Oscar(US:OSCR)2023-02-24 01:02Company Structure and Operations - Oscar Health, Inc. had a total of 14 health insurance subsidiaries as of December 31, 2022[20]. - The company operates through health insurance subsidiaries and offers services via its +Oscar platform, focusing on value-based care[484]. Financial Performance - Total revenue for the year ended December 31, 2022, was $3,963,638, a significant increase of 116.5% compared to $1,838,715 in 2021[468]. - Premiums earned rose to $3,871,117 in 2022, up 111.3% from $1,831,020 in 2021[468]. - Total operating expenses increased to $4,553,505 in 2022, up 91.1% from $2,383,196 in 2021[468]. - Claims incurred, net, were $3,280,798 in 2022, representing a 102.5% increase from $1,623,995 in 2021[468]. - Administrative services revenue surged to $61,047 in 2022, compared to $5,394 in 2021, marking a 1,030.5% increase[468]. - Investment income and other revenue increased to $31,474 in 2022, up from $2,301 in 2021, a growth of 1,267.5%[468]. - The net loss attributable to Oscar Health, Inc. for 2022 was $606,275, compared to a net loss of $572,606 in 2021, reflecting a 5.8% increase in losses[471]. - Comprehensive loss attributable to Oscar Health, Inc. was $612,319 in 2022, compared to $577,156 in 2021, indicating a 6.1% increase in comprehensive losses[471]. - Net loss for the year ended December 31, 2022, was $609,552, compared to a net loss of $571,426 in 2021, representing an increase of 6.5%[477]. Assets and Liabilities - Total current assets increased to $4,121.6 million as of December 31, 2022, from $2,305.9 million in 2021, marking a 78.9% growth[466]. - Total liabilities rose to $3,634.2 million as of December 31, 2022, up from $1,929.1 million in the previous year, representing an increase of 88.5%[466]. - The company's cash and cash equivalents increased to $1,558.6 million as of December 31, 2022, compared to $1,104.0 million in 2021, a rise of 41.1%[466]. - The accumulated deficit grew to $2,606.0 million as of December 31, 2022, from $2,000.0 million in the previous year, indicating a 30.3% increase[466]. - The total stockholders' equity decreased to $892.4 million as of December 31, 2022, down from $1,392.5 million in 2021, a decline of 36.0%[466]. - The company's long-term debt stood at $298.0 million as of December 31, 2022, indicating the company has taken on debt compared to the previous year when there was none[466]. Membership and Market Risks - The company reported that its membership is affected by enrollment changes, including retroactive disenrollments[20]. - Oscar Health's primary market risk exposure is changes to prime rate-based interest rates, which are sensitive to various economic factors[439]. - The company is subject to heightened competition in the health insurance markets, impacting its ability to retain and expand its member base[23]. - Oscar Health's ability to achieve or maintain profitability in the future is uncertain due to various risks, including regulatory changes[23]. Regulatory and Compliance - The Company established a minimum Medical Loss Ratio (MLR) requirement, mandating insurers to pay rebates when MLR falls below set thresholds, impacting premium revenue adjustments[497]. - The Health Insurance Industry Fee (HIF) was permanently repealed starting in 2021, following a temporary suspension in 2019 and resumption in 2020[497]. - The Company utilizes quota share and excess of loss (XOL) reinsurance contracts to manage exposure to unexpected MLR fluctuations and reduce capital requirements[498][500]. - The company has not maintained effective internal control over financial reporting as of December 31, 2022, due to a material weakness identified[445]. Cash Flow and Investment - Cash flows from operating activities resulted in a net cash provided of $380,349 for 2022, a significant recovery from a net cash used of $(181,745) in 2021[477]. - Cash used in investing activities decreased to $(226,519) in 2022 from $(774,515) in 2021, indicating improved cash management[477]. - The fair value of total investments as of December 31, 2022, was $1,620,206, a slight increase from $1,431,562 in 2021[545]. - The net investment income for the year ended December 31, 2022, was $27,594,000, a significant increase from $2,395,000 in 2021[551]. Stock and Equity - The company executed a one-for-three reverse stock split, resulting in 132,760,639 shares of Class A common stock and 35,335,579 shares of Class B common stock[19]. - The weighted average common shares outstanding increased to 212,474,615 in 2022 from 178,967,056 in 2021, reflecting a 18.7% increase[468]. - The total fair value of RSUs vested in 2022 was $68.4 million, significantly higher than $13.2 million in 2021[583]. - The amount of unrecognized compensation expense for RSUs as of December 31, 2022, was $134.3 million, expected to be recognized over 2.3 years[584]. - Performance-based restricted stock units (PSUs) granted in 2022 totaled 1,659,598, with an outstanding total of 8,464,577 PSUs at year-end[586]. Debt and Financing - The company issued $305 million in convertible senior notes in February 2022, with a 7.25% annual interest rate, maturing on December 31, 2031[607]. - As of December 31, 2022, the net carrying amount of the 2031 Notes was $298 million, with an estimated fair value of $190.8 million[614]. - The company has a revolving credit facility of $200 million, maturing on February 21, 2024, with the option to increase commitments by up to $50 million[616]. - The financial covenants for the Revolving Credit Facility include a maximum combined ratio of 108% for fiscal year 2022 and 102% for fiscal year 2023[618].