þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware
(State or other jurisdiction of incorporation or organization) |
76-0479645
(I.R.S. Employer Identification No.) |
|
19001 Crescent Springs Drive
Kingwood, Texas (Address of principal executive offices) |
77339
(Zip Code) |
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CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30,
December 31,
2007
2006
(Unaudited)
$
118,933
$
148,416
35,792
37,405
86,348
85,617
2,298
8,157
117,583
112,432
2,127
2,134
12,009
10,660
6,978
4,573
48
3,193
196
2,492
382,312
415,079
2,920
2,920
60,742
60,120
63,824
61,375
21,393
20,588
30,693
30,537
22,091
22,091
201,663
197,631
(122,395
)
(116,511
)
79,268
81,120
9,000
11,000
2,811
2,461
35,645
46,429
4,854
4,922
969
504
53,279
65,316
$
514,859
$
561,515
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CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands)
June 30,
December 31,
2007
2006
(Unaudited)
$
3,307
$
3,802
89,641
116,926
102,896
94,818
9,045
2,824
37,384
39,035
12,670
21,381
7,746
7,309
606
583
263,295
286,678
857
1,166
40,491
40,019
5,979
5,207
47,327
46,392
309
309
138,457
135,942
(98,091
)
(55,405
)
(141
)
(131
)
163,703
147,730
204,237
228,445
$
514,859
$
561,515
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CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2007
2006
2007
2006
$
376,758
$
337,778
$
784,516
$
698,414
298,291
269,562
637,982
562,205
78,467
68,216
146,534
136,209
33,076
29,440
65,121
57,664
2,435
1,068
3,743
1,357
14,276
13,876
30,222
29,851
2,704
2,709
5,623
5,542
3,958
3,319
6,060
5,702
3,704
3,829
7,424
7,724
60,153
54,241
118,193
107,840
18,314
13,975
28,341
28,369
2,987
3,008
5,984
5,817
(29
)
(392
)
(61
)
(1,062
)
(7
)
9
112
21,272
16,584
34,273
33,236
7,627
6,087
12,235
12,198
$
13,645
$
10,497
$
22,038
$
21,038
$
0.51
$
0.38
$
0.81
$
0.77
$
0.50
$
0.37
$
0.79
$
0.74
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CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
SIX MONTHS ENDED JUNE 30, 2007
(in thousands)
(Unaudited)
Accumulated
Common Stock
Additional
Other
Issued
Paid-In
Treasury
Comprehensive
Retained
Shares
Amount
Capital
Stock
Income (Loss)
Earnings
Total
30,839
$
309
$
135,942
$
(55,405
)
$
(131
)
$
147,730
$
228,445
(47,973
)
(47,973
)
(702
)
2,674
1,972
1,721
1,721
1,324
2,419
3,743
172
194
366
(6,065
)
(6,065
)
(10
)
(10
)
22,038
22,038
22,028
30,839
$
309
$
138,457
$
(98,091
)
$
(141
)
$
163,703
$
204,237
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Six Months Ended
June 30,
2007
2006
$
22,038
$
21,038
7,423
7,934
3,743
1,357
3,074
458
1,613
(3,644
)
715
1,434
4,802
6,121
(2,405
)
(1,342
)
11,968
11,203
(495
)
(1,033
)
(27,285
)
(18,802
)
8,078
5,593
70
(1,635
)
(1,179
)
8,105
(8,274
)
(5,584
)
3,145
(2,365
)
4,993
7,800
27,031
28,838
(70,943
)
(49,410
)
70,189
26,830
50
(5,509
)
(8,391
)
14
78
(6,249
)
(30,843
)
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(in thousands)
(Unaudited)
Six Months Ended
June 30,
2007
2006
$
(47,973
)
$
(13,897
)
(6,065
)
(4,997
)
1,972
13,733
(286
)
(32,864
)
1,721
10,948
366
388
(50,265
)
(26,689
)
(29,483
)
(28,694
)
148,416
137,407
$
118,933
$
108,713
$
4,408
$
3,425
$
61
$
994
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2007
2006
$
77,424
$
60,272
12,584
22,757
(1,990
)
(3,326
)
(11,735
)
(10,732
)
$
76,283
$
68,971
$
35,792
$
31,224
40,491
37,747
$
76,283
$
68,971
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Three Months Ended
Six Months Ended
June 30,
June 30,
2007
2006
2007
2006
26,919
27,663
27,195
27,433
545
797
580
937
53
101
70
103
598
898
650
1,040
27,517
28,561
27,845
28,473
878
760
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Benefits costs
We provide group health insurance coverage to our worksite employees
through a national network of carriers including UnitedHealthcare (United), Cigna
Healthcare, PacifiCare, Kaiser Permanente, Blue Cross and Blue Shield of Georgia, Blue Shield
of California, Hawaii Medical Service Association and Tufts, all of which provide fully
insured policies or service contracts.
The policy with United, which was first obtained in January 2002, provides the majority of our
health insurance coverage. As a result of certain contractual terms, we have accounted for this
plan since its inception using a partially self-funded insurance accounting model. Accordingly,
we record the costs of the United Plan, including an estimate of the incurred claims, taxes and
administrative fees (collectively the Plan Costs), as benefits expense in the Consolidated
Statements of Operations. The estimated incurred claims are based upon: (i) the level of claims
processed during the quarter; (ii) recent claim development patterns under the plan, to estimate
a completion rate; and (iii) the number of participants in the plan. Each reporting period,
changes in the estimated ultimate costs resulting from claims trends, plan design and migration,
participant demographics and other factors are incorporated into the reported benefits costs.
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Additionally, since the plans inception in January 2002, under the terms of the contract,
United establishes cash funding rates 90 days in advance of the beginning of a reporting
quarter. If the Plan Costs for a reporting quarter are greater than the cash funded to United,
a deficit in the plan would be incurred and the Company would accrue a liability for the excess
costs on its Consolidated Balance Sheet. On the other hand, if the Plan Costs for the reporting
quarter are less than the cash funded to United, a surplus in the plan would be incurred and the
Company would record an asset for the excess premiums on its Consolidated Balance Sheet. In
April 2007, Administaff and United entered into a new three-year arrangement, which reduced the
required accumulated cash surplus in the plan from $11.0 million to $9.0 million and included a
$3.3 million administrative fee credit, which was recorded as a reduction in benefits costs in
the second quarter of 2007. As of June 30, 2007, Plan Costs were less than the net cash funded
to United by $16.8 million. As this amount is in excess of the agreed-upon $9.0 million surplus
maintenance level, the $7.8 million balance is included in prepaid insurance, a current asset,
on the Companys Consolidated Balance Sheet.
Adjustments to estimated benefits costs, resulting primarily from higher than anticipated
incurred claims related to prior reporting periods, totaled $3.5 million, or 1.1% of total
benefits costs, during the six months ended June 30, 2007.
Workers compensation costs
Our workers compensation coverage (the AIG Program) is
currently provided through selected member insurance companies of American International
Group, Inc. (AIG). Under our arrangement with AIG, we bear the economic burden for the
first $1 million layer of claims per occurrence. AIG bears the economic burden for all claims
in excess of such first $1 million layer. The policies are fully insured, whereby AIG has the
responsibility to pay all claims incurred under the policies regardless of whether we satisfy
our responsibilities.
Because we bear the economic burden of the first $1 million layer of claims per occurrence, such
claims, which are the primary component of our workers compensation costs, are recorded in the
period incurred. Workers compensation insurance includes ongoing healthcare and indemnity
coverage, whereby claims are paid over numerous years following the date of injury.
Accordingly, the accrual of related incurred costs in each reporting period includes estimates,
which take into account the ongoing development of claims and therefore require a significant
level of judgment. Our management estimates our workers compensation costs by applying an
aggregate loss development rate to worksite employee payroll levels.
We employ a third party actuary to estimate our loss development rate, which is primarily based
upon the nature of worksite employees job responsibilities, the location of worksite employees,
the historical frequency and severity of workers compensation claims, and an estimate of future
cost trends. Each reporting period, changes in the actuarial assumptions resulting from changes
in actual claims experience and other trends are incorporated into the Companys workers
compensation claims cost estimates. During the six months ended June 30, Administaff reduced
workers compensation costs by $11.4 million in 2007 and $4.4 million in 2006 for changes in
estimated losses related to prior reporting periods. Workers compensation cost estimates are
discounted to present value at a rate based upon the U.S.
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Treasury rates that correspond with the weighted average estimated claim payout period (the
average discount rate utilized in 2007 and 2006 was 5.0% and 4.8%, respectively) and are
accreted over the estimated claim payment period and included as a component of direct costs in
our Consolidated Statements of Operations.
Contingent liabilities
We accrue and disclose contingent liabilities in our Consolidated
Financial Statements in accordance with Statement of Financial
Accounting Standards (SFAS) No. 5,
Accounting for Contingencies
. SFAS No. 5 requires accrual of contingent
liabilities that are considered probable to occur and can be reasonably estimated. For
contingent liabilities that are considered reasonably possible to occur, financial statement
disclosure is required, including the range of possible loss if it can be reasonably determined.
From time to time we disclose in our financial statements issues that we believe are reasonably
possible to occur, although we cannot determine the range of possible loss in all cases. As
these issues develop, we evaluate the probability of future loss and the potential range of such
losses. If such evaluation were to determine that a loss was probable and the loss could be
reasonably estimated, we would be required to accrue our estimated loss, which would reduce net
income in the period such determination was made.
Deferred taxes
We have recorded a valuation allowance to reduce
our deferred tax assets to the amount that is more likely than not
to be realized. While we have considered future taxable income
and ongoing prudent and feasible tax planning strategies in
assessing the need for the valuation allowance, our ability to
realize our deferred tax assets could change from our current
estimates. If we determine we will be able to realize our
deferred tax assets in the future in excess of our net recorded
amount, an adjustment to reduce the valuation allowance would
increase net income in the period that such determination is made.
Likewise, should we determine we will not be able to realize all
or part of our net deferred tax assets in the future, an
adjustment to increase the valuation allowance would reduce net
income in the period such determination is made.
Allowance for doubtful accounts
We maintain an allowance for
doubtful accounts for estimated losses resulting from the
inability of our customers to pay our comprehensive service fees.
We believe that the success of our business is heavily dependent
on our ability to collect these comprehensive service fees for
several reasons, including:
the fact that we are at risk for the payment of our direct costs and worksite
employee payroll costs regardless of whether our clients pay their comprehensive
service fees;
the large volume and dollar amount of transactions we process; and
the periodic and recurring nature of payroll, upon which the comprehensive
service fees are based.
To mitigate this risk, we have established very tight credit policies. We generally require our
clients to pay their comprehensive service fees no later than one day prior to the applicable
payroll date. In addition, we maintain the right to terminate the Client Service Agreement and
associated worksite employees or to require prepayment, letters of credit or other collateral if
a clients financial position deteriorates or if the client does not pay the comprehensive
service fee. As a result of these efforts, losses related to customer
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nonpayment have historically been low as a percentage of revenues. However, if our clients
financial condition were to deteriorate rapidly, resulting in nonpayment, our accounts
receivable balances could grow and we could be required to provide for additional allowances,
which would decrease net income in the period that such determination was made.
Property and equipment
Our property and equipment relate
primarily to our facilities and related improvements, furniture
and fixtures, computer hardware and software and capitalized
software development costs. These costs are depreciated or
amortized over the estimated useful lives of the assets. If the
useful lives of these assets were determined to be shorter than
their current estimates, our depreciation and amortization expense
could be accelerated, which would decrease net income in the
periods of such a determination. In addition, we periodically
evaluate these costs for impairment in accordance with SFAS No.
144,
Accounting for Impairment or Disposal of Long-Lived Assets
.
If events or circumstances were to indicate that any of our
long-lived assets might be impaired, we would analyze the
estimated undiscounted future cash flows to be generated from the
applicable asset. In addition, we would record an impairment
loss, which would reduce net income, to the extent the carrying
value of the asset exceeded the fair value of the asset. Fair
value is generally determined using an estimate of discounted
future net cash flows from operating activities or upon disposal
of the asset.
Goodwill and other intangibles
The December 2005 acquisition of
HRTools.com and associated software applications included certain
identifiable intangible assets and goodwill implied in the
purchase price. The goodwill and intangible assets are subject to
the provisions of SFAS No. 142,
Goodwill and Other Intangible
Assets
(SFAS 142). In accordance with SFAS 142, goodwill is
tested for impairment on an annual basis and between annual tests
in certain circumstances, and written down when impaired.
Furthermore, SFAS 142 requires purchased intangible assets other
than goodwill to be amortized over their useful lives unless these
lives are determined to be indefinite. Our purchased intangible
assets are carried at cost less accumulated amortization.
Amortization is computed over the estimated useful lives of the
respective assets, five to ten years.
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Three months ended
June 30,
2007
2006
% Change
(in thousands, except per share and statistical data)
$
376,758
$
337,778
11.5
%
78,467
68,216
15.0
%
60,153
54,241
10.9
%
18,314
13,975
31.0
%
2,958
2,609
13.4
%
13,645
10,497
30.0
%
0.50
0.37
35.1
%
108,336
99,839
8.5
%
$
1,159
$
1,128
2.7
%
241
228
5.7
%
185
181
2.2
%
56
47
19.1
%
42
35
20.0
%
(1)
Gross billings of $6,741 and $6,378 per worksite employee per month less payroll
cost of $5,582 and $5,250 per worksite employee per month, respectively.
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Three months ended June 30,
Three months ended June 30,
2007
2006
% Change
2007
2006
(in thousands)
(% of total revenues)
$
74,042
$
61,662
20.1
%
19.7
%
18.3
%
39,735
36,165
9.9
%
10.5
%
10.7
%
52,495
47,955
9.5
%
13.9
%
14.2
%
128,800
112,652
14.3
%
34.2
%
33.3
%
78,726
77,089
2.1
%
20.9
%
22.8
%
2,960
2,255
31.3
%
0.8
%
0.7
%
$
376,758
$
337,778
11.5
%
100.0
%
100.0
%
Benefits costs
The cost of group health insurance and related employee benefits
increased $31 per worksite employee per month, or 6.4% on a cost per covered employee
basis, compared to the second quarter of 2006. The percentage of worksite employees
covered under our health insurance plans was 72.8% in the 2007 period compared to 72.4% in
the 2006 period. The 2007 benefit costs were partially offset by a $3.3 million, or $10
per worksite employee per month, administrative fee credit from UHC related to the
three-year health insurance agreement signed in April 2007, while the 2006 benefits costs
were partially offset by a $1.9 million, or $6 per worksite employee per month,
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Workers compensation costs
Workers compensation costs decreased $19 per worksite
employee per month compared to the second quarter of 2006. As a percentage of non-bonus
payroll cost, workers compensation costs decreased to 0.52% in the 2007 period from 0.95%
in the 2006 period as a result of favorable trends in both the frequency and severity of
workers compensation claims. During the 2007 period, the Company recorded reductions in
workers compensation costs of $6.4 million, or 0.38% of non-bonus payroll costs, for
changes in estimated losses related to prior reporting periods compared to $2.3 million, or
0.16% of non-bonus payroll costs, in the 2006 period. Please read Critical Accounting
Policies and Estimates Workers Compensation Costs on page 15 for a discussion of our
accounting for workers compensation costs.
Payroll tax costs
Payroll taxes increased $7 per worksite employee per month
compared to the second quarter of 2006, due primarily to a 6.3% increase in average
payroll cost per worksite employee per month. Payroll taxes as a percentage of payroll
cost declined from 7.45% in the 2006 period to 7.14% in the 2007 period primarily due
to a $2.9 million, or 0.16% of payroll cost, state unemployment tax refund from the
State of Texas, and lower state unemployment tax rates in 2007.
Three months ended June 30,
Three months ended June 30,
2007
2006
% change
2007
2006
% change
(in thousands)
(per worksite employee per month)
$
33,076
$
29,440
12.4
%
$
102
$
98
4.1
%
2,435
1,068
128.0
%
8
4
100.0
%
14,276
13,876
2.9
%
44
46
(4.3
)%
2,704
2,709
(0.2
)%
8
9
(11.1
)%
3,958
3,319
19.3
%
12
11
9.1
%
3,704
3,829
(3.3
)%
11
13
(15.4
)%
$
60,153
$
54,241
10.9
%
$
185
$
181
2.2
%
Salaries, wages and payroll taxes of corporate and sales staff
increased 12.4%, or $4 per worksite employee per month compared to
the 2006 period. The increase in total dollars was primarily due
to: (i) a 7.3% increase in corporate headcount, primarily in the
sales and
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Stock-based compensation expense increased $1.4 million or $4 per
worksite employee per month. The stock based compensation expense
primarily represents the vesting of restricted stock awards
granted to employees, including 282,500 shares granted in March
2007.
General and administrative expenses increased 2.9%, but decreased
$2 per worksite employee per month compared to the second quarter
of 2006.
Commissions expense remained relatively flat, but decreased $1 per
worksite employee per month compared to the 2006 period.
Advertising costs increased 19.3%, or $1 per worksite employee per
month compared to the second quarter of 2006, primarily due to a
change in the timing and level of radio and television advertising
expenditures relative to 2006.
Depreciation and amortization expense decreased 3.3% or $2 on a
per worksite employee per month basis compared to the 2006 period.
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Six months ended
June 30,
2007
2006
% Change
(in thousands, except per share and statistical data)
$
784,516
$
698,414
12.3
%
146,534
136,209
7.6
%
118,193
107,840
9.6
%
28,341
28,369
(0.1
)%
5,932
4,867
21.9
%
22,038
21,038
4.8
%
0.79
0.74
6.8
%
106,609
97,923
8.9
%
$
1,226
$
1,189
3.1
%
229
232
(1.3
)%
185
184
0.5
%
44
48
(8.3
)%
34
36
(5.6
)%
(1)
Gross billings of $6,981 and $6,506 per worksite employee per month less payroll
cost of $5,755 and $5,317 per worksite employee per month, respectively.
Six months ended June 30,
Six months ended June 30,
2007
2006
% Change
2007
2006
(in thousands)
(% of total revenues)
$
155,502
$
126,885
22.6
%
19.8
%
18.2
%
81,743
74,184
10.2
%
10.4
%
10.6
%
110,703
100,899
9.7
%
14.1
%
14.4
%
263,422
232,380
13.4
%
33.6
%
33.3
%
167,082
159,552
4.7
%
21.3
%
22.8
%
6,064
4,514
34.3
%
0.8
%
0.7
%
$
784,516
$
698,414
12.3
%
100.0
%
100.0
%
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Benefits costs
The cost of group health insurance and related employee benefits
increased $45 per worksite employee per month, or 9.6% on a per covered employee basis,
compared to 2006. The percentage of worksite employees covered under our health insurance
plans was 73.0% in the 2007 period compared to 72.7% in the 2006 period. Please read
Critical Accounting Policies and Estimates Benefits Costs on page 14 for a discussion
of our accounting for health insurance costs.
Workers compensation costs
Workers compensation costs decreased $18 per worksite
employee per month compared to the first six months of 2006. As a percentage of non-bonus
payroll cost, workers compensation costs decreased to 0.56% in the 2007 period from 0.97%
in the 2006 period as a result of favorable trends in both the frequency and severity of
workers compensation claims. During the 2007 period, the Company recorded reductions in
workers compensation costs of $11.4 million, or 0.34% of non-bonus payroll costs, for
changes in estimated losses related to prior reporting periods compared to $4.4 million, or
0.15% of non-bonus payroll costs, in the 2006 period. Please read Critical Accounting
Policies and Estimates Workers Compensation Costs on page 15 for a discussion of our
accounting for workers compensation costs.
Payroll tax costs
Payroll taxes increased $14 per worksite employee per month
compared to the first half of 2006, due to an 8.2% increase in average payroll cost per
worksite employee per month. Payroll taxes as a percentage of payroll cost declined from
8.45% in the 2006 period to 8.05% in the 2007 period due to: i) worksite employees
reaching their taxable wage limit earlier in 2007 as a result of increased payroll
averages and bonus levels; and ii) lower state unemployment tax rates in 2007, including a
$2.9 million state unemployment tax refund from the State of Texas.
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Six months ended June 30,
Six months ended June 30,
2007
2006
% change
2007
2006
% change
(in thousands)
(per worksite employee per month)
$
65,121
$
57,664
12.9
%
$
102
$
98
4.1
%
3,743
1,357
175.8
%
6
2
200.0
%
30,222
29,851
1.2
%
47
51
(7.8
)%
5,623
5,542
1.5
%
9
10
(10.0
)%
6,060
5,702
6.3
%
9
10
(10.0
)%
7,424
7,724
(3.9
)%
12
13
(7.7
)%
$
118,193
$
107,840
9.6
%
$
185
$
184
0.5
%
Salaries, wages and payroll taxes of corporate and sales staff
increased 12.9%, or $4 per worksite employee per month compared to
the 2006 period. Corporate headcount, primarily in the sales and
service areas of the business, increased 9.8% in the 2007 period
as compared to 2006.
Stock-based compensation expense increased $2.4 million, or $4 per
worksite employee per month. Stock based compensation expense
primarily represents the vesting of restricted stock awards
granted to employees.
General and administrative expenses increased 1.2%, but decreased
$4 on a per worksite employee per month basis compared to the
first half of 2006.
Commissions expense increased 1.5%, but decreased $1 per worksite
employee per month compared to the 2006 period.
Advertising costs increased 6.3% due to an increase in radio and
television advertising expenditures relative to 2006, but
decreased $1 per worksite employee per month compared to the
second quarter of 2006.
Depreciation and amortization expense decreased 3.9% or $1 on a
per worksite employee per month basis compared to the 2006 period.
Table of Contents
Three months ended
Six months ended
June 30,
June 30,
2007
2006
% change
2007
2006
% change
(in thousands, except per worksite employee data)
$
1,814,103
$
1,572,541
15.4
%
$
3,680,862
$
3,124,043
17.8
%
120,779
108,381
11.4
%
356,774
262,108
36.1
%
$
1,693,324
$
1,464,160
15.7
%
$
3,324,088
$
2,861,935
16.1
%
$
5,582
$
5,250
6.3
%
$
5,755
$
5,317
8.2
%
372
362
2.8
%
558
446
25.1
%
$
5,210
$
4,888
6.6
%
$
5,197
$
4,871
6.7
%
Table of Contents
Operating results
Our net income has a significant impact on our operating cash
flows. Our net income increased 4.8% to $22.0 million in 2007 compared to 2006.
Please read
Results of Operations Six Months Ended June 30, 2007 Compared to Six
Months Ended June 30, 2006
on page 22.
Medical plan funding
Our healthcare contract with United establishes participant
cash funding rates 90 days in advance of the beginning of a reporting quarter.
Therefore, changes in the participation level of the United Plan have a direct impact
on our operating cash flows. In addition, changes to the funding rates, which are
solely determined by United based primarily upon recent claim history and anticipated
cost trends, also have a significant impact on our operating cash flows. Since
inception of the United Plan in January 2002, cash funded to United has exceeded Plan
Costs, resulting in a $16.8 million surplus, $7.8 million of which is reflected as a
current asset, and $9.0 million of which is reflected as a long-term asset on our
Consolidated Balance Sheet at June 30, 2007.
Workers compensation plan funding
Under our arrangement with AIG, we make monthly
payments to AIG comprised of premium costs and funds to be set aside for payment of future
claims (claim funds). These pre-determined amounts are stipulated
Table of Contents
Timing of customer payments / payrolls
We typically collect our comprehensive
service fee, along with the clients payroll funding, from clients at least one day
prior to the payment of worksite employee payrolls. Therefore, the date of the last
day of a reporting period has a substantial impact on our reporting of operating cash
flows. For example, many worksite employees are paid on Fridays; therefore,
operating cash flows decline in the reporting periods that end on a Friday, such as
in June 2007, when client prepayments were $8.2 million and accrued worksite employee
payroll was $102.9 million. However, for those reporting periods that end on a
Thursday, our cash flows are higher due to the collection of the comprehensive
service fee and clients payroll funding prior to processing the large number
worksite employees payrolls one day subsequent to quarter-end.
Table of Contents
Table of Contents
- 29 -
- 30 -
- 31 -
- 32 -
Table of Contents
Total Number of
Maximum
Shares Purchased as
Number of Shares
Total Number
Part of Publicly
that May Yet be
of Shares
Average Price
Announced
Purchased Under
Period
Purchased
(1)
Paid per Share
Program
(2)
the Program
(2)
186,090
$
33.55
8,547,684
952,316
697,282
35.53
9,244,966
255,034
122,867
34.58
9,367,833
1,132,167
1,006,239
$
35.05
9,367,833
1,132,167
(1)
Our board of directors has approved the repurchase of up to an aggregate amount of
10,500,000 shares of Administaff common stock, including 1,000,000 shares in June 2007, of
which 9,367,833 had been repurchased as of June 30, 2007. During the three months ended
June 30, 2007, we repurchased 1,006,239 shares of our common stock.
(2)
Unless terminated earlier by resolution of the board of directors, the repurchase
program will expire when we have repurchased all shares authorized for repurchase under the
repurchase program.
Table of Contents
1.
Election of Class III Directors to serve until the Annual Meeting of
Stockholders in 2010.
For
Withheld
23,708,452
2,742,368
24,869,567
1,581,253
24,854,962
1,595,858
2.
Ratification of Ernst & Young, LLP as the Companys independent auditors for
the year ending December 31, 2007.
For
Against
Abstain
1,320,541
8,298
Table of Contents
*(+)
Letter Agreement dated April 21, 2007, between Administaff
of Texas, Inc. and UnitedHealthcare Insurance Company.
*(+)
Amendment to Minimum Premium Financial Agreement, as amended
and restated effective January 1, 2005, by and between
Administaff of Texas, Inc., and UnitedHealthcare Insurance
Company.
*(+)
Amendment to Minimum Premium Administrative Services
Agreement, as amended and restated effective January 1,
2005, by and between Administaff of Texas, Inc., and
UnitedHealthcare Insurance Company.
*
Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
*
Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
*
Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
*
Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
*
Filed herewith.
(+)
Confidential Treatment has been requested for this exhibit and confidential portions have been filed with the
Securities and Exchange Commision.
Table of Contents
- 33 -
Administaff, Inc.
By
:
/s/ Douglas S. Sharp
Douglas S. Sharp
Vice President of Finance,
Chief Financial Officer and Treasurer
(Principal Financial and Duly Authorized Officer)
Table of Contents
*(+)
Letter Agreement dated April 21, 2007, between Administaff
of Texas, Inc. and UnitedHealthcare Insurance Company.
*(+)
Amendment to Minimum Premium Financial Agreement, as amended
and restated effective January 1, 2005, by and between
Administaff of Texas, Inc., and UnitedHealthcare Insurance
Company.
*(+)
Amendment to Minimum Premium Administrative Services
Agreement, as amended and restated effective January 1,
2005, by and between Administaff of Texas, Inc., and
UnitedHealthcare Insurance Company.
*
Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
*
Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
*
Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
*
Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
*
Filed herewith.
(+)
Confidential Treatment has been requested for this exhibit and confidential portions have been filed with the
Securities and Exchange Commision.
-2-
2008 | 2009 | 2010 | ||||||||||
Expense Percentage
|
* | ** | * | ** | * | ** | ||||||
|
||||||||||||
MP Premium
|
* | ** | * | ** | * | ** | ||||||
|
||||||||||||
MMEBO
|
* | ** | * | ** | * | ** |
-3-
-4-
-5-
b. | If, as part of a Quarterly Review or Annual Review, the Company determines that the Redetermined Accumulated Surplus for the Preceding Quarter exceeds $9 million, then commencing 15 days after such determination, the Company shall waive the Employers then current obligation to fund the Claims Account, if any, in an amount equal to the Redetermined Accumulated Surplus amount less $9 million. Any Claims Account funding waived by the Company under this subparagraph 6.b. shall not be recognized as Policy Revenue (e.g., as Health Benefits Paid from the Claims Account or otherwise) but the claims funded by such waiver shall be included as Incurred Claims. | ||
The parties acknowledge that the Company waived Additional Quarterly Premium due in 2007 with respect to the first Arrangement Quarter of 2007 in the amount of $2,000,000.00 and (i) such amount shall be taken into consideration for the purposes of determining any further actions, if any, which may be necessary to manage the Redetermined Accumulated Surplus (initially calculated as of June 30, 2007) in accordance with Exhibit A to the MP Financial Agreement, and (ii) such amount shall not be recognized as Policy Revenue. |
2
c. | If, as part of a Quarterly Review or Annual Review, the Company determines that the Redetermined Accumulated Surplus for a Preceding Quarter is less than $9 million or a Redetermined Accumulated Deficit exists, then the Employer shall, within 15 days of the redetermination pay to the Company an amount equal to the difference between $9 million and either (A) the Redetermined Accumulated Surplus amount as of the redetermination date or (B) the Redetermined Accumulated Deficit amount (expressed as a negative value) as of the redetermination date, as applicable. Such payment shall be treated as additional Policy Revenue for purposes of this Exhibit A . |
3
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
247936 |
***
|
1/1/2002 | ||||||
247974 |
***
|
1/1/2002 | 5/28/2003 | |||||
247977 |
***
|
1/1/2002 | 3/1/2002 | |||||
247989 |
***
|
1/1/2002 | 5/27/2003 | |||||
247996 |
***
|
1/1/2002 | 9/1/2002 | |||||
248003 |
***
|
1/1/2002 | 3/1/2003 | |||||
248006 |
***
|
1/1/2002 | 1/22/2002 | |||||
248026 |
***
|
1/1/2002 | 11/19/2005 | |||||
248030 |
***
|
1/1/2002 | 1/1/2007 | |||||
248035 |
***
|
1/1/2002 | 1/1/2002 | |||||
248041 |
***
|
1/1/2002 | 2/1/2004 | |||||
248056 |
***
|
1/1/2002 | 1/11/2002 | |||||
248063 |
***
|
1/1/2002 | 1/1/2004 | |||||
248110 |
***
|
1/1/2002 | 1/1/2007 | |||||
248128 |
***
|
1/1/2002 | 1/1/2006 | |||||
248131 |
***
|
1/1/2002 | 10/1/2003 | |||||
248133 |
***
|
1/1/2002 | 9/1/2005 | |||||
248135 |
***
|
1/1/2002 | 2/22/2002 | |||||
248144 |
***
|
1/1/2002 | 8/15/2003 | |||||
248151 |
***
|
1/1/2002 | 8/1/2002 | |||||
248163 |
***
|
1/1/2002 | 1/1/2002 | |||||
248165 |
***
|
1/1/2002 | 7/1/2002 | |||||
248180 |
***
|
1/1/2002 | 6/1/2002 | |||||
248197 |
***
|
1/1/2002 | 11/1/2002 | |||||
248208 |
***
|
1/1/2002 | 6/16/2002 | |||||
248241 |
***
|
1/1/2002 | 1/1/2005 | |||||
248263 |
***
|
1/1/2002 | 11/22/2002 | |||||
248271 |
***
|
1/1/2002 | ||||||
248291 |
***
|
1/1/2002 | 3/4/2003 | |||||
248306 |
***
|
1/1/2002 | 5/1/2003 | |||||
248314 |
***
|
1/1/2002 | 9/4/2002 | |||||
248324 |
***
|
1/1/2002 | ||||||
248325 |
***
|
1/1/2002 | 5/31/2002 | |||||
248339 |
***
|
1/1/2002 | 9/8/2003 | |||||
248346 |
***
|
1/1/2002 | ||||||
248352 |
***
|
1/1/2002 | 3/30/2002 | |||||
248370 |
***
|
1/1/2002 | 6/1/2002 | |||||
248371 |
***
|
1/1/2002 | 4/28/2002 |
4
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
248372 |
***
|
1/1/2002 | ||||||
248373 |
***
|
1/1/2002 | 2/25/2002 | |||||
248374 |
***
|
1/1/2002 | ||||||
248375 |
***
|
1/1/2002 | ||||||
248376 |
***
|
1/1/2002 | 11/1/2002 | |||||
248379 |
***
|
1/1/2002 | 5/31/2002 | |||||
248382 |
***
|
1/1/2002 | 12/21/2005 | |||||
248384 |
***
|
1/1/2002 | 1/1/2005 | |||||
248388 |
***
|
1/1/2002 | 3/19/2005 | |||||
248390 |
***
|
1/1/2002 | 6/26/2002 | |||||
248396 |
***
|
1/1/2002 | 4/15/2003 | |||||
248399 |
***
|
1/1/2002 | 1/1/2005 | |||||
248404 |
***
|
1/1/2002 | 7/1/2002 | |||||
248405 |
***
|
1/1/2002 | ||||||
248407 |
***
|
1/1/2002 | 12/2/2002 | |||||
248408 |
***
|
1/1/2002 | ||||||
248409 |
***
|
1/1/2002 | ||||||
248410 |
***
|
1/1/2002 | 7/1/2002 | |||||
248411 |
***
|
1/1/2002 | ||||||
248412 |
***
|
1/1/2002 | 3/1/2002 | |||||
248413 |
***
|
1/1/2002 | 6/1/2003 | |||||
248414 |
***
|
1/1/2002 | ||||||
248415 |
***
|
1/1/2002 | ||||||
248416 |
***
|
1/1/2002 | 1/1/2005 | |||||
248417 |
***
|
1/1/2002 | 6/12/2003 | |||||
248418 |
***
|
1/1/2002 | ||||||
248421 |
***
|
1/1/2002 | 6/1/2002 | |||||
248429 |
***
|
1/1/2002 | ||||||
248433 |
***
|
1/1/2002 | 1/1/2002 | |||||
248442 |
***
|
1/1/2002 | ||||||
248457 |
***
|
1/1/2002 | 1/1/2003 | |||||
248463 |
***
|
1/1/2002 | 10/26/2002 | |||||
248466 |
***
|
1/1/2002 | 2/1/2005 | |||||
248473 |
***
|
1/1/2002 | ||||||
248474 |
***
|
1/1/2002 | 6/15/2002 | |||||
248478 |
***
|
1/1/2002 | 8/8/2002 | |||||
248480 |
***
|
1/1/2002 | ||||||
248486 |
***
|
1/1/2002 | 10/1/2005 | |||||
248494 |
***
|
1/1/2002 | 4/1/2003 | |||||
248495 |
***
|
1/1/2002 | 7/1/2002 | |||||
248497 |
***
|
1/1/2002 | ||||||
248501 |
***
|
1/1/2002 | 10/1/2005 | |||||
248516 |
***
|
1/1/2002 | 1/1/2003 | |||||
248519 |
***
|
1/1/2002 | ||||||
248521 |
***
|
1/1/2002 | 1/1/2003 |
5
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
248524 |
***
|
1/1/2002 | 10/16/2002 | |||||
248528 |
***
|
1/1/2002 | ||||||
248532 |
***
|
1/1/2002 | 2/1/2003 | |||||
250136 |
***
|
1/1/2002 | 7/1/2002 | |||||
250197 |
***
|
1/7/2002 | 7/1/2003 | |||||
250201 |
***
|
1/1/2002 | ||||||
250656 |
***
|
1/1/2002 | 6/1/2003 | |||||
250657 |
***
|
1/1/2002 | 1/1/2003 | |||||
250658 |
***
|
2/1/2002 | ||||||
250659 |
***
|
2/1/2002 | 2/1/2004 | |||||
250660 |
***
|
1/1/2002 | 2/16/2005 | |||||
250669 |
***
|
2/15/2002 | 12/9/2002 | |||||
252657 |
***
|
3/1/2002 | ||||||
252926 |
***
|
3/1/2002 | 6/1/2002 | |||||
253683 |
***
|
3/4/2002 | 3/18/2002 | |||||
253774 |
***
|
3/1/2002 | 2/19/2003 | |||||
253775 |
***
|
3/1/2002 | ||||||
253778 |
***
|
2/27/2002 | 8/28/2002 | |||||
254553 |
***
|
4/1/2002 | 5/21/2002 | |||||
254678 |
***
|
4/1/2002 | 5/31/2002 | |||||
254741 |
***
|
4/1/2002 | 4/1/2006 | |||||
255675 |
***
|
4/1/2002 | 10/9/2002 | |||||
255701 |
***
|
4/1/2002 | 8/3/2005 | |||||
255709 |
***
|
4/1/2002 | 4/1/2002 | |||||
256410 |
***
|
2/4/2002 | 2/4/2002 | |||||
256498 |
***
|
2/4/2002 | 8/12/2002 | |||||
256505 |
***
|
4/1/2002 | 1/2/2004 | |||||
257668 |
***
|
4/15/2002 | 5/2/2003 | |||||
261873 |
***
|
6/1/2002 | 10/1/2004 | |||||
262606 |
***
|
7/1/2002 | 1/1/2003 | |||||
262614 |
***
|
6/1/2002 | ||||||
262616 |
***
|
6/1/2002 | 7/1/2004 | |||||
262666 |
***
|
6/1/2002 | 3/6/2003 | |||||
263961 |
***
|
6/7/2002 | 8/1/2002 | |||||
264562 |
***
|
7/1/2002 | 10/22/2004 | |||||
264565 |
***
|
7/1/2002 | ||||||
266459 |
***
|
7/28/2002 | 5/3/2004 | |||||
266473 |
***
|
7/28/2002 | 9/3/2006 | |||||
267825 |
***
|
9/1/2002 | 3/3/2004 | |||||
268747 |
***
|
9/1/2002 | 1/15/2004 | |||||
271606 |
***
|
10/1/2002 | 1/1/2003 | |||||
272924 |
***
|
11/1/2002 | 5/1/2003 | |||||
273651 |
***
|
10/16/2002 | 8/1/2006 | |||||
274488 |
***
|
11/20/2002 | 1/1/2003 | |||||
277124 |
***
|
1/1/2003 | 1/1/2005 |
6
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
278257 |
***
|
12/1/2002 | 11/29/2004 | |||||
279171 |
***
|
1/1/2003 | 7/1/2003 | |||||
279197 |
***
|
1/6/2003 | 2/12/2004 | |||||
279225 |
***
|
12/15/2002 | 4/1/2003 | |||||
281742 |
***
|
1/1/2003 | 1/1/2006 | |||||
282005 |
***
|
1/1/2003 | 12/1/2003 | |||||
282007 |
***
|
1/1/2003 | ||||||
282062 |
***
|
1/6/2003 | 3/1/2004 | |||||
286373 |
***
|
2/1/2003 | ||||||
288802 |
***
|
3/1/2003 | 3/1/2004 | |||||
303058 |
***
|
7/1/2003 | ||||||
303075 |
***
|
5/1/2003 | ||||||
303083 |
***
|
5/1/2003 | 6/1/2005 | |||||
310924 |
***
|
5/22/2003 | ||||||
311776 |
***
|
8/11/2003 | 8/16/2005 | |||||
314764 |
***
|
7/1/2003 | 10/1/2004 | |||||
314770 |
***
|
7/1/2003 | 11/16/2005 | |||||
315038 |
***
|
7/1/2003 | 4/1/2004 | |||||
326974 |
***
|
9/1/2003 | 8/16/2004 | |||||
334639 |
***
|
9/14/2003 | ||||||
338429 |
***
|
10/1/2003 | 8/1/2005 | |||||
345349 |
***
|
9/1/2003 | 9/6/2006 | |||||
348740 |
***
|
10/1/2003 | 3/1/2004 | |||||
348746 |
***
|
10/1/2003 | 2/18/2004 | |||||
353316 |
***
|
11/1/2003 | 11/1/2004 | |||||
369064 |
***
|
1/1/2004 | 12/1/2005 | |||||
378384 |
***
|
1/1/2004 | 1/1/2004 | |||||
389529 |
***
|
1/1/2004 | 6/1/2005 | |||||
391528 |
***
|
3/1/2004 | 10/1/2005 | |||||
395396 |
***
|
3/1/2004 | 10/1/2004 | |||||
399283 |
***
|
2/16/2004 | 6/12/2004 | |||||
400182 |
***
|
2/16/2004 | 3/18/2005 | |||||
400899 |
***
|
2/19/2004 | 5/5/2004 | |||||
420189 |
***
|
5/3/2004 | 5/1/2005 | |||||
421616 |
***
|
6/1/2004 | ||||||
426244 |
***
|
2/1/2004 | 9/28/2004 | |||||
428344 |
***
|
7/1/2004 | 9/4/2005 | |||||
429009 |
***
|
5/12/2004 | 5/12/2004 | |||||
429057 |
***
|
5/12/2004 | 5/12/2004 | |||||
430384 |
***
|
7/1/2004 | ||||||
433257 |
***
|
6/13/2004 | 10/15/2004 | |||||
433886 |
***
|
6/21/2004 | 10/1/2004 | |||||
436305 |
***
|
7/15/2004 | 11/1/2004 | |||||
445040 |
***
|
9/5/2004 | 11/1/2006 | |||||
456752 |
***
|
10/1/2004 | 9/28/2005 | |||||
461332 |
***
|
11/1/2004 | 5/1/2005 |
7
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
462865 |
***
|
11/2/2004 | 2/17/2005 | |||||
464334 |
***
|
1/1/2005 | ||||||
467310 |
***
|
1/1/2005 | ||||||
468171 |
***
|
1/1/2005 | 3/1/2005 | |||||
469055 |
***
|
12/20/2004 | 11/21/2005 | |||||
469086 |
***
|
1/1/2005 | 1/1/2005 | |||||
469115 |
***
|
1/1/2005 | 8/1/2006 | |||||
469117 |
***
|
1/1/2005 | ||||||
472227 |
***
|
1/1/2005 | 7/7/2005 | |||||
473377 |
***
|
1/3/2005 | 6/24/2005 | |||||
473385 |
***
|
1/28/2005 | ||||||
474789 |
***
|
1/29/2005 | 1/1/2006 | |||||
475654 |
***
|
1/30/2005 | ||||||
475961 |
***
|
1/31/2005 | ||||||
476007 |
***
|
2/1/2005 | 11/1/2005 | |||||
476271 |
***
|
2/2/2005 | 7/1/2005 | |||||
478946 |
***
|
1/1/2005 | ||||||
478950 |
***
|
1/1/2005 | ||||||
481120 |
***
|
3/1/2005 | ||||||
481138 |
***
|
3/1/2005 | 9/1/2006 | |||||
482143 |
***
|
4/1/2005 | ||||||
485156 |
***
|
4/1/2005 | 4/7/2006 | |||||
485726 |
***
|
4/16/2005 | 6/10/2006 | |||||
488018 |
***
|
5/9/2005 | 12/1/2005 | |||||
490568 |
***
|
6/1/2005 | 11/4/2006 | |||||
492332 |
***
|
6/6/2005 | 9/1/2005 | |||||
492601 |
***
|
7/1/2005 | 7/1/2006 | |||||
494007 |
***
|
7/1/2005 | 7/1/2006 | |||||
495680 |
***
|
7/15/2005 | 8/1/2006 | |||||
496820 |
***
|
8/1/2005 | ||||||
499842 |
***
|
9/1/2005 | 12/1/2005 | |||||
502882 |
***
|
9/1/2005 | ||||||
505860 |
***
|
10/1/2005 | ||||||
506464 |
***
|
10/1/2005 | 1/1/2007 | |||||
506578 |
***
|
10/16/2005 | ||||||
507063 |
***
|
10/16/2005 | ||||||
507115 |
***
|
10/16/2005 | ||||||
507408 |
***
|
10/1/2005 | ||||||
507509 |
***
|
5/1/2005 | 1/1/2006 | |||||
507823 |
***
|
11/1/2005 | ||||||
508107 |
***
|
11/1/2005 | ||||||
509757 |
***
|
12/1/2005 | ||||||
510325 |
***
|
12/1/2005 | 12/1/2005 | |||||
510608 |
***
|
12/1/2005 | 12/1/2005 | |||||
511462 |
***
|
12/1/2005 | ||||||
515539 |
***
|
1/1/2006 |
8
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
516080 |
***
|
1/1/2006 | ||||||
516355 |
***
|
1/1/2006 | ||||||
516359 |
***
|
1/1/2006 | ||||||
516372 |
***
|
12/1/2005 | ||||||
516376 |
***
|
12/1/2005 | ||||||
516459 |
***
|
1/1/2006 | 8/16/2006 | |||||
516460 |
***
|
1/1/2006 | ||||||
516463 |
***
|
1/1/2006 | ||||||
516606 |
***
|
1/1/2006 | ||||||
516690 |
***
|
1/1/2006 | ||||||
516696 |
***
|
1/1/2006 | ||||||
516730 |
***
|
1/1/2006 | 1/20/2007 | |||||
516733 |
***
|
1/1/2006 | 1/20/2007 | |||||
516919 |
***
|
1/1/2006 | ||||||
517265 |
***
|
1/1/2006 | ||||||
517267 |
***
|
1/1/2006 | ||||||
517272 |
***
|
1/1/2006 | 10/1/2006 | |||||
517314 |
***
|
1/1/2006 | 6/16/2006 | |||||
517398 |
***
|
1/1/2006 | ||||||
517475 |
***
|
1/1/2006 | 4/19/2006 | |||||
517480 |
***
|
1/1/2006 | 1/20/2007 | |||||
517515 |
***
|
1/1/2006 | ||||||
517605 |
***
|
1/28/2006 | 1/28/2007 | |||||
517617 |
***
|
1/23/2006 | ||||||
517871 |
***
|
1/1/2006 | ||||||
517876 |
***
|
2/1/2006 | 12/1/2006 | |||||
518177 |
***
|
2/1/2006 | ||||||
518187 |
***
|
2/1/2006 | 1/25/2007 | |||||
518189 |
***
|
2/1/2006 | 1/25/2007 | |||||
518266 |
***
|
1/9/2006 | 2/26/2007 | |||||
518271 |
***
|
1/1/2006 | ||||||
518459 |
***
|
2/1/2006 | ||||||
518507 |
***
|
11/28/2005 | 11/28/2005 | |||||
518632 |
***
|
2/1/2006 | 12/1/2006 | |||||
520851 |
***
|
1/28/2006 | ||||||
520857 |
***
|
1/28/2006 | ||||||
520959 |
***
|
2/1/2006 | 8/23/2006 | |||||
521502 |
***
|
3/1/2006 | ||||||
521538 |
***
|
4/1/2006 | ||||||
521543 |
***
|
4/1/2006 | ||||||
522179 |
***
|
2/1/2006 | 5/9/2006 | |||||
522217 |
***
|
3/1/2006 | ||||||
523129 |
***
|
3/1/2006 | ||||||
525060 |
***
|
4/1/2006 | ||||||
525064 |
***
|
4/1/2006 | ||||||
525406 |
***
|
4/1/2006 |
9
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
525632 |
***
|
4/26/2006 | ||||||
525956 |
***
|
4/1/2006 | ||||||
526514 |
***
|
3/1/2006 | ||||||
527434 |
***
|
4/28/2006 | ||||||
527515 |
***
|
4/28/2006 | ||||||
528767 |
***
|
1/25/2006 | ||||||
528870 |
***
|
4/1/2006 | 7/7/2006 | |||||
528883 |
***
|
6/1/2006 | ||||||
529102 |
***
|
5/17/2006 | 10/1/2006 | |||||
529253 |
***
|
4/16/2006 | ||||||
530009 |
***
|
5/1/2006 | ||||||
530927 |
***
|
6/1/2006 | ||||||
532376 |
***
|
6/1/2006 | ||||||
532719 |
***
|
7/1/2006 | ||||||
532727 |
***
|
7/1/2006 | ||||||
533813 |
***
|
7/1/2006 | ||||||
533818 |
***
|
7/1/2006 | ||||||
534014 |
***
|
7/1/2006 | ||||||
534026 |
***
|
5/28/2006 | ||||||
534331 |
***
|
7/1/2006 | 1/16/2007 | |||||
534336 |
***
|
7/1/2006 | 1/16/2007 | |||||
535663 |
***
|
7/1/2006 | 10/1/2006 | |||||
536206 |
***
|
8/1/2006 | 8/19/2006 | |||||
536926 |
***
|
8/6/2006 | ||||||
538492 |
***
|
8/1/2006 | ||||||
538925 |
***
|
8/7/2006 | ||||||
539879 |
***
|
9/1/2006 | ||||||
540257 |
***
|
7/24/2006 | 7/24/2006 | |||||
542302 |
***
|
8/28/2006 | 1/1/2007 | |||||
542608 |
***
|
9/1/2006 | ||||||
542986 |
***
|
10/1/2006 | 1/27/2007 | |||||
543149 |
***
|
7/28/2006 | ||||||
543770 |
***
|
9/9/2006 | ||||||
544043 |
***
|
9/23/2006 | ||||||
544697 |
***
|
10/1/2006 | ||||||
545056 |
***
|
9/25/2006 | 1/6/2007 | |||||
545333 |
***
|
9/11/2006 | 9/11/2006 | |||||
545886 |
***
|
11/1/2006 | 2/20/2007 | |||||
545891 |
***
|
11/1/2006 | ||||||
545901 |
***
|
11/1/2006 | ||||||
546303 |
***
|
9/25/2006 | ||||||
546591 |
***
|
11/1/2006 | ||||||
546881 |
***
|
11/1/2006 | ||||||
546885 |
***
|
10/14/2006 | ||||||
547606 |
***
|
11/1/2006 | ||||||
547607 |
***
|
11/1/2006 |
10
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
548027 |
***
|
12/1/2006 | 3/10/2007 | |||||
548039 |
***
|
10/1/2006 | 12/21/2006 | |||||
548056 |
***
|
12/1/2006 | ||||||
549262 |
***
|
1/1/2007 | ||||||
549993 |
***
|
12/1/2006 | ||||||
550439 |
***
|
1/1/2007 | ||||||
550588 |
***
|
12/1/2006 | ||||||
551508 |
***
|
12/4/2006 | 12/21/2006 | |||||
552481 |
***
|
1/1/2007 | ||||||
552561 |
***
|
1/1/2007 | ||||||
552953 |
***
|
1/1/2007 | ||||||
553575 |
***
|
1/1/2007 | ||||||
556151 |
***
|
12/20/2006 | ||||||
556153 |
***
|
12/24/2006 | ||||||
556155 |
***
|
1/1/2007 | 2/14/2007 | |||||
556157 |
***
|
1/1/2007 | 2/14/2007 | |||||
556161 |
***
|
1/1/2007 | ||||||
556163 |
***
|
1/1/2007 | 2/14/2007 | |||||
557712 |
***
|
1/1/2007 | ||||||
559103 |
***
|
2/1/2007 | ||||||
559109 |
***
|
1/1/2007 | 1/1/2007 | |||||
559124 |
***
|
1/1/2007 | 1/2/2007 | |||||
567965 |
***
|
2/26/2007 | ||||||
569809 |
***
|
4/1/2007 | ||||||
569825 |
***
|
4/1/2007 | ||||||
570491 |
***
|
4/1/2007 | ||||||
250579 |
***
|
1/16/2002 | 5/1/2002 | |||||
250671 |
***
|
1/22/2002 | 3/4/2002 | |||||
251016 |
***
|
1/13/2002 | 3/1/2005 | |||||
256129 |
***
|
3/1/2002 | 7/1/2002 | |||||
256904 |
***
|
1/1/2002 | 6/1/2002 | |||||
256960 |
***
|
3/20/2002 | 6/1/2002 | |||||
257422 |
***
|
3/26/2002 | 6/1/2002 | |||||
257424 |
***
|
4/9/2002 | 4/9/2002 | |||||
259230 |
***
|
4/2/2002 | 11/1/2002 | |||||
259740 |
***
|
4/14/2002 | 7/9/2002 | |||||
260298 |
***
|
4/2/2002 | 8/2/2002 | |||||
260303 |
***
|
4/16/2002 | 7/16/2002 | |||||
263976 |
***
|
4/3/2002 | 6/26/2002 | |||||
265506 |
***
|
6/20/2002 | 3/24/2003 | |||||
265510 |
***
|
6/1/2002 | 11/1/2002 | |||||
265515 |
***
|
6/1/2002 | 9/21/2002 | |||||
265560 |
***
|
6/1/2002 | 10/12/2002 | |||||
268687 |
***
|
7/1/2002 | 7/1/2002 | |||||
268689 |
***
|
8/8/2002 | 11/1/2002 | |||||
268694 |
***
|
7/24/2002 | 11/24/2002 |
11
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
269888 |
***
|
8/1/2002 | 8/1/2002 | |||||
269896 |
***
|
8/1/2002 | 8/1/2002 | |||||
269898 |
***
|
8/1/2002 | 8/1/2002 | |||||
269899 |
***
|
7/18/2002 | 11/17/2002 | |||||
274864 |
***
|
10/15/2002 | 4/15/2003 | |||||
274873 |
***
|
10/16/2002 | 1/13/2003 | |||||
274875 |
***
|
10/16/2002 | 12/1/2002 | |||||
274880 |
***
|
10/16/2002 | 11/16/2002 | |||||
274914 |
***
|
10/16/2002 | 11/16/2002 | |||||
275044 |
***
|
9/12/2002 | 11/30/2002 | |||||
280221 |
***
|
12/1/2002 | 3/1/2003 | |||||
280224 |
***
|
11/1/2002 | 2/1/2003 | |||||
280225 |
***
|
1/1/2003 | 7/1/2003 | |||||
280327 |
***
|
12/4/2002 | 6/4/2004 | |||||
281701 |
***
|
1/1/2003 | 10/3/2003 | |||||
282549 |
***
|
12/10/2002 | 2/10/2004 | |||||
283649 |
***
|
11/20/2002 | 1/20/2004 | |||||
286556 |
***
|
12/27/2002 | 9/1/2003 | |||||
288804 |
***
|
1/21/2003 | 1/21/2005 | |||||
293814 |
***
|
2/1/2003 | 5/27/2003 | |||||
293891 |
***
|
2/27/2003 | 2/1/2003 | |||||
310933 |
***
|
5/1/2003 | 11/1/2003 | |||||
315060 |
***
|
6/12/2003 | 7/1/2003 | |||||
315099 |
***
|
6/12/2003 | 0/1/2003 | |||||
315132 |
***
|
6/2/2003 | 0/1/2003 | |||||
343286 |
***
|
8/21/2003 | 12/17/2003 | |||||
355898 |
***
|
9/15/2003 | 3/15/2005 | |||||
360528 |
***
|
9/1/2003 | 2/1/2004 | |||||
373490 |
***
|
11/11/2003 | 12/11/2004 | |||||
375159 |
***
|
12/3/2003 | 3/1/2005 | |||||
386745 |
***
|
2/1/2004 | 3/1/2005 | |||||
388711 |
***
|
11/26/2003 | 1/1/2004 | |||||
390767 |
***
|
2/1/2004 | 3/1/2005 | |||||
390903 |
***
|
2/6/2004 | 3/1/2005 | |||||
390937 |
***
|
1/7/2004 | 3/1/2005 | |||||
397824 |
***
|
3/3/2004 | 8/1/2005 | |||||
397852 |
***
|
3/3/2004 | 8/1/2005 | |||||
397859 |
***
|
3/3/2004 | 12/4/2004 | |||||
397876 |
***
|
3/3/2004 | 7/1/2005 | |||||
397881 |
***
|
3/3/2004 | 5/4/2004 | |||||
398067 |
***
|
3/3/2004 | 5/4/2005 | |||||
398089 |
***
|
3/15/2004 | 7/1/2005 | |||||
398122 |
***
|
3/3/2004 | 8/1/2005 | |||||
398159 |
***
|
3/3/2004 | 9/1/2004 | |||||
401392 |
***
|
3/1/2004 | 4/1/2004 | |||||
406144 |
***
|
2/19/2004 | 6/6/2004 |
12
Policy | Effective | Termination | ||||||
# | Policyholder | Date | Date | |||||
421429 |
***
|
4/16/2004 | 7/1/2004 | |||||
421796 |
***
|
5/6/2004 | 3/1/2005 | |||||
428137 |
***
|
5/11/2004 | 6/1/2004 | |||||
442733 |
***
|
7/13/2004 | 10/4/2004 | |||||
452935 |
***
|
8/13/2004 | 3/1/2005 | |||||
454038 |
***
|
9/8/2004 | 3/1/2005 | |||||
459689 |
***
|
10/2/2004 | 3/1/2005 | |||||
462574 |
***
|
11/19/2004 | 3/1/2005 | |||||
463573 |
***
|
11/24/2004 | 1/3/2005 | |||||
464871 |
***
|
12/1/2004 | 3/1/2005 | |||||
465323 |
***
|
9/2/2004 | 7/1/2005 |
13
14
I. | The definition of Policy for purposes of Section 1(s) of the Agreement shall be as follows: |
| Effective January 1, 2008: |
o | Policy No. 701648 (Medical *** ) (Policy) |
II. | The Maximum Monthly Employer Benefit Obligation shall be the following: |
| Effective January 1, 2008: |
o | *** of the Quoted Premium for each Policy |
| Effective January 1, 2009: |
o | *** of the Quoted Premium for each Policy |
| Effective January 1, 2010: |
o | *** of the Quoted Premium for each Policy |
III. | The MP Premium shall be the following: |
| Effective January 1, 2008: |
o | *** of the Quoted Premium for each Policy |
| Effective January 1, 2009: |
o | *** of the Quoted Premium for each Policy |
| Effective January 1, 2010: |
o | *** of the Quoted Premium for each Policy |
IV. | The Expense Percentage shall be the following: |
| Effective January 1, 2008: |
o | *** for the Policies and Non-MP Policies |
| Effective January 1, 2009: |
o | *** for the Policies and Non-MP Policies |
15
| Effective January 1, 2010: |
o | *** for the Policies and Non-MP Policies |
V. | If the Pooling Option is elected by the Employer, the Pooling Charge shall be based on Employees covered under a Policy or Non-MP Policy (Covered Employees) and shall be as follows: |
| With respect to the 2005 Arrangement Year, |
o | *** per Covered Employee per Arrangement Month. |
For example, assuming that the number of covered Employees for each month of 2005 remains constant at 46,871, the annual Pool Charge for the 2005 Arrangement Year would be the product of (i) 46,871 multiplied by *** and (ii) 12 months, which would equal approximately *** . |
| with respect to the 2006 Arrangement year, |
o | an amount determined by the Company, but in no event greater than *** per Covered Employee per Arrangement Month. |
| with respect to the 2007 Arrangement year, |
o | an amount determined by the Company, but in no event greater than *** per Covered Employee per Arrangement Month. |
VI. | The percentages contained in this Exhibit D assume an estimated premium tax expense and assessments of *** . The parties agree to review and revise the percentages described in Exhibit D to maintain profit/risk and administrative charges described in the Letter of Agreement dated April 21, 2007 if the actual incurred premium tax expense and assessments total more or less than *** . |
16
17
ADMINISTAFF OF TEXAS, IN | UNITED HEALTHCARE INSURANCE COMPANY | |||||||
|
||||||||
By:
|
/s/ Richard G. Rawson | By: | /s/ Kenneth A. Burdick | |||||
|
||||||||
Authorized Signature | Authorized Signature | |||||||
|
||||||||
Name:
|
Richard G. Rawson | Name: | Kenneth A. Burdick | |||||
Title:
|
President | Title: | Vice President | |||||
Date:
|
July 2, 2007 | Date: | July 2, 2007 |
18
1. | *** : Effective May 10, 2007, the Employer may offer alternate *** coverage (but not *** coverage) through *** , *** and *** to Clients in *** . Subject to Section E of this Exhibit F , the Employer may offer *** coverage to Clients in *** . | ||
2. | *** and *** : |
a. | The Employer shall offer to each Client the following coverage options for Employees at *** worksites: (i) existing *** coverage options (medical and/or dental) or (ii) coverage options offered by the Company (medical and/or dental). | ||
b. | The Employer shall offer to each Client the following coverage options for Employees at *** worksites: (i) existing *** coverage options and (ii) Competitive coverage options offered by the Company (medical and/or dental). |
3. | *** and *** : Effective January 1, 2008, *** and *** shall no longer be an exception to Companys right to be the Employers exclusive provider. | ||
4. | Developing Markets : |
a. | Effective *** , the exclusivity exception for New Markets reflected in the 2005 Agreement is eliminated (except for those New Markets designated as such prior to *** ). | ||
b. | Effective *** , if no group health insurance or similar product offered by the Company in a Developing Market is competitive in that market, as determined in section B.4.c of this Exhibit F , the Employer may offer, subject to section B.4.c and Section C of this Exhibit F , the health insurance or similar products of a Competing Vendor in such Developing Market. | ||
c. | If the Employer in good faith reasonably believes the Companys product offerings are not competitive in a Developing Market, then the Employer shall inform the Company of such belief as soon as practicable and the parties shall discuss the Employers concerns. If the Company, after such discussions, in good faith reasonably believes its product offerings in such Developing Market are competitive, the Company will not be required to waive the Employers exclusivity requirement under this Exhibit F ; provided, however, that the Company will in no event unreasonably withhold any such waiver. |
2
5. | Removal or Addition of the Companys *** and Other Products |
a. | If, at any time the *** offered by the Employer through the Company ceases to be Competitive, the Employer may in its sole discretion cease offering such product. In any such case, the Employer shall notify the Company of its opinion concerning the Competitive status of such product at least *** before it ceases offering the product and shall have the burden of undertaking the steps required to confirm the same in accordance with section B(4) and B.7(b) of this Exhibit F . If the Companys *** becomes Competitive within *** after its receipt of the Employers notice, the Employer may not replace it unless and until it is again not Competitive, in which case a new notice shall be required and a new *** corrective period will begin. | ||
b. | If, at the time the Company begins to offer an *** which is Competitive in a certain market, the Employer is offering an *** through a Competing Vendor consistent with the provisions of this Exhibit F in that market, the Employer shall offer each Client in such market coverage options for Employees in such market not later than the renewal date of such Clients service agreement consisting of either (i) subject to Section C of this Exhibit F , the *** and *** options or (ii) such Competing Vendors *** and, at the Competing Vendors option, its *** . | ||
c. | Notwithstanding section B of this Exhibit F , the Employer and the Company shall discuss in detail the circumstances under which the Company could make available and the Employer could accept new Company offerings in *** beginning on a date mutually agreed upon by the parties. In no event shall the Employer be required to include a new Company product in *** that would reasonably be expected to materially increase Employers health plan costs in that market or adversely impact its arrangements with insurers in that market. |
3
4
ADMINISTAFF OF TEXAS, INC. | UNITED HEALTHCARE INSURANCE COMPANY | |
By:
/s/ Richard G. Rawson
Authorized Signature |
By: /s/ Kenneth A. Burdick
Authorized Signature |
|
|
||
Name: Richard G. Rawson
Title: President |
Name: Kenneth A. Burdick
Title: Vice President |
|
|
||
Date: July 2, 2007
|
Date: July 2, 2007 |
6
1. | I have reviewed this quarterly report on Form 10-Q of Administaff, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Paul J. Sarvadi | ||||
Paul J. Sarvadi | ||||
Chairman of the Board and Chief Executive Officer | ||||
1. | I have reviewed this quarterly report on Form 10-Q of Administaff, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Douglas S. Sharp | ||||
Douglas S. Sharp | ||||
Vice President of Finance,
Chief Financial Officer and Treasurer |
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/s/ Paul J. Sarvadi
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Chairman of the Board and Chief Executive Officer | ||
August 1, 2007
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/s/ Douglas S. Sharp
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Vice President of Finance, Chief Financial Officer and Treasurer | ||
August 1, 2007
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