WellPoint, Inc. (NYSE:WLP) Q1 2015 Earnings Conference Call - Final Transcript

Apr 29, 2015 • 08:00 am ET

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WellPoint, Inc. (NYSE:WLP) Q1 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Ladies and gentlemen, thank you for standing by and welcome to the Anthem conference call. (Operator Instructions). As a reminder, this conferenceis being recorded.

I would now like to turn the conference over to Company's management.

Executive
Doug Simpson

Welcome to Anthem's first-quarter 2015 earnings call. This is Doug Simpson, Vice President of Investor Relations. With us this morning are JoeSwedish, President and CEO, and Wayne DeVeydt, our CFO. Joe will discuss our first-quarter 2015 financial results and the macro backdrop andalso provide additional commentary on our 2015 outlook. Joe and Wayne are then both available for Q&A.

During the call we will reference certain non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAPmeasures are available on our website at antheminc.com.

We will also be making some forward-looking statements on this call. Listeners are cautioned that these statements are subject to certain risks anduncertainties, many of which are difficult to predict and generally beyond the control of Anthem. These risks and uncertainties can cause actualresults to differ materially from our current expectations. We advise listeners to review the risk factors discussed in today's press release and in ourquarterly and annual filings with the SEC.

I will now turn the call over to Joe.

Executive
Joe Swedish

Thank you, Doug, and good morning. We are pleased to announce a strong first quarter 2015 adjusted earnings per share of $3.14 with membershipand margins tracking well thus far. We ended the first quarter of 2015 with over 38.5 million members, in excess of 1 million members more thanthe 37.5 million members we reported on our fourth-quarter 2014 earnings call.

Our growth continues to be balance so far in 2015 as we added 429,000 Medicaid members, 371,000 National members, 102,000 Individual membersand 82,000 Local Group members. Notice that this is the first quarter where our results include the impact of Simply Healthcare which we closedin February and which contributed 205,000 members as of March 31.

Driving our strong first-quarter results were solid contributions from both our Commercial and Government segments. Specifically in the firstquarter, we reported earnings per share of $3.09 on a GAAP basis and $3.14 per share on an adjusted basis. Our GAAP earnings per share andadjusted earnings per share increased from the first quarter 2014, driven by revenue growth, an improved medical loss ratio, and opportunisticcapital deployment.

We are pleased with the evolution of our diversified business model and believe it bodes well for future growth opportunities. In the first quarter,our membership grew to over 38.5 million lives and our quarterly revenue approached $19 billion. This quarter also marked the first time thatGovernment business represented slightly more than half of our consolidated operating revenues. The diversity of our business model is servingour members and our shareholders well as we leverage capabilities and investment to drive improvements in cost and quality.

During the quarter we closed on the acquisition of Simply Healthcare, a Medicaid/Medicare company in the state of Florida. The deal is expectedto be earnings neutral on a GAAP basis and to be slightly