Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document


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

November 6, 2018
Date of Report (Date of earliest event reported)   

Evolent Health, Inc.
(Exact name of registrant as specified in its charter)
_________________________


Delaware 
001-37415
32-0454912
(State or other jurisdiction of
incorporation or organization)
Commission File Number: 
(IRS Employer
Identification No.)
 
800 N. Glebe Road, Suite 500, Arlington, Virginia 22203
 
 
(Address of principal executive offices)(zip code)
 
  
(571) 389-6000
(Registrant’s telephone number, including area code)
 
Not Applicable
(Former name, former address and former fiscal year, 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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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 November 6, 2018, Evolent Health, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2018, a copy of which is furnished herewith as Exhibit 99.1.
   
Item 9.01.  Financial Statements and Exhibits

(d) Exhibits

The following exhibits are being furnished with this Form 8-K
 
Exhibit


Number

Description








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 thereunto duly authorized.

EVOLENT HEALTH, INC.
 
 
By:
 /s/ Lydia Stone
Name:
Lydia Stone
Title:
Chief Accounting Officer
 
and Corporate Controller
 
 
By:
 /s/ Jonathan Weinberg
Name:
Jonathan Weinberg
Title:
General Counsel and Secretary


Dated: November 6, 2018





EXHIBIT INDEX

Exhibit
 
 
Number
 
Description
 
 
 



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

 
395661524_evhlogoa04.jpg

 
 

Evolent Health Announces Third Quarter 2018 Results
WASHINGTON, D.C., November 6, 2018Evolent Health, Inc. (NYSE: EVH), a company providing an integrated value-based care platform to the nation’s leading health systems and physician organizations, today announced financial results for the quarter ended September 30, 2018.

Highlights from the third quarter of 2018 announcement include (all comparisons are to the quarter ended September 30, 2017):

GAAP revenue of $149.9 million, an increase of 39.0%; Adjusted Revenue of $150.2 million, an increase of 38.6%
Net income (loss) attributable to Evolent Health, Inc. of $(12.4) million, Adjusted EBITDA of $4.8 million
Lives on platform of approximately 3.1 million, an increase of 16.4%
Expanded opportunity with SOMOS IPA (“SOMOS”). The New York State Department of Health recently announced that SOMOS has been approved to participate in the Innovator program. Working closely with Evolent, SOMOS intends to contract with Managed Care Organizations (MCOs) to take on delegated risk and coordinate care for Medicaid enrollees in the greater New York metropolitan region.
Entered into a definitive agreement to acquire New Century Health (“NCH”), a technology-enabled, specialty care management company focused primarily on cancer and cardiac care supporting approximately 462,000 Medicare Advantage lives. As of the October 1, 2018 transaction close date, NCH is a full subsidiary of Evolent Health.

Frank Williams, Chief Executive Officer of Evolent Health, Inc., commented, “We are quite pleased with our third quarter results and our continued strong performance in 2018. Coupled with the recent positive movement in the health care policy environment, our success in driving clinical and financial improvement for our partners has served as a catalyst in growing our pipeline and adding nine new partners to the Evolent network this year.”

Mr. Williams commented, “We are delighted to announce that one of our new partners, SOMOS, has received a new contracting designation as a Value-Based Payment Innovator in New York. As a participant in the Innovator program, SOMOS is now able to pursue delegated risk arrangements with MCOs responsible for more than one million Medicaid managed care lives in the greater New York metropolitan region. We look forward to supporting SOMOS in its clinical operations as a Value-Based Payment Innovator and continuing to support its efforts in New York State’s Delivery System Reform Incentive Payment program. As an organization with such deep ties to the communities it serves, SOMOS is well-positioned to make a significant impact on the health of New York’s Medicaid population.”

Mr. Williams added, “We are also pleased to report that, together, our Evolent teams and Medicaid partners in Florida—Lee Health, Baptist Health Care and Nicklaus Children’s Health System—are making great strides to meet the state regulator’s readiness requirements for the launch of three new Medicaid health plans. The plans are slated to begin operations at staggered start dates across late 2018 and early 2019, and we’re excited to see the value these provider-led plans can bring to thousands of beneficiaries in one of the largest Medicaid populations in the U.S.


1



Mr. Williams concluded, “As we approach the end of 2018, the Evolent team is highly focused on driving strong results for our network, which has surpassed 35 partners. The team is also focused on onboarding several new partners at the beginning of 2019. We are excited about the addition of NCH to our portfolio of solutions focused on managing total cost of care. NCH has a proven track record of delivering impressive results for its partners, both from a clinical quality and financial standpoint in the specialty care management areas of oncology and cardiology. We look forward to collaborating with the talented NCH team and exploring a number of market opportunities going forward.”

Financial Results of Evolent Health, Inc.

In our earnings releases, prepared remarks, conference calls, slide presentations and webcasts, we may use or discuss non-GAAP financial measures. Definitions of the non-GAAP financial measures, as well as reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this earnings release. See “Financial Statement Presentation” and “Non-GAAP Financial Measures” for more information.

Reported Results

Evolent Health, Inc. reported the following United States of America generally accepted accounting principles (“GAAP”) results:

Total revenue of $149.9 million and $107.9 million for the three months ended September 30, 2018 and 2017, respectively, an increase of 39.0%;
Services revenue of $130.9 million for the three months ended September 30, 2018, before intersegment eliminations of $(3.5) million; and
True Health premiums revenue of $22.8 million before intersegment eliminations of $0.2 million.
Cost of revenue of $74.0 million and $68.3 million for the three months ended September 30, 2018 and 2017, respectively, an increase of 8.3%;
Claims expenses of $17.0 million for the three months ended September 30, 2018;
Selling, general and administrative expenses of $59.6 million and $45.8 million for the three months ended September 30, 2018 and 2017, respectively, an increase of 30.0%;
Net income (loss) attributable to Evolent Health, Inc. of $(12.4) million and $(12.6) million for the three months ended September 30, 2018 and 2017, respectively;
Earnings (loss) available to common shareholders, basic and diluted, of $(12.4) million and $(12.6) million for the three months ended September 30, 2018 and 2017, respectively; and
Earnings (loss) available to common shareholders, per basic and diluted share, of $(0.16) and $(0.18) for the three months ended September 30, 2018 and 2017, respectively.

Total cash and cash equivalents as of September 30, 2018, were $221.8 million.


2



Adjusted Results

Adjusted Revenue of $150.2 million and $108.4 million for the three months ended September 30, 2018 and 2017, respectively, an increase of 38.6%;
Adjusted Services Revenue of $131.1 million for the three months ended September 30, 2018, before intersegment eliminations of $(3.5) million; and
True Health premiums revenue of $22.8 million for the three months ended September 30, 2018, before intersegment eliminations of $(0.2) million.
Adjusted Cost of Revenue of $73.0 million and $65.7 million for the three months ended September 30, 2018 and 2017, respectively, an increase of 11.1%;
Claims expenses of $17.0 million for the three months ended September 30, 2018;
Adjusted Selling, General and Administrative Expenses of $55.4 million and $40.0 million for the three months ended September 30, 2018 and 2017, respectively, an increase of 38.3%;
Adjusted EBITDA of $4.8 million and $2.6 million for the three months ended September 30, 2018 and 2017, respectively;
Services Adjusted EBITDA of $4.1 million for three months ended September 30, 2018; and
True Health Adjusted EBITDA of $0.7 million for the three months ended September 30, 2018.
Adjusted Earnings (Loss) Available for Class A and Class B Shareholders of $(3.0) million and $(3.2) million for the three months ended September 30, 2018 and 2017, respectively; and
Adjusted Earnings (Loss) per Share Available for Class A and Class B Shareholders of $(0.04) and $(0.04) for the three months ended September 30, 2018 and 2017, respectively.

Business Outlook

The fourth quarter will be the first time that we will include the results of NCH subsequent to closing the acquisition on October 1, 2018. We are not providing forward looking guidance for GAAP reported financial measures. A reconciliation of forward looking non-GAAP financial measures to the most comparable GAAP financial measure is provided in the “Guidance Reconciliation” table below. For the full year 2018, Adjusted Revenue is expected to be in the range of approximately $624.0 million to $629.0 million. The components of Adjusted Revenue include Adjusted Services Revenue, which is forecasted to be approximately $548.0 million to $552.0 million, and True Health premiums revenue, which is forecasted to be approximately $91.0 million to $92.0 million; intersegment eliminations are forecasted to be approximately $(15.5) million for the full year. Adjusted EBITDA is expected to be in the range of approximately $22.5 million to $24.5 million.

For the three months ended December 31, 2018, Adjusted Revenue is expected to be in the range of approximately $185.0 million to $190.0 million. The components of Adjusted Revenue include Adjusted Services Revenue, which is forecasted to be approximately $167.0 million to $171.0 million, and True Health premiums revenue, which is forecasted to be approximately $22.0 million to $23.0 million; intersegment eliminations are forecasted to be approximately $(4.0) million for the quarter. Within Adjusted Services Revenue, we are forecasting the contribution from NCH to be within the range of $44.0 million to $46.0 million. Adjusted EBITDA is expected to be in the range of approximately $5.0 million to $7.0 million. Adjusted EBITDA from NCH is forecasted to be approximately $4.0 million.

This “Business Outlook” section contains forward-looking statements, and actual results may differ materially. Factors that may cause actual results to differ materially from our current expectations are set forth below in “Forward Looking Statements - Cautionary Language” and Evolent Health, Inc.’s filings with the Securities and Exchange Commission (“SEC”).


3



Web and Conference Call Information
As previously announced, Evolent Health, Inc. will hold a conference call to discuss its third quarter performance this evening, November 6, 2018, at 5:00 p.m., Eastern Time. The conference call will be available via live webcast on the Company’s Investor Relations website at http://ir.evolenthealth.com. To participate by telephone, dial 855.940.9467 or 412.317.6034 for international callers, and ask to join the Evolent Health call. Participants are advised to dial in at least fifteen minutes prior to the call to register. The call will be archived on the company’s website for one week and will be available beginning later this evening. Evolent Health invites all interested parties to attend the conference call.
###
About Evolent Health
Evolent Health partners with leading provider organizations to achieve superior clinical and financial results in value-based care and under full-risk arrangements. With a provider heritage and over 20 years of health plan administration experience, Evolent operates in more than 30 U.S. health care markets, actively managing care across Medicare, Medicaid, commercial and self-funded adult and pediatric populations. With the experience to drive change, Evolent confidently stands by a commitment to achieve results. For more information, visit www.evolenthealth.com.

Contacts:

Bob East
Robin Glass
443.213.0500
571.389.6005
Investor Relations
Media Relations
InvestorRelations@evolenthealth.com
RGlass@evolenthealth.com

Financial Statement Presentation
Evolent Health, Inc. is a holding company and its principal asset is all of the Class A common units in its operating subsidiary, Evolent Health LLC, which has owned all of our operating assets and substantially all of our business since inception. The financial results of Evolent Health LLC are consolidated in the financial statements of Evolent Health, Inc.
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in accordance with GAAP, we present and discuss Adjusted Revenue, Adjusted Services Revenue, Adjusted Transformation Services Revenue, Adjusted Platform and Operations Services Revenue, Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses, Adjusted Depreciation and Amortization Expenses, Adjusted Total Operating Expenses, Adjusted Operating Income (Loss), Adjusted EBITDA, Services Adjusted EBITDA, True Health Adjusted EBITDA, Adjusted Earnings (Loss) Available to Class A and Class B Shareholders, Adjusted Earnings (Loss) per Share Available to Class A and Class B Shareholders and Adjusted Weighted-Average Class A and Class B Shares, which are all non-GAAP financial measures, as supplemental measures to help investors evaluate our fundamental operational performance.

Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue are defined as transformation services revenue and platform and operations services revenue, respectively, before the effect of intersegment eliminations and adjusted to exclude the impact of purchase accounting adjustments. In addition, the company’s Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue for the nine months ended September 30, 2018, include a $4.5 million adjustment related to revenue that was contracted for prior to 2018 and that was properly excluded from revenue in our 2017 results under the revenue recognition rules then in effect under Accounting Standards

4



Codification (“ASC”) 605. On January 1, 2018, we adopted the new revenue recognition rules under ASC 606 using the modified retrospective method, which required us to include this $4.5 million as part of the cumulative transition adjustment to beginning retained earnings as of January 1, 2018. Under ASC 605, and based on proportionate performance revenue recognition, we would have recognized an additional $4.5 million in revenue during 2018, primarily within our Adjusted Transformation Services Revenue. The company has therefore included this revenue, and related profit, in its adjusted results for the nine months ended September 30, 2018, as they had not been previously reported prior to 2018 and the contracts are expected to be completed within 2018. This is a one-time adjustment and it will not reoccur in future periods.

Adjusted Services Revenue is defined as the sum of Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue. Adjusted Revenue is defined as the sum of Adjusted Services Revenue and True Health premiums revenue, less relevant intersegment eliminations. Management uses Adjusted Revenue, Adjusted Services Revenue, Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue as supplemental performance measures because they reflect a complete view of the operational results. The measures are also useful to investors because they reflect the full view of our operational performance in line with how we generate our long term forecasts.

Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses are defined as cost of revenue and selling, general and administrative expenses, respectively, adjusted to exclude the impact of stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, transaction costs related to acquisitions and business combinations, securities offerings and other one-time adjustments. Management uses Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses as supplemental performance measures, which are also useful to investors, because they facilitate an understanding of our long term operational costs while removing the effect of costs that are one-time (e.g. transaction costs) and non-cash (e.g. stock-based compensation expenses) in nature. Additionally, these supplemental performance measures facilitate understanding a breakdown of our Adjusted Total Operating Expenses.

Adjusted Depreciation and Amortization Expenses is defined as depreciation and amortization expenses adjusted to exclude the impact of amortization expenses related to intangible assets acquired through acquisitions and business combinations. Management uses Adjusted Depreciation and Amortization Expenses as a supplemental performance measure because it reflects a complete view of the operational results. The measure is also useful to investors because it facilitates understanding a breakdown of our Adjusted Total Operating Expenses.

Adjusted Total Operating Expenses is defined as the sum of Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses and Adjusted Depreciation and Amortization Expenses, and reflects the adjustments made in those non-GAAP measures. Adjusted Total Operating Expenses is adjusted to exclude the impact of one-time adjustments, such as goodwill impairment, severance costs, and items arising from acquisitions and business combinations, such as changes in fair value of contingent consideration and indemnification assets.

Adjusted Operating Income (Loss) is defined as Adjusted Revenue less Adjusted Total Operating Expenses, and reflects the adjustments made in those non-GAAP measures.

Adjusted EBITDA is the sum of Services Adjusted EBITDA and True Health Adjusted EBITDA and is defined as EBITDA (net income (loss) attributable to Evolent Health, Inc. before interest income, interest expense, (provision) benefit for income taxes, depreciation and amortization expenses), adjusted to exclude, changes in fair value of contingent consideration and indemnification assets, income (loss) from equity method investees, other income (expense), net, net (income) loss attributable to non-controlling interests, purchase accounting adjustments, stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, transaction costs related to acquisitions and business combinations and other one-time adjustments (which for the nine months ended

5



September 30, 2018, includes the ASC 606 transition adjustment described above). Management uses Adjusted EBITDA as a supplemental performance measure because the removal of transaction costs, one-time or non-cash items (e.g. depreciation, amortization and stock-based compensation expenses) allows us to focus on operational performance. We believe that this measure is also useful to investors because it allows further insight into the period over period operational performance in a manner that is comparable to other organizations in our industry and in the market in general.

Adjusted Earnings (Loss) Available to Class A and Class B Shareholders is defined as earnings (loss) available to common shareholders adjusted to exclude, income (loss) from equity method investees, (provision) benefit for income taxes, changes in fair value of contingent consideration and indemnification assets, net (income) loss attributable to non-controlling interests, purchase accounting adjustments, stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, transaction costs related to acquisitions and business combinations and other one-time adjustments (which for the nine months ended September 30, 2018, includes the ASC transition adjustment described above).

Adjusted Weighted-Average Class A and Class B Shares is defined as weighted average common shares (diluted) adjusted to include, in periods of net loss, the dilutive or potentially dilutive effect of the assumed conversion of Class B common shares to Class A common shares.

Adjusted Earnings (Loss) per Share Available to Class A and Class B Shareholders is defined as Adjusted Earnings (Loss) Available to Class A and Class B Shareholders divided by Adjusted Weighted-Average Class A and Class B Shares, and reflects the adjustments made in those non-GAAP measures.
 
Management uses Adjusted Earnings (Loss) Available to Class A and Class B Shareholders, Adjusted Weighted-Average Class A and Class B Shares and Adjusted Earnings (Loss) per Share Available to Class A and Class B Shareholders because these performance measures represent our core operating performance distributed amongst all of our investors which is not represented by the GAAP results across time due to our complex equity structure. We believe that these measures are also useful to investors for the same reason.

These adjusted measures do not represent and should not be considered as alternatives to GAAP measurements, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies. A reconciliation of these adjusted measures to their most comparable GAAP financial measures is presented in the tables below. We believe these measures are useful across time in evaluating our fundamental core operating performance.


6




Evolent Health, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(unaudited)
(in thousands, except per share data)
For the Three
 
For the Nine
 
Months Ended
 
Months Ended
 
September 30,
 
September 30,
 
2018
 
2017
 
2018
 
2017
Revenue
 
 
 
 
 
 
 
Transformation services
$
9,230

 
$
8,204

 
$
23,950

 
$
23,799

Platform and operations services
118,094

 
99,708

 
341,258

 
297,422

Premiums
22,623

 

 
68,751

 

Total revenue
149,947

 
107,912

 
433,959

 
321,221

 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization
 
 
 
 
 
 
 
expenses presented separately below)
73,967

 
68,281

 
214,945

 
203,804

Claims expenses
16,992

 

 
52,169

 

Selling, general and administrative expenses
59,566

 
45,834

 
172,495

 
150,474

Depreciation and amortization expenses
10,352

 
7,717

 
29,882

 
21,236

Change in fair value of contingent consideration and indemnification asset
100

 
100

 
(1,404
)
 
300

Total operating expenses
160,977

 
121,932

 
468,087

 
375,814

Operating income (loss)
(11,030
)
 
(14,020
)
 
(34,128
)
 
(54,593
)
Interest income
968

 
411

 
2,918

 
813

Interest expense
(853
)
 
(880
)
 
(2,561
)
 
(2,781
)
Income (loss) from equity method investees
(1,381
)
 
(369
)
 
(2,787
)
 
(1,446
)
Other Income (expense), net
(124
)
 
15

 
(64
)
 
21

Income (loss) before income taxes and
 
 
 
 
 
 
 
non-controlling interests
(12,420
)
 
(14,843
)
 
(36,622
)
 
(57,986
)
Provision (benefit) for income taxes
135

 
(1,714
)
 
29

 
(2,009
)
Net income (loss)
(12,555
)
 
(13,129
)
 
(36,651
)
 
(55,977
)
Net income (loss) attributable to non-controlling interests
(126
)
 
(541
)
 
(680
)
 
(8,471
)
Net income (loss) attributable to Evolent Health, Inc.
$
(12,429
)
 
$
(12,588
)
 
$
(35,971
)
 
$
(47,506
)
 
 
 
 
 
 
 
 
Earnings (Loss) Available to Common Shareholders
 
 
 
 
 
 
 
Basic
$
(12,429
)
 
$
(12,588
)
 
$
(35,971
)
 
$
(47,506
)
Diluted
(12,429
)
 
(12,588
)
 
(35,971
)
 
(47,506
)
 
 
 
 
 
 
 
 
Earnings (Loss) per Common Share
 
 
 
 
 
 
 
Basic
$
(0.16
)
 
$
(0.18
)
 
$
(0.47
)
 
$
(0.78
)
Diluted
(0.16
)
 
(0.18
)
 
(0.47
)
 
(0.78
)
 
 
 
 
 
 
 
 
Weighted-Average Common Shares Outstanding
 
 
 
 
 
 
 
Basic
77,999

 
70,328

 
76,871

 
60,867

Diluted
77,999

 
70,328

 
76,871

 
60,867

 
 
 
 
 
 
 
 
Comprehensive income (loss)
 
 
 
 
 
 
 
Net income (loss)
$
(12,555
)
 
$
(13,129
)
 
$
(36,651
)
 
$
(55,977
)
Other comprehensive income (loss), net of taxes, related to:
 
 
 
 
 
 
 
Foreign currency translation adjustment
(116
)
 

 
(264
)
 

Total comprehensive income (loss)
(12,671
)
 
(13,129
)
 
(36,915
)
 
(55,977
)
Total comprehensive income (loss) attributable to
 
 
 
 
 
 
 
non-controlling interests
(126
)
 
(541
)
 
(680
)
 
(8,471
)
Total comprehensive income (loss) attributable to
 
 
 
 
 
 
 
Evolent Health, Inc.
$
(12,545
)
 
$
(12,588
)
 
$
(36,235
)
 
$
(47,506
)

7



Evolent Health, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
 
(in thousands)
 
As of
 
 
As of
 
 
September 30,
December 31,
 
 
2018
 
 
2017
 
Cash and cash equivalents
 
$
221,837

 
 
$
238,433

 
Restricted cash
 
45,010

 
 
56,930

 
Restricted investments
 
712

 
 
8,755

 
Note receivable
 
6,000

 
 
20,000

 
Total current assets
 
348,591

 
 
378,182

 
Intangible assets, net
 
230,806

 
 
241,261

 
Goodwill
 
635,088

 
 
628,186

 
Total assets
 
1,322,676

 
 
1,312,697

 
 
 
 
 
 
 
 
Long-term debt, net of discount
 
122,082

 
 
121,394

 
Total liabilities
 
274,103

 
 
266,391

 
Total shareholders' equity (deficit) attributable to
 
 
 
 
 
 
Evolent Health, Inc.
 
1,038,565

 
 
1,010,879

 
Non-controlling interests
 
10,008

 
 
35,427

 
Total liabilities and shareholders' equity (deficit)
 
1,322,676

 
 
1,312,697

 


8



Evolent Health, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
 
(in thousands)
For the Nine
 
Months Ended
 
September 30,
 
2018
 
2017
Net cash and restricted cash provided by (used in) operating activities
$
4,317

 
$
(33,993
)
Net cash and restricted cash provided by (used in) investing activities
(24,933
)
 
15,967

Net cash and restricted cash provided by (used in) financing activities
(7,935
)
 
143,922

Effect of exchange rate on cash and cash equivalents and restricted cash
35

 

 
 
 
 
Net increase (decrease) in cash and cash equivalents and restricted cash
(28,516
)
 
125,896

Cash and cash equivalents and restricted cash as of beginning-of-period
295,363

 
170,029

Cash and cash equivalents and restricted cash as of end-of-period
$
266,847

 
$
295,925



9



Evolent Health, Inc.
Reconciliation of Adjusted Results of Operations
(unaudited)
(in thousands)
For the Three Months Ended September 30, 2018
 
 
For the Three Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evolent Health, Inc.
 
Evolent Health, Inc.
 
Evolent
 
 
 
Evolent
 
 
Evolent
 
 
 
Evolent
 
as Reported
 
as Adjusted
 
Health, Inc.
 
 
 
Health, Inc.
 
 
Health, Inc.
 
 
 
Health, Inc.
 
Change Over Prior Period
 
Change Over Prior Period
 
as Reported
 
Adjustments
 
as Adjusted
 
 
as Reported
 
Adjustments
 
as Adjusted
 
$
 
%
 
$
 
%
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transformation services
$
9,230

 
$

 
$
9,230

 
 
$
8,204

 
$

 
$
8,204

 
$
1,026

 
12.5
%
 
$
1,026

 
12.5
 %
Platform and operations services (1)
118,094

 
214

 
118,308

 
 
99,708

 
449

 
100,157

 
18,386

 
18.4
%
 
18,151

 
18.1
 %
Premiums
22,623

 

 
22,623

 
 

 

 

 
22,623

 
%
 
22,623

 
 %
Total revenue
149,947

 
214

 
150,161

 
 
107,912

 
449

 
108,361

 
42,035

 
39.0
%
 
41,800

 
38.6
 %
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue (exclusive of
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
depreciation and amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
expenses presented
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
separately below) (2)
73,967

 
(988
)
 
72,979

 
 
68,281

 
(2,613
)
 
65,668

 
5,686

 
8.3
%
 
7,311

 
11.1
 %
Claims expenses
16,992

 

 
16,992

 
 

 

 

 
16,992

 
%
 
16,992

 
 %
Selling, general and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
administrative expenses (3)
59,566

 
(4,173
)
 
55,393

 
 
45,834

 
(5,789
)
 
40,045

 
13,732

 
30.0
%
 
15,348

 
38.3
 %
Depreciation and amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
expenses (4)
10,352

 
(2,739
)
 
7,613

 
 
7,717

 
(2,349
)
 
5,368

 
2,635

 
34.1
%
 
2,245

 
41.8
 %
Change in fair value of contingent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
consideration and indemnification asset (5)
100

 
(100
)
 

 
 
100

 
(100
)
 

 

 
%
 

 
 %
Total operating expenses
160,977

 
(8,000
)
 
152,977

 
 
121,932


(10,851
)

111,081

 
39,045

 
32.0
%
 
41,896

 
37.7
 %
Operating income (loss)
$
(11,030
)
 
$
8,214

 
$
(2,816
)
 
 
$
(14,020
)
 
$
11,300

 
$
(2,720
)
 
$
2,990

 
21.3
%
 
$
(96
)
 
(3.5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total operating expenses as a


 
 
 


 
 


 
 
 


 
 
 
 
 
 
 
 
percentage of total revenue
107.4
%
 
 
 
101.9
%
 
 
113.0
%
 
 
 
102.5
%
 
 
 
 
 
 
 
 

(1) 
Adjustments to platform and operations services revenue include deferred revenue purchase accounting adjustments of approximately $0.2 million and $0.4 million for the three months ended September 30, 2018 and 2017, respectively, resulting from our acquisitions and business combinations.
(2) 
Adjustments to cost of revenue include approximately $0.4 million and $0.4 million in stock-based compensation expense for the three months ended September 30, 2018 and 2017, respectively. The adjustments also include approximately $0.6 million related to the amortization of contract cost assets recorded as a result of the one-time ASC 606 transition adjustment for the three months ended September 30, 2018. Adjustments also include transaction costs of approximately $2.2 million for the three months ended September 30, 2017, resulting from acquisitions and business combinations.
(3) 
Adjustments to selling, general and administrative expenses include $3.7 million and $5.3 million in stock-based compensation expense for the three months ended September 30, 2018 and 2017, respectively. Adjustments also include transaction costs of $0.5 million and $0.5 million for the three months ended September 30, 2018 and 2017, respectively, resulting from acquisitions and business combinations and costs relating to our securities offerings.
(4) 
Adjustments to depreciation and amortization expenses of approximately $2.7 million and $2.3 million for the three months ended September 30, 2018 and 2017, respectively, relate to amortization of intangible assets acquired via asset acquisition and business combinations.
(5) 
The adjustment reverses the impact of changes in fair value of our contingent consideration that was assumed as part of a business combination during 2016.

10



Evolent Health, Inc.
Reconciliation of Adjusted Results of Operations
(unaudited)
(in thousands)
For the Nine Months Ended September 30, 2018
 
 
For the Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evolent Health, Inc.
 
Evolent Health, Inc.
 
Evolent
 
 
 
Evolent
 
 
Evolent
 
 
 
Evolent
 
as Reported
 
as Adjusted
 
Health, Inc.
 
 
 
Health, Inc.
 
 
Health, Inc.
 
 
 
Health, Inc.
 
Change Over Prior Period
 
Change Over Prior Period
 
as Reported
 
Adjustments
 
as Adjusted
 
 
as Reported
 
Adjustments
 
as Adjusted
 
$
 
%
 
$
 
%
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transformation services (1)
$
23,950

 
$
3,655

 
$
27,605

 
 
$
23,799

 
$

 
$
23,799

 
$
151

 
0.6
 %
 
$
3,806

 
16.0
%
Platform and operations services (1)
341,258

 
1,490

 
342,748

 
 
297,422

 
1,224

 
298,646

 
43,836

 
14.7
 %
 
44,102

 
14.8
%
Premiums
68,751

 

 
68,751

 
 

 

 

 
68,751

 
 %
 
68,751

 
%
Total revenue
433,959

 
5,145

 
439,104

 
 
321,221

 
1,224

 
322,445

 
112,738

 
35.1
 %
 
116,659

 
36.2
%
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue (exclusive of
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
depreciation and amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
expenses presented
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
separately below) (2)
214,945

 
(3,439
)
 
211,506

 
 
203,804

 
(5,473
)
 
198,331

 
11,141

 
5.5
 %
 
13,175

 
6.6
%
Claims expenses
52,169

 

 
52,169

 
 

 

 

 
52,169

 
 %
 
52,169

 
%
Selling, general and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
administrative expenses (3)
172,495

 
(14,661
)
 
157,834

 
 
150,474

 
(20,671
)
 
129,803

 
22,021

 
14.6
 %
 
28,031

 
21.6
%
Depreciation and amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
expenses (4)
29,882

 
(8,144
)
 
21,738

 
 
21,236

 
(7,057
)
 
14,179

 
8,646

 
40.7
 %
 
7,559

 
53.3
%
Change in fair value of contingent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
consideration and indemnification asset (5)
(1,404
)
 
1,404

 

 
 
300

 
(300
)
 

 
(1,704
)
 
(568.0
)%
 

 
%
Total operating expenses
468,087

 
(24,840
)
 
443,247

 
 
375,814

 
(33,501
)
 
342,313

 
92,273

 
24.6
 %
 
100,934

 
29.5
%
Operating income (loss)
$
(34,128
)
 
$
29,985

 
$
(4,143
)
 
 
$
(54,593
)
 
$
34,725

 
$
(19,868
)
 
$
20,465

 
37.5
 %
 
$
15,725

 
79.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total operating expenses as a
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
percentage of total revenue
107.9
%
 
 
 
100.9
%
 
 
117.0
%
 
 
 
106.2
%
 
 
 
 
 
 
 
 

(1) 
Adjustments to transformation services revenue and platform and operations services revenue for the nine months ended September 30, 2018, include approximately $3.7 million and $0.8 million, respectively, resulting from our transition adjustments related to the implementation of ASC 606. Adjustments to platform and operations services revenue also include deferred revenue purchase accounting adjustments of approximately $0.6 million and $1.2 million for the nine months ended September 30, 2018 and 2017, respectively, resulting from our acquisitions and business combinations.
(2) 
Adjustments to cost of revenue include $1.1 million and $1.1 million in stock-based compensation expense for the nine months ended September 30, 2018 and 2017, respectively. The adjustments also include $1.7 million related to the amortization of contract cost assets recorded as a result of the one-time ASC 606 transition adjustment and $0.7 million of one-time severance costs for the nine months ended September 30, 2018. Adjustments for the nine months ended September 30, 2017 also include transaction costs of approximately $4.3 million resulting from acquisitions and business combinations.
(3) 
Adjustments to selling, general and administrative expenses include $11.4 million and $15.0 million in stock-based compensation expense for the nine months ended September 30, 2018 and 2017, respectively. Adjustments also include transaction costs of $2.3 million and $5.6 million for the nine months ended September 30, 2018 and 2017, respectively, resulting from acquisitions and business combinations and costs relating to our securities offerings. The adjustments also include $0.1 million related to the amortization of contract cost assets recorded as a result of the one-time ASC 606 transition adjustment and $0.8 million of one-time severance costs for the nine months ended September 30, 2018.
(4) 
Adjustments to depreciation and amortization expenses of approximately $8.1 million and $7.1 million for the nine months ended September 30, 2018 and 2017, respectively, relate to amortization of intangible assets acquired via asset acquisition and business combinations.
(5) 
The adjustment reverses the impact of changes in fair value of our contingent consideration and indemnification asset that were acquired through business combinations during 2016.

11



Evolent Health, Inc.
Segment Results
(unaudited)

 
 
 
 
 
 
 
Intersegment
 
 
 
 
 
Services
 
True Health (1)
Eliminations
Consolidated
Adjusted Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Services:
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Transformation Services
 
$
9,230

 
 
$

 
 
$

 
 
$
9,230

 
Adjusted Platform and Operations Services
 
121,845

 
 

 
 
(3,537
)
 
 
118,308

 
Adjusted Services Revenue
 
131,075

 
 

 
 
(3,537
)
 
 
127,538

 
True Health:
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 

 
 
22,829

 
 
(206
)
 
 
22,623

 
Adjusted Revenue
 
131,075

 
 
22,829

 
 
(3,743
)
 
 
150,161

 
Purchase accounting adjustments (2)
 
(214
)
 
 

 
 

 
 
(214
)
 
Total revenue
 
$
130,861

 
 
$
22,829

 
 
$
(3,743
)
 
 
$
149,947

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Services:
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Transformation Services
 
$
8,204

 
 
$

 
 
$

 
 
$
8,204

 
Adjusted Platform and Operations Services
 
100,157

 
 

 
 

 
 
100,157

 
Adjusted Services Revenue
 
108,361

 
 

 
 

 
 
108,361

 
Adjusted Revenue
 
108,361

 
 

 
 

 
 
108,361

 
Purchase accounting adjustments (2)
 
(449
)
 
 

 
 

 
 
(449
)
 
Total revenue
 
$
107,912

 
 
$

 
 
$

 
 
$
107,912

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments
 
 
 
 
 
 
Services
 
True Health (1)
Total
 
Three Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
$
4,065

 
 
$
732

 
 
$
4,797

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
$
2,648

 
 
$

 
 
$
2,648

 
 
 
 

(1) 
The True Health segment was created in January 2018.
(2) 
Purchase accounting adjustments pertain to Adjusted Platform and Operations Services Revenue. There were no purchase accounting adjustments in relation to Adjusted Transformation Services Revenue or True Health premiums revenue.

12



Evolent Health, Inc.
Segment Results
(unaudited)

 
 
 
 
 
 
 
Intersegment
 
 
 
 
 
Services
 
True Health (1)
Eliminations
Consolidated
Adjusted Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Services:
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Transformation Services
 
$
27,605

 
 
$

 
 
$

 
 
$
27,605

 
Adjusted Platform and Operations Services
 
353,697

 
 

 
 
(10,949
)
 
 
342,748

 
Adjusted Services Revenue
 
381,302

 
 

 
 
(10,949
)
 
 
370,353

 
True Health:
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 

 
 
69,353

 
 
(602
)
 
 
68,751

 
Adjusted Revenue
 
381,302

 
 
69,353

 
 
(11,551
)
 
 
439,104

 
ASC 606 transition adjustment (2)
 
(4,498
)
 
 

 
 

 
 
(4,498
)
 
Purchase accounting adjustments (3)
 
(647
)
 
 

 
 

 
 
(647
)
 
Total revenue
 
$
376,157

 
 
$
69,353

 
 
$
(11,551
)
 
 
$
433,959

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Services:
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Transformation Services
 
$
23,799

 
 
$

 
 
$

 
 
$
23,799

 
Adjusted Platform and Operations Services
 
298,646

 
 

 
 

 
 
298,646

 
Adjusted Services Revenue
 
322,445

 
 

 
 

 
 
322,445

 
Adjusted Revenue
 
322,445

 
 

 
 

 
 
322,445

 
Purchase accounting adjustments (3)
 
(1,224
)
 
 

 
 

 
 
(1,224
)
 
Total revenue
 
$
321,221

 
 
$

 
 
$

 
 
$
321,221

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segments
 
 
 
 
 
 
Services
 
True Health (1)
Total
 
Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
$
16,674

 
 
$
921

 
 
$
17,595

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
$
(5,689
)
 
 
$

 
 
$
(5,689
)
 
 
 
 

(1) 
The True Health segment was created in January 2018.
(2) 
Adjustment to Adjusted Transformation Services Revenue was approximately $3.7 million and the adjustment to Adjusted Platform and Operations Services Revenue was approximately $0.8 million. See “Non-GAAP Financial Measures” above for more information on adjustments pertaining to the implementation of ASC 606.
(3) 
Purchase accounting adjustments pertain to Adjusted Platform and Operations Services Revenue. There were no purchase accounting adjustments in relation to Adjusted Transformation Services Revenue or True Health premiums revenue.


13




Evolent Health, Inc.
Reconciliation of Adjusted EBITDA to Net Income (Loss)
Attributable to Evolent Health, Inc.
(unaudited)
 
(in thousands)
For the Three
 
For the Nine
 
Months Ended
 
Months Ended
 
September 30,
 
September 30,
 
2018
 
2017
 
2018
 
2017
Net Income (Loss) Attributable to
 
 
 
 
 
 
 
Evolent Health, Inc.
$
(12,429
)
 
$
(12,588
)
 
$
(35,971
)
 
$
(47,506
)
Less:
 
 
 
 
 
 
 
Interest income
968

 
411

 
2,918

 
813

Interest expense
(853
)
 
(880
)
 
(2,561
)
 
(2,781
)
(Provision) benefit for income taxes
(135
)
 
1,714

 
(29
)
 
2,009

Depreciation and amortization expenses
(10,352
)
 
(7,717
)
 
(29,882
)
 
(21,236
)
EBITDA
(2,057
)
 
(6,116
)
 
(6,417
)
 
(26,311
)
Less:
 
 
 
 
 
 
 
Income (loss) from equity method investees
(1,381
)
 
(369
)
 
(2,787
)
 
(1,446
)
Change in fair value of contingent
 
 
 
 
 
 
 
consideration and indemnification asset
(100
)
 
(100
)
 
1,404

 
(300
)
Other income (expense), net
(124
)
 
15

 
(64
)
 
21

Net (income) loss attributable to
 
 
 
 
 
 
 
non-controlling interests
126

 
541

 
680

 
8,471

ASC 606 transition adjustments

 

 
(4,498
)
 

Purchase accounting adjustments
(214
)
 
(449
)
 
(647
)
 
(1,224
)
Stock-based compensation expense
(4,047
)
 
(5,708
)
 
(12,560
)
 
(16,172
)
Severance costs

 

 
(1,489
)
 

Amortization of contract cost assets
(658
)
 

 
(1,797
)
 

Transaction costs
(456
)
 
(2,694
)
 
(2,254
)
 
(9,972
)
Adjusted EBITDA
$
4,797

 
$
2,648

 
$
17,595

 
$
(5,689
)


14



Evolent Health, Inc.
Reconciliation of Adjusted Earnings (Loss) Available to Class A and Class B
Shareholders to Earnings (Loss) Available to Common Shareholders
(unaudited)
 
(in thousands, except per share data)
For the Three
 
For the Nine
 
Months Ended
 
Months Ended
 
September 30,
 
September 30,
 
2018
 
2017
 
2018
 
2017
Earnings (Loss) Available to
 
 
 
 
 
 
 
Common Shareholders - Basic and Diluted (a)
$
(12,429
)
 
$
(12,588
)
 
$
(35,971
)
 
$
(47,506
)
Less:
 
 
 
 
 
 
 
Income (loss) from equity method investees
(1,381
)
 
(369
)
 
(2,787
)
 
(1,446
)
(Provision) benefit for income taxes

 
1,714

 
136

 
1,994

Change in fair value of contingent consideration
 
 
 
 
 
 
 
and indemnification asset
(100
)
 
(100
)
 
1,404

 
(300
)
Net (income) loss attributable to
 
 
 
 
 
 
 
non-controlling interests
126

 
541

 
680

 
8,471

ASC 606 Transition Adjustment

 

 
(4,498
)
 

Purchase accounting adjustments
(2,953
)
 
(2,800
)
 
(8,791
)
 
(8,369
)
Stock-based compensation expense
(4,047
)
 
(5,708
)
 
(12,560
)
 
(16,172
)
Severance costs

 

 
(1,489
)
 

Amortization of contract cost assets
(658
)
 

 
(1,797
)
 

Transaction costs
(456
)
 
(2,694
)
 
(2,254
)
 
(9,972
)
Adjusted Earnings (Loss) Available
 
 
 
 
 
 
 
to Class A and Class B Shareholders (b)
$
(2,960
)
 
$
(3,172
)
 
$
(4,015
)
 
$
(21,712
)
 
 
 
 
 
 
 
 
Earnings (Loss) per Share Available to
 
 
 
 
 
 
 
Common Shareholders - Basic and Diluted (a) (1)
$
(0.16
)
 
$
(0.18
)
 
$
(0.47
)
 
$
(0.78
)
 
 
 
 
 
 
 
 
Adjusted Earnings (Loss) per Share Available
 
 
 
 
 
 
 
to Class A and Class B Shareholders (b) (2)
$
(0.04
)
 
$
(0.04
)
 
$
(0.05
)
 
$
(0.31
)
 
 
 
 
 
 
 
 
Weighted-average common shares - basic
77,999

 
70,328

 
76,871

 
60,867

Weighted-average common shares - diluted
77,999

 
70,328

 
76,871

 
60,867

Adjusted Weighted-Average Class A
 
 
 
 
 
 
 
and Class B Shares (3)
78,765

 
72,982

 
78,122

 
69,713


(1) 
For periods of net loss, shares used in both the basic and diluted earnings per share calculation represent basic shares as using diluted shares would be anti-dilutive.
(2) 
Represents Adjusted Earnings (Loss) Available to Class A and Class B Shareholders divided by Adjusted Weighted-Average Class A and Class B Shares as described in footnote 3 below.
(3) 
Represents the weighted-average common shares (diluted) adjusted to include, in periods of net loss, the dilutive or potentially dilutive effect of the assumed conversion of Class B common shares to Class A common shares. See the reconciliation of Adjusted Weighted-Average Class A and Class B Shares to diluted weighted-average common shares on the following page.

15



Evolent Health, Inc.
Reconciliation of Adjusted Weighted-Average Class A and Class B
Shares to Diluted Weighted-Average Common Shares
(unaudited)
 
(in thousands)
For the Three
 
For the Nine
 
Months Ended
 
Months Ended
 
September 30,
 
September 30,
 
2018
 
2017
 
2018
 
2017
Weighted-average common shares - diluted
77,999

 
70,328

 
76,871

 
60,867

Assumed conversion of Class B common
 
 
 
 
 
 
 
shares to Class A common shares
766

 
2,654

 
1,251

 
8,846

Adjusted Weighted-Average Class A and Class B Shares
78,765

 
72,982

 
78,122

 
69,713



16



Evolent Health, Inc.
Guidance Reconciliation
(unaudited)
(in thousands)
For the Three
For the Twelve
 
Months Ended
Months Ended
 
December 31,
December 31,
 
 
2018
 
 
2018
 
Services revenue
 
$
168,800

 
 
$
544,700

 
Purchase accounting adjustments
 
200

 
 
800

 
ASC 606 transition adjustments
 

 
 
4,500

 
Adjusted Services Revenue
 
169,000

 
 
550,000

 
True Health premiums revenue
 
22,500

 
 
91,500

 
Intersegment eliminations
 
(4,000
)
 
 
(15,500
)
 
Adjusted Revenue
 
$
187,500

 
 
$
626,000

 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to
 
 
 
 
 
 
Evolent Health, Inc.
 
$
(18,600
)
 
 
$
(55,800
)
 
Less:
 
 
 
 
 
 
Interest income
 
1,700

 
 
4,400

 
Interest expense
 
(2,000
)
 
 
(4,500
)
 
Depreciation and amortization expenses
 
(11,700
)