2018 Q4 Form 10-Q Financial Statement

#000122460818000045 Filed on November 05, 2018

View on sec.gov

Income Statement

Concept 2018 Q4 2018 Q3 2017 Q3
Revenue $778.2M $1.481B $1.079B
YoY Change -28.61% 37.24% 6.24%
Cost Of Revenue $646.9M $638.1M
YoY Change 1.38% 4.64%
Gross Profit $834.3M $441.2M
YoY Change 89.1% 8.64%
Gross Profit Margin 56.33% 40.88%
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization
YoY Change
% of Gross Profit
Operating Expenses $701.4M $1.982B $913.8M
YoY Change -24.52% 116.92% -2.5%
Operating Profit $109.0M -$472.6M
YoY Change -123.06% -11.01%
Interest Expense -$39.70M $38.80M $30.10M
YoY Change 26.43% 28.9% 2.38%
% of Operating Profit 35.6%
Other Income/Expense, Net $0.00
YoY Change
Pretax Income $37.10M -$539.8M $129.9M
YoY Change -70.41% -515.55% 163.49%
Income Tax $8.800M -$10.00M $29.10M
% Of Pretax Income 23.72% 22.4%
Net Earnings $28.30M -$529.8M $100.8M
YoY Change -139.92% -625.6% 441.94%
Net Earnings / Revenue 3.64% -35.77% 9.34%
Basic Earnings Per Share $0.17 -$3.22 $0.60
Diluted Earnings Per Share $0.17 -$3.22 $0.59
COMMON SHARES
Basic Shares Outstanding 164.6M shares 164.6M shares 168.7M shares
Diluted Shares Outstanding 164.6M shares 171.0M shares

Balance Sheet

Concept 2018 Q4 2018 Q3 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments
YoY Change
Cash & Equivalents $656.6M $595.6M $871.8M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets
YoY Change
LONG-TERM ASSETS
Property, Plant & Equipment
YoY Change
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $23.00B $23.36B $27.06B
YoY Change -17.44% -13.68% 1.24%
Other Assets $630.0M $578.0M $567.0M
YoY Change 71.66% 1.94% -6.59%
Total Long-Term Assets
YoY Change
TOTAL ASSETS
Total Short-Term Assets
Total Long-Term Assets
Total Assets $31.44B $31.65B $32.70B
YoY Change -5.05% -3.23% 0.88%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable
YoY Change
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities
YoY Change
LONG-TERM LIABILITIES
Long-Term Debt $3.980B $3.980B $3.760B
YoY Change 0.2% 5.85% -11.53%
Other Long-Term Liabilities $632.0M $690.0M $789.0M
YoY Change -15.96% -12.55% 8.08%
Total Long-Term Liabilities $4.612B $4.670B $4.549B
YoY Change -2.37% 2.66% -8.65%
TOTAL LIABILITIES
Total Short-Term Liabilities
Total Long-Term Liabilities $4.612B $4.670B $4.549B
Total Liabilities $28.07B $28.03B $27.82B
YoY Change -0.69% 0.73% -0.37%
SHAREHOLDERS EQUITY
Retained Earnings $196.6M $184.8M $851.9M
YoY Change -64.92% -78.31% 97.98%
Common Stock $2.997B $3.032B $3.096B
YoY Change -2.55% -2.09% -3.49%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $3.371B $3.620B $4.882B
YoY Change
Total Liabilities & Shareholders Equity $31.44B $31.65B $32.70B
YoY Change -5.05% -3.23% 0.88%

Cashflow Statement

Concept 2018 Q4 2018 Q3 2017 Q3
OPERATING ACTIVITIES
Net Income $28.30M -$529.8M $100.8M
YoY Change -139.92% -625.6% 441.94%
Depreciation, Depletion And Amortization
YoY Change
Cash From Operating Activities $202.8M -$128.7M $163.5M
YoY Change 10.34% -178.72% -33.29%
INVESTING ACTIVITIES
Capital Expenditures
YoY Change
Acquisitions
YoY Change
Other Investing Activities -$211.1M -$73.70M $97.70M
YoY Change -60.49% -175.44% -310.11%
Cash From Investing Activities -$211.1M -$73.70M $97.70M
YoY Change -60.49% -175.44% -310.11%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 69.30M 52.30M -329.3M
YoY Change -70.64% -115.88% -569.09%
NET CHANGE
Cash From Operating Activities 202.8M -128.7M 163.5M
Cash From Investing Activities -211.1M -73.70M 97.70M
Cash From Financing Activities 69.30M 52.30M -329.3M
Net Change In Cash 61.00M -150.1M -68.10M
YoY Change -153.28% 120.41% -125.33%
FREE CASH FLOW
Cash From Operating Activities $202.8M -$128.7M $163.5M
Capital Expenditures
Free Cash Flow
YoY Change

Facts In Submission

Frame Concept Type Concept / XBRL Key Value Unit
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us-gaap Reinsurance Effect On Claims And Benefits Incurred Amount Assumed
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CY2018Q3 us-gaap Reinsurance Effect On Claims And Benefits Incurred Amount Ceded
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us-gaap Reinsurance Effect On Claims And Benefits Incurred Amount Ceded
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CY2017Q4 us-gaap Reinsurance Recoverables On Paid Losses
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us-gaap Repayments Of Annuities And Investment Certificates
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us-gaap Repayments Of Annuities And Investment Certificates
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CY2018Q1 us-gaap Retained Earnings Accumulated Deficit
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CY2017Q3 us-gaap Revenues
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us-gaap Revenues
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CY2018Q3 us-gaap Revenues
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CY2017Q4 us-gaap Separate Accounts Liability
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5000000 USD
CY2018Q3 us-gaap Separate Accounts Liability
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5100000 USD
us-gaap Shares Paid For Tax Withholding For Share Based Compensation
SharesPaidForTaxWithholdingForShareBasedCompensation
239000 shares
us-gaap Stock Repurchased And Retired During Period Value
StockRepurchasedAndRetiredDuringPeriodValue
140100000 USD
us-gaap Stock Repurchased And Retired During Period Value
StockRepurchasedAndRetiredDuringPeriodValue
60500000 USD
CY2016Q4 us-gaap Stockholders Equity
StockholdersEquity
4486900000 USD
CY2017Q3 us-gaap Stockholders Equity
StockholdersEquity
4881700000 USD
CY2017Q4 us-gaap Stockholders Equity
StockholdersEquity
4847500000 USD
CY2018Q3 us-gaap Stockholders Equity
StockholdersEquity
3619900000 USD
CY2018Q1 us-gaap Stockholders Equity
StockholdersEquity
4847500000 USD
CY2017Q4 us-gaap Trading Securities
TradingSecurities
284600000 USD
CY2018Q3 us-gaap Trading Securities
TradingSecurities
239000000 USD
CY2017Q4 us-gaap Unearned Premiums
UnearnedPremiums
261700000 USD
CY2018Q3 us-gaap Unearned Premiums
UnearnedPremiums
249200000 USD
CY2017Q4 us-gaap Value Of Business Acquired Voba
ValueOfBusinessAcquiredVOBA
359600000 USD
CY2018Q3 us-gaap Value Of Business Acquired Voba
ValueOfBusinessAcquiredVOBA
351600000 USD
CY2017Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
170982000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
172800000 shares
CY2018Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
164551000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
165903000 shares
CY2017Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
168684000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
170890000 shares
CY2018Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
164551000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
165903000 shares
us-gaap Loss Contingency Disclosures
LossContingencyDisclosures
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">LITIGATION AND OTHER LEGAL PROCEEDINGS</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Legal Proceedings</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company and its subsidiaries are involved in various legal actions in the normal course of business, in which claims for compensatory and punitive damages are asserted, some for substantial amounts.&#160;&#160;We recognize an estimated loss from these loss contingencies when we believe it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Some of the pending matters have been filed as purported class actions and some actions have been filed in certain jurisdictions that permit punitive damage awards that are disproportionate to the actual damages incurred.&#160;&#160;The amounts sought in certain of these actions are often large or indeterminate and the ultimate outcome of certain actions is difficult to predict.&#160;&#160;In the event of an adverse outcome in one or more of these matters, there is a possibility that the ultimate liability may be in excess of the liabilities we have established and could have a material adverse effect on our business, financial condition, results of operations and cash flows.&#160;&#160;In addition, the resolution of pending or future litigation may involve modifications to the terms of outstanding insurance policies or could impact the timing and amount of rate increases, which could adversely affect the future profitability of the related insurance policies.&#160;&#160;Based upon information presently available, and in light of legal, factual and other defenses available to the Company and its subsidiaries, the Company does not believe that it is probable that the ultimate liability from either pending or threatened legal actions, after consideration of existing loss provisions, will have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows. However, given the inherent difficulty in predicting the outcome of legal proceedings, there exists the possibility that such legal actions could have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In addition to the inherent difficulty of predicting litigation outcomes, particularly those that will be decided by a jury, some matters purport to seek substantial or an unspecified amount of damages for unsubstantiated conduct spanning several years based on complex legal theories and damages models. The alleged damages typically are indeterminate or not factually supported in the complaint, and, in any event, the Company's experience indicates that monetary demands for damages often bear little relation to the ultimate loss. In some cases, plaintiffs are seeking to certify classes in the litigation and class certification either has been denied or is pending and we have filed oppositions to class certification or sought to decertify a prior class certification. In addition, for many of these cases: (i) there is uncertainty as to the outcome of pending appeals or motions; (ii) there are significant factual issues to be resolved; and/or (iii) there are novel legal issues presented. Accordingly, the Company cannot reasonably estimate the possible loss or range of loss in excess of amounts accrued, if any, or predict the timing of the eventual resolution of these matters.&#160;&#160;The Company reviews these matters on an ongoing basis.&#160;&#160;When assessing reasonably possible and probable outcomes, the Company bases its assessment on the expected ultimate outcome following all appeals.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On September 29, 2016, Washington National and Bankers Conseco Life Insurance Company ("BCLIC") commenced an arbitration proceeding seeking compensatory, consequential and punitive damages against Beechwood Re Ltd. ("BRe") based upon BRe&#8217;s incurable material breaches of the long-term care reinsurance agreements, conversion, fraud, and breaches of fiduciary duties and the obligation to deal honestly and in good faith. BRe filed a counterclaim against Washington National and BCLIC in the arbitration alleging damages relating to the reinsurance agreements and their termination. In addition, on September 29, 2016, a complaint was filed by BCLIC and Washington National in the United States District Court for the Southern District of New York, Bankers Conseco Life Insurance Company and Washington National Insurance Company v. Moshe M. Feuer, Scott Taylor and David Levy, Case No. 16-cv-7646, alleging, among other claims, fraud/fraudulent concealment, and violation of the Racketeer Influenced and Corrupt Organizations Act. These allegations relate to the long-term care reinsurance agreements between BRe and Washington National and BCLIC, respectively, and emanate from the undisclosed relationships between and among the defendants (who were the principal owners and officers of BRe) and Platinum Partners, LP and its affiliates. On April 27, 2017, an amended complaint was filed adding Beechwood Capital Group, LLC as a defendant. On March 13, 2018, the District Court granted the motion that had been filed by Feuer, Taylor and Levy to compel arbitration of Washington National's and BCLIC's claims and the litigation is now stayed pending the outcome of the arbitration. Washington National and BCLIC intend to vigorously pursue their claims for damages and other remedies in the arbitration and the litigation described above.</font></div><div style="line-height:120%;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">By public notice dated July 26, 2017, the Cayman Islands Monetary Authority advised that, effective July 25, 2017, </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> individuals (the "Controllers") had been appointed pursuant to Section 24(2)(h) of the Cayman Islands Insurance Law to assume control of the affairs of BRe.&#160; According to the public notice, effective with their appointment, the Controllers assumed immediate control of the affairs of BRe and have all the powers necessary to administer the affairs of BRe including power to terminate its insurance business.&#160; The Controllers are responsible for assessing the financial position of BRe and submitting a report to the Cayman Islands Monetary Authority. &#160;On August 10, 2018, the Cayman Islands Monetary Authority filed a public petition in the Grand Court of the Cayman Islands to officially wind up Beechwood, concluding that Beechwood was now of doubtful solvency. We are in the process of assessing the potential impact of this action on the proceedings described in the foregoing paragraph.</font></div><div style="line-height:120%;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Regulatory Examinations and Fines</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Insurance companies face significant risks related to regulatory investigations and actions.&#160;&#160;Regulatory investigations generally result from matters related to sales or underwriting practices, payment of contingent or other sales commissions, claim payments and procedures, product design, product disclosure, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, charging excessive or impermissible fees on products, procedures related to canceling policies, changing the way cost of insurance charges are calculated for certain life insurance products or recommending unsuitable products to customers.&#160;&#160;We are, in the ordinary course of our business, subject to various examinations, inquiries and information requests from state, federal and other authorities.&#160;&#160;The ultimate outcome of these regulatory actions (including the costs of complying with information requests and policy reviews) cannot be predicted with certainty.&#160;&#160;In the event of an unfavorable outcome in one or more of these matters, the ultimate liability may be in excess of liabilities we have established and we could suffer significant reputational harm as a result of these matters, which could also have a material adverse effect on our business, financial condition, results of operations or cash flows.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2011, we were notified of an examination to be done on behalf of a number of states for the purpose of determining compliance with unclaimed property laws by the Company and its subsidiaries. &#160;Such examination has included inquiries related to the use of data available on the U.S. Social Security Administration's Death Master File to identify instances where benefits under life insurance policies, annuities and retained asset accounts are payable. We are continuing to provide information to the examiners in response to their requests. A total of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">40</font><font style="font-family:inherit;font-size:10pt;"> states and the District of Columbia are currently participating in this examination.</font></div></div>

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