**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C.  20549**

 

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**FORM 10-K/A**

 

**AMENDMENTNO. 1 TO**

**ANNUAL REPORT PURSUANT TO SECTION13 OR 15(d)**

**OF THE SECURITIES EXCHANGE ACT OF1934**

 

**For the fiscal yearended December 31, 2001**

 

**Commission filenumber 1-14177**

 

**COBALT CORPORATION**

(Exact name of registrant as specified in itscharter)

 
| **Wisconsin**                                                                |   | **39-1931212**                       |
|------------------------------------------------------------------------------|--------|--------------------------------------|
| (State of incorporation)                                                     |   | (I.R.S. Employer Identification No.) |
|                                                                         |   |                                 |
| **401 West Michigan Street****Milwaukee,  Wisconsin**                        |   | **53203-2896**                       |
| (Address of principal executive offices)                                     |   | (Zip Code)                           |
|                                                                         |   |                                 |
| Registrant’s telephone number,  including area code: **(414) 226-6900** |

 

Securitiesregistered pursuant to Section 12(b) of the Act:

 

| **Title of each class**    |   | **Name of each exchange on which registered** |
|----------------------------|--------|-----------------------------------------------|
| Common Stock, no par value |   | New York Stock Exchange                       |

 

Securitiesregistered pursuant to Section 12(g) of the Act:**  None**

 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days. Yes ý    No 

 

Indicate by check mark if disclosure of delinquent filers pursuant toItem 405 of Registration S-K is not contained herein, and will not becontained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K.

 

As of February 28, 2002, there were outstanding 40,639,438 shares ofCommon Stock.  The aggregate marketvalue of the shares of such stock held by non-affiliates of the registrant was$71,344,267 as of the same date, assuming solely for the purposes of thiscalculation that the Wisconsin United for Health Foundation, Inc. and alldirectors and executive officers of the Registrant are “affiliates.”  This determination of affiliate status isnot necessarily a conclusive determination of other purposes.

 

**DOCUMENTSINCORPORATED BY REFERENCE**

Portions of Cobalt Corporation Proxy Statement dated on or about

April 25, 2002 (Part III)

 

 

 

**EXPLANATORY NOTE**

 

This AmendmentNo. 1 on Form 10-K/A amends the Form 10-K filed by Cobalt Corporation (the"Registrant") on March 27, 2002. This Form 10-K/A amends Item 6 of the Registrant's original Form 10-Kfiling only, and all other portions of the Registrant's original 10-K filingremain in effect.

 

 

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**ITEM 6. Selected Consolidated Financial Data**

 

The followingselected financial data are derived from the consolidated financial statementsof Cobalt .   The data should be read inconjunction with Cobalt’s consolidated financial statements, the related notesthereto, “Management’s Discussion and Analysis of Financial Condition andResults of Operations” and other financial information included herein.

 
|                                                          |   | **Years  Ended December 31,**          |      |
|---------------------------------------------------------------|--------|----------------------------------------|-----------|
|                                                          |   | **2001**                               |      | **2000** |   | **1999** |   | **1998** |   | **1997** |   |
|                                                          |   | **(In  thousands, except share data)** | * *  |
| **Statement of Operations Data:**                             |   |                                   |      |
| Revenues:                                                     |   |                                   |      |   |   |   |   |   |   |   |   |
| Health services revenue:                                      |   |                                   |      |   |   |   |   |   |   |   |   |
| Premium                                                       |   | $                                      | 1,262,145 |   | $ | 538,080 |   | $ | 418,949 |   | $ | 361,965 |   | $ | 345,903 |   |
| Government contract fees                                      |   | 117,192                                |      | 70,305 |   | 52,259 |   | 31,667 |   | 23,333 |   |
| Other                                                         |   | 59,383                                 |      | 24,715 |   | 25,970 |   | 25,302 |   | 20,606 |   |
| Investment results                                            |   | 12,526                                 |      | 9,583 |   | 18,510 |   | 13,501 |   | 18,347 |   |
| Total revenues                                                |   | 1,451,246                              |      | 642,683 |   | 515,688 |   | 432,435 |   | 408,189 |   |
| Expenses:                                                     |   |                                   |      |   |   |   |   |   |   |   |   |
| Medical and other benefits                                    |   | 1,121,357                              |      | 497,822 |   | 376,814 |   | 297,885 |   | 297,979 |   |
| Selling, general, administrative and other                    |   | 323,377                                |      | 176,878 |   | 158,187 |   | 133,153 |   | 119,036 |   |
| Profit sharing on joint ventures                              |   | 510                                    |      | — |   | — |   | — |   | — |   |
| Interest                                                      |   | 561                                    |      | 300 |   | 553 |   | 115 |   | 215 |   |
| Amortization of goodwill                                      |   | 5,908                                  |      | 622 |   | 191 |   | — |   | — |   |
| Total expenses                                                |   | 1,451,713                              |      | 675,622 |   | 535,745 |   | 431,153 |   | 417,230 |   |
| Operating income (loss)                                       |   | (467                                   | )         | (32,939 | ) | (20,057 | ) | 1,282 |   | (9,041 | ) |
| Gain (loss) from investment in affiliates,  net of tax        |   | (22,724                                | )         | (6,526 | ) | (22,690 | ) | 3,991 |   | 6,857 |   |
| Pretax income (loss)                                          |   | (23,191                                | )         | (39,465 | ) | (42,747 | ) | 5,273 |   | (2,184 | ) |
| Income tax expense (benefit)                                  |   | (886                                   | )         | 548 |   | — |   | (78 | ) | (2,785 | ) |
| Net income (loss)                                             |   | $                                      | (22,305   | ) | $ | (40,013 | ) | $ | (42,747 | ) | $ | 5,351 |   | $ | 601 |   |
| Earnings (loss) per share: (1), (2)                           |   |                                   |      |   |   |   |   |   |   |   |   |
| Basic and diluted                                             |   | $                                      | (0.58     | ) | $ | (1.28 | ) | $ | (1.37 | ) | $ | 0.17 |   | $ | 0.02 |   |
| Weighted average shares outstanding:                          |   |                                   |      |   |   |   |   |   |   |   |   |
| Basic and diluted (1), (2)                                    |   | 38,434,459                             |      | 31,313,390 |   | 31,313,390 |   | 31,313,390 |   | 31,313,390 |   |
| **Operating Statistics:**                                     |   |                                   |      |   |   |   |   |   |   |   |   |
| Loss ratio (3)                                                |   | 88.8                                   | %         | 92.5 | % | 89.9 | % | 82.3 | % | 86.1 | % |
| Selling, general, administrative and other  expense ratio (4) |   | 22.5                                   | %         | 27.9 | % | 31.8 | % | 31.8 | % | 30.5 | % |
| Net income (loss) margin (5)                                  |   | (1.5%                                  | )         | (6.2% | ) | (8.3% | ) | 1.2 | % | 0.1 | % |
|                                                               |        |                                        |           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 
|                            |   | **December  31,**   |     |
|---------------------------------|--------|---------------------|----------|
|                            |   | **2001**            |     | **2000** |   | **1999** |   | **1998** |   | **1997** |   |
|                            |   | **(In  thousands)** | * * |
| **Balance Sheet Data:**         |   |                |     |   |   |   |   |   |   |   |   |
| Cash  and investments           |   | $                   | 243,617  |   | $ | 45,678 |   | $ | 57,383 |   | $ | 109,447 |   | $ | 104,261 |   |
| Total assets                    |   | 726,805             |     | 394,205 |   | 381,400 |   | 443,186 |   | 392,699 |   |
| Note receivable from affiliate  |   | —              |     | 70,000 |   | 70,000 |   | 70,000 |   | 70,000 |   |
| Total shareholders’ equity |   | 208,222             |     | 168,943 |   | 200,109 |   | 250,991 |   | 245,857 |   |
|                                 |        |                     |          |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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(1)                                  Whenthe Company reports a net loss, potentially dilutive securities are notincluded in the calculation of earnings per share (“EPS”) because theirinclusion would have an antidilutive effect.

(2)                                  The31,313,390 shares of Cobalt stock issued to the Foundation were used tocalculate EPS for all periods prior to the Combination.

(3)                                  Representsmedical and other benefits as a percentage of premium revenue.

(4)                                  Representsselling, general, administrative and other expenses as a percentage of healthservices revenue.

(5)                                  Representsnet income (loss) as a percentage of total revenues.

 

 

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**SIGNATURES**

 

Pursuant to the requirements ofthe Securities Exchange Act of 1934, the Registrant has duly caused thisamendment to report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

 

 
| April 16, 2002 | COBALT CORPORATION |
|----------------|--------------------|
|           |               |
|           | By:                | /s/ Gail L. Hanson |
|           |               | Gail L. Hanson  Senior Vice President, Treasurer and   Chief Financial Officer |

 

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