strong earnings per share growth this year," concluded Mr. Glaser.

Consolidated Results

Consolidated revenue in the second quarter of 2017 was $3.5 billion, an increase of 4% compared with the second quarter of 2016. On an underlying basis, revenue increased 3%. Operating income was $764 million, an increase of 5% from the prior year. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, increased 7% to $788 million. Net income attributable to the Company was $501 million. On a per share basis, net income per share attributable to the Company rose 7% to $0.96 from $0.90 last year. Adjusted earnings per share of $1.00 was up 10%.

For the six months ended June 30, 2017, consolidated revenue was $7.0 billion, an increase of 4%, or 3% on an underlying basis. Net income attributable to the Company increased 12% to $1.1 billion.

Earnings per share rose 13% to $2.05. Adjusted earnings per share increased 14% to $2.08 compared with $1.83 for the comparable period in 2016.

Risk & Insurance Services

Risk & Insurance Services revenue was $1.9 billion in the second quarter of 2017, an increase of 4%, or 2% on an underlying basis. Operating income was $528 million, an increase of 7%, and adjusted operating income rose 9% to $535 million. For the six months ended June 30, 2017, revenue was $3.9 billion, an increase of 5%, or 3% on an underlying basis. Operating income rose 11% to $1.1 billion and adjusted operating income rose 10% to $1.1 billion.

Marsh's revenue in the second quarter was $1.6 billion, an increase of 2% on an underlying basis. International operations produced underlying revenue growth of 1%, reflecting flat underlying revenue in EMEA, 3% growth in Asia Pacific, and 4% in Latin America. In US/Canada, underlying revenue rose 2%. For the six months ended June 30, 2017, Marsh’s underlying revenue growth was 3%.

Guy Carpenter's revenue in the second quarter was $293 million, an increase of 4% on an underlying basis for both the second quarter and first six months.

Consulting

Consulting revenue in the second quarter was $1.6 billion, an increase of 3%, or 4% on an underlying basis. Operating income decreased 1% to $283 million and adjusted operating income increased 3% to $298 million. For the first six months of 2017, revenue was $3.1 billion, an increase of 3%, or 4% on an underlying basis. Operating income of $524 million declined 1% and adjusted operating income increased 3% to $543 million compared with $526 million in 2016.

Mercer's revenue was $1.1 billion in the second quarter, an increase of 3% on an underlying basis. Within Wealth, Investment Management & Related Services increased 11%, while Defined Benefit Consulting & Administration decreased 3%. Total Wealth revenue of $532 million increased 1% on an underlying basis. Health revenue of $423 million was up 3% on an underlying basis and Career revenue of $154 million increased 5% on an underlying basis. For the six months ended June 30, 2017, Mercer’s revenue was $2.2 billion, an increase of 3% on an underlying basis.

Oliver Wyman Group’s revenue was $483 million in the second quarter, an increase of 7% on an underlying basis. For the first six months Oliver Wyman Group’s revenue increased to $932 million, up 6% on an underlying basis.

Other Items

The effective tax rate in the second quarter of 2017 was 28.6% compared with 29.5% in the second quarter of 2016. For the six months of 2017, the effective tax rate was 25.9% compared with 29.0% for the same period last year. The tax rate in 2017 includes the impact of the required change in accounting for equity awards.

The Company repurchased 2.7 million shares of its common stock for $200 million in the second quarter. Through six months, the Company has repurchased 5.4 million shares for $400 million. In May, the Board of Directors increased the quarterly dividend 10%, to $0.375 per share, effective with the third quarter dividend payable on August 15, 2017.

Conference Call

A conference call to discuss second quarter 2017 results will be held today at 8:30 a.m. Eastern time. To participate in the teleconference, please dial +1 888 394 8218. Callers from outside the United States should dial +1 719 457 2086. The access code for both numbers is 3085890. The live audio webcast may be accessed at http://www.mmc.com. A replay of the webcast will be available approximately two hours after the event.

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McKesson Reports Fiscal 2018 1st Quarter Results

McKesson Corporation has reported that revenues for the first quarter ended June 30, 2017 were $51.1 billion, up 3% compared to $49.7 billion a year ago. On the basis of U.S. generally accepted accounting principles (“GAAP”), first-quarter earnings per diluted share from continuing operations was $1.44, compared to $2.88 a year ago.

First-quarter Adjusted Earnings per diluted share was $2.46, down 22% compared to $3.15 a year ago. First-quarter results included the lapping effect of the lower profit contribution from increased price competition in our independent pharmacy business in Fiscal 2017 and weaker pharmaceutical manufacturer pricing trends in our U.S. Pharmaceutical business within our Distribution Solutions segment, and lower profit in our Technology Solutions segment driven primarily by the contribution of the majority of the businesses to Change Healthcare.

For the first quarter, McKesson generated cash from operations of $741 million, and ended the quarter with cash and cash equivalents of $2.3 billion. During the quarter, McKesson repaid $541 million in long-term debt, paid $1.5 billion for acquisitions, repurchased $250 million of its common stock, invested $118 million internally and paid $62 million in dividends. Yesterday, the Board of Directors approved an increase to the quarterly dividend from 28 cents to 34 cents per share.

“McKesson's first-quarter operating results were consistent with our expectations,” said John H. Hammergren, chairman and chief executive officer. “We’re off to a solid start to the year and are raising our previous Fiscal 2018 Adjusted Earnings outlook to a range of $11.80 to $12.50 per diluted share. In addition, we generated strong first-quarter cash flows, which allowed us to allocate capital in line with our portfolio approach to capital deployment.”

Segment Results

Distribution Solutions revenues were $50.9 billion for the quarter, up 4% on a reported basis and 5% on a constant currency basis.

North America pharmaceutical distribution and services revenues of $43.0 billion for the quarter were up 4% on a reported basis and 5% on a constant currency basis, primarily reflecting market growth and acquisitions.

International pharmaceutical distribution and services revenues were $6.4 billion for the quarter, up 1% on a reported basis and 6% on a constant currency basis, driven by acquisitions and market growth.

Medical-Surgical distribution and services revenues were up 4% for the quarter, driven by market growth.

In the first quarter, Distribution Solutions GAAP operating profit was $713 million and GAAP operating margin was 1.40%. First-quarter adjusted operating profit was $887 million and adjusted operating margin was 1.73%, both on a constant currency basis. Adjusted operating margin excluding noncontrolling interests for the Distribution Solutions segment was 1.64% on a constant currency basis.

Technology Solutions revenues were down 83% on both a reported and constant currency basis in the first quarter, following the contribution of the majority of our Technology Solutions businesses to the Change Healthcare joint venture on March 1, 2017, and reflecting our remaining Enterprise Information Solutions business.

First-quarter GAAP loss from McKesson’s equity investment in Change Healthcare was $120 million. Adjusted income from McKesson’s equity investment in Change Healthcare was $70 million for the first quarter.

Technology Solutions GAAP operating loss was $78 million for the first quarter. Adjusted operating profit was $87 million for the first quarter, primarily reflecting our equity share of Change Healthcare’s net income.

Fiscal Year 2018 Outlook

McKesson expects GAAP earnings per diluted share between $7.10 to $9.00 for the fiscal year ending March 31, 2018, which includes the following items:

  • Amortization of acquisition-related intangibles of $2.40 to $2.70 per diluted share;
  • Acquisition-related expenses and adjustments of $1.10 to $1.30 per diluted share;
  • LIFO inventory-related adjustments include charges of 20 cents to 60 cents per diluted share;
  • Gains from antitrust legal settlements of up to 10 cents per diluted share;
  • Restructuring charges of up to 10 cents per diluted share; and
  • Other adjustments include net credits of up to 10 cents per diluted share.

McKesson expects Adjusted Earnings of $11.80 to $12.50 per diluted share for the fiscal year ending March 31, 2018.

Adjusted Earnings

McKesson separately reports financial results on the basis of Adjusted Earnings. Adjusted Earnings is a non-GAAP financial measure defined as GAAP income from continuing operations, excluding amortization of acquisition-related intangible assets, acquisition-related expenses and adjustments, Last-In-First-Out (“LIFO”) inventory-related adjustments, gains from antitrust legal settlements, restructuring charges, and other adjustments. 

Constant Currency

McKesson also presents its financial results on a constant currency basis. The company conducts business worldwide in local currencies, including the Euro, British pound and Canadian dollar. As a result, the comparability of the financial results reported in U.S. dollars can be affected by changes in foreign currency exchange rates. Constant currency information is presented to provide a framework for assessing how the company’s business performed excluding the effect of foreign currency exchange rate fluctuations. 

Adjusted Operating Profit Margin Excluding Noncontrolling Interests

McKesson also provides adjusted operating profit margin excluding noncontrolling interests. The company has arrangements involving third-party noncontrolling interests. As a result, pre-tax results are affected by the portion of pre-tax earnings attributable to noncontrolling interests. Adjusted operating profit margin excluding noncontrolling interests information is presented to provide a framework for assessing how the company’s business performed excluding the effect of pre-tax earnings that is not attributable to McKesson. 

Risk Factors

Except for historical information contained in this press release, matters discussed may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These statements may be identified by their use of forward-looking terminology such as “believes”, “expects”, “anticipates”, “may”, “will”, “should”, “seeks”, “approximately”, “intends”, “plans”, “estimates” or the negative of these words or other comparable terminology. The discussion of financial trends, strategy, plans or intentions may also include forward-looking statements. It is not possible to predict or identify all such risks and uncertainties; however, the most significant of these risks and uncertainties are described in the company’s Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission and include, but are not limited to: changes in the U.S. healthcare industry and regulatory environment; managing foreign expansion, including the related operating, economic, political and regulatory risks; changes in the Canadian healthcare industry and regulatory environment; exposure to European economic conditions, including recent austerity measures taken by certain European governments; changes in the European regulatory environment with respect to privacy and data protection regulations; fluctuations in foreign currency exchange rates; the company’s ability to successfully identify, consummate, finance and integrate acquisitions; the company’s ability to manage and complete divestitures; material adverse resolution of pending legal proceedings; competition and industry consolidation; substantial defaults in payment or a material reduction in purchases by, or the loss of, a large customer or group purchasing organization; the loss of government contracts as a result of compliance or funding challenges; public health issues in the U.S. or abroad; cyberattack, natural disaster, or malfunction of sophisticated internal computer systems to perform as designed; the adequacy of insurance to cover property loss or liability claims; the company’s failure to attract and retain customers for its software products and solutions due to integration and implementation challenges, or due to an inability to keep pace with technological advances; the company’s proprietary products and services may not be adequately protected, and its products and solutions may be found to infringe on the rights of others; system errors or failure of our technology products or services to conform to specifications; disaster or other event causing interruption of customer access to data residing in our service centers; the delay or extension of our sales or implementation cycles for external software products; changes in circumstances that could impair our goodwill or intangible assets; new or revised tax legislation or challenges to our tax positions; general economic conditions, including changes in the financial markets that may affect the availability and cost of credit to the company, its customers or suppliers; changes in accounting principles generally accepted in the United States of America; withdrawal from participation in multiemployer pension plans or if such plans are reported to have underfunded liabilities; inability to realize the expected benefits from the company’s restructuring and business process initiatives; difficulties with outsourcing and similar third party relationships; risks associated with the company’s retail expansion; and the company’s inability to keep existing retail store locations or open new retail locations in desirable places. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are first made. Except to the extent required by law, the company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.

Conference Call Details

The company has scheduled a conference call for today, Thursday, July 27th, at 8:30 AM ET. The dial-in number for individuals wishing to participate on the call is 323-794-2130. Craig Mercer, senior vice president, Investor Relations, is the leader of the call, and the password to join the call is ‘McKesson’. A telephonic replay of this conference call will be available for five calendar days. The dial-in number for individuals wishing to listen to the replay is 719-457-0820 and the pass code is 3179042. An archive of the conference call will also be available on the company’s Investor Relations website at http://investor.mckesson.com.

Shareholders are encouraged to review the company’s filings with the Securities and Exchange Commission.

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PartnerRe Ltd. Reports Second Quarter and Half Year 2017 Results

PartnerRe Ltd. has reported a net income available to common shareholder of $191 million for the second quarter of 2017 compared to $137 million for the same period in 2016.

PartnerRe President and Chief Executive Officer Emmanuel Clarke said, “We delivered good results in the second quarter with an annualized adjusted Net Income ROE of 13.0% driven by strong Non-Life underwriting results and Investments contribution. The Non-life combined ratio of 87.7% was driven by a strong performance in our Specialty segment, with a technical ratio of 77.9%, highlighting the quality and diversification of our Specialty portfolio, but also by an improvement in our P&C non-CAT accident year technical ratio compared to the second quarter of 2016. Having successfully completed the acquisition of Aurigen in the quarter, we will now work on leveraging this platform to expand our footprint in North America, consistent with our strategy to increase our revenues and profitability in the broader Life and Health segment."

 

Net income available to common shareholder includes net realized and unrealized gains on investments of $129 million in the second quarter of 2017 compared to a $192 million gain in the same period of 2016. Operating earnings were $97 million for the second quarter of 2017 compared to operating losses of $66 million for the same period of 2016.

Net income available to common shareholder for the first six months of 2017 was $229 million compared to $338 million in the same period of 2016. Net income available to common shareholder includes net realized and unrealized gains on investments of $152 million compared to $359 million in the same period of 2016. Operating earnings for the first six months of 2017 were $140 million compared to operating losses of $21 million for the same period of 2016.

Operating earnings is a non-GAAP financial measure which excludes certain net after-tax realized and unrealized investment gains and losses, net after-tax foreign exchange gains and losses, certain net after-tax interest in results of equity method investments, and is calculated after dividends to preferred shareholders.

Operating earnings and net income available to common shareholder, and the associated annualized ROEs, for the second quarters and the first six months of 2017 and 2016 include various non-recurring transaction and severance related costs, which impact period over period comparability.

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HCI Group Reports Third Quarter And Nine-Month 2015 Results

Income available to common stockholders in the third quarter of 2015 totaled $7.4 million, or $0.71 diluted earnings per common share, compared with $14.1 million, or $1.23 diluted earnings per common share in the third quarter of 2014.

Gross premiums earned in the third quarter of 2015 increased 16.7% to $103.8 million from $88.9 million in the same period in 2014. The increase was primarily due to the assumption of approximately 6,000 homeowners multi-peril policies and approximately 30,000 wind-only policies from Florida's state sponsored Citizens Property Insurance Corporation in December 2014 and 4,000 primarily homeowners multi-peril policies from Citizens in February 2015.

Premiums ceded in the third quarter of 2015 were $41.1 million, or 39.6% of gross premiums earned, compared with $27.7 million, or 31.1% of gross premiums earned during the same period in 2014. The quarter over quarter increase is primarily due to higher rates implemented by the Florida Hurricane Catastrophe Fund and an overall increase in units of reinsurance purchased for the 2015/16 reinsurance program.

Net premiums earned (defined as gross premiums earned less premiums ceded to reinsurance companies) in the third quarter of 2015 increased 2.5% to $62.8 million from $61.3 million in the same period in 2014.

Investment related losses during the quarter ended September 30, 2015 totaled $0.8 million. In addition, the company recognized a net non-cash charge of $1.9 million due to declines in the fair value of securities owned by the company determined to be other than temporary. The losses are primarily due to material market declines and volatility that occurred during the quarter.  This loss compares with $4.5 million in investment related income in the third quarter of 2014, which included $3.3 million of net realized gains from investment sales.

Losses and loss adjustment expenses during the third quarter of 2015 were $26.2 million compared with $22.0 million in the same period in 2014. We experienced significant weather-related events during the current quarter, which contributed to an increase in the volume of reported claims and losses incurred when compared to the same period in 2014. We also experienced unfavorable development during the quarter attributable to the settlement and further development of older claims.

Policy acquisition and other underwriting expenses in the third quarter of 2015 were $10.7 million compared with $10.0 million in the comparable period in 2014. The increase was primarily attributable to commissions and premium taxes related to the policies assumed in December 2014 from Citizens that have renewed and are included in 2015 premiums.

Salaries and wages during the third quarter of 2015 were $5.0 million compared with $4.4 million in the same period in 2014. The increase is primarily attributable to an increase in headcount at the Tampa headquarters.

Other operating expenses, which include a variety of general and administrative expenses, totaled $4.7 million in the third quarter of 2015 compared with $5.2 million in the third quarter of 2014. The decrease was primarily attributable to a $1.0 million decrease in stock-based compensation expense.

Third Quarter 2015 - Financial Ratios

The loss ratio applicable to the three months ended September 30, 2015 (defined as losses and loss adjustment expenses related to net premiums earned) was 41.7% compared with 35.9% in the three months ended September 30, 2014. The increase is attributable to higher reinsurance costs, which impacted net premiums earned, combined with significant weather-related events as well as unfavorable development that increased losses and loss adjustment expenses during the quarter.

The expense ratio applicable to the three months ended September 30, 2015 (defined as underwriting expenses, salaries and wages, interest and other operating expenses related to net premiums earned) was 36.9% compared with 36.2% for the three months ended September 30, 2014.

Expressed as a total of all expenses in relation to net premiums earned, the combined loss and expense ratio to net premiums earned was 78.6% in the third quarter of 2015 compared with 72.1% for the three months ended September 30, 2014.

Nine months Ended September 30, 2015 - Financial Results

Income available to common stockholders for the nine months ended September 30, 2015 totaled $54.8 million, or $4.84 diluted earnings per common share, compared with $48.1 million, or $4.07 diluted earnings per common share, for the nine months ended September 30, 2014.

Gross premiums earned for the nine months ended September 30, 2015 increased 17.2% to $321.2 million from $274.1 million in the same year-ago period.

Premiums ceded for the nine months ended September 30, 2015 were $100.3 million, or 31.2% of gross premiums earned, compared with $83.8 million, or 30.6% of the gross premiums earned, during the same period in 2014.

Net premiums earned for the nine months ended September 30, 2015 increased 16.1% to $220.9 million from $190.3 million in the same period in 2014.

Investment related income in the nine months ended September 30, 2015 was $2.1 million, which was offset by a $3.9 million non-cash charge for declines in the fair value of securities owned by the company determined to be other than temporary. This income amount compares with $8.2 million in investment related income in the nine months ended September 30, 2014, which included $4.5 million of net realized gains from investment sales.

Losses and loss adjustment expenses for the nine months ended September 30, 2015 and 2014 were $65.8 million and $58.9 million respectively.

Policy acquisition and other underwriting expenses for the nine months ended September 30, 2015 were $30.9 million compared with $28.7 million for the nine months ended September 30, 2014.

Salaries and wages during the nine months ended September 30, 2015 were $15.2 million compared with $12.6 million in the same period in 2014.

Other operating expenses totaled $14.0 million for the nine months ended September 30, 2015 compared with $15.9 million for the nine months ended September 30, 2014.

Nine months Ended September 30, 2015 - Financial Ratios

The loss ratio applicable to the nine months ended September 30, 2015 was 29.8% compared with 31.0% in the nine months ended September 30, 2014.

The expense ratio applicable to the nine months ended September 30, 2015 was 30.9% compared with 34.1% in the same period in 2014.

Expressed as a total of all expenses related to net premiums earned, the combined loss and expense ratio to net premiums earned was 60.7% in the nine months ended September 30, 2015 compared with 65.1% in the same period in 2014.

Management Commentary

"Despite the heavy rains in parts of Florida during the third quarter, our geographically diversified book of homeowners' insurance business was again able to produce profitable results," said Paresh Patel, HCI Group's chairman and chief executive officer. "As we look to the remainder of 2015 and beyond, our capital position allows us to patiently seek opportunities to add shareholder value."  

 

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Medical, Healthcare, Expatriate And Travel Insurance

A guide to leading international medical, healthcare, expatriate and travel insurance underwriters, companies, providers, operating within leisure, expatriate and corporate travel business markets, globally.

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