ALIGNMENT HEALTHCARE, INC. – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is intended to help the reader understand
our business, financial condition, results of operations, liquidity and capital
resources. This discussion should be read in conjunction with our audited
financial statements and the accompanying notes as well as "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in our Annual Report on Form 10-K for the year ended
consolidated financial statements and related notes presented herein in Part I,
Item 1 included elsewhere in this Quarterly Report. Unless the context otherwise
indicates or requires, the terms "we", "our" and the "Company" as used herein
refer to
predecessor for financial reporting purposes.
In addition to historical data, the discussion contains forward-looking
statements about the business, operations and financial performance of the
Company based on our current expectations that involves risks, uncertainties and
assumptions. Actual results could differ materially from those discussed in or
implied by forward-looking statements as a result of various factors, including
those discussed above in "Forward-Looking Statements," and Part II, Item 1A,
"Risk Factors."
Overview
Alignment is a next generation, consumer-centric platform designed to improve
the healthcare experience for seniors. We deliver this experience through our
Medicare Advantage plans, which are customized to meet the needs of a diverse
array of seniors. Our innovative model of consumer-centric healthcare is
purpose-built to provide seniors with care as it should be: high quality, low
cost and accompanied by a vastly improved consumer experience. We combine a
proprietary technology platform and a high-touch clinical model that enhances
our members' lifestyles and health outcomes while simultaneously controlling
costs, which allows us to reinvest savings back into our platform and products
to directly benefit the senior consumer. We have grown Health Plan Membership,
which we define as members enrolled in our health maintenance organization
("HMO") and preferred provider organization ("PPO") contracts, from
approximately 13,000 at inception to 109,700 as of
a 27% compound annual growth rate across 52 markets and 6 states. Our ultimate
goal is to bring this differentiated, advocacy-driven healthcare experience to
millions of senior consumers in
senior healthcare brand in the country.
Our model is based on a flywheel concept, referred to as our "virtuous cycle,"
which is designed to delight our senior consumers. We start by listening to and
engaging with our seniors in order to provide a superior experience in both
their healthcare and daily living needs. Through our proprietary technology
platform, Alignment's Virtual Application ("AVA"), we utilize data and
predictive algorithms that are specifically designed to ensure personalized care
is delivered to each member. When our information-enabled care model is combined
with our member engagement, we are able to improve healthcare outcomes by, for
example, reducing unnecessary hospital admissions, which in turn lowers overall
costs. Our ability to manage healthcare expenditures while maintaining quality
and member satisfaction is a distinct and sustainable competitive advantage. Our
lower total healthcare expenditures allow us to reinvest our savings into richer
coverage and benefits, which propels our growth in revenue and membership due to
the enhanced consumer value proposition. As we grow, we continue to listen to
and incorporate member feedback, and we are able to further enhance benefits and
produce strong clinical outcomes. Our virtuous cycle, based on the principle of
doing well by doing good, is highly repeatable and a core tenet of our ability
to continue to expand in existing and new markets in the future.
For the 2023 plan year, Alignment offers plans in 52 markets across
(21 markets),
markets),
million Medicare-eligible seniors in our current markets.
Factors Affecting Our Performance
Our proprietary technology platform, AVA, is a key element of our business with
capabilities that we expect to impact our future performance. AVA enables us to
personalize and manage our member relationships, care quality and experience,
and to coordinate and manage risk with our provider partners. AVA's unified
platform, analytical tools and data across the healthcare ecosystem enable us to
produce consistent outcomes, unit economics and support new member growth.
Additionally, our historical financial performance has been, and we expect our
financial performance in the future will be, driven by our ability to:
•
Capitalize on Our Existing Market Growth Opportunity: Our ability to attract and
retain members to grow in our existing markets depends on our ability to offer a
superior value proposition. We have proven that we can compete against, and take
market share from, large established players in highly competitive markets.
According to CMS data, we
23
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were one of the top three Medicare Advantage Organizations in terms of HMO net
members growth in our
approximately 4.4 million Medicare-eligible individuals enrolled in Medicare
Advantage plans in our existing 52 counties, of which our approximately 109,700
Health Plan Members represents only 2% market share. We believe that there are
still significant opportunities for future growth even in our most mature
markets where we have a 10-20% market share. Additionally, we are evaluating
other opportunities to leverage our historical investments in our technology
platform and our comprehensive clinical model across our existing and
potentially new geographies. For example, in
Innovation Center's Direct Contracting
directly with physicians to help manage their Medicare FFS patient populations
and participate in the upside and downside risk associated with managing the
health of such patients. CMS announced it is replacing the DCE program with the
"ACO Realizing Equity, Access, and Community Health Model" or "ACO REACH" model,
which became effective
approximately 7,800 ACO REACH seniors in our arrangement with our clinician
partners.
•
Drive Growth and Consistent Outcomes Through New Market Expansion: We enter new
markets with the goal of building brand awareness across our key stakeholders to
achieve meaningful market share over time. We intend to focus on markets with
significant senior populations where we expect to be able to replicate our model
most effectively. Our existing markets also feature a diverse array of
membership profiles across ethnicities, income levels and acuity. In 2022 and
2023, we expanded into 16 and 14 new markets, respectively, across our four
existing states and two new states,
•
Provide Superior Service, Care and Consumer Satisfaction: We are highly focused
on providing superior service and care to our members and on maintaining high
levels of consumer satisfaction, which are key to our financial performance and
growth. The CMS Five Star Quality Rating System provides economic incentives to
Medicare Advantage plans that achieve higher Star ratings by (i) meeting certain
care criteria (such as completing particular preventative screening procedures
or ensuring proper follow-up care is provided for specific conditions or
episodes) and (ii) receiving high member satisfaction ratings. These incentives
impact financial performance in the year following the CMS Rating Year (for
example, CMS's announcement of the 2023 Ratings occurred in the second half of
2022 and will impact our financial performance in 2024). In aggregate, more than
90% of our health plan members are enrolled in plans rated 4 stars and above,
meaning the vast majority of members consistently receive a high-quality care
experience, as defined under CMS star measurement criteria.
•
Effectively Manage the Quality of Care to Improve Member Outcomes: Our care
delivery model is based on a clinical continuum through which we have created a
highly personalized experience that is unique to each member depending on their
personal health and circumstances. Utilizing data and predictive analytics
generated by AVA, our clinical continuum separates seniors into four categories
in order to provide optimized care for every stage of a senior's life: healthy,
healthy utilizer, pre-chronic and chronic. We partner with our broader network
of community providers to service members in our non-chronic categories, and we
have developed a Care Anywhere program implemented by our internal clinical
teams to care for our higher risk and/or chronically ill members. By investing
in our members' care proactively, our model has consistently reduced unnecessary
and costly care while improving the quality of our members' lifestyle and
healthcare experience. By delivering superior care and preventing avoidable
utilization of the healthcare system, we are able to reduce our claims
expenditures in some of our largest medical expense categories, which translates
to superior medical benefits ratio ("MBR") financial performance and ultimately
the ability to offer richer products in the market.
•
Achieve Superior Unit Economics: As our senior population ages, their healthcare
needs become more frequent and complex. To combat the healthcare cost increases
that typically result, we proactively look to (i) connect with our population
early in their enrollment with Alignment to assess their care needs, (ii)
develop care plans and engage those members with more chronic, complex health
challenges in our clinical model, and (iii) continue to monitor and evaluate our
healthier members in a preventative fashion over time. Given the Medicare
Advantage payment mechanism and the retention of the vast majority of our
members who continue to choose Alignment after their initial selection year, we
are able to focus our efforts on driving favorable long-term health outcomes for
our entire population. As a result, our clinical model efforts have demonstrated
the ability to lower the MBRs of our returning members. We believe this is
evidence of our ability to manage the financial risk of our members as they age,
and that these favorable underlying unit economic trends translate directly to
our ability to continue to deliver a richer product to the marketplace. With
this dynamic in mind, our consolidated MBR may be impacted year-to-year based on
our pace of new member growth and mix of members by cohort. However, we believe
our ability to sustain MBR performance improvement over time positions us well
to invest in new member growth to drive long-term financial performance.
•
Invest in our Platform and Growth: We plan to continue to invest in our business
in order to further develop our AVA platform, pursue new expansion opportunities
and create innovative product offerings. In addition, in order to maintain a
24
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differentiated value proposition for our members, we continue to invest in
innovative product offerings and supplementary benefits to meet the evolving
needs of the senior consumer. We anticipate further investments in our business
as we expand into new markets and pursue strategic acquisitions, which we expect
will primarily be focused on healthcare delivery groups in key geographies,
standalone and provider-sponsored Medicare Advantage plans and other
complementary risk bearing assets.
•
Navigate Seasonality to our Business: Our operational and financial results will
experience some variability depending upon the time of year in which they are
measured. We experience the largest portion of member growth during the first
quarter, when plan enrollment selections made during the annual enrollment
period ("AEP") from
effect. As a result, we expect to see a majority of our member growth occur on
revenue often declines as new members join us, typically with less complete or
accurate documentation (and therefore lower risk-adjustment scores), and senior
mortality disproportionately impacts our higher-acuity (and therefore greater
revenue) members. Medical costs will vary seasonally depending on a number of
factors, but most significantly the weather. Certain illnesses, such as the
influenza virus, are far more prevalent during colder months of the year, which
will result in an increase in medical expenses during these time periods. We
therefore expect to see higher levels of per-member medical costs in the first
and fourth quarters. The design of our prescription drug coverage (Medicare Part
D) results in coverage that varies as a member's cumulative out-of-pocket costs
pass through successive stages of a member's plan period, which begins annually
on
greater portion of the responsibility for total prescription drug costs in the
early stages of the year and less in the latter stages, which typically results
in a higher MBR on our Part D program in the first half of the year relative to
the second half of the year. In addition, we expect our corporate, general and
administrative expenses to increase in absolute dollars for the foreseeable
future to support our growth and because of additional costs of being a public
company. Due to the timing of many of these investments, including our primary
sales and marketing season, we typically incur a greater level of investment in
the second half of the year relative to the first half of the year.
Executive Summary
The following table presents key financial statistics for the periods indicated:
Three Months Ended March 31,
(dollars in '000's, except percentages) 2023 2022 % Change
Health plan membership (at period end) 109,700 94,200 16.5 %
Medical benefits ratio 89.7 % 87.0 % 2.7 %
Revenues $ 439,155 $ 345,526 27.1 %
Loss from Operations $ (32,489 ) $ (36,475 ) NM(2)
Net loss $ (37,371 ) $ (40,817 ) NM(2)
Adjusted EBITDA(1) $ (5,172 ) $ (3,890 ) NM(2)
Adjusted gross profit (1) $ 45,425 $ 44,932 1.1 %
(1)
See "Adjusted EBITDA" and "Adjusted Gross Profit" below for a reconciliation to
the most directly comparable financial measure calculated in accordance with
GAAP and related disclosures.
(2)
Not meaningful
Health Plan Membership
We define Health Plan Membership as the number of members enrolled in our HMO
and PPO contracts as of the end of a reporting period. We believe this is an
important metric to assess growth of our underlying business, which is
indicative of our ability to consistently offer a superior value proposition to
seniors. This metric excludes third party payor members with respect to which we
are at-risk for managing their healthcare expenditures, which represented
approximately 400 members and 500 members as of
respectively. It also excludes the approximately 7,800 traditional Medicare
seniors for which we are at-risk for managing their healthcare expenditures
through our ACO REACH contract with CMS.
Adjusted Gross Profit and Medical Benefits Ratio
Adjusted gross profit is a non-GAAP financial measure that we define as loss
from operations before depreciation and amortization, clinical equity-based
compensation expense, and selling, general, and administrative expenses.
Adjusted gross profit is a key measure used by our management and Board to
understand and evaluate our operating performance and trends before the impact
of our consolidated selling, general and administrative expenses.
25
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Adjusted gross profit should not be considered in isolation of, or as an
alternative to, measures prepared in accordance with GAAP. There are a number of
limitations related to the use of adjusted gross profit in lieu of loss from
operations, which is the most directly comparable financial measure calculated
in accordance with GAAP.
Our use of the term adjusted gross profit may vary from the use of similar terms
by other companies in our industry and accordingly may not be comparable to
similarly titled measures used by other companies.
Adjusted gross profit is reconciled as follows:
Three Months Ended March 31,
2023 2022
(dollars in thousands)
Loss from operations $ (32,489 ) $ (36,475 )
Add back:
Equity-based compensation (medical expenses) 2,524 3,121
Depreciation (medical expenses) 61 43
Depreciation and amortization 4,921 3,950
Selling, general, and administrative expenses 70,408 74,293
Total add back 77,914 81,407
Adjusted gross profit $ 45,425 $ 44,932
Adjusted gross profit % 10.3 % 13.0 %
We calculate our MBR by dividing total medical expenses, excluding depreciation
and equity-based compensation, by total revenues in a given period. We believe
our MBR is an indicator of our gross profit for our Medicare Advantage plans and
demonstrates the ability of our clinical model to produce superior outcomes by
identifying and providing targeted care to our high-risk members resulting in
improved member health and reduced total population medical expenses. We expect
that this metric may fluctuate over time due to a variety of factors, including
our pace of new member growth given that new members typically join Alignment
with higher MBRs, while our model has demonstrated an ability to improve MBR for
a given cohort over time.
When we determine, on an annual basis, whether we have satisfied the CMS minimum
Medical Loss Ratio of 85%, adjustments are made to the MBR calculation to
include certain additional expenses related to improving the quality of care
provided, and to exclude certain taxes and fees, in each case as permitted or
required by CMS and applicable regulatory requirements.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we define as net loss
before interest expense, income taxes, depreciation and amortization expense,
reorganization and transaction-related expenses and equity-based compensation
expense. Adjusted EBITDA is a key measure used by our management and our Board
to understand and evaluate our operating performance and trends, to prepare and
approve our annual budget and to develop short and long-term operating plans. In
particular, we believe that the exclusion of the amounts eliminated in
calculating Adjusted EBITDA provides useful measures for period-to-period
comparisons of our business. Given our intent to continue to invest in our
platform and the scalability of our business in the short to medium-term, we
believe Adjusted EBITDA over the long term will be an important indicator of
value creation.
Adjusted EBITDA should not be considered in isolation of, or as an alternative
to, measures prepared in accordance with GAAP. There are a number of limitations
related to the use of Adjusted EBITDA in lieu of net loss, which is the most
directly comparable financial measure calculated in accordance with GAAP.
Our use of the term Adjusted EBITDA may vary from the use of similar terms by
other companies in our industry and accordingly may not be comparable to
similarly titled measures used by other companies.
26
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Adjusted EBITDA is reconciled as follows:
Three Months Ended
March 31,
2023 2022
(dollars in thousands)
Net loss $ (37,371 ) $ (40,817 )
Less: Net loss attributable to noncontrolling interest 87 -
Add back:
Interest expense 5,019 4,401
Depreciation and amortization 4,982 3,993
Income taxes 1 -
EBITDA (27,282 ) (32,423 )
Equity-based compensation(1) 21,978 28,047
Acquisition expenses(2) 132 486
Adjusted EBITDA $ (5,172 ) $ (3,890 )
(1)
Represents equity-based compensation related to grants made in the applicable
year, as well as equity-based compensation related to the timing of the IPO,
which includes previously issued stock appreciation rights ("SARs") liability
awards, modifications related to transaction vesting units, and grants made in
conjunction with the IPO.
(2)
Represents acquisition-related fees, such as legal and advisory fees, that are
non-capitalizable.
Results of Operations
The following table sets forth our consolidated statements of operations data
for the periods indicated:
Three Months Ended March 31,
2023 2022
(dollars in thousands)
Revenues:
Earned premiums $ 434,812 $ 345,292
Other 4,343 234
Total revenues 439,155 345,526
Expenses:
Medical expenses 396,315 303,758
Selling, general and administrative expenses 70,408 74,293
Depreciation and amortization 4,921 3,950
Total expenses 471,644 382,001
Loss from operations (32,489 ) (36,475 )
Other expenses:
Interest expense 5,019 4,401
Other income (138 ) (59 )
Total other expenses 4,881 4,342
Loss before income taxes (37,370 ) (40,817 )
Provision for income taxes 1 -
Net loss $ (37,371 ) $ (40,817 )
Less: Net loss attributable to noncontrolling interest 87 -
Net loss attributable to
27
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The following table sets forth our consolidated statements of operations data
expressed as a percentage of total revenues for the periods indicated:
Three Months Ended March 31,
2023 2022
(% of revenue)
Revenues:
Earned premiums 99 % 100 %
Other 1 -
Total revenues 100 100
Expenses:
Medical expenses 90 88
Selling, general and administrative expenses 16 22
Depreciation and amortization 1 1
Total expenses 107 111
Loss from operations (7 ) (11 )
Other expenses:
Interest expense 1 1
Other expenses (income) - -
Total other expenses 1 1
Loss before income taxes (8 ) (12 )
Provision for income taxes - -
Net loss (8 ) (12 )
Less: Net loss attributable to noncontrolling interest - -
Net loss attributable to Alignment Healthcare, Inc. (8 )% (12 )%
Revenues
Three Months Ended
March 31, Change
2023 2022 $ %
(dollars in thousands)
Revenues:
Earned premiums $ 434,812 $ 345,292 $ 89,520 25.9 %
Other 4,343 234 4,109 1756.0 %
Total revenues $ 439,155 $ 345,526 $ 93,629 27.1 %
Revenues. Revenues were
ended
27.1%. The increase was driven by a combination of growth in our Health Plan
membership and higher revenue per member per month in 2023 as compared to 2022.
Health plan membership increased 16.2% between
2023
an increase in the CMS benchmark rates. Additionally, ACO REACH revenue
increased
the three months ended
between
is mainly attributable to an increase in the interest rate of our interest
earning cash balances.
Expenses
Three Months Ended
March 31, Change
2023 2022 $ %
(dollars in thousands)
Expenses:
Medical expenses $ 396,315 $ 303,758 $ 92,557 30.5 %
Selling, general and
administrative expenses 70,408 74,293 (3,885 ) (5.2 )%
Depreciation and amortization 4,921 3,950 971 24.6 %
Total expenses $ 471,644 $ 382,001 $ 89,643 23.5 %
28
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Medical Expenses. Medical expenses were
the three months ended
Alignment's Health Plan membership, as well as growth in ACO REACH membership.
Overall, medical expenses for the three months ended
higher rate than total revenues compared to the three months ended
2022
revenue growth with ACO REACH patients, and a smaller amount of favorable prior
year development.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were
months ended
or 5.2%. The decrease for the three months ended
three months ended
equity-based compensation, offset by ongoing investments and expenditures in
network development, operations and sales and marketing to drive the growth of
Alignment's Health Plan membership. Excluding equity-based compensation in the
three months ended
expenses increased 3.2% from the three months ended
Depreciation and Amortization. Depreciation and amortization expense was
million
respectively, an increase of
due to the amount and timing of our capital expenditures and the associated
depreciation relative to 2022.
Other Expenses
Interest expense. Interest expense was
three months ended
million
principal balance caused by the payment-in-kind interest under our loan
agreement (described below).
Other expenses (income). Other expenses (income) were
million
Liquidity and Capital Resources
General
To date, we have financed our operations principally through our IPO, private
placements of our equity securities, revenues, and certain term loans (described
below). As of
and short-term investments. Deferred premium revenue represented
of the cash balance as of
our monthly premium revenue payments from CMS.
In addition, we operate as a holding company in a highly regulated industry.
administrative expense reimbursements from our subsidiaries, most of which are
subject to regulatory restrictions. We maintain significant levels of aggregate
excess statutory capital and surplus in our state-regulated operating
subsidiaries. As of
cash, cash equivalents and short-term investments.
We may incur operating losses in the future due to the investments we intend to
continue to make in expanding our operations and sales and marketing and due to
the general and administrative costs we expect to incur in connection with
continuing to operate as a public company. As a result, we may require
additional capital resources to execute strategic initiatives to grow our
business.
We believe that our liquid assets will be sufficient to fund our operating and
organic capital needs for at least the next 12 months. Our assessment of the
period of time through which our financial resources will be adequate to support
our operations is a forward-looking statement and involves risks and
uncertainties. Our actual results could vary because of, and our future capital
requirements will depend on, many factors, including our growth rate, the timing
and extent of spending to expand our presence in existing markets, expand into
new markets and increase our sales and marketing activities. We may in the
future enter into arrangements to acquire or invest in complementary businesses,
services and technologies, including intellectual property rights. We have based
this estimate on assumptions that may prove to be wrong, and we could use our
available capital resources sooner than we currently expect. We may be required
to seek additional equity or debt financing. In the event that additional
financing is required from outside sources, we may not be able to raise it on
terms acceptable to us or at all. If we are unable to raise additional capital
when desired, or if we cannot expand our operations or otherwise capitalize on
our business opportunities because we lack sufficient capital, our business,
results of operations, and financial condition would be adversely affected.
Certain states in which we operate as a CMS-licensed Medicare Advantage company
may require us to meet certain capital adequacy performance standards and tests.
The
implemented by the states, set minimum capitalization requirements for insurance
companies, HMOs, and other entities bearing risk for healthcare
29
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coverage. The requirements take the form of risk-based capital ("RBC") rules,
which may vary from state to state. Certain states in which our health plans or
risk bearing entities operate have adopted the RBC rules. Other states in which
our health plans or risk bearing entities operate have chosen not to adopt the
RBC rules, but instead have designed and implemented their own rules regarding
capital adequacy. Our health plans or risk-bearing entities were in compliance
with the minimum capital requirements for all periods presented.
Oxford Term Loan
On
an indirect subsidiary of the Company (the "Borrower") and certain of our other
subsidiaries (together with the Company and the Borrower, the "Borrower
Parties") entered into a term loan agreement (the "Oxford Loan Agreement") with
lender, and the other lenders from time to time party thereto (collectively, the
"Lenders"), pursuant to which the Lenders have agreed to lend the Borrower an
aggregate principal amount of up to
(the "Term Loans"). Pursuant to the Oxford Loan Agreement, the Borrower received
an initial Term Loan of
Loan") and may borrow up to an additional
option (such additional Term Loans, the "Delayed Draw Term Loans"). Interest on
the Term Loans is a variable rate equal to (i) the secured overnight financing
rate administered by the
subject to a floor of 1.00%, plus (ii) an applicable margin of 6.50%. All unpaid
principal and accrued and unpaid interest with respect to each Term Loan is due
and payable in full on
quarter ended
The Term Loans are guaranteed by certain of our wholly owned subsidiaries and
collateralized by all unrestricted assets.
For certain prepayments of the Term Loans prior to the second anniversary of the
Effective Date, the Borrower will be required to pay a prepayment fee ranging
from 1.00% to 2.00% of the principal amount of the Term Loans being prepaid.
The Oxford Loan Agreement includes customary events of default, including, among
others, payment defaults, breach of representations and warranties, covenant
defaults, judgment defaults, insolvency and bankruptcy defaults, and change of
control. The occurrence of an event of default could result in the acceleration
of the obligations under the Loan Agreement, termination of the Term Loan
commitments and the right to foreclose on the collateral securing the
obligations. During the existence of an event of default, the outstanding Term
Loans will accrue interest at a rate per annum equal to 2.00% plus the otherwise
applicable interest rate. Additionally, in the event of any contemplated asset
sale or series of asset sales yielding net proceeds in excess of
those excluded per the Loan Agreement, we are required to prepay the aggregate
outstanding principal balance of the Term Loans in an amount equal to the entire
amount of the asset sale net proceeds, plus any accrued and unpaid interest.
The Oxford Loan Agreement includes financial covenants that require the Borrower
Parties to (i) maintain minimum liquidity, as defined in the Loan Agreement, of
twelve-month revenue, as set forth in the Loan Agreement. As of
we were in compliance with the financial covenants.
Cash Flows
The following table presents a summary of our consolidated cash flows from
operating, investing and financing activities for the periods indicated:
Three Months Ended March 31,
(dollars in thousands) 2023 2022
Net cash provided by (used in) operating activities
Net cash used in investing activities
(110,428 ) (6,127 ) Net cash provided by financing activities 30 - Net change in cash (25,288 ) (17,765 ) Cash, cash equivalents and restricted cash at beginning of period 411,299 468,350 Cash, cash equivalents and restricted cash at end of period$ 386,011 $ 450,585 Operating Activities
For the three months ended
activities was
used in operating activities of
31, 2022
revenue of
payments from CMS, as compared to the three months ended
Excluding deferred premium revenue for the three months ended
net cash used in operating activities increased
months ended
30
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2022. The increase is mainly attributable to an increase in prepayments on
certain vendor contracts, as well as improved timeliness of claims payments for
three months ended
2022
Investing Activities
For the three months ended
was
investing activities of
The increase primarily relates to the purchase of short-term treasury securities
during the three months ended
Financing Activities
For the three months ended
activities was
was no cash provided by financing activities.
Material cash requirements from known contractual and other obligations
There have been no material changes to our contractual obligations disclosed in
our Annual Report.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations
are based upon our condensed consolidated financial statements, which have been
prepared in accordance with
include the accounts of our wholly-owned subsidiaries and three variable
interest entities ("VIEs") in
consolidation requirements for accounting purposes. All intercompany
transactions have been eliminated in consolidation. Noncontrolling interest is
presented within the equity section of the condensed consolidated balance
sheets.
There have been no significant changes in our critical accounting estimate
policies or methodologies to our condensed consolidated financial statements.
For a description of our policies regarding our critical accounting policies,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations-Critical Accounting Policies" in the Annual Report.
Recent Accounting Pronouncements
See Note 2 to our condensed consolidated financial statements, "Summary of
Significant Accounting Policies-Recent Accounting Pronouncements Adopted" for
more information.
31
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ASSURANT, INC. – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations
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