UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 13, 2013
WELLPOINT, INC.
(Exact name of registrant as specified in its charter)
| Indiana | 001-16751 | 35-2145715 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
120 Monument Circle
Indianapolis, IN 46204
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (317) 488-6000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 7 – Regulation FD
Item 7.01—Regulation FD Disclosure
Officers of WellPoint, Inc. (“WellPoint”) expect to speak with securities analysts and investors on August 13, 2013. During these meetings, the officers expect to discuss WellPoint’s net income per share guidance for full year 2013, as adjusted for the factors discussed below.
WellPoint today announced that it expects to complete the repurchase of approximately $1.1 billion aggregate principal amount of outstanding notes during the third quarter of 2013. The early retirement of this debt is expected to result in an after-tax expense of approximately $97 million during the quarter. WellPoint also expects to realize net tax benefits of approximately $65 million during the third quarter due to a favorable tax election made subsequent to the AMERIGROUP Corporation acquisition. As a result, WellPoint is reducing its full year 2013 GAAP earnings per share guidance by $0.11 to at least $7.89. This revised outlook includes expenses of $0.32 per share related to the early retirement of debt, partially offset by benefits of $0.21 per share related to the favorable tax election. This updated guidance does not include any investment gains or losses realized since June 30, 2013.
Excluding these items, WellPoint continues to expect adjusted earnings per share of at least $8.00 for the full year of 2013 (refer to the table below).
| Full Year 2013 Outlook |
||||
| Net income per diluted share |
At least $ | 7.89 | ||
| Add / (Subtract)—net of related tax effects: |
||||
| Expenses related to the early retirement of debt—third quarter 2013 |
0.32 | |||
| Tax benefits from a favorable tax election—third quarter 2013 |
(0.21 | ) | ||
| Acquisition and integration related costs—first six months of 2013 |
0.05 | |||
| Net realized gains on investments—first six months of 2013 |
(0.15 | ) | ||
| Other-than-temporary impairment losses on investments—first six months of 2013 |
0.10 | |||
|
|
|
|||
| Net adjustment items |
0.11 | |||
|
|
|
|||
| Adjusted net income per diluted share |
At least $ | 8.00 | ||
|
|
|
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None of the information furnished in this Item 7.01 hereto shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Unless expressly set forth by specific reference in such filings, none of the information furnished in this Item 7.01 shall be incorporated by reference in any filing under the Securities Act of 1933, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings.
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Section 8 – Other Events
Item 8.01. Other Events
On August 13, 2013, the Company issued a press release announcing the early results and pricing for its previously announced modified “Dutch Auction” cash tender offers for certain of its notes (the “Tender Offers”). The Tender Offers are being conducted on the terms and conditions set forth in the offers to purchase, dated July 30, 2013, and the related letter of transmittal, as amended by a press release issued by the Company on August 6, 2013.
A copy of the August 13, 2013 press release related to the Tender Offers is attached as Exhibit 99.1 to this report and is hereby incorporated by reference herein.
Section 9 – Financial Statements and Exhibits.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
The following exhibit is being furnished herewith:
| Exhibit No. |
Exhibit | |
| 99.1 | Press Release dated August 13, 2013 reporting on the early results and pricing of the WellPoint Tender Offers. | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 13, 2013
| WELLPOINT, INC. | ||
| By: | /s/ Kathleen S. Kiefer | |
| Name: | Kathleen S. Kiefer | |
| Title: | Corporate Secretary | |
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EXHIBIT INDEX
| Exhibit No. |
Exhibit | |
| 99.1 | Press Release dated August 13, 2013 reporting on the early results and pricing of the WellPoint Tender Offers. | |
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Exhibit 99.1
WellPoint Announces Early Results, Increase to Tender Cap and Pricing of Its Previously Announced Tender Offers
Indianapolis, Ind., August 13, 2013 – WellPoint, Inc. (“WellPoint”) announced today the early results and pricing for its previously announced cash tender offers for $600 million aggregate principal amount of its outstanding notes, in each case at a purchase price determined in accordance with the procedures of a modified “Dutch Auction.” The offers (the “Offers”, and each an “Offer”) are comprised of:
| • | an Offer (the “First Tranche Offer”) to purchase up to $300 million (subject to increase by up to $100 million, the “First Tranche Tender Cap”) aggregate principal amount of the “First Tranche Notes” set forth in the table below; and |
| • | an Offer (the “Second Tranche Offer”) to purchase up to $300 million (subject to increase by up to $100 million, the “Second Tranche Tender Cap” and together with the First Tranche Tender Cap, the “Tender Caps”) aggregate principal amount of the “Second Tranche Notes” set forth in the table below. |
As of 5:00 p.m., New York City time, on August 12, 2013 (the “Early Tender Time”), WellPoint had received early tenders for approximately (i) $580.0 million aggregate principal amount of First Tranche Notes, and (ii) $802.8 million aggregate principal amount of Second Tranche Notes, as specified in the table below. Each of the First Tranche Notes and Second Tranche Notes validly tendered (and not validly withdrawn) exceeds the previously announced Tender Caps. In addition, WellPoint announced that it is raising the Tender Cap for the Second Tranche Notes from $300 million to $400 million, which is the maximum increase previously contemplated and described in the Offer Documents. Because the aggregate principal amounts of each of the First Tranche Notes and Second Tranche Notes validly tendered (and not validly withdrawn) pursuant to the Offers exceed the applicable Tender Caps, as increased, each of the tendered First Tranche Notes and Second Tranche Notes have been accepted for purchase on a prorated basis as provided in the Offer Documents. As a result, WellPoint has accepted for purchase $300.0 million aggregate principal amount of the First Tranche Notes and $400.0 million aggregate principal amount of the Second Tranche Notes.
Holders of Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Time and accepted for purchase are eligible to receive the “Full Tender Offer Consideration” specified in the table below, which includes the Early Tender Payment (as defined in the Offer Documents). In addition to the Full Tender Offer Consideration, Holders of Notes accepted for purchase will receive Accrued Interest (as defined in the Offer Documents) on those Notes from the last interest payment date with respect to those Notes to, but not including, the Early Settlement Date (as defined in the Offer Documents). Since each of the Offers was oversubscribed as of the Early Tender Time, WellPoint will not accept for purchase any Notes tendered after the Early Tender Time. Furthermore, the withdrawal deadline of 5:00 p.m., New York City time, on August 12, 2013 has passed and has not been extended.
| Title of Security |
CUSIP Numbers |
Reference Bloomberg |
Principal Amount Outstanding (millions) |
Aggregate Principal Amount Tendered |
Aggregate Principal Amount Accepted (1) |
Clearing Spread (bps) |
Reference Yield |
Purchase Yield |
Early Tender Payment (2) |
Full Tender Offer Consideration (2)(3) |
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| First Tranche Notes |
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| 5.875% Notes due 2017 |
94973VAM9 | 0.625% U.S. Treasury Notes due May 31, 2017 PX5 |
$ | 700.0 | $ | 241.7 | $ | 153.3 | 75 | 0.936 | % | 1.686 | % | $ | 30.00 | $ | 1,155.06 | |||||||||||||||||||||
| 7.000% Notes due 2019 |
94973VAR8 | 2.750% U.S. Treasury Notes due February 15, 2019 PX6 |
$ | 600.0 | $ | 338.3 | $ | 146.7 | 80 | 1.506 | % | 2.306 | % | $ | 30.00 | $ | 1,241.39 | |||||||||||||||||||||
| Second Tranche Notes |
||||||||||||||||||||||||||||||||||||||
| 5.950% Notes due 2034 |
94973VAH0 | 3.125% U.S. Treasury Notes due February 15, 2043 PX1 |
$ | 500.0 | $ | 89.5 | $ | 51.7 | 123 | 3.635 | % | 4.865 | % | $ | 30.00 | $ | 1,142.98 | |||||||||||||||||||||
| 94973VAD9 | ||||||||||||||||||||||||||||||||||||||
| 5.850% Notes due 2036 |
94973VAL1 | 3.125% U.S. Treasury Notes due February 15, 2043 PX1 |
$ | 900.0 | $ | 322.5 | $ | 120.8 | 123 | 3.635 | % | 4.865 | % | $ | 30.00 | $ | 1,133.51 | |||||||||||||||||||||
| 6.375% Notes due 2037 |
94973VAN7 | 3.125% U.S. Treasury Notes due February 15, 2043 PX1 |
$ | 800.0 | $ | 247.8 | $ | 146.0 | 113 | 3.635 | % | 4.765 | % | $ | 30.00 | $ | 1,227.84 | |||||||||||||||||||||
| 5.800% Notes due 2040 |
94973VAT4 | 3.125% U.S. Treasury Notes due February 15, 2043 PX1 |
$ | 300.0 | $ | 143.0 | $ | 81.5 | 131 | 3.635 | % | 4.945 | % | $ | 30.00 | $ | 1,126.67 | |||||||||||||||||||||
| (1) | Subject to rounding due to proration. |
| (2) | Per $1,000 principal amount of Notes accepted for purchase. WellPoint will also pay Accrued Interest on those Notes from the last interest payment date with respect to those Notes to, but not including, the Early Settlement Date. |
| (3) | Includes the applicable Early Tender Payment. |
WellPoint expects to settle all Notes shown as accepted in the table above on August 13, 2013. All Notes not accepted by WellPoint as a result of proration will be rejected and returned to Holders.
The Offers are described in the Offers to Purchase dated July 30, 2013 and the related Letter of Transmittal dated July 30, 2013, as amended by the press release issued by WellPoint on August 6, 2013 (together, the “Offer Documents”), previously sent to holders of the Notes. Capitalized terms used in this press release and not defined herein have the meanings given to them in the Offer Documents. Except as described above, the Offers are not modified by this announcement.
BofA Merrill Lynch and Deutsche Bank Securities are acting as dealer managers for the Offers. For additional information regarding the terms of the Offers, please contact: BofA Merrill Lynch at 888-292-0070 (toll-free) or 980-683-3215 (collect) or Deutsche Bank Securities at 866-627-0391 (toll-free) or 212-250-2955 (collect). Requests for the Offer Documents may be directed to D.F. King & Co., Inc., which is acting as the Tender Agent and Information Agent for the Offers, at 212-269-5550 or 800-488-8095 (toll-free).
THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER OR SOLICITATION TO PURCHASE NOTES. THE OFFERS TO PURCHASE ARE BEING MADE SOLELY PURSUANT TO THE OFFER DOCUMENTS, WHICH SET FORTH THE COMPLETE TERMS OF THE OFFERS THAT HOLDERS OF THE NOTES SHOULD CAREFULLY READ PRIOR TO MAKING ANY DECISION.
THE OFFER DOCUMENTS DO NOT CONSTITUTE AN OFFER OR SOLICITATION TO PURCHASE NOTES IN ANY JURISDICTION IN WHICH, OR TO OR FROM ANY PERSON TO OR FROM WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION UNDER APPLICABLE SECURITIES OR BLUE SKY LAWS. IN ANY JURISDICTION IN WHICH THE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE OFFERS TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFERS WILL BE DEEMED TO BE MADE ON BEHALF OF THE OFFEROR BY ANY OR ALL DEALER MANAGERS, IF ONE OR MORE OF THE DEALER MANAGERS ARE LICENSED BROKERS OR DEALERS UNDER THE LAWS OF SUCH JURISDICTION, OR BY ONE OR MORE REGISTERED BROKERS OR DEALERS THAT ARE LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
NEITHER THIS PRESS RELEASE NOR THE OFFER DOCUMENTS CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO PURCHASE WITH RESPECT TO ANY DEBT SECURITIES, NOR SHALL THERE BE ANY SALE OF SECURITIES IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR PURCHASE WOULD BE UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
About WellPoint
At WellPoint, we believe there is an important connection between our members’ health and well-being, and the value we bring our customers and shareholders. So each day we work to improve the health of our members and their communities. And, we can make a real difference since we have nearly 36 million people in our affiliated health plans, and nearly 68 million people served through our subsidiaries. As an independent licensee of the Blue Cross and Blue Shield Association, WellPoint serves members as the Blue Cross licensee for California; and as 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, New York (as the Blue Cross Blue Shield licensee in 10 New York City metropolitan and surrounding counties and as the Blue Cross or Blue Cross Blue Shield licensee in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In a majority of these service areas, WellPoint’s plans do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia and Empire Blue Cross Blue Shield, or Empire Blue Cross (in the New York service areas). We also serve customers in several additional states through our Amerigroup subsidiary and in certain markets through our CareMore subsidiary. Our 1-800 CONTACTS, Inc. subsidiary offers customers online sales of contact lenses, eyeglasses and other ocular products. Additional information about WellPoint is available at www.wellpoint.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
WellPoint and its representatives may from time to time make written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA), including statements in this press release, in presentations, filings with the Securities and Exchange Commission, or SEC, reports to shareholders and in meetings with analysts and investors. The projections referenced in this press release are forward-looking and they are intended to be covered by the safe harbor for “forward-looking statements” provided by PSLRA. Words such as “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “anticipate(s)”, “intend”, “estimate”, “project” and similar expressions are intended to identify forward-looking statements, which generally are not historical in nature. 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 our control, 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 the public filings that we have made with the SEC; increased government participation in, or regulation or taxation of, health benefits and managed care operations, including, but not limited to, the impact of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010; trends in health care costs and utilization rates; our ability to secure sufficient premium rates including regulatory approval for and implementation of such rates; our ability to contract with providers consistent with past practice; our ability to integrate and achieve expected synergies and operating efficiencies in the AMERIGROUP Corporation acquisition within the expected timeframe or at all, as such integration may be more difficult, time consuming or costly than expected, revenues following the transaction may be lower than expected and operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients and suppliers, may be greater than expected following the transaction; competitor pricing below market trends of increasing costs; reduced enrollment, as well as a negative change in our health care product mix; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations imposed thereon and funding risks with respect to revenue received from participation therein; a downgrade in our financial strength ratings; litigation and investigations targeted at our industry and our ability to resolve litigation and investigations within estimates; medical malpractice or professional liability claims or other risks related to health care services provided by our subsidiaries; risks inherent in selling health care products in the consumer retail market; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; non-compliance by any party with the Express Scripts, Inc. pharmacy benefit management services agreement, which could result in financial penalties, our inability to meet customer demands, and sanctions imposed by governmental entities, including the Centers for Medicare and Medicaid Services; events that result in negative publicity for us or the health benefits industry; failure to effectively maintain and modernize our information systems and e-business organization and to maintain good relationships with third
party vendors for information system resources; events that may negatively affect our licenses with the Blue Cross and Blue Shield Association; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; intense competition to attract and retain employees; unauthorized disclosure of member sensitive or confidential information; changes in the economic and market conditions, as well as regulations that may negatively affect our investment portfolios and liquidity; possible restrictions in the payment of dividends by our subsidiaries and increases in required minimum levels of capital and the potential negative effect from our substantial amount of outstanding indebtedness; general risks associated with mergers and acquisitions; various laws and provisions in our governing documents that may prevent or discourage takeovers and business combinations; future public health epidemics and catastrophes; and general economic downturns. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Except to the extent otherwise required by federal securities law, we do not undertake 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. Readers are also urged to carefully review and consider the various disclosures in our SEC reports.
Source: WellPoint, Inc.
WellPoint Contacts:
Investor Relations
Doug Simpson, 212- 476-1473
Media
Kristin Binns, 917-697-7802