INDIANAPOLIS, Dec. 6 /PRNewswire-FirstCall/ -- WellPoint, Inc. today hosted its 2005 investor conference in New York City and provided detailed company guidance for 2006. During the meeting, senior management recapped the successes of 2005 and discussed the company's strategic plans and outlook for 2006 and beyond.
"Looking back, 2005 was a truly outstanding year for the company," said Larry C. Glasscock, chairman, president and chief executive officer of WellPoint, Inc. "In addition to successfully integrating Anthem and WellPoint, we also completed several significant milestones that helped to strongly position the company for continued success in the coming years."
Some of the milestones in 2005 the company achieved included:
* Adding 1.3 million members through the first nine months of the year, including providing individual policies to more than 282,000 who had previously been uninsured
* Increasing operating revenue by $2.3 billion, or 7.5% on a comparable basis for the first nine months of the year compared to the first nine months of 2004
* Acquiring Lumenos, a pioneer in developing consumer-driven health care plans
* Partnering with WebMD to provide all members with highly personalized information enabling them to better manage their health and health care decision-making
* Developing a strong portfolio of new products and services in the Medicare marketplace
* Completing a significant amount of integration work in the Anthem and WellPoint merger that will lead to at least $150 million in synergy savings in 2005
* Announcing plans to merge with WellChoice, Inc.
"During the year, we also completed a new strategic plan that reflects the opportunities and challenges facing our industry along with a clear roadmap to help us achieve success over the next five years. By implementing our plans, we will be well positioned to play a leading role in defining and driving the transformation of health care. In doing so, we will become the most trusted choice for consumers and a leader in affordable quality care," added Glasscock.
"The growth model we have developed is based on our proven ability to increase our membership in a disciplined manner while continually reducing our SG&A cost ratio and effectively using our cash flow," said David Colby, executive vice president and chief financial officer of WellPoint, Inc. "We are becoming more efficient while further leveraging information technology solutions to meet the needs of all of our customers."
Looking forward to 2006, the company reiterated its commitment to its long-term goal of achieving 15 percent growth in net income per diluted share.
For 2006 and excluding the potential impact of the pending merger with WellChoice, Inc., the Company expects:
* Net income is expected to be approximately $4.51 per share, which includes $0.18 per share impact for the expensing of stock options. This is 15 percent higher than current estimated EPS of $3.93 per diluted share for 2005.
* Operating revenue is expected to total approximately $49.5 billion or an increase of 11 percent as compared to current projections for 2005.
* Medical enrollment is expected to increase by approximately 3 percent during 2006.
* The benefit expense ratio is expected to be approximately 80.8 percent.
* The SG&A expense ratio is expected to decrease to approximately 15.8 percent.
* Cash flow from operations is expected to exceed $3.5 billion in 2006.
* The merger between WellPoint and WellChoice is expected to close in the first quarter of 2006.
COMPARABLE BASIS INFORMATION
We have included "comparable basis" analyses that we believe provides a more meaningful comparison between periods, due to the inclusion of operations for the former WellPoint Health Networks Inc. in the comparable historical results. The comparable, historical information is not calculated in accordance with generally accepted accounting principles ("GAAP") and is not intended to represent or be indicative of the results that WellPoint, Inc. would have reported had the acquisition been completed as of the dates presented, and should not be taken as representative or indicative of our future results. Comparable, historical information and reconciliations for the year-to-date period ended September 30, 2004, is available at http://www.wellpoint.com under "Investor Info."
About WellPoint, Inc.
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 (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), Wisconsin; and through HealthLink and UniCare. Additional information about WellPoint is available at http://www.wellpoint.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains certain forward-looking information about WellPoint, Inc. ("WellPoint"), WellChoice, Inc. ("WellChoice") and the combined company after completion of the transactions that are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as "expect(s)", "feel(s)", "believe(s)", "will", "may", "anticipate(s)" and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of WellPoint and WellChoice, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in public filings with the U.S. Securities and Exchange Commission ("SEC") made by WellPoint (formerly Anthem, Inc.), WellPoint Health Networks Inc. ("WellPoint Health") and WellChoice; trends in health care costs and utilization rates; our ability to secure sufficient premium rate increases; competitor pricing below market trends of increasing costs; increased government regulation of health benefits and managed care; significant acquisitions or divestitures by major competitors; introduction and utilization of new prescription drugs and technology; a downgrade in our financial strength ratings; litigation targeted at health benefits companies; our ability to contract with providers consistent with past practice; other potential uses of cash in the future that present attractive alternatives to share repurchases; our ability to achieve expected synergies and operating efficiencies in the WellPoint Health merger within the expected time-frames or at all and to successfully integrate our operations; such integration may be more difficult, time-consuming or costly than expected; revenues following the transaction may be lower than expected; operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected following the transaction; our ability to consummate WellPoint's merger with WellChoice, to achieve expected synergies and operating efficiencies in the merger within the expected time-frames or at all; to meet expectations regarding repurchases of shares of our common stock and to successfully integrate our operations; such integration may be more difficult, time-consuming or costly than expected; revenues following the transaction may be lower than expected; operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected following the transaction; the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule; our ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction and the value of the transaction consideration; future bio-terrorist activity or other potential public health epidemics; and general economic downturns. Individuals are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date thereof. Neither WellPoint nor WellChoice undertakes any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Individuals are also urged to carefully review and consider the various disclosures in WellPoint's and WellChoice's various SEC reports, including but not limited to Annual Reports on Form 10-K for the year ended December 31, 2004 and Quarterly Reports on Form 10-Q for the reporting periods of 2005.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
These communications were made in respect of the proposed merger transaction involving WellPoint and WellChoice. In connection with the proposed transaction, WellPoint has filed a registration statement on Form S- 4, containing the final proxy statement/prospectus for the stockholders of WellChoice with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE FINAL PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final proxy statement/prospectus was first mailed to WellChoice's stockholders on or about November 22, 2005. Investors and security holders may receive the final proxy statement/prospectus and other documents free of charge at the SEC's web site, http://www.sec.gov, from WellPoint Investor Relations at 120 Monument Circle, Indianapolis, Indiana 46204, or from WellChoice Investor Relations at 11 West 42nd Street, New York, New York 10036.
PARTICIPANTS IN SOLICITATION
WellPoint, WellChoice and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding WellPoint's directors and executive officers is available in WellPoint's proxy statement for its 2005 annual meeting of shareholders, which was filed with the SEC on April 8, 2005, and information regarding WellChoice's directors and executive officers is available in WellChoice's proxy statement for its 2005 annual meeting of stockholders, which was filed with SEC on March 28, 2005. Information regarding the persons who may, under the rules of the SEC, be considered
participants in the solicitation of WellChoice stockholders in connection with the proposed transaction is set forth in the proxy statement/prospectus.
WellPoint, Inc.CONTACT: Investor Relations: Tami Durle, +1-317-488-6390, or Media: JamesKappel, +1-317-694-2376, both of WellPoint, Inc.
