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Section 1: 8-K (8-K)


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): May 8, 2018
TRIPLE-S MANAGEMENT CORPORATION
(Exact Name of Registrant as Specified in Charter)
 
Puerto Rico
001-33865
66-0555678
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
Registrant’s telephone number, including area code: 787-749-4949

1441 F.D. Roosevelt Avenue, San Juan, Puerto Rico 00920
(Address of Principal Executive Offices and Zip Code)

Not Applicable
(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:
 
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))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 


Item 2.02.
Results of Operations and Financial Condition.
 
On May 8, 2018, Triple-S Management Corporation issued a press release announcing its unaudited financial results for the quarter ended March 31, 2018, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.
 
In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to this Item 2.02 of  this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.
Financial Statements and Exhibits.
 
 
Press release, dated May 8, 2018, issued by Triple-S Management Corporation.
 

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.

 
TRIPLE-S MANAGEMENT CORPORATION
 
       
Date: May 8, 2018
By:
/s/ Juan José Román-Jiménez
 
   
Name: Juan José Román-Jiménez
 
   
Title: EVP and Chief Financial Officer
 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)


Exhibit 99.1
 
Triple-S Management Corporation
 
1441 F.D. Roosevelt Ave.
 
San Juan, PR 00920
 
www.triplesmanagement.com

FOR FURTHER INFORMATION:

AT THE COMPANY:
INVESTOR RELATIONS:
Juan José Román-Jiménez
Mr. Garrett Edson
EVP and Chief Financial Officer
ICR
(787) 749-4949
(787) 792-6488
 
Triple-S Management Corporation Reports First Quarter 2018 Results

SAN JUAN, Puerto Rico, May 8, 2018 – Triple-S Management Corporation (NYSE:GTS), a leading managed care company in Puerto Rico, today announced its first quarter 2018 results.

Quarterly Consolidated and Other Highlights

·
Net income of $3.9 million, or $0.17 per diluted share, versus net loss of $4.3 million, or $0.18 per diluted share, in the prior-year period;
·
Adjusted net income of $14.1 million, or $0.60 per diluted share, versus adjusted net loss of  $4.8 million, or $0.20 per diluted share, a year ago, reflecting the ongoing improvements in the Company’s Managed Care operations;
·
Operating revenues of $770.2 million, a 7.0% increase from the prior-year period, reflecting higher premiums in the Managed Care segment;
·
Consolidated operating income of $18.1 million compared to an operating loss of $12.2 million in the prior-year period;
·
Consolidated loss ratio improved to 82.3% and medical loss ratio (“MLR”) to 85.0%, driven primarily by Managed Care premium trends that are higher than claim trends;
·
The Company's Board authorized a $25.0 million expansion of its existing $30.0 million Class B share repurchase program in February.  Under the repurchase program, during the first quarter of 2018, 563,559 shares were repurchased at an aggregate cost of $14.3 million.  During the second quarter of 2018, as of May 4, an additional 80,404 shares were repurchased at an aggregate cost of $2.1 million.  As of May 4, 2018, $18.5 million of availability remains in the program.
 
"We are pleased with our first quarter performance, as our financial results begin to manifest the impact of our operational improvements and clinical initiatives,” said Roberto Garcia-Rodriguez, President and Chief Executive Officer.  “We continue to invest considerably in our Managed Care operations to ensure we are providing top-shelf service to our customers, making our products more attractive and thus enabling Triple-S to generate sustainable long-term growth.”
 
“As Puerto Rico begins to rebuild after Hurricane María, we remain keenly focused on a three-pronged approach to growing the company," continued Mr. Garcia-Rodriguez. “First, we aim to win and retain Medicare Advantage business with a more competitive and consistent product offering.  Secondly, we will further modernize our infrastructure and technology to improve our service, reduce our expenses and ultimately expand our margins.  And finally, we will expand our ambulatory clinic network to provide us an additional and vital platform to improve access, cost, quality and outcomes throughout our Managed Care businesses.  By focusing on these key initiatives, we remain confident that we are positioning ourselves to create long-term value for our shareholders.”
 
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Triple-S Management Corporation
 
Selected Consolidated Quarterly Details

·
Consolidated premiums earned were $752.0 million, up 7.1% from the prior-year period, primarily reflecting higher premiums across all businesses within the Managed Care segment. In the Medicare business, premiums increased due to the Company’s four-star rated Medicare Advantage HMO contract, resulting in a 5% bonus applied to the benchmark used in premium calculation, as well as higher sharing on rebates.  These increases were partially offset by lower Commercial and Medicare membership.

·
Consolidated claims incurred were $619.0 million, down 0.3% year-over-year, mostly driven by lower enrollment in the Managed Care segment’s Medicare and Commercial businesses, and partially offset by the impact of additional benefits in the Company’s Medicare Advantage product. Consolidated loss ratio of 82.3% improved 610 basis points from the prior-year period.

·
Consolidated operating expenses of $133.1 million increased 20.0% from the prior-year period, while the Company’s operating expense ratio increased 190 basis points year over year to 17.6%. The increase in operating expenses primarily reflected the reinstatement of the Health Insurance Providers Fee (HIP fee) of $11.7 million, as well as higher professional services and personnel costs related to the Company’s ongoing Managed Care initiatives.

·
Consolidated income tax expense was $0.4 million, compared to a benefit of $6.7 million in the prior-year period, primarily reflecting a significant increase in taxable income in the Managed Care segment, which also has a higher effective tax rate than the Company’s other segments.

·
Net income for the period reflects the implementation of new accounting guidance that requires changes in unrealized gains or losses of equity securities to be recorded through operations.  This amount was excluded from adjusted net income.
 
Selected Managed Care Segment Quarterly Details

·
Managed Care premiums earned were $686.9 million, up 7.2% year over year.

o
Commercial premiums earned of $198.7 million declined 3.1% from the prior-year period, mainly due to an approximate decline of 52,000 in fully-insured member month enrollment and partially offset by $3.9 million related to the reinstatement of the HIP fee pass-through in 2018.

o
Medicare premiums earned of $287.9 million increased 11.7% from the prior-year period, largely reflecting an increase in the 2018 Medicare reimbursement rates for the first time since 2012, an increase in premium rates related to the upgraded four-star rating of the Company’s 2018 HMO product, and to higher average risk score. These increases were partially offset by a decrease in member month enrollment of approximately 25,000.

o
Medicaid premiums earned improved 12.7% from the prior-year period to $200.3 million, primarily reflecting higher premium rates that became effective July 1, 2017, $3.8 million in premiums earned related to the Company’s achieving the contract’s quality incentive metrics, and $3.7 million associated to the reinstatement of the HIP fee pass-through in 2018.

·
Reported MLR of 85.0% and recasted MLR of 86.2% represent a year-over-year improvement of 670 and 400 basis points, respectively, mostly reflecting claim trends lower than premium trends across all of the Company’s Managed Care businesses.  Recasted MLR excludes the impact of prior-period reserve developments, and moves the Medicare risk score revenue and other adjustments to their corresponding periods.
 
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Triple-S Management Corporation
 
·
Managed Care operating expenses were $101.8 million, up $20.5 million, or 25.2%, year over year, primarily reflecting the reinstatement of the HIP fee, and an increase in professional services and personnel costs related to the Company’s ongoing clinical and operational initiatives.
 
2018 Outlook

Despite the ongoing market uncertainty regarding utilization patterns, outward migration and the impact of post-hurricane reconstruction efforts, the Company is maintaining its full year 2018 directional guidance regarding its Commercial and Medicare businesses, as well as its Life Insurance segment and consolidated operating expenses.  Directional guidance regarding its Property and Casualty segment was raised for the full year 2018.  More specifically:
 
·
In the Commercial business, the Company continues to expect full-year at-risk member month enrollment between 3.7 million and 3.8 million, and full-year MLR between 80.5% and 82.5%.

·
In the Medicare Advantage business, the Company anticipates full year member month enrollment to be between 1.35 million and 1.45 million, while the expected MLR range for 2018 remains between 85% and 87%.

·
The Company continues to expect Life insurance premiums earned for 2018 between $160 million and $164 million.

·
The Company has raised expectations for its Property and Casualty premiums earned for 2018 to between $82 million and $86 million. The Company’s previous outlook for Property and Casualty 2018 premiums earned was between $76 million and $80 million.

·
The Company continues to expect consolidated operating expenses for full year 2018 between $530 million and $545 million.
 
3

Triple-S Management Corporation
 
Conference Call and Webcast

Management will host a conference call and webcast today at 8:30 a.m. Eastern Time to discuss its financial results for the three months ended March 31, 2018. To participate, callers within the U.S. and Canada should dial 1-855-327-6837 and international callers should dial 1-631-891-4304 about five minutes before the call.

To listen to the webcast, participants should visit the “Investor Relations” section of the Company’s website at www.triplesmanagement.com several minutes before the event is broadcast and follow the instructions provided to ensure they have the necessary audio application downloaded and installed. This program is provided at no charge to the user. An archived version of the call, also located on the “Investor Relations” section of Triple-S Management’s website, will be available about two hours after the call ends and for at least the following two weeks. This news release, along with other information relating to the call, will be available on the “Investor Relations” section of the website.

In addition, a replay will be available through May 22, 2018 by calling 1-844-512-2921 or 1-412-317-6671 and entering passcode 10004746. A replay will also be available at www.triplesmanagement.com for 30 days.
 
About Triple-S Management Corporation

Triple-S Management Corporation is an independent licensee of the Blue Cross Blue Shield Association. It is one of the leading players in the managed care industry in Puerto Rico. Triple-S Management has the exclusive right to use the Blue Cross Blue Shield name and mark throughout Puerto Rico, the U.S. Virgin Islands, and Costa Rica. With more than 55 years of experience in the industry, Triple-S Management offers a broad portfolio of managed care and related products in the Commercial, Medicare Advantage, and Medicaid markets under the Blue Cross Blue Shield marks. It also provides non-Blue Cross Blue Shield branded life and property and casualty insurance in Puerto Rico. For more information about Triple-S Management, visit www.triplesmanagement.com or contact [email protected].
 
Non-GAAP Financial Measures

This earnings release presents information about the Company’s adjusted net income, which is a non-GAAP financial metric provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America (GAAP). A reconciliation of adjusted net income to net income, the most comparable GAAP financial measure, is provided in the accompanying tables found at the end of this release.
 
Forward-Looking Statements

This document contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information about possible or assumed future sales, results of operations, developments, regulatory approvals or other circumstances. Sentences that include “believe”, “expect”, “plan”, “intend”, “estimate”, “anticipate”, “project”, “may”, “will”, “shall”, “should” and similar expressions, whether in the positive or negative, are intended to identify forward-looking statements.

All forward-looking statements in this news release reflect management’s current views about future events and are based on assumptions and subject to risks and uncertainties. Consequently, actual results may differ materially from those expressed here as a result of various factors, including all the risks discussed and identified in public filings with the U.S. Securities and Exchange Commission (SEC).
 
4

Triple-S Management Corporation
 
In addition, the Company operates in a highly competitive, constantly changing environment, influenced by very large organizations that have resulted from business combinations, aggressive marketing and pricing practices of competitors, and regulatory oversight. The following factors, if markedly different from the Company’s planning assumptions (either individually or in combination), could cause Triple-S Management’s results to differ materially from those expressed in any forward-looking statements shared here:

·
Trends in health care costs and utilization rates
·
Ability to secure sufficient premium rate increases
·
Competitor pricing below market trends of increasing costs
·
Re-estimates of policy and contract liabilities
·
Changes in government laws and regulations of managed care, life insurance or property and casualty insurance
·
Significant acquisitions or divestitures by major competitors
·
Introduction and use of new prescription drugs and technologies
·
A downgrade in the Company’s financial strength ratings
·
A downgrade in the Government of Puerto Rico’s debt
·
Litigation or legislation targeted at managed care, life insurance or property and casualty insurance companies
·
Ability to contract with providers consistent with past practice
·
Ability to successfully implement the Company’s disease management, utilization management and Star ratings programs
·
Ability to maintain Federal Employees, Medicare and Medicaid contracts
·
Volatility in the securities markets and investment losses and defaults
·
General economic downturns, major disasters, and epidemics

This list is not exhaustive. Management believes the forward-looking statements in this release are reasonable. However, there is no assurance that the actions, events or results anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on the Company’s results of operations or financial condition. In view of these uncertainties, investors should not place undue reliance on any forward-looking statements, which are based on current expectations. In addition, forward-looking statements are based on information available the day they are made, and (other than as required by applicable law, including the securities laws of the United States) the Company does not intend to update or revise any of them in light of new information or future events.

Readers are advised to carefully review and consider the various disclosures in the Company’s SEC reports.
5

Triple-S Management Corporation
 
Earnings Release Schedules and Supplementary Information

Condensed Consolidated Balance Sheets
Exhibit I
   
Condensed Consolidated Statements of Earnings
Exhibit II
   
Condensed Consolidated Statements of Cash Flows
Exhibit III
   
Segment Performance Supplemental Information
Exhibit IV
   
Reconciliation of Non-GAAP Financial Measures
Exhibit V
 
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Triple-S Management Corporation
 
Exhibit I

Condensed Consolidated Balance Sheets
(dollar amounts in thousands)
Unaudited
 
 
 
March 31,
2018
   
December 31,
2017
 
Assets
           
 
           
Investments
 
$
1,651,860
   
$
1,605,477
 
Cash and cash equivalents
   
212,610
     
198,941
 
Premium and other receivables, net
   
775,258
     
899,327
 
Deferred policy acquisition costs and value of business acquired
   
202,581
     
200,788
 
Property and equipment, net
   
76,825
     
74,716
 
Other assets
   
181,857
     
137,516
 
 
               
Total assets
 
$
3,100,991
   
$
3,116,765
 
 
               
 
               
Liabilities and Stockholders' Equity
               
 
               
Policy liabilities and accruals
 
$
1,786,713
   
$
1,761,553
 
Accounts payable and accrued liabilities
   
387,454
     
410,457
 
Long-term borrowings
   
31,275
     
32,073
 
 
               
Total liabilities
   
2,205,442
     
2,204,083
 
 
               
Stockholders’ equity:
               
Common stock
   
23,283
     
23,578
 
Other stockholders’ equity
   
872,948
     
889,786
 
 
               
Total Triple-S Management Corporation stockholders’ equity
   
896,231
     
913,364
 
 
               
Non-controlling interest in consolidated subsidiary
   
(682
)
   
(682
)
 
               
Total stockholders’ equity
   
895,549
     
912,682
 
 
               
Total liabilities and stockholders’ equity
 
$
3,100,991
   
$
3,116,765
 
 
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Triple-S Management Corporation
 
Exhibit II

Condensed Consolidated Statements of Earnings
(dollar amounts in thousands, except per share data)
Unaudited
 
 
 
For the Three Months Ended
March 31,
 
   
2018
   
2017
 
Revenues:
           
Premiums earned, net
 
$
752,034
   
$
702,273
 
Administrative service fees
   
3,348
     
4,379
 
Net investment income
   
13,755
     
12,016
 
Other operating revenues
   
1,071
     
965
 
                 
Total operating revenues
   
770,208
     
719,633
 
                 
Net realized investment gains on sale of securities
   
2,942
     
336
 
                 
Net unrealized investment losses on equity investments
   
(16,199
)
   
-
 
                 
Other income, net
   
1,163
     
2,525
 
                 
Total revenues
   
758,114
     
722,494
 
                 
                 
Benefits and expenses:
               
Claims incurred
   
618,989
     
620,863
 
Operating expenses
   
133,134
     
110,946
 
                 
Total operating costs
   
752,123
     
731,809
 
                 
Interest expense
   
1,690
     
1,686
 
                 
Total benefits and expenses
   
753,813
     
733,495
 
                 
Income (loss) before taxes
   
4,301
     
(11,001
)
                 
Income tax expense (benefit)
   
387
     
(6,658
)
                 
Net income (loss)
   
3,914
     
(4,343
)
                 
Less: Net loss attributable to the non-controlling interest
   
-
     
1
 
                 
Net income (loss) attributable to Triple-S Management Corporation
 
$
3,914
   
$
(4,342
)
                 
Earnings per share attributable to Triple-S Management Corporation:
               
                 
Basic net income (loss) per share
 
$
0.17
   
$
(0.18
)
Diluted net income (loss) per share
 
$
0.17
   
$
(0.18
)
                 
Weighted average of common shares
   
23,277,633
     
24,143,261
 
Diluted weighted average of common shares
   
23,394,997
     
24,143,261
 
 
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Triple-S Management Corporation
 
Exhibit III

Condensed Consolidated Statements of Cash Flows
(dollar amounts in thousands)
Unaudited
 
   
For the Year Ended
March 31,
 
   
2018
   
2017
 
             
Net cash provided by operating activities
 
$
130,473
   
$
130,965
 
                 
Cash flows from investing activities:
               
Proceeds from investments sold or matured:
               
Securities available for sale:
               
Fixed maturities sold
   
443,419
     
26,023
 
Fixed maturities matured/called
   
5,368
     
5,001
 
Securities held to maturity - fixed maturities matured/called
   
1,048
     
703
 
Equity securities sold
   
113,863
     
10,272
 
Other invested assets sold
   
845
     
-
 
Acquisition of investments:
               
Securities available for sale - fixed maturities
   
(575,694
)
   
(33,738
)
Securities held to maturity - fixed maturities
   
(1,212
)
   
(382
)
Equity securities
   
(49,591
)
   
(5,482
)
Other invested assets
   
(9,683
)
   
-
 
Increase in other investments
   
(4,136
)
   
(2,044
)
Net change in policy loans
   
(185
)
   
18
 
Net capital expenditures
   
(4,861
)
   
(3,295
)
                 
Net cash used in investing activities
   
(80,819
)
   
(2,924
)
                 
Cash flows from financing activities:
               
Change in outstanding checks in excess of bank balances
   
(19,992
)
   
(11,401
)
Repayments of long-term borrowings
   
(810
)
   
(24,676
)
Proceeds from revolving line of credit
   
-
     
24,266
 
Repurchase and retirement of common stock
   
(14,259
)
   
-
 
Proceeds from policyholder deposits
   
6,237
     
4,116
 
Surrender of policyholder deposits
   
(7,161
)
   
(4,890
)
                 
Net cash used in financing activities
   
(35,985
)
   
(12,585
)
                 
Net increase in cash and cash equivalents
   
13,669
     
115,456
 
                 
Cash and cash equivalents, beginning of period
   
198,941
     
103,428
 
                 
Cash and cash equivalents, end of period
 
$
212,610
   
$
218,884
 
 
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Triple-S Management Corporation
 
Exhibit IV

Segment Performance Supplemental Information

(Unaudited)
 
Three months ended March 31,
 
(dollar amounts in millions)
 
2018
   
2017
   
Percentage
Change
 
Premiums earned, net:
                 
Managed Care:
                 
Commercial
 
$
198.7
   
$
205.1
     
(3.1
%)
Medicare
   
287.9
     
257.7
     
11.7
%
Medicaid
   
200.3
     
177.7
     
12.7
%
Total Managed Care
   
686.9
     
640.5
     
7.2
%
Life Insurance
   
41.5
     
40.5
     
2.5
%
Property and Casualty
   
24.2
     
21.7
     
11.5
%
Other
   
(0.6
)
   
(0.4
)
   
(50.0
%)
Consolidated premiums earned, net
 
$
752.0
   
$
702.3
     
7.1
%
Operating revenues (loss): 1
                       
Managed Care
 
$
696.1
   
$
650.0
     
7.1
%
Life Insurance
   
47.5
     
46.6
     
1.9
%
Property and Casualty
   
26.6
     
23.6
     
12.7
%
Other
   
-
     
(0.6
)
   
100.0
%
Consolidated operating revenues
 
$
770.2
   
$
719.6
     
7.0
%
Operating income (loss): 2
                       
Managed Care
 
$
10.6
   
$
(18.6
)
   
157.0
%
Life Insurance
   
3.6
     
3.9
     
(7.7
%)
Property and Casualty
   
3.1
     
2.1
     
47.6
%
Other
   
0.8
     
0.4
     
100.0
%
Consolidated operating income (loss)
 
$
18.1
   
$
(12.2
)
   
248.4
%
Operating margin: 3
                       
Managed Care
   
1.5
%
   
(2.9
%)
   
440
bp
Life Insurance
   
7.6
%
   
8.4
%
   
-80
bp
Property and Casualty
   
11.7
%
   
8.9
%
   
280
bp
Consolidated
   
2.4
%
   
(1.7
%)
   
410
bp
Depreciation and amortization expense
 
$
3.4
   
$
3.0
     
13.3
%
 
1 Operating revenues include premiums earned, net, administrative service fees and net investment income.
2 Operating income or loss include operating revenues minus operating costs. Operating costs include claims incurred and operating expenses.
3 Operating margin is defined as operating income or loss divided by operating revenues.
 
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Triple-S Management Corporation
 
Managed Care Additional Data
 
Three months ended
March 31,
 
(Unaudited)
 
2018
   
2017
 
Member months enrollment:
           
Commercial:
           
Fully-insured
   
961,290
     
1,013,205
 
Self-insured
   
449,778
     
507,167
 
Total Commercial
   
1,411,068
     
1,520,372
 
Medicare Advantage
   
338,340
     
363,727
 
Medicaid
   
1,171,345
     
1,173,273
 
Total member months
   
2,920,753
     
3,057,372
 
Claim liabilities (in millions)
 
$
402.4
   
$
393.5
 
Days claim payable
   
62
     
60
 
Premium PMPM:
               
Managed Care
 
$
277.99
   
$
251.16
 
Commercial
   
206.70
     
202.43
 
Medicare Advantage
   
850.92
     
708.50
 
Medicaid
   
171.00
     
151.46
 
Medical loss ratio:
   
85.0
%
   
91.7
%
Commercial
   
81.3
%
   
83.5
%
Medicare Advantage
   
84.6
%
   
94.0
%
Medicaid
   
89.2
%
   
97.8
%
Adjusted medical loss ratio: 1
   
86.2
%
   
90.2
%
Commercial
   
82.6
%
   
82.9
%
Medicare Advantage
   
86.1
%
   
94.1
%
Medicaid
   
90.0
%
   
93.0
%
Operating expense ratio:
               
Consolidated
   
17.6
%
   
15.7
%
Managed Care
   
14.7
%
   
12.6
%
 
1 The adjusted medical loss ratio accounts for subsequent adjustments to estimates, such as prior-period reserve developments and Medicare premium adjustments, and presents them in the corresponding period.
 
11

Triple-S Management Corporation
 
Managed Care Membership by Segment
 
As of March 31,
 
   
2018
   
2017
 
Members:
           
Commercial:
           
Fully-insured
   
319,208
     
336,845
 
Self-insured
   
148,688
     
169,003
 
Total Commercial
   
467,896
     
505,848
 
Medicare Advantage
   
112,080
     
121,352
 
Medicaid
   
394,454
     
389,130
 
Total members
   
974,430
     
1,016,330
 
 
12

Triple-S Management Corporation
 
Exhibit V

Reconciliation of Non-GAAP Financial Measures

 
 
Adjusted Net Income (Loss)
 
(Unaudited)
 
Three months ended
March 31,
 
(dollar amounts in millions)
 
2018
   
2017
 
Net income (loss)
 
$
3.9
   
$
(4.3
)
Less adjustments:
               
Net realized investment gains, net of tax
   
2.4
     
0.3
 
Unrealized losses on equity investments
   
(13.1
)
   
-
 
Private equity investment income, net of tax
   
0.5
     
0.2
 
Adjusted net income (loss)
 
$
14.1
   
$
(4.8
)
Diluted adjusted net income (loss) per share
 
$
0.60
   
$
(0.20
)
 
Adjusted net income is a non-GAAP financial metric and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Management believes that the use of this adjusted net income and adjusted net income per share provides investors and management useful information about the earnings impact of realized and unrealized investment gains or losses, as well as other non-recurring items impacting the Company’s results of operations. This non-GAAP metric does not consider all of the items associated with the Company’s operations as determined in accordance with GAAP. As a result, one should not consider these measures in isolation.
 
 
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