ST. LOUIS, July 27 /PRNewswire-FirstCall/ -- Centene
Corporation (NYSE: CNC) today announced net earnings from
continuing operations for the quarter ended June 30, 2010, of $23.0
million, or $0.45 per diluted
share. The discussions below, with the exception of cash flow
information, are in the context of continuing operations and all
financial ratios exclude premium taxes.
Second Quarter Highlights
- Quarter-end managed care at-risk membership of 1,531,800, an
increase of 242,800 members, or 18.8% year over year.
- Premium and Service Revenues of $1.051
billion, representing 12.8% year over year growth.
- Health Benefits Ratio (HBR) of 83.8%, compared to 83.1% in the
prior year.
- General and Administrative (G&A) expense ratio of 12.7%,
compared to 13.9% in the prior year.
- Earnings from operations of $41.7
million, compared to $31.4
million in the prior year.
- Earnings from continuing operations, net of income tax expense,
increased 11.0% year over year to $23.0
million. Within the quarter, we incurred a
$0.03 charge per diluted share to
write off a deferred tax asset associated with our Georgia health plan and benefited by
$0.03 per diluted share from a shift
in start up costs for Mississippi
from the second to the third quarter.
- Diluted earnings per share from continuing operations of
$0.45.
- Days in claims payable of 48.2, including pharmacy claims
payable.
- Estimated 2010 composite premium rate increase between 1% and
3%.
Other Events
- In May 2010, our Texas health plan was awarded a new ABD
contract in the Dallas service
area subject to execution of a final contract. The new
contract is expected to commence during the first quarter of 2011.
- In June 2010, we completed the
acquisition of certain assets of Carolina Crescent Health Plan.
We now serve 92,600 at-risk members in South Carolina as of June 30, 2010.
- In June 2010, our Indiana health plan was selected to negotiate
a statewide managed care contract effective January 1, 2011. Upon successful execution
of the contract, we will continue to serve Hoosier Healthwise
members and begin serving Healthy Indiana Plan members.
- In July 2010, we closed on the
acquisition of certain assets of NovaSys Health, LLC, a leading
third party administrator in Arkansas that will complement our existing
Celtic business.
Michael F. Neidorff, Centene’s
Chairman and Chief Executive Officer, stated, “Our team continues
to focus on fundamentals and driving Centene to be a low-cost
producer. These are key factors in producing another
solid quarterly report and for the long-term success of our
enterprise.”
The following table depicts membership in Centene’s managed care
organizations, by state, at June 30,
2010 and 2009:
|
|
June 30,
|
|
|
|
2010
|
|
2009
|
|
Arizona
|
|
19,300
|
|
16,200
|
|
Florida
|
|
113,100
|
|
22,300
|
|
Georgia
|
|
295,600
|
|
292,800
|
|
Indiana
|
|
212,700
|
|
196,100
|
|
Massachusetts
|
|
30,100
|
|
—
|
|
Ohio
|
|
159,300
|
|
141,200
|
|
South
Carolina
|
|
92,600
|
|
46,000
|
|
Texas
|
|
475,500
|
|
443,200
|
|
Wisconsin
|
|
133,600
|
|
131,200
|
|
Total
at-risk membership
|
|
1,531,800
|
|
1,289,000
|
|
Non-risk
membership
|
|
50,900
|
|
114,000
|
|
Total
|
|
1,582,700
|
|
1,403,000
|
|
|
|
|
|
|
The following table depicts membership in Centene’s managed care
organizations, by member category, at June
30, 2010 and 2009:
|
|
June 30,
|
|
|
|
2010
|
|
2009
|
|
Medicaid
|
|
1,135,500
|
|
958,600
|
|
CHIP &
Foster Care
|
|
272,400
|
|
261,400
|
|
ABD &
Medicare
|
|
93,800
|
|
69,000
|
|
Other State
programs
|
|
30,100
|
|
—
|
|
Total
at-risk membership
|
|
1,531,800
|
|
1,289,000
|
|
Non-risk
membership
|
|
50,900
|
|
114,000
|
|
Total
|
|
1,582,700
|
|
1,403,000
|
|
|
|
|
|
|
Statement of Operations
- Premium and service revenues increased 12.8% for the three
months ended June 30, 2010 over 2009
as a result of membership growth in each of our states. This
increase was moderated by the removal of pharmacy services in two
states beginning in 2010. These pharmacy carve outs had the
effect of reducing 2010 second quarter revenue by approximately
$48 million.
- The consolidated HBR for the three months ended June 30, 2010 of 83.8% was an increase of 0.7%
over the comparable period in 2009. A reconciliation of the
change in HBR from the prior year is presented below:
|
Second Quarter 2009
|
83.1%
|
|
|
New markets reserved at higher
rates
|
0.6
|
|
|
Net changes in existing
markets
|
0.1
|
|
|
Second Quarter 2010
|
83.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
- Consolidated G&A expense as a percent of premium and
service revenues was 12.7% in the second quarter of 2010, a
decrease from 13.9% in the second quarter of 2009. The
decrease reflects the leveraging of our expenses over higher
revenues and the impact of our ongoing focus on system enhancements
and operational efficiencies. Additionally, we benefited
by $0.03 per diluted share from a
shift in start up costs for Mississippi from the second to the third
quarter.
- Effective July 1, 2010, our
Georgia health plan will begin
paying premium taxes and will no longer be subject to income taxes.
Accordingly, the deferred tax asset related to state net
operating loss carry forwards was written off. The write off
increased income tax expense during the second quarter by
$1.7 million, or $0.03 per diluted share.
- Earnings per diluted share from continuing operations were
$0.45, compared to $0.47 in the second quarter of 2009.
Balance Sheet and Cash Flow
At June 30, 2010, we had cash and
investments of $852.4 million,
including $813.0 million held by our
regulated entities and $39.4 million
held by our unregulated entities. Medical claims liabilities
totaled $455.4 million, representing
48.2 days in claims payable, an increase of 0.5 days from
March 31, 2010. Total debt was
$252.8 million and debt to
capitalization was 24.5%.
Cash flow from operations through June
30, 2010 was $(98.3) million
and was impacted by 1) $86.0 million
decrease in unearned revenue due to advance payments received in
December 2009 for January 2010 premium payments and 2) $57.7 million increase in premium and related
receivables for June premium payments deferred by several states
until July 2010. During the
second half of 2010, we expect cash flow from operations to return
to historical levels, although the timing of premium payments from
each state can vary from period to period.
A reconciliation of the change in days in claims payable from
the immediately preceding quarter-end is presented below:
Days in claims payable, March
31, 2010
|
47.7
|
|
|
Timing of claims
payments
|
0.8
|
|
|
Payment of annual
provider bonuses
|
(0.5)
|
|
|
Impact of new
business
|
0.3
|
|
|
Pharmacy payment
timing
|
(0.1)
|
|
|
Days in claims payable, June 30,
2010
|
48.2
|
|
|
|
|
|
|
|
Outlook
The table below depicts our guidance from continuing operations
for 2010:
|
|
Full Year 2010
|
|
|
|
|
Low
|
|
High
|
|
|
Premium and Service revenues (in
millions)
|
|
$ 4,350
|
|
$ 4,450
|
|
|
Earnings per diluted share
(EPS)
|
|
$ 1.78
|
|
$ 1.86
|
|
|
HBR %
|
|
83.5%
|
|
84.5%
|
|
|
G&A %
|
|
12.4%
|
|
12.9%
|
|
|
|
|
|
|
|
|
|
Diluted Shares Outstanding (in
thousands)
|
|
50,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based upon known rate adjustments and preliminary discussions
with our states that finalize rates in the second half of the year,
we currently estimate our 2010 composite premium rate increase to
be between 1% and 3%.
Conference Call
As previously announced, we will host a conference call
Tuesday, July 27, 2010, at
8:30 A.M. (Eastern Time) to review
the financial results for the second quarter ended June 30, 2010, and to discuss our business
outlook. Michael F. Neidorff and William N. Scheffel will host the conference
call.
Investors and other interested parties are invited to listen to
the conference call by dialing 800-860-2442 in the U.S. and
Canada; +1-412-858-4600 from
abroad; or via a live, audio webcast on our website at
www.centene.com, under the Investors section.
A replay will be available for on-demand listening shortly after
the completion of the call for the next twelve months or until
11:59 PM (Eastern Time) on
Tuesday, July 26, 2011, at the
aforementioned URL, or by dialing 877-344-7529 in the U.S. and
Canada, or +1-412-317-0088 from
abroad and entering the playback conference number 442132.
About Centene Corporation
Centene Corporation, a Fortune 500 company, is a leading
multi-line healthcare enterprise that provides programs and
related services to the rising number of under-insured and
uninsured individuals. Many receive benefits provided under
Medicaid, including the State Children's Health Insurance Program
(CHIP), as well as Aged, Blind or Disabled (ABD), Foster Care and long-term care, in addition to
other state-sponsored programs, and Medicare (Special Needs Plans).
Centene's CeltiCare subsidiary offers states unique, "exchange
based" and other cost-effective coverage solutions for low-income
populations. The Company operates local health plans and offers a
range of health insurance solutions. It also contracts with other
healthcare and commercial organizations to provide specialty
services including behavioral health, life and health management,
managed vision, telehealth services, and pharmacy benefits
management.
The information provided in this press release contains
forward-looking statements that relate to future events and future
financial performance of Centene. Subsequent events and
developments may cause the Company’s estimates to change. The
Company disclaims any obligation to update this forward-looking
financial information in the future. Readers are cautioned
that matters subject to forward-looking statements involve known
and unknown risks and uncertainties, including economic,
regulatory, competitive and other factors that may cause Centene’s
or its industry’s actual results, levels of activity, performance
or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by these forward-looking statements. Actual results
may differ from projections or estimates due to a variety of
important factors, including Centene’s ability to accurately
predict and effectively manage health benefits and other operating
expenses, competition, changes in healthcare practices, changes in
federal or state laws or regulations, inflation, provider contract
changes, new technologies, reduction in provider payments by
governmental payors, major epidemics, disasters and numerous other
factors affecting the delivery and cost of healthcare. The
expiration, cancellation or suspension of Centene’s Medicaid
Managed Care contracts by state governments would also negatively
affect Centene.
CENTENE CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
(Unaudited)
|
|
|
|
June 30,
2010
|
|
December 31,
2009
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents of continuing operations, including $5,154 and $8,667,
respectively, from
consolidated
variable interest entities
|
|
$
|
264,723
|
$
|
400,951
|
|
|
Cash and cash
equivalents of discontinued operations
|
|
|
877
|
|
2,801
|
|
|
Total cash and cash
equivalents
|
|
|
265,600
|
|
403,752
|
|
|
Premium and related
receivables, net of allowance for uncollectible accounts of $1,336
and $1,338,
respectively,
including $7,266 and $11,313, respectively, from consolidated
variable interest entities
|
|
|
164,420
|
|
103,456
|
|
|
Short-term
investments, at fair value (amortized cost $29,542 and $39,230,
respectively)
|
|
|
29,660
|
|
39,554
|
|
|
Other current
assets, including $3,918 and $4,507, respectively, from
consolidated variable interest entities
|
|
|
83,843
|
|
64,866
|
|
|
Current assets of
discontinued operations other than cash
|
|
|
2,314
|
|
4,506
|
|
|
Total
current assets
|
|
|
545,837
|
|
616,134
|
|
|
Long-term investments, at fair
value (amortized cost $522,589 and $514,256,
respectively)
|
|
|
537,399
|
|
525,497
|
|
|
Restricted deposits, at fair
value (amortized cost $20,485 and $20,048, respectively)
|
|
|
20,570
|
|
20,132
|
|
|
Property, software and
equipment, net of accumulated depreciation of $118,995 and
$103,883, respectively,
including $138,998 and $89,219,
respectively, from consolidated variable interest
entities
|
|
|
313,839
|
|
230,421
|
|
|
Goodwill
|
|
|
244,304
|
|
224,587
|
|
|
Intangible assets,
net
|
|
|
24,589
|
|
22,479
|
|
|
Other long-term
assets
|
|
|
35,557
|
|
36,829
|
|
|
Long-term assets of discontinued
operations
|
|
|
11,442
|
|
26,285
|
|
|
Total
assets
|
|
$
|
1,733,537
|
$
|
1,702,364
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Medical claims
liability
|
|
$
|
455,375
|
$
|
470,932
|
|
|
Accounts payable
and accrued expenses, including $30,366 and $14,020, respectively,
from consolidated
variable interest
entities
|
|
|
167,613
|
|
132,001
|
|
|
Unearned
revenue
|
|
|
5,695
|
|
91,644
|
|
|
Current portion of
long-term debt
|
|
|
771
|
|
646
|
|
|
Current liabilities
of discontinued operations
|
|
|
7,365
|
|
20,685
|
|
|
Total
current liabilities
|
|
|
636,819
|
|
715,908
|
|
|
Long-term debt
|
|
|
252,028
|
|
307,085
|
|
|
Other long-term
liabilities
|
|
|
64,870
|
|
59,561
|
|
|
Long-term liabilities of
discontinued operations
|
|
|
652
|
|
383
|
|
|
Total
liabilities
|
|
|
954,369
|
|
1,082,937
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common stock, $.001
par value; authorized 100,000,000 shares; 51,654,541 issued and
49,210,505
outstanding
at June 30, 2010, and 45,593,383 shares issued and 43,179,373
shares outstanding at
December
31, 2009
|
|
|
52
|
|
46
|
|
|
Additional paid-in
capital
|
|
|
395,926
|
|
281,806
|
|
|
Accumulated other
comprehensive income:
|
|
|
|
|
|
|
|
Unrealized gain on
investments, net of tax
|
|
|
9,400
|
|
7,348
|
|
|
Retained
earnings
|
|
|
405,682
|
|
358,907
|
|
|
Treasury stock, at
cost (2,444,036 and 2,414,010 shares, respectively)
|
|
|
(47,830)
|
|
(47,262)
|
|
|
Total Centene
Corporation stockholders' equity
|
|
|
763,230
|
|
600,845
|
|
|
Noncontrolling
interest
|
|
|
15,938
|
|
18,582
|
|
|
Total
stockholders' equity
|
|
|
779,168
|
|
619,427
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
1,733,537
|
$
|
1,702,364
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share
data)
(Unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2010
|
|
|
2009
|
|
2010
|
|
|
2009
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium
|
$
|
1,025,928
|
|
|
$
|
909,698
|
|
$
|
2,025,243
|
|
|
$
|
1,794,704
|
|
|
Service
|
|
24,682
|
|
|
|
21,591
|
|
|
47,589
|
|
|
|
45,440
|
|
|
Premium and service revenues
|
|
1,050,610
|
|
|
|
931,289
|
|
|
2,072,832
|
|
|
|
1,840,144
|
|
|
Premium
tax
|
|
26,162
|
|
|
|
108,180
|
|
|
72,661
|
|
|
|
131,760
|
|
|
Total
revenues
|
|
1,076,772
|
|
|
|
1,039,469
|
|
|
2,145,493
|
|
|
|
1,971,904
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical
costs
|
|
859,335
|
|
|
|
755,706
|
|
|
1,699,043
|
|
|
|
1,495,046
|
|
|
Cost of
services
|
|
15,707
|
|
|
|
14,559
|
|
|
32,859
|
|
|
|
30,521
|
|
|
General and
administrative expenses
|
|
133,470
|
|
|
|
129,221
|
|
|
268,977
|
|
|
|
251,500
|
|
|
Premium
tax
|
|
26,551
|
|
|
|
108,548
|
|
|
73,294
|
|
|
|
132,490
|
|
|
Total
operating expenses
|
|
1,035,063
|
|
|
|
1,008,034
|
|
|
2,074,173
|
|
|
|
1,909,557
|
|
|
Earnings from operations
|
|
41,709
|
|
|
|
31,435
|
|
|
71,320
|
|
|
|
62,347
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and
other income
|
|
4,142
|
|
|
|
4,418
|
|
|
11,199
|
|
|
|
8,031
|
|
|
Interest
expense
|
|
(3,869)
|
|
|
|
(4,160)
|
|
|
(7,682)
|
|
|
|
(8,146)
|
|
|
Earnings from continuing operations, before income
tax
expense
|
|
41,982
|
|
|
|
31,693
|
|
|
74,837
|
|
|
|
62,232
|
|
|
Income tax
expense
|
|
17,254
|
|
|
|
11,789
|
|
|
29,779
|
|
|
|
22,634
|
|
|
Earnings from continuing operations, net of income
tax
expense
|
|
24,728
|
|
|
|
19,904
|
|
|
45,058
|
|
|
|
39,598
|
|
|
Discontinued operations, net of
income tax (benefit)
expense of $(90), $(196), $4,350
and $(356),
respectively
|
|
(226)
|
|
|
|
(485)
|
|
|
3,694
|
|
|
|
(934)
|
|
|
Net
earnings
|
|
24,502
|
|
|
|
19,419
|
|
|
48,752
|
|
|
|
38,664
|
|
|
Noncontrolling interest
(loss)
|
|
1,729
|
|
|
|
(811)
|
|
|
1,977
|
|
|
|
(24)
|
|
|
Net earnings attributable to
Centene Corporation
|
$
|
22,773
|
|
|
$
|
20,230
|
|
$
|
46,775
|
|
|
$
|
38,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Centene
Corporation common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations, net of income tax
expense
|
$
|
22,999
|
|
|
$
|
20,715
|
|
$
|
43,081
|
|
|
$
|
39,622
|
|
|
Discontinued
operations, net of income tax (benefit)
expense
|
|
(226)
|
|
|
|
(485)
|
|
|
3,694
|
|
|
|
(934)
|
|
|
Net
earnings
|
$
|
22,773
|
|
|
$
|
20,230
|
|
$
|
46,775
|
|
|
$
|
38,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per common
share attributable to
Centene
Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.46
|
|
|
$
|
0.48
|
|
$
|
0.89
|
|
|
$
|
0.92
|
|
|
Discontinued
operations
|
|
—
|
|
|
|
(0.01)
|
|
|
0.08
|
|
|
|
(0.02)
|
|
|
Earnings per
common share
|
$
|
0.46
|
|
|
$
|
0.47
|
|
$
|
0.97
|
|
|
$
|
0.90
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.45
|
|
|
$
|
0.47
|
|
$
|
0.86
|
|
|
$
|
0.90
|
|
|
Discontinued
operations
|
|
—
|
|
|
|
(0.01)
|
|
|
0.08
|
|
|
|
(0.02)
|
|
|
Earnings per
common share
|
$
|
0.45
|
|
|
$
|
0.46
|
|
$
|
0.94
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
49,135,552
|
|
|
|
43,001,157
|
|
|
48,203,312
|
|
|
|
43,034,390
|
|
|
Diluted
|
|
50,866,318
|
|
|
|
44,242,339
|
|
|
49,807,084
|
|
|
|
44,240,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CENTENE CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(In thousands)
(Unaudited)
|
|
|
Six Months
Ended June
30,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
48,752
|
|
$
|
38,664
|
|
|
Adjustments to
reconcile net earnings to net cash (used in) provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
24,918
|
|
|
20,892
|
|
|
Stock
compensation expense
|
|
6,888
|
|
|
7,611
|
|
|
(Gain) loss
on sale of investments, net
|
|
(3,987)
|
|
|
450
|
|
|
(Gain) on
sale of UHP
|
|
(8,201)
|
|
|
--
|
|
|
Deferred
income taxes
|
|
4,928
|
|
|
1,512
|
|
|
Changes in assets
and liabilities:
|
|
|
|
|
|
|
|
Premium and
related receivables
|
|
(57,718)
|
|
|
(23,327)
|
|
|
Other
current assets
|
|
948
|
|
|
1,357
|
|
|
Other
assets
|
|
1,719
|
|
|
(608)
|
|
|
Medical
claims liabilities
|
|
(28,868)
|
|
|
17,093
|
|
|
Unearned
revenue
|
|
(85,950)
|
|
|
44,129
|
|
|
Accounts
payable and accrued expenses
|
|
(3,536)
|
|
|
(49,377)
|
|
|
Other
operating activities
|
|
1,851
|
|
|
3,723
|
|
|
Net cash (used in) provided by operating
activities
|
|
(98,256)
|
|
|
62,119
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(63,602)
|
|
|
(29,833)
|
|
|
Purchases of
investments
|
|
(306,124)
|
|
|
(415,052)
|
|
|
Proceeds from asset
sales
|
|
13,420
|
|
|
--
|
|
|
Sales and
maturities of investments
|
|
291,735
|
|
|
377,320
|
|
|
Investments in
acquisitions, net of cash acquired
|
|
(21,473)
|
|
|
(7,621)
|
|
|
Net cash used in investing activities
|
|
(86,044)
|
|
|
(75,186)
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
Proceeds from
exercise of stock options
|
|
1,759
|
|
|
1,109
|
|
|
Proceeds from
borrowings
|
|
42,161
|
|
|
288,000
|
|
|
Proceeds from stock
offering
|
|
104,534
|
|
|
--
|
|
|
Payment of
long-term debt
|
|
(97,193)
|
|
|
(264,135)
|
|
|
Distributions to
noncontrolling interest
|
|
(4,840)
|
|
|
(707)
|
|
|
Excess tax benefits
from stock compensation
|
|
295
|
|
|
15
|
|
|
Common stock
repurchases
|
|
(568)
|
|
|
(5,447)
|
|
|
Debt issue
costs
|
|
--
|
|
|
(368)
|
|
|
Net cash provided by financing activities
|
|
46,148
|
|
|
18,467
|
|
|
Net (decrease) increase in cash and cash
equivalents
|
|
(138,152)
|
|
|
5,400
|
|
|
Cash and cash
equivalents, beginning of period
|
|
403,752
|
|
|
379,099
|
|
|
Cash and cash
equivalents, end of period
|
$
|
265,600
|
|
$
|
384,499
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash
flow information:
|
|
|
|
|
|
|
|
Interest
paid
|
$
|
7,320
|
|
$
|
7,658
|
|
|
Income taxes
paid
|
$
|
27,940
|
|
$
|
31,512
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of
non-cash investing and financing activities:
|
|
|
|
|
|
|
|
Contribution from
noncontrolling interest
|
$
|
306
|
|
$
|
5,107
|
|
|
|
|
|
|
|
|
|
|
|
CENTENE
CORPORATION
CONTINUING OPERATIONS
SUPPLEMENTAL FINANCIAL DATA
|
|
|
Q2
|
|
Q1
|
|
Q4
|
|
Q3
|
|
Q2
|
|
|
2010
|
|
2010
|
|
2009
|
|
2009
|
|
2009
|
|
MEMBERSHIP
|
|
|
|
|
|
|
|
|
|
|
Managed Care:
|
|
|
|
|
|
|
|
|
|
|
Arizona
|
19,300
|
|
19,000
|
|
18,100
|
|
17,400
|
|
16,200
|
|
Florida
|
113,100
|
|
105,900
|
|
102,600
|
|
84,400
|
|
22,300
|
|
Georgia
|
295,600
|
|
301,000
|
|
309,700
|
|
303,400
|
|
292,800
|
|
Indiana
|
212,700
|
|
211,400
|
|
208,100
|
|
200,700
|
|
196,100
|
|
Massachusetts
|
30,100
|
|
26,900
|
|
27,800
|
|
500
|
|
—
|
|
Ohio
|
159,300
|
|
156,000
|
|
150,800
|
|
151,200
|
|
141,200
|
|
South
Carolina
|
92,600
|
|
53,900
|
|
48,600
|
|
46,100
|
|
46,000
|
|
Texas
|
475,500
|
|
459,600
|
|
455,100
|
|
450,200
|
|
443,200
|
|
Wisconsin
|
133,600
|
|
134,900
|
|
134,800
|
|
132,500
|
|
131,200
|
|
Total
at-risk membership
|
1,531,800
|
|
1,468,600
|
|
1,455,600
|
|
1,386,400
|
|
1,289,000
|
|
Non-risk
membership
|
50,900
|
|
62,200
|
|
63,700
|
|
63,200
|
|
114,000
|
|
TOTAL
|
1,582,700
|
|
1,530,800
|
|
1,519,300
|
|
1,449,600
|
|
1,403,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicaid
|
1,135,500
|
|
1,088,300
|
|
1,081,400
|
|
1,040,000
|
|
958,600
|
|
CHIP & Foster
Care
|
272,400
|
|
266,300
|
|
263,600
|
|
263,400
|
|
261,400
|
|
ABD & Medicare
|
93,800
|
|
87,100
|
|
82,800
|
|
82,500
|
|
69,000
|
|
Other State programs
|
30,100
|
|
26,900
|
|
27,800
|
|
500
|
|
—
|
|
Total at-risk
membership
|
1,531,800
|
|
1,468,600
|
|
1,455,600
|
|
1,386,400
|
|
1,289,000
|
|
Non-risk membership
|
50,900
|
|
62,200
|
|
63,700
|
|
63,200
|
|
114,000
|
|
TOTAL
|
1,582,700
|
|
1,530,800
|
|
1,519,300
|
|
1,449,600
|
|
1,403,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty
Services(a):
|
|
|
|
|
|
|
|
|
|
|
Cenpatico
Behavioral Health
|
|
|
|
|
|
|
|
|
|
|
Arizona
|
119,700
|
|
119,300
|
|
120,100
|
|
117,300
|
|
110,500
|
|
Kansas
|
39,100
|
|
39,800
|
|
41,400
|
|
41,000
|
|
41,100
|
|
Bridgeway Health
Solutions
|
|
|
|
|
|
|
|
|
|
|
Long-term
Care
|
2,800
|
|
2,700
|
|
2,600
|
|
2,500
|
|
2,400
|
|
TOTAL
|
161,600
|
|
161,800
|
|
164,100
|
|
160,800
|
|
154,000
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes external membership
only.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE PER MEMBER PER
MONTH(b)
|
$
|
208.58
|
|
$
|
215.95(c)
|
|
$
|
226.42
|
|
$
|
222.77
|
|
$
|
219.75
|
|
|
|
|
|
|
|
|
|
|
|
|
CLAIMS(b)
|
|
|
|
|
|
|
|
|
|
|
Period-end
inventory
|
480,400
|
|
341,400
|
|
423,400
|
|
414,900
|
|
362,200
|
|
Average
inventory
|
306,900
|
|
283,900
|
|
279,000
|
|
227,100
|
|
234,500
|
|
Period-end
inventory per member
|
0.31
|
|
0.23
|
|
0.29
|
|
0.30
|
|
0.28
|
|
(b) Revenue per member and
claims information are presented for the Managed Care at-risk
members.
|
|
(c) Reduction in revenue per
member per month is a result of the pharmacy carve-outs in
2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
|
|
Q1
|
|
Q4
|
|
Q3
|
|
Q2
|
|
|
2010
|
|
2010
|
|
2009
|
|
2009
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
DAYS IN CLAIMS
PAYABLE
|
|
|
|
|
|
|
|
|
|
|
Medical
|
47.2
|
|
46.6
|
|
48.1
|
|
47.1
|
|
47.5
|
|
Pharmacy
|
1.0
|
|
1.1
|
|
2.0
|
|
1.8
|
|
1.5
|
|
TOTAL
|
48.2
|
|
47.7
|
|
50.1
|
|
48.9
|
|
49.0
|
|
Days in Claims Payable is a
calculation of Medical Claims Liabilities at the end of the period
divided by average claims expense per calendar day for such
period.
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND INVESTMENTS (in
millions)
|
|
|
|
|
|
|
|
|
|
Regulated
|
$
|
813.0
|
|
$
|
917.9
|
|
$
|
949.9
|
|
$
|
911.4
|
|
$
|
825.8
|
|
Unregulated
|
|
39.4
|
|
|
51.3
|
|
|
36.2
|
|
|
27.6
|
|
|
27.0
|
|
TOTAL
|
$
|
852.4
|
|
$
|
969.2
|
|
$
|
986.1
|
|
$
|
939.0
|
|
$
|
852.8
|
|
|
|
|
|
|
|
|
|
|
|
|
DEBT TO
CAPITALIZATION
|
24.5%
|
|
23.7%
|
|
33.2%
|
|
31.9%
|
|
33.0%
|
|
Debt to Capitalization is
calculated as follows: total debt divided by (total
debt + total equity).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Ratios:
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2010
|
|
|
2009
|
|
2010
|
|
|
2009
|
|
Health Benefits
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicaid and
CHIP
|
83.4
|
%
|
|
|
83.7
|
%
|
|
84.5
|
%
|
|
|
84.2
|
%
|
|
ABD and
Medicare
|
86.5
|
|
|
|
82.6
|
|
|
83.4
|
|
|
|
82.0
|
|
|
Specialty
Services
|
81.7
|
|
|
|
79.8
|
|
|
81.2
|
|
|
|
79.0
|
|
|
Total
|
83.8
|
|
|
|
83.1
|
|
|
83.9
|
|
|
|
83.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total General &
Administrative Expense
Ratio
|
12.7
|
%
|
|
|
13.9
|
%
|
|
13.0
|
%
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MEDICAL CLAIMS LIABILITY
(In thousands)
The changes in medical claims
liability are
summarized as
follows:
|
|
Balance, June 30,
2009
|
$
|
406,834
|
|
|
Incurred related to:
|
|
|
|
|
Current period
|
|
3,427,022
|
|
|
Prior period
|
|
(59,502)
|
|
|
Total incurred
|
|
3,367,520
|
|
|
Paid related to:
|
|
|
|
|
Current period
|
|
2,980,741
|
|
|
Prior period
|
|
338,238
|
|
|
Total paid
|
|
3,318,979
|
|
|
Balance, June 30,
2010
|
$
|
455,375
|
|
|
|
|
|
|
|
|
Centene's claims reserving process utilizes a consistent
actuarial methodology to estimate Centene's ultimate liability. Any
reduction in the "Incurred related to: Prior period" amount may be
offset as Centene actuarially determines "Incurred related to:
Current period." As such, only in the absence of a consistent
reserving methodology would favorable development of prior period
claims liability estimates reduce medical costs. Centene believes
it has consistently applied its claims reserving methodology in
each of the periods presented.
The amount of the "Incurred related to: Prior period" above
includes the effects of reserving under moderately adverse
conditions, new markets where we use a conservative approach in
setting reserves during the initial periods of operations,
increased receipts from other third party payors related to
coordination of benefits and lower medical utilization and cost
trends for dates of service prior to June
30, 2009.
SOURCE Centene Corporation