# EDGAR Filing Document

**Accession Number:** 0001831097
**File Stem:** 0000950170-23-005516
**Filing Date:** 2023-3
**Character Count:** 37545
**Document Hash:** 6bfda7f4aa277668b9362c73d42c7060
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-005516.hdr.sgml**: 20230301

**ACCESSION NUMBER**: 0000950170-23-005516

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230301

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230301

**DATE AS OF CHANGE**: 20230301

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** agilon health, inc.
- **CENTRAL INDEX KEY:** 0001831097
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090]
- **IRS NUMBER:** 371915147
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40332
- **FILM NUMBER:** 23693468

**BUSINESS ADDRESS:**
- **STREET 1:** 6210 E HWY 290
- **STREET 2:** SUITE 450
- **CITY:** AUSTIN
- **STATE:** TX
- **ZIP:** 78723
- **BUSINESS PHONE:** 562-256-3800

**MAIL ADDRESS:**
- **STREET 1:** 6210 E HWY 290
- **STREET 2:** SUITE 450
- **CITY:** AUSTIN
- **STATE:** TX
- **ZIP:** 78723

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Agilon Health Topco, Inc.
- **DATE OF NAME CHANGE:** 20201103

?xml version="1.0" encoding="ASCII"? 8-K

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549**

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**FORM** 8-K

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**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported):** March 01, 2023<br>

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agilon health, inc.

**(Exact name of Registrant as Specified in Its Charter)**

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---

| | | |
|:---|:---|:---|
| Delaware | 001-40332 | 37-1915147 |
| **(State or Other Jurisdiction<br>of Incorporation)** | **(Commission File Number)** | **(IRS Employer<br>Identification No.)** |
| 6210 E Hwy 290, Suite 450 |  |  |
| Austin**,** Texas |  | 78723 |
| **(Address of Principal Executive Offices)** |  | **(Zip Code)** |

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**Registrant's Telephone Number, Including Area Code:** 562 256-3800<br>

Not Applicable

**(Former Name or Former Address, if Changed Since Last Report)**

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

**Securities registered pursuant to Section 12(b) of the Act:**

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| | |
|:---|:---|
| **<br>Title of each class** | **<br>Name of each exchange on which registered** |
| Common stock, par value $0.01 per share<br> AGL | The New York Stock Exchange |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02 Results of Operations and Financial Condition.**

On March 1, 2023, agilon health, inc., a Delaware corporation, issued a press release setting forth its financial results for the quarter and year ended December 31, 2022. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.

The information set forth in this Item 2.02 of this Current Report on Form 8-K and the related information in Exhibit 99.1 attached hereto is being furnished herewith, and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section and shall not be incorporated by reference in any filing with, the Securities and Exchange Commission under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference therein.

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits

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| | |
|:---|:---|
| **Exhibit**<br>**Number** | <br>**Description** |
| &nbsp;&nbsp;&nbsp;&nbsp;99.1 | [<u>Press Release dated March 1, 2023.</u>](agl-ex99_1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | | |
|:---|:---|:---|:---|
|  |  |  | agilon health, inc. |
| Date: | March 1, 2023 | By:  | /s/ TIMOTHY S. BENSLEY |
|  |  |  | Timothy S. Bensley<br>Chief Financial Officer |

---

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## Ex-99

**Exhibit 99.1**

![img88042655_0.gif](img88042655_0.gif)

**agilon health Reports Fourth Quarter and Fiscal Year 2022 Results** 

**Revenue increased 49% to $690 million, Medicare Advantage membership increased 45% to 269,500, and Medical Margin increased 93% to $61 million during the fourth quarter**

**Guidance for 2023 includes significant gains in Adjusted EBITDA to $75 million to $90 million while maintaining strong revenue and membership growth**<sup>1</sup>

**Class of 2024 new partners expected to add at least 80,000 Medicare Advantage members across 6 physician groups, driving growth of over 130,000 new Medicare Advantage members in 2024**

**Acquisition of mphrX enables faster onboarding of agilon physician partners and rapid integration of clinical data, accelerating performance and speed to value**

**AUSTIN, T.X., March 1, 2023** – agilon health, inc. (NYSE: AGL), the trusted partner empowering physicians to transform health care in our communities, announced results for the fourth quarter and fiscal year ended December 31, 2022.

**<u>Fourth Quarter and Fiscal Year 2022 Results:</u>**

• Total revenue of $690 million increased 49% during the fourth quarter compared to $463 million in the fourth quarter 2021. For the fiscal year 2022, total revenue of $2.71 billion increased 48% compared to $1.83 billion in the comparable 2021 period.

• Total members live on the agilon platform increased to 358,600 as of December 31, including 269,500 Medicare Advantage members and 89,000 Direct Contracting beneficiaries. Medicare Advantage membership increased 45%, with 13% growth in same geographies.

• Medical margin of $61 million increased 93% during the fourth quarter compared to $31 million in the fourth quarter 2021. For the fiscal year 2022, medical margin of $305 million increased 67% compared to $182 million in 2021. Medical margin represented 8.8% of revenue during the fourth quarter and 11.2% for the fiscal year 2022, compared to 6.8% and 9.9% of revenue in the fourth quarter and full year 2021, respectively.

• Net loss of $57 million in the fourth quarter, compared to a net loss of $57 million in fourth quarter 2021. For the fiscal year 2022, net loss of $107 million compared to a net loss of $407 million in 2021. Net loss for the fiscal year 2021 includes $292 million in non-cash stock-based compensation expense primarily related to agilon's initial public offering in April 2021.

• Adjusted EBITDA of negative $11 million in the fourth quarter compared to negative $27 million during the fourth quarter 2021. For the fiscal year 2022, Adjusted EBITDA of positive $4 million compared to negative $39 million in the comparable 2021 period. Adjusted EBITDA contribution from Direct Contracting was $8 million during the fourth quarter 2022 and $14 million for the for the fiscal year 2022.

"Our strong results in 2022 demonstrate the power of our aligned partnership model to drive consistently better outcomes for patients and physicians," said Steve Sell, chief executive officer. "We are entering 2023 with incredible momentum and the Class of 2024 new partners will expand our national network to 2,700 primary care physicians and 30+ communities."

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**Outlook for First Quarter and Fiscal Year 2023:**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quarter Ended**<br>**March 31, 2023** | **Quarter Ended**<br>**March 31, 2023** | **Year Ended**<br>**December 31, 2023** | **Year Ended**<br>**December 31, 2023** |
|  | Low | High | Low | High |
| Medicare Advantage Members2 | 385000 | 390000 | 400000 | 410000 |
| ACO REACH Members2 | 85000 | 90000 | 85000 | 90000 |
| Total Members Live on Platform2 | 470000 | 480000 | 485000 | 500000 |
| Total revenues ($M) | $1070 | $1090 | $4280 | $4370 |
| Medical Margin ($M) | $160 | $170 | $535 | $560 |
| Adjusted EBITDA ($M)1 | $32 | $37 | $75 | $90 |

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<sup>1</sup>We have not reconciled guidance for Adjusted EBITDA to net income (loss), the most comparable GAAP measure, and have not provided forward-looking guidance for net income (loss) because of the uncertainty around certain items that may impact net income (loss), including stock-based compensation and geography entry costs.

<sup>2</sup>Membership reflects management's outlook for end of period. agilon's partnered ACO REACH Entities (formerly Direct Contracting) are not consolidated within its financial results.

Adjusted EBITDA contribution from ACO REACH (formerly Direct Contracting) is expected in a range of $5 million to $10 million for 2023.<sup>1</sup>

**Membership Details for the Year Ended 2022**

Total members live on the agilon platform increased to 358,600 as of December 31, 2022. Total members live on the platform include 269,500 Medicare Advantage members and 89,000 attributed Direct Contracting beneficiaries. Average Medicare Advantage membership was 272,000 during the fourth quarter and 264,000 for the fiscal year 2022.

**Acquisition of mphrX**

On February 28, 2023, agilon health completed the acquisition of mphrX, a leading provider of value-based care technology and interoperability solutions. mphrX's Minerva Healthcare Data Platform uses FHIR-based standards to rapidly aggregate, access, and exchange data across healthcare delivery networks. Minerva's integration into agilon's existing technology platform will enable faster onboarding of agilon partners and rapid integration of clinical data, accelerating performance and speed to value for patients and physicians. Management does not anticipate mphrX will have a meaningful impact on agilon's Adjusted EBITDA during 2023.

**Webcast and Conference Call:**

agilon health will host a conference call to discuss fourth quarter and fiscal year 2022 results on Wednesday, March 1, 2023 at 4:30 PM Eastern Time. The conference call can be accessed by dialing (844) 200-6205 for U.S. participants and +1 (929) 526-1599 for international participants and referencing participant code 553857. A simultaneous webcast can be accessed by visiting the "Events & Presentations" section of agilon's Investor Relations website at https://investors.agilonhealth.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call.

**About agilon health**

agilon health is the trusted partner empowering physicians to transform health care in our communities. Through our partnerships and purpose-built platform, agilon is accelerating at scale how physician groups transition to a value-based Total Care Model for senior patients. agilon provides the technology, people, capital, process, and access to a peer network of 2,200+ PCPs that allow physician groups to maintain

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their independence and focus on the total health of their most vulnerable patients. Together, agilon and its physician partners are creating the healthcare system we need – one built on the value of care, not the volume of fees. The result: healthier communities and empowered doctors. agilon is the trusted partner in 25 diverse communities and is here to help more of our nation's leading physician groups and health systems have a sustained, thriving future. For more information visit <u>www.agilonhealth.com</u> and connect with us on <u>Twitter</u>, <u>Instagram</u>, <u>LinkedIn</u> and <u>YouTube.</u>

**Forward-Looking Statements**

Statements in this release that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among other things, statements regarding our and our officers' intent, belief or expectation as identified by the use of words such as "may," "will," "project," "expect," "believe," "intend," "anticipate," "seek," "target," "forecast," "plan," "potential," "estimate," "could," "would," "should," and other comparable and derivative terms or the negatives thereof. Examples of forward-looking statements include, among other things: statements regarding timing, outcomes and other details relating to current, pending or contemplated new markets, new partnership structures, financing activities, acquisitions and dispositions, or other transactions discussed in this release; and statements regarding growth opportunities, ability to deliver sustainable long-term value, business environment, long term opportunities and strategic growth plans including without limitation with respect to expected revenue and net income, total and average membership, Adjusted EBITDA, and other financial projections and assumptions, as well as comparable statements included in other sections of this release. Forward-looking statements reflect our current expectations and views about future events and are subject to risks and uncertainties that could significantly affect our future financial condition and results of operations. While forward-looking statements reflect our good faith belief and assumptions we believe to be reasonable based upon current information, we can give no assurance that our expectations or forecasts will be attained. Further, we cannot guarantee the accuracy of any such forward-looking statement contained in this release, and such forward-looking statements are subject to known and unknown risks and uncertainties that are difficult to predict. These risks and uncertainties that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, but are not limited to: our history of net losses, and our ability to achieve or maintain profitability in an environment of increasing expenses; our ability to identify and develop successful new geographies, physician partners and payors, or to execute upon our growth initiatives; our ability to execute our operating strategies or to achieve results consistent with our historical performance; our expectation that our expenses will increase in the future and the risk that medical expenses incurred on behalf of members may exceed the amount of medical revenues we receive; our ability to secure contracts with Medicare Advantage payors or to secure Medicare Advantage payments at favorable financial terms; our ability to recover startup costs incurred during the initial stages of development of our physician partner relationships and program initiatives; significant reductions in our membership; our ability to obtain additional capital needed to support our business; challenges for our physician partners in the transition to a Total Care Model; inaccuracies in the estimates and assumptions we use to project the size, revenue or medical expense amounts of our target markets; the spread of, and response to, COVID-19, potential new variants of COVID-19 and entirely new pandemics, and the inability to predict the ultimate impact of pandemics on us; inaccuracies in the estimates and assumptions we use to project our members' risk adjustment factors, medical services expense, incurred but not reported claims, and earnings under payor contracts; the impact of restrictive or exclusivity clauses in some of our contracts with physician partners that may prohibit us from establishing new risk-bearing entities within certain geographies in the future; the impact of restrictive or exclusivity clauses in some of our contracts with physician partners that may subject us to investigations or litigation; security breaches, loss of data or other disruptions to our data platforms; our subsidiaries' lack of performance or ability to fund their operations, which could require us to fund such losses; our dependence on a limited number of key payors; the limited terms of our contracts with payors and that they may not be renewed upon their expiration; our reliance on our payors for membership attribution and assignment, data and reporting accuracy and claims payment; our dependence on physician partners and other providers to effectively manage the quality and cost of care and perform obligations under payor contracts; our dependence on physician partners to accurately, timely and sufficiently document their services and potential regulatory or other liability if any diagnosis information or encounter data are inaccurate or incorrect; reductions in reimbursement rates or methodology applied to derive reimbursement from, or discontinuation of, federal government healthcare programs, from which we derive substantially all of our total revenue; statutory or regulatory changes, administrative rulings, interpretations of policy and determinations by intermediaries and governmental funding restrictions, and their impact on government funding, program coverage and reimbursements; regulatory proposals directed at containing or lowering the cost of healthcare and our participation in such proposed models; the impact on our revenue of CMS modifying the methodology used to determine the revenue associated with MA members; the potential that we may incur future indebtedness; our ability to successfully integrate acquired businesses; our ability to remediate material weaknesses in our internal control over financial reporting or if additional material weaknesses occur in the future; and risks related to other factors discussed under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022. Except as required by law, we do not undertake, and hereby disclaim, any obligation to update any forward-looking statements, which speak only as of the date on which they are made.

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**agilon health, inc.**

**Consolidated Balance Sheets**

**In thousands, except per share data**

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| | | |
|:---|:---|:---|
|  | **December 31,<br>2022** | **December 31,<br>2021** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $497070 | $1040039 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash and equivalents | 10610 | 14781 |
| &nbsp;&nbsp;&nbsp;&nbsp;Marketable securities | 411901 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables, net | 497574 | 293407 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets, net | 34119 | 18968 |
| Total current assets | 1451274 | 1367195 |
| Property and equipment, net | 20050 | 9161 |
| Intangible assets, net | 67680 | 55398 |
| Goodwill | 41540 | 41540 |
| Other assets, net | 116924 | 112958 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1697468 | $1586252 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Medical claims and related payables | $346727 | $239014 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 183364 | 112946 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt | 5000 | 5000 |
| Total current liabilities | 535091 | 356960 |
| Long-term debt, net of current portion | 38482 | 43401 |
| Other liabilities | 83286 | 94295 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 656859 | 494656 |
| Commitments and contingencies |  |  |
| Stockholders' equity (deficit): |  |  |
| Common stock, $0.01 par value: 2,000,000 shares authorized;<br> 412,385 and 400,095 shares issued and outstanding, respectively | 4124 | 4001 |
| Additional paid-in capital | 2106886 | 2045572 |
| Accumulated deficit | (1064230) | (957677) |
| Accumulated other comprehensive income (loss) | (5560) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total agilon health, inc. stockholders' equity (deficit) | 1041220 | 1091896 |
| Noncontrolling interests | (611) | (300) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity (deficit) | 1040609 | 1091596 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity (deficit) | $1697468 | $1586252 |

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**agilon health, inc.**

**Consolidated Statements of Operations**

**In thousands, except per share data**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | **(unaudited)** | **(unaudited)** |  |  |
| **Revenues:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Medical services revenue | $688855 | $461999 | $2704396 | $1829735 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating revenue | 919 | 887 | 3815 | 3824 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 689774 | 462886 | 2708211 | 1833559 |
| **Expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Medical services expense | 628163 | 430620 | 2399798 | 1647659 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other medical expenses | 51615 | 22678 | 196127 | 109487 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative (including noncash<br> stock-based compensation expense of $9,951,<br> $4,414, $28,381, and $292,394, respectively) | 75207 | 53840 | 218945 | 455821 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 3907 | 3621 | 13772 | 14544 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 758892 | 510759 | 2828642 | 2227511 |
| **Income (loss) from operations** | (69118) | (47873) | (120431) | (393952) |
| **Other income (expense):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 14885 | (8534) | 24725 | (4500) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain (loss) on lease terminations |  |  | (5458) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (1709) | (840) | (4525) | (6146) |
| **Income (loss) before income taxes** | (55942) | (57247) | (105689) | (404598) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax benefit (expense) | (572) | (179) | (1640) | (886) |
| **Income (loss) from continuing operations** | (56514) | (57426) | (107329) | (405484) |
| **Discontinued operations:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income (loss) before gain (loss) on sales and<br> income taxes | (35) | (1209) | 491 | (3463) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain (loss) on sales of assets, net |  |  |  | 473 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax benefit (expense) |  | 1898 | (26) | 1687 |
| **Total discontinued operations** | (35) | 689 | 465 | (1303) |
| **Net income (loss)** | (56549) | (56737) | (106864) | (406787) |
| &nbsp;&nbsp;Noncontrolling interests' share in (earnings) loss | 83 | 16 | 311 | 300 |
| **Net income (loss) attributable to common shares** | $(56466) | $(56721) | $(106553) | $(406487) |
| **Net income (loss) per common share,<br> basic and diluted (continuing operations)** | $(0.14) | $(0.14) | $(0.26) | $(1.09) |
| **Weighted average shares outstanding,<br> basic and diluted** | 412103 | 396411 | 408154 | 372931 |

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**agilon health, inc.**

**Consolidated Statements of Cash Flows**

**In thousands**

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| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** |
| **Cash flows from operating activities:** |  |  |
| Net income (loss) | $(106864) | $(406787) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 13772 | 14670 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 28381 | 292394 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment |  | 1590 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss (income) from equity method investments | (10720) | 6766 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes and uncertain tax positions | 532 | (3231) |
| &nbsp;&nbsp;&nbsp;&nbsp;Release of indemnification assets | 553 | 1705 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on sale of assets, net |  | (473) |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions of earnings from equity method investments |  | 174 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other non-cash items | 2973 | 58 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables, net | (204167) | (149041) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expense and other current assets | (16620) | (3916) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | (205) | 3931 |
| &nbsp;&nbsp;&nbsp;&nbsp;Medical claims and related payables | 107713 | 76339 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 65736 | 19360 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (11892) | (1698) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) operating activities | (130808) | (148159) |
| **Cash flows from investing activities:** |  |  |
| Purchase of property and equipment, net | (15426) | (6564) |
| Purchase of intangible assets | (17235) | (6862) |
| Investment in loans receivable and other | (6510) | (82831) |
| Investments in marketable securities | (458265) |  |
| Proceeds from maturities and sales of marketable securities and other | 52548 | 7095 |
| Proceeds from sale of business and property, net of cash divested | 500 | (1344) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing activities | (444388) | (90506) |
| **Cash flows from financing activities:** |  |  |
| Proceeds from initial public offering |  | 1170942 |
| Proceeds from other equity issuances, net | 33056 | 18086 |
| Proceeds from the issuance of long-term debt |  | 100000 |
| Repayments of long-term debt | (5000) | (119899) |
| Equity and debt issuance costs and other |  | (14739) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 28056 | 1154390 |
| Net increase (decrease) in cash, cash equivalents and restricted cash<br> and equivalents | (547140) | 915725 |
| Cash, cash equivalents and restricted cash and equivalents from <br> continuing operations, beginning of period | 1054820 | 135178 |
| Cash, cash equivalents and restricted cash and equivalents from <br> discontinued operations, beginning of period |  | 3917 |
| **Cash, cash equivalents and restricted cash and equivalents, <br> beginning of period** | 1054820 | 139095 |
| **Cash, cash equivalents and restricted cash and equivalents,<br> end of period** | $507680 | $1054820 |

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**agilon health, inc.**

**Key Operating Metrics**

**In thousands**

**(unaudited)**

**MEDICAL MARGIN**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Medical services revenue | $688855 | $461999 | $2704396 | $1829735 |
| Medical services expense | (628163) | (430620) | (2399798) | (1647659) |
| &nbsp;&nbsp;Medical margin | $60692 | $31379 | $304598 | $182076 |

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Medical margin represents the amount earned from medical services revenue after medical services expenses are deducted. Medical services expense represents costs incurred for medical services provided to our members. As our platform matures over time, we expect medical margin to increase in absolute dollars. However, medical margin per member per month (PMPM) may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM.

**GENERAL AND ADMINISTRATIVE COSTS, INCLUDING PLATFORM SUPPORT COSTS**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Platform support costs | $41613 | $30899 | $146481 | $123521 |
| Geography entry costs(1) | 19434 | 7872 | 43890 | 20583 |
| Severance and related costs |  | 7763 | 2470 | 12861 |
| Management fees(2) |  |  |  | 433 |
| Stock-based compensation expense | 9951 | 4414 | 28381 | 292394 |
| Other(3) | 4209 | 2892 | (2277) | 6029 |
| &nbsp;&nbsp;General and administrative | $75207 | $53840 | $218945 | $455821 |

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(1)Represents direct geography entry costs, including investments to develop and expand our platform and costs in geographies that are in implementation and are not yet generating revenue.

(2)Represents management fees and other expenses paid to Clayton Dubilier & Rice, LLC ("CD&R") prior to our IPO. In connection with our initial public offering, we terminated our consulting agreement with CD&R, effective April 16, 2021. We were not charged a fee in connection with the termination of this agreement.

(3)Includes non-cash accruals for unasserted claims and contingent liabilities.

Our platform support costs, which include regionally-based support personnel and other operating costs to support our geographies, are expected to decrease over time as a percentage of revenue as our physician partners add members and our revenue grows. Our operating expenses at the enterprise level include resources and technology to support payor contracting, clinical program development, quality, data management, finance and legal functions.

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**agilon health, inc.**

**Non-GAAP Financial Measures**

**In thousands**

**(unaudited)**

**NETWORK CONTRIBUTION**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Income (loss) from operations | $(69118) | $(47873) | $(120431) | $(393952) |
| Other operating revenue | (919) | (887) | (3815) | (3824) |
| Other medical expenses | 51615 | 22678 | 196127 | 109487 |
| Other medical expenses—live geographies(1) | (38653) | (18704) | (172276) | (97498) |
| General and administrative | 75207 | 53840 | 218945 | 455821 |
| Depreciation and amortization | 3907 | 3621 | 13772 | 14544 |
| &nbsp;&nbsp;Network contribution | $22039 | $12675 | $132322 | $84578 |

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(1)Represents physician compensation expense related to surplus sharing and other direct medical expenses incurred to improve care for our members in our live geographies. Excludes costs in geographies that are in implementation and are not yet generating revenue. For the three months ended December 31, 2022 and 2021, costs incurred in implementing geographies were $13.0 million and $4.0 million, respectively. For the years ended December 31, 2022 and 2021, costs incurred in implementing geographies were $23.9 million and $12.0 million, respectively.

**ADJUSTED EBITDA** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Net income (loss) | $(56549) | $(56737) | $(106864) | $(406787) |
| (Income) loss from discontinued operations,<br> net of income taxes | 35 | (689) | (465) | 1303 |
| Interest expense | 1709 | 840 | 4525 | 6146 |
| Income tax expense (benefit) | 572 | 179 | 1640 | 886 |
| Depreciation and amortization | 3907 | 3621 | 13772 | 14544 |
| (Gain) loss on lease terminations |  |  | 5458 |  |
| Geography entry costs(1) | 32396 | 11846 | 67741 | 32572 |
| Severance and related costs(2) |  | 7763 | 2470 | 12861 |
| Management fees(3) |  |  |  | 433 |
| Stock-based compensation expense | 9951 | 4414 | 28381 | 292394 |
| EBITDA adjustments related to equity<br> method investments(4) | 749 | (571) | 3737 | 1736 |
| Other(5) | (3391) | 2642 | (16144) | 5293 |
| &nbsp;&nbsp;Adjusted EBITDA | $(10621) | $(26692) | $4251 | $(38619) |

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(1)Represents direct geography entry costs, including investments to develop and expand our platform and costs in geographies that are in implementation and are not yet generating revenue. For the three months ended December 31, 2022 and 2021, (i) $13.0 million and $4.0 million, respectively, are included in other medical expenses and (ii) $19.4 million and $7.9 million, respectively, are included in general and administrative expenses. For the years ended December 31, 2022 and 2021, (i) $23.9 million and $12.0 million, respectively, are included in other medical expenses and (ii) $43.9 million and $20.6 million, respectively, are included in general and administrative expenses.

(2)For the year ended December 31, 2022, includes taxes and related costs on stock option exercises for departed executives of $2.0 million. For the three months and year ended December 31, 2021, includes taxes and related costs on stock option exercises for departed executives of $5.4 million.

(3)Represents management fees and other expenses paid to CD&R prior to our IPO. In connection with our initial public offering, we terminated our consulting agreement with CD&R, effective April 16, 2021. We were not charged a fee in connection with the termination of this agreement.

(4)Includes direct geography entry costs of $0.1 million and $1.3 million for the three and twelve months ended December 31, 2021, respectively.

(5)Includes interest income and non-cash accruals for unasserted claims and contingent liabilities.

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In addition to providing results that are determined in accordance with GAAP, we present network contribution and Adjusted EBITDA, which are non-GAAP financial measures.

We define network contribution as medical services revenue less the sum of: (i) medical services expense and (ii) other medical expenses excluding costs incurred in implementing geographies. Other medical expenses consist of physician compensation expense related to surplus sharing and other direct medical expenses incurred to improve care for our members. We believe this metric provides insight into the economics of our Total Care Model as it includes all medical services expense associated with our members' care as well as partner compensation and additional medical costs we incur as part of our aligned partnership model. Other medical expenses are largely variable and proportionate to the level of surplus in each respective geography.

We define Adjusted EBITDA as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) geography entry costs, (vi) stock-based compensation expense, (vii) severance and related costs, and (viii) certain other items that are not considered by us in the evaluation of ongoing operating performance. We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis.

Income (loss) from operations is the most directly comparable GAAP measure to network contribution. Net income (loss) is the most directly comparable GAAP measure to Adjusted EBITDA.

We believe network contribution and Adjusted EBITDA help identify underlying trends in our business and facilitate evaluation of period-to-period operating performance of our live geographies by eliminating items that are variable in nature and not considered by us in the evaluation of ongoing operating performance, allowing comparison of our recurring core business operating results over multiple periods. We also believe network contribution and Adjusted EBITDA provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics we use for financial and operational decision-making. We believe network contribution and Adjusted EBITDA or similarly titled non-GAAP measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance. Other companies may calculate network contribution and Adjusted EBITDA or similarly titled non-GAAP measures differently from the way we calculate these metrics. As a result, our presentation of network contribution and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, limiting their usefulness as comparative measures.

**Contacts**

**Investor Contact**

Matthew Gillmor

VP, Investor Relations

<u>investors@agilonhealth.com</u>

**Media Contact**

Claire Mulhearn

Chief Communications & Public Affairs Officer

<u>media@agilonhealth.com</u>

Source: agilon health

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