Financial News

Bright Health Group Reports Fourth Quarter and Full Year 2022 Results

  • Q4’22 Results from Continuing Business: Revenue of $551.4 million, Net Loss of $188.2 million, Adjusted EBITDA Loss of $108.5 million
  • Full Year 2022 Results from Continuing Operations: Revenue of $2.4 billion, Net Loss of $638.0 million, Adjusted EBITDA Loss of $233.5 million
  • Maintaining expectation for 2023 Adjusted EBITDA profitability

Bright Health Group, Inc. (“Bright Health” or the “Company”) (NYSE: BHG), the technology enabled, value-driven healthcare company serving aging and underserved consumers with unmet clinical needs, today reported financial results for its fourth quarter and full year ended December 31, 2022.

“The Fourth Quarter and Fiscal Year of 2022 marked a year of significant transition, as we focus on our continuing business, which is anchored by our Consumer Care and Bright HealthCare segments, and successfully exit our ACA insurance business,” said Mike Mikan, President and CEO of Bright Health Group. “While we recognize the significant work ahead of us, we have conviction in our go-forward strategy. We are taking actions to best position the business for capital efficient, long-term growth as we work to build a strong foundation with value-driven care. We are also taking early, but meaningful, steps to refocus and simplify our business, while we are gaining more certainty on the final obligations for our discontinued operations and strengthening our capital position.”

“As we continue to expand our refined model, we are confident that the continuing business is well-suited to capitalize on both the market environment as it stands today and the significant future upside of the industry,” added Mr. Mikan. “Most importantly, none of this would be possible without our dedicated team. In the face of a challenging year, we are grateful for their unwavering commitment to our mission, making healthcare right, together.”

Key Metrics

 

As of December 31,

 

2022

 

2021

Consumer and Patient Metrics

 

 

 

Bright HealthCare Commercial Consumers

1,020,000

 

610,000

Bright HealthCare Medicare Advantage Consumers

125,000

 

117,000

Consumer Care Value-Based Consumers

530,000

 

170,000

 

Three Months Ended

 

Twelve Months Ended

($ in thousands)

December 31,

 

December 31,

 

2022

 

2021

 

2022

 

2021

Financial Metrics

 

 

 

 

 

 

 

Revenue

$

551,425

 

 

$

380,223

 

 

$

2,412,030

 

 

$

1,513,033

 

Medical Cost Ratio - Bright HealthCare(1)

 

100.1

%

 

 

96.9

%

 

 

93.9

%

 

 

97.3

%

Operating Cost Ratio

 

33.7

%

 

 

49.4

%

 

 

26.2

%

 

 

34.9

%

GAAP Net Loss(2)

$

(668,561

)

 

$

(816,165

)

 

$

(1,359,880

)

 

$

(1,178,365

)

Adjusted EBITDA (non-GAAP)

$

(108,516

)

 

$

(121,071

)

 

$

(233,489

)

 

$

(321,317

)

(1)

Medical Cost Ratio for Bright HealthCare for the three months ended December 31, 2022 and 2021, include a 210 basis point and 290 basis point, respectively, unfavorable impact from COVID-19 related costs. Medical Cost Ratio for the twelve months ended December 31, 2022 and 2021, include a 220 basis point and 460 basis point, respectively, unfavorable impact from COVID-19 related costs.

(2)

The GAAP Net Loss for the twelve months ended December 31, 2022 included EBITDA related adjustments from continuing operations of $404.5 million, and over $180 million of investment impairments, restructuring costs, goodwill and intangibles impairments and other exit related costs related to discontinued operations.

See the table at the end of this release for additional information and a reconciliation of the non-GAAP measure used in the table above.

Financial Outlook

For full year 2023, Bright Health Group is providing the following guidance and commentary:

Bright Health Group’s 2023 outlook remains consistent with the update provided in January 2023, but the company’s expectation for Revenue is now lower due to our finalized accounting treatment on certain value-based care contracts. Operating Cost expectations are unchanged, but is now forecast to be a higher percent of Revenue.

  • Bright Health Group’s Enterprise Revenue is expected to be between $2.9 billion and $3.1 billion.
  • On a segment basis, Bright HealthCare Revenue is expected to be greater than $1.8 billion, while Consumer Care Revenue is expected to be between $1.1 billion and $1.3 billion.
  • Enterprise Adjusted Operating Cost Ratio is expected to be between 13% and 14%
  • Bright Health Group expects to be Adjusted EBITDA profitable in 2023

Liquidity and Going Concern

Bright Health Group noted in a Form 8-K filed this morning that during the First Quarter of 2023 the Company breached the minimum liquidity covenant of its credit facility. Bright Health has been working cooperatively with its bank group and, as described in such Form 8-K, has entered into a waiver and amendment to its credit facility which reduced the minimum liquidity requirement until April 30th. As of February 24, 2023, the Company possesses more than $150 million in non-regulated cash, nearly all of which is in cash and cash equivalents. Additionally, the Company had over $2.8 billion of additional cash and short- or long-term investments held by its regulated insurance subsidiaries as of December 31, 2022.

Bright Health Group expects to file its Annual Report on Form 10-K within the next 15 days, which will include a disclosure around substantial doubt of the Company’s ability to continue as a “going concern”. This is predicated on the Company’s ability to obtain additional capital to fund our ongoing operations over the next twelve months. The Company’s management is actively engaged with its Board of Directors and the Company’s outside advisors to find the best long-term capital structure based on the Company’s size and financial expectations.

Earnings Conference Call

As previously announced, Bright Health Group will discuss the Company’s results, strategy, and outlook on a conference call with investors at 8:00 a.m. Eastern Time today. Bright Health Group will host a live webcast of this conference call which can be accessed from the Investor Relations page of the company’s website (investors.brighthealthgroup.com). Following the call, a webcast replay will be available on the same site. This earnings release and the Form 8-K filed March 1, 2023, can be accessed on the Investor Relations page of the Company’s website. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website. Accordingly, investors should monitor this portion of our website, in addition to following our press releases, U.S. Securities and Exchange Commission (“SEC”) filings and public conference calls and webcasts.

About Bright Health Group

Bright Health Group is a technology enabled, value-driven healthcare company that organizes and operates networks of affiliate care providers to be successful at managing population risk. We focus on serving aging and underserved consumers that have unmet clinical needs through our Fully Aligned Care Model in Florida, Texas and California, some of the largest markets in healthcare where 26% of the U.S. aging population call home. We believe everyone should have access to personal, affordable, and high-quality healthcare. Our mission is to Make healthcare right. Together. For more information, visit www.brighthealthgroup.com.

Notes

Reconciliations of projected Adjusted EBITDA and projected Adjusted Operating Cost Ratio to the most directly comparable GAAP financial measures are not provided because the Company is unable to provide such reconciliations without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. With respect to Adjusted EBITDA, these GAAP measures may include the impact of such items as interest expense, income tax expense, depreciation and amortization, impairment of goodwill or intangible assets, transaction costs, share-based compensation expense, changes in the fair value of equity securities, changes in the fair value of contingent consideration, contract termination costs, restructuring costs; and the tax effect of all such items. Historically, the Company has excluded these items from non-GAAP financial measures. With respect to Adjusted Operating Cost Ratio, these GAAP measures may include the impact of such items as stock-based compensation, changes in the fair value of contingent consideration, contract termination costs, and depreciation and amortization. The Company currently expects to continue to exclude these items in future disclosures of non-GAAP financial measures and may also exclude other items that may arise (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments, such as a decision to exit part of the business, are inherently unpredictable as to if or when they may occur. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.

Forward-Looking Statements

Statements made in this release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “projections,” “outlook,” “ensure,” and other similar expressions. These forward-looking statements include any statements regarding our plans and expectations with respect to Bright Health Group, Inc. Such forward-looking statements are subject to various risks, uncertainties and assumptions. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Factors that might materially affect such forward-looking statements include: our ability to continue as a going concern; our ability to comply with the terms of our credit facility, including financial covenants, both during and after any waiver period, and/or obtain any additional waivers of any terms of our credit facility to the extent required; our ability to quickly and efficiently wind down our IFP businesses and MA businesses outside of California; potential disruptions to our business due to our corporate restructuring and resulting headcount reduction; our ability to accurately estimate and effectively manage the costs relating to changes in our businesses offerings and models; a delay or inability to withdraw regulated capital from our subsidiaries; a lack of acceptance or slow adoption of our business model; our ability to retain existing consumers and expand consumer enrollment; our and our Care Partner’s abilities to obtain and accurately assess, code, and report risk adjustment factor scores; our ability to contract with care providers and arrange for the provision of quality care; our ability to accurately estimate our medical expenses, effectively manage our costs and claims liabilities or appropriately price our products and charge premiums; our ability to obtain claims information timely and accurately; the impact of the ongoing COVID-19 pandemic on our business and results of operations; the risks associated with our reliance on third-party providers to operate our business; the impact of modifications or changes to the U.S. health insurance markets; our ability to manage the growth of our business; our ability to operate, update or implement our technology platform and other information technology systems; our ability to retain key executives; our ability to successfully pursue acquisitions and integrate acquired businesses; the occurrence of severe weather events, catastrophic health events, natural or man-made disasters, and social and political conditions or civil unrest; our ability to prevent and contain data security incidents and the impact of data security incidents on our members, patients, employees and financial results; our ability to comply with requirements to maintain effective internal controls; our ability to adapt to the new risks associated with our expansion into ACO Reach; and the other factors set forth under the heading “Risk Factors” in the Company’s reports on Form 10-K, Form 10-Q, and Form 8-K (including all amendments to those reports) and our other filings with the SEC. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or changes in our expectations.

 

Bright Health Group, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)

 

 

As of December 31,

 

2022

 

2021

Assets

Current assets:

Cash and cash equivalents

$

466,325

 

$

289,283

 

Short-term investments

 

13,206

 

 

144,477

 

Accounts receivable, net of allowance of $6,098 and $3,417, respectively

 

73,605

 

 

98,882

 

Direct contracting performance year receivable

 

99,181

 

 

 

 

Current assets of discontinued operations

 

2,783,474

 

 

 

1,027,345

 

Prepaids and other current assets

 

134,843

 

 

100,213

 

Total current assets

 

3,570,634

 

 

1,660,200

 

Other assets:

Long-term investments

 

5,401

 

 

18,608

 

Property, equipment and capitalized software, net

 

42,596

 

 

38,344

 

Goodwill

 

760,078

 

 

830,992

 

Intangible assets, net

 

249,083

 

 

336,995

 

Long-term assets of discontinued operations

 

 

 

 

668,695

 

Other non-current assets

 

37,260

 

 

44,505

 

Total other assets

 

1,094,418

 

 

1,938,139

 

Total assets

$

4,665,052

 

$

3,598,339

 

Liabilities, Redeemable Noncontrolling Interests, Redeemable Preferred Stock and Shareholders’ Equity (Deficit)

Current liabilities:

Medical costs payable

$

411,753

 

$

263,187

 

Accounts payable

 

67,854

 

 

57,888

 

Unearned revenue

 

242

 

 

2,585

 

Short-term borrowings

 

303,947

 

 

 

155,000

 

Current liabilities of discontinued operations

 

2,783,474

 

 

 

1,696,040

 

Other current liabilities

 

121,424

 

 

108,849

 

Total current liabilities

 

3,688,694

 

 

2,283,549

 

Other liabilities

 

36,673

 

 

41,263

 

Total liabilities

 

3,725,367

 

 

2,324,812

 

Redeemable noncontrolling interests

 

219,758

 

 

128,407

 

Redeemable Series A preferred stock, $0.0001 par value; 750,000 and — shares authorized in 2022 and 2021, respectively; 750,000 and — shares issued and outstanding in 2022 and 2021, respectively

 

747,481

 

 

 

Redeemable Series B preferred stock, $0.0001 par value; 175,000 shares authorized in 2022 and 2021, respectively; 175,000 and — shares issued and outstanding in 2022 and 2021, respectively

 

172,936

 

 

 

 

Shareholders’ equity (deficit):

Common stock, $0.0001 par value; 3,000,000,000 shares authorized in 2022 and 2021; 630,271,508 and 628,622,872 shares issued and outstanding in 2022 and 2021, respectively

 

63

 

 

63

 

Additional paid-in capital

 

2,972,271

 

 

2,861,243

 

Accumulated deficit

 

(3,156,395

)

 

(1,700,851

)

Accumulated other comprehensive (loss) income

 

(4,429

)

 

(3,335

)

Treasury stock, at cost, 2,522,148 shares at December 31, 2022 and 2021

 

(12,000

)

 

 

(12,000

)

Total shareholders’ equity (deficit)

 

(200,490

)

 

1,145,120

 

Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit)

$

4,665,052

 

$

3,598,339

 

 

Bright Health Group, Inc. and Subsidiaries

Consolidated Statements of Income (Loss)

(in thousands, except share and per share data)

(Unaudited)

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

2022

2021

 

2022

2021

Revenue:

 

 

 

 

 

 

 

Premium revenue

$

354,842

 

$

398,150

 

 

$

1,764,949

 

$

1,390,330

 

Direct Contracting revenue

 

188,652

 

 

 

 

 

 

654,087

 

 

 

 

Service revenue

 

10,731

 

 

11,028

 

 

 

48,013

 

 

42,469

 

Investment income

 

(2,800

)

 

(28,955

)

 

 

(55,019

)

 

80,234

 

Total revenue

 

551,425

 

 

380,223

 

 

 

2,412,030

 

 

1,513,033

 

Operating expenses:

 

 

 

 

 

Medical costs

 

519,291

 

 

359,820

 

 

 

2,206,243

 

 

1,294,158

 

Operating costs

 

185,731

 

 

187,797

 

 

 

632,030

 

 

527,453

 

Restructuring charges

 

20,869

 

 

 

 

 

 

31,739

 

 

 

 

Goodwill impairment

 

1,208

 

 

 

 

 

 

71,225

 

 

 

 

Intangible assets impairment

 

 

 

 

 

 

 

42,611

 

 

 

 

Depreciation and amortization

 

10,402

 

 

9,358

 

 

 

50,430

 

 

35,049

 

Total operating expenses

 

737,501

 

 

556,975

 

 

 

3,034,278

 

 

1,856,660

 

Operating loss

 

(186,076

)

 

(176,752

)

 

 

(622,248

)

 

(343,627

)

Interest expense

 

6,386

 

 

947

 

 

 

12,821

 

 

7,230

 

Other income

 

 

 

 

 

(784

)

 

(1,226

)

Loss from continuing operations before income taxes

 

(192,462

)

 

(177,699

)

 

 

(634,285

)

 

(349,631

)

Income tax (benefit) expense

 

(4,228

)

 

(8,295

)

 

 

3,680

 

 

(26,521

)

Net loss from continuing operations

 

(188,234

)

 

(169,404

)

 

 

(637,965

)

 

(323,110

)

Loss from discontinued operations, net of tax

 

(480,327

)

 

 

(646,761

)

 

 

(721,915

)

 

 

(855,255

)

Net loss

$

(668,561

)

 

$

(816,165

)

 

$

(1,359,880

)

 

$

(1,178,365

)

Net earnings from continuing operations attributable to noncontrolling interests

$

(11,012

)

$

(1,143

)

 

$

(95,664

)

$

(6,497

)

Series A preferred stock dividend accrued

$

(9,806

)

 

$

 

 

$

(37,889

)

 

$

 

Series B preferred stock dividend accrued

$

(1,798

)

 

$

 

 

$

(1,798

)

 

 

Net loss attributable to Bright Health Group, Inc. common shareholders

$

(691,177

)

$

(817,308

)

 

$

(1,495,231

)

$

(1,184,862

)

 

 

 

 

 

 

 

 

Basic and diluted loss per share attributable to Bright Health Group, Inc. common shareholders

 

 

 

 

 

 

 

Continuing operations

 

(0.34

)

 

(0.27

)

 

 

(1.23

)

 

(0.84

)

Discontinued operations

 

(0.76

)

 

 

(1.03

)

 

 

(1.15

)

 

 

(2.18

)

Basic and diluted loss per share

 

(1.10

)

 

 

(1.30

)

 

 

(2.38

)

 

 

(3.02

)

 

Bright Health Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

Twelve Months Ended December 31,

2022

 

2021

Cash flows from operating activities:

Net loss

$

(1,359,880

)

$

(1,184,862

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

 

50,575

 

 

35,484

 

Impairment of intangibles

 

49,331

 

 

 

 

Impairment of goodwill

 

75,372

 

 

 

 

Share-based compensation

 

109,713

 

 

68,423

 

Deferred income taxes

 

2,027

 

 

(25,654

)

Unrealized gain on equity securities

 

55,449

 

 

 

(80,231

)

Impairment of investments

 

67,723

 

 

 

 

Other, net

 

17,077

 

 

20,254

 

Changes in assets and liabilities, net of acquired assets and liabilities:

 

Accounts receivable

 

28,787

 

 

(32,941

)

Direct Contracting receivable

 

(99,181

)

 

 

 

Other assets

 

(14,744

)

 

(143,463

)

Medical cost payable

 

279,563

 

 

475,461

 

Risk adjustment payable

 

1,012,720

 

 

742,075

 

Accounts payable and other liabilities

 

2,727

 

 

192,611

 

Unearned revenue

 

(42,760

)

 

14,902

 

Net cash provided by operating activities

 

234,499

 

 

82,059

 

Cash flows used in investing activities:

 

 

 

Purchases of investments

 

(1,457,444

)

 

(1,017,588

)

Proceeds from sales, paydown, and maturities of investments

 

1,055,479

 

 

926,901

 

Purchases of property and equipment

 

(27,448

)

 

(30,414

)

Business acquisitions, net of cash acquired

 

(310

)

 

(431,791

)

Net cash used in investing activities

 

(429,723

)

 

(552,892

)

Cash flows from financing activities:

Proceeds from issuance of preferred stock

 

920,417

 

 

 

 

Proceeds from issuance of common stock

 

1,315

 

 

11,390

 

Net proceeds from short-term borrowings

 

148,947

 

 

 

155,000

 

Payments for debt issuance costs

 

 

 

 

(3,391

)

Distribution to noncontrolling interest holders

 

(4,311

)

 

 

 

Proceeds from IPO

 

 

 

 

887,328

 

Payments for IPO offering costs

 

 

 

(6,686

)

Net cash provided by financing activities

 

1,066,368

 

 

1,043,641

 

Net increase in cash and cash equivalents

 

871,144

 

 

572,808

 

Cash and cash equivalents – beginning of year

 

1,061,179

 

 

488,371

 

Cash and cash equivalents – end of year

$

1,932,323

 

$

1,061,179

 

 

Bright Health Group, Inc. and Subsidiaries

Segment Information

(in thousands)

(Unaudited)

 

Bright HealthCare

Three Months Ended

 

Twelve Months Ended

($ in thousands)

December 31,

 

December 31,

Statements of income (loss) data:

2022

2021

 

2022

2021

 

 

 

 

 

 

 

 

Bright HealthCare:

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Premium revenue

 

393,200

 

 

 

367,910

 

 

 

1,652,045

 

 

 

1,297,273

 

Investment income

 

328

 

 

 

(185

)

 

 

410

 

 

 

(80

)

Total revenue

 

393,528

 

 

 

367,725

 

 

 

1,652,455

 

 

 

1,297,193

 

Operating expenses

 

 

 

 

 

 

 

 

Medical costs

 

393,406

 

 

 

356,591

 

 

 

1,550,934

 

 

 

1,262,407

 

Operating costs

 

59,715

 

 

 

70,491

 

 

 

187,191

 

 

 

189,648

 

Goodwill impairment

 

 

 

 

 

 

 

70,017

 

 

 

 

Depreciation and amortization

 

4,411

 

 

 

4,342

 

 

 

17,702

 

 

 

14,245

 

Total operating expenses

 

457,532

 

 

 

431,424

 

 

 

1,826,289

 

 

 

1,466,300

 

Operating loss

$

(64,004

)

 

$

(63,699

)

 

$

(173,834

)

 

$

(169,107

)

 

 

 

 

 

 

 

 

Medical Cost Ratio (MCR)

 

100.1

%

 

 

96.9

%

 

 

93.9

%

 

 

97.3

%

Consumer Care

Three Months Ended

 

Twelve Months Ended

($ in thousands)

December 31,

 

December 31,

Statements of income (loss) data:

2022

2021

 

2022

2021

 

 

 

 

 

 

 

 

Consumer Care:

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Premium revenue

$

168,063

 

 

$

116,418

 

 

$

1,141,936

 

 

$

338,391

 

Direct Contracting revenue

 

188,652

 

 

 

 

 

 

654,087

 

 

 

 

Service revenue

 

10,731

 

 

 

11,028

 

 

 

48,013

 

 

 

42,469

 

Investment income

 

(3,128

)

 

 

(28,770

)

 

 

(55,429

)

 

 

80,314

 

Total revenue

 

364,318

 

 

 

98,676

 

 

 

1,788,607

 

 

 

461,174

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Medical costs

 

476,316

 

 

 

221,143

 

 

 

1,844,578

 

 

 

432,318

 

Operating costs

 

57,799

 

 

 

39,155

 

 

 

189,586

 

 

 

125,444

 

Goodwill impairment

 

1,208

 

 

 

 

 

 

1,208

 

 

 

 

Intangible assets impairment

 

 

 

 

 

 

 

42,611

 

 

 

 

Depreciation and amortization

 

3,680

 

 

 

3,971

 

 

 

24,252

 

 

 

18,333

 

Total operating expenses

 

539,003

 

 

 

264,269

 

 

 

2,104,351

 

 

 

576,095

 

Operating loss

$

(174,685

)

 

$

(165,593

)

 

$

(315,744

)

 

$

(114,921

)

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures

We use the non-GAAP financial measure Adjusted EBITDA. We define Adjusted EBITDA as Net Loss excluding loss from discontinued operations, Interest Expense, Income Taxes, Depreciation and Amortization, adjusted for the impact of impairment of goodwill or intangible assets, acquisition and financing-related transaction costs, share-based compensation, changes in the fair value of contingent consideration, changes in the fair value of equity securities, contract termination costs and restructuring costs. This non-GAAP measure has been presented in this quarterly Earnings Release as a supplemental measure of financial performance that is not required by or presented in accordance with GAAP because we believe it assists management and investors in comparing our operating performance across reporting periods on a consistent basis by excluding and including items that we do not believe are indicative of our core operating performance. Management believes this measure is useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.

Adjusted EBITDA is not a recognized term under GAAP and should not be considered as an alternative to Net Income (Loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow available for management’s discretionary use as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The presentation of Adjusted EBITDA has limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.

The following table provides a reconciliation of net loss to Adjusted EBITDA for the periods presented:

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

($ in thousands)

2022

 

2021

 

2022

 

2021

Net loss

$

(668,561

)

 

$

(813,375

)

 

$

(1,359,880

)

 

$

(1,178,365

)

Loss from discontinued operations (a)

 

480,327

 

 

 

646,762

 

 

 

721,915

 

 

 

855,255

 

EBITDA adjustments from continuing operations:

 

 

 

 

 

 

 

Interest expense

 

6,386

 

 

 

948

 

 

 

12,821

 

 

 

7,230

 

Income tax (benefit) expense

 

(4,228

)

 

 

(8,296

)

 

 

3,680

 

 

 

(26,521

)

Depreciation and amortization

 

10,402

 

 

 

9,358

 

 

 

50,430

 

 

 

35,049

 

Goodwill impairment

 

1,208

 

 

 

 

 

 

71,225

 

 

 

 

Intangible assets impairment

 

 

 

 

 

 

 

42,611

 

 

 

 

Transaction costs (b)

 

1,407

 

 

 

(4,854

)

 

 

1,661

 

 

 

2,064

 

Share-based compensation expense (c)

 

32,450

 

 

 

25,190

 

 

 

109,713

 

 

 

68,423

 

Change in fair value of equity securities (d)

 

10,892

 

 

 

28,780

 

 

 

80,231

 

 

 

(80,231

)

Change in fair value of contingent consideration (e)

 

332

 

 

 

(5,584

)

 

 

332

 

 

 

(4,221

)

Contract termination costs (f)

 

 

 

 

 

 

 

1,241

 

 

 

 

Restructuring costs (g)

 

20,869

 

 

 

 

 

 

30,531

 

 

 

 

EBITDA adjustments from continuing operations

 

79,718

 

 

 

45,542

 

 

 

404,476

 

 

 

1,793

 

Adjusted EBITDA

$

(108,516

)

 

$

(121,071

)

 

$

(233,489

)

 

$

(321,317

)

(a)

Beginning in fourth quarter of 2022, Adjusted EBITDA excludes the impact of discontinued operations. The comparable period in 2021 has been recast to exclude these impacts. Represents losses associated with the Commercial business segment that we exited at the end of 2022. The loss from discontinued operations includes over $165 million and over $180 million of investment impairments, restructuring costs, goodwill and intangibles impairments and other exit related costs for the three and twelve months ended December 31, 2022, respectively.

(b)

Transaction costs include accounting, tax, valuation, consulting, legal and investment banking fees directly relating to business combinations and certain costs associated with our initial public offering. These costs can vary from period to period and impact comparability, and we do not believe such transaction costs reflect the ongoing performance of our business.

(c)

Represents non-cash compensation expense related to stock option and restricted stock unit award grants, which can vary from period to period based on a number of factors, including the timing, quantity and grant date fair value of the awards.

(d)

Beginning in 2022, Adjusted EBITDA excludes the impact of changes in unrealized gains and losses on equity securities. The comparable period in 2021 has been recast to exclude changes in unrealized gains and losses on equity securities.

(e)

Represents the non-cash change in fair value of contingent consideration from business combinations, which is remeasured at fair value each reporting period.

(f)

Represents amounts paid for early termination of existing vendor contracts.

(g)

Restructuring costs represent severance costs as part of a workforce reduction in 2022 and impairment of certain long-lived assets relating to our decision to exit the Commercial business for the 2023 plan year.

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.

Use the myMotherLode.com Keyword Search to go straight to a specific page

Popular Pages

  • Local News
  • US News
  • Weather
  • State News
  • Events
  • Traffic
  • Sports
  • Dining Guide
  • Real Estate
  • Classifieds
  • Financial News
  • Fire Info
Feedback