ST. LOUIS, Oct. 25, 2011 /PRNewswire/ -- Centene Corporation
(NYSE: CNC) today announced its financial results for the quarter
ended September 30, 2011. The
discussions below, with the exception of cash flow information, are
in the context of continuing operations and all financial ratios
exclude premium taxes.
Third Quarter Highlights
- Quarter-end managed care at-risk membership of 1,615,700, an
increase of 141,900 members year over year.
- Premium and Service Revenues of $1.3
billion, representing 17.0% year over year growth.
- Health Benefits Ratio of 83.0%, compared to 84.2% in the prior
year and 83.0% in the second quarter of 2011.
- General and Administrative expense ratio (G&A ratio) of
13.3%, compared to 12.2% in the prior year.
- Diluted earnings per share from continuing operations increased
25.0% from the prior year to $0.55.
- Employees increased 25.0% from the prior year to 5,000 at
September 30, 2011, reflecting our
continued business expansions.
Other Events
- In August 2011, Superior
HealthPlan, Inc. announced it was awarded renewed and expanded
contracts by the Texas Health and Human Services Commission.
The contracts expand Superior’s STAR, STAR+PLUS and CHIP
product offerings to include the new 10 county Hidalgo Service Area
(STAR and STAR+PLUS), Medicaid RSA West Texas, Medicaid RSA Central
Texas, Medicaid RSA North-East Texas and Lubbock (STAR+PLUS).
All of the service areas and products will now include the
management of the pharmacy benefit for Superior’s members. In
addition, the state has added inpatient facility services to the
managed care structure for the STAR+PLUS program. Operations
in the expanded areas are expected to commence late in the first
quarter of 2012.
- In October 2011, Buckeye
Community Health Plan began operating under an amended contract
with the Ohio Department of Job and Family Services. The
amended contract includes the management of the pharmacy benefit
for Buckeye’s members.
- In October 2011, our respiratory
syncytial virus (RSV) prevention and management program was awarded
the silver medal for health care consumer empowerment and
protection by URAC, a leading healthcare accreditation
organization, at the 2011 URAC Quality Summit and Awards Program.
We also received an honorable mention for our Nurse Response
program, a 24-hour medical triage telehealth service. A
program coordinator for Nurse Response was also honored with a URAC
Health Care Stars! Award at the same event.
Michael F. Neidorff, Centene’s
Chairman and Chief Executive Officer, stated, “We are pleased to
report solid quarterly results for the third quarter of 2011.
The focus of our team and the dependability of our processes
continue to drive Centene’s successful execution.”
The following table depicts membership in Centene’s managed care
organizations, by state:
|
|
September
30,
|
|
|
|
|
2011
|
|
2010
|
|
|
Arizona
|
|
22,800
|
|
22,300
|
|
|
Florida
|
|
188,600
|
|
116,300
|
|
|
Georgia
|
|
298,000
|
|
300,900
|
|
|
Illinois
|
|
13,600
|
|
—
|
|
|
Indiana
|
|
205,300
|
|
213,300
|
|
|
Massachusetts
|
|
34,700
|
|
34,400
|
|
|
Mississippi
|
|
30,600
|
|
—
|
|
|
Ohio
|
|
162,200
|
|
161,800
|
|
|
South Carolina
|
|
86,500
|
|
90,600
|
|
|
Texas
|
|
494,500
|
|
428,100
|
|
|
Wisconsin
|
|
78,900
|
|
106,100
|
|
|
Total at-risk
membership
|
|
1,615,700
|
|
1,473,800
|
|
|
Non-risk membership
|
|
10,600
|
|
35,900
|
|
|
Total
|
|
1,626,300
|
|
1,509,700
|
|
|
|
|
|
|
|
|
The following table depicts membership in Centene’s managed care
organizations, by member category:
|
|
September
30,
|
|
|
|
|
2011
|
|
2010
|
|
|
Medicaid
|
|
1,189,900
|
|
1,122,800
|
|
|
CHIP & Foster
Care
|
|
210,600
|
|
219,100
|
|
|
ABD & Medicare
|
|
171,700
|
|
94,500
|
|
|
Hybrid Programs
|
|
38,400
|
|
34,400
|
|
|
Long-term Care
|
|
5,100
|
|
3,000
|
|
|
Total at-risk
membership
|
|
1,615,700
|
|
1,473,800
|
|
|
Non-risk membership
|
|
10,600
|
|
35,900
|
|
|
Total
|
|
1,626,300
|
|
1,509,700
|
|
|
|
|
|
|
|
|
Statement of Operations: Three Months Ended September 30, 2011
- For the third quarter of 2011, Premium and Service Revenues
increased 17.0% to $1,265 million
from $1,082 million in the third
quarter of 2010. The increase was primarily driven by the
addition of our Mississippi and
Illinois contracts, Texas expansion and membership growth.
Sequentially, Premium and Service Revenues increased 3.3%
after adjusting for the recognition of $52.8
million of revenue from our Mississippi contract during the second quarter
2011 related to the first quarter of 2011.
- Consolidated HBR of 83.0% for the third quarter of 2011
represents a decrease of 1.2% from the comparable period in 2010
primarily as a result of lower levels of utilization and contract
enhancements. Consolidated HBR was consistent with the second
quarter of 2011 at 83.0%.
- Consolidated G&A expense ratio for the third quarter of
2011 was 13.3%, compared to 12.2% in the prior year. The
increase is primarily due to additional business expansion costs.
- Earnings from operations increased to $48.5 million in the third quarter 2011 from
$40.2 million in the third quarter
2010, or 20.6% year over year. Net earnings from continuing
operations were $29.0 million in the
third quarter 2011, compared to $22.4
million in the third quarter of 2010.
- Earnings per diluted share increased to $0.55 in the third quarter of 2011 over the
comparable period in 2010. Earnings per diluted share in the
third quarter of 2010 were $0.44,
including a net $0.04 charge per
diluted share related to investment writedowns.
Balance Sheet and Cash Flow
At September 30, 2011, the Company
had cash, investments and restricted deposits of $1,115 million, including $1,079 million held by its regulated entities and
$35.9 million held by its unregulated
entities. Medical claims liabilities totaled $498.7 million, representing 44.6 days in claims
payable, an increase of 0.2 days from 44.4 days at June 30, 2011. Total debt was $351.3 million and debt to capitalization was
23.2% at September 30, 2011 excluding
the $78.4 million non-recourse
mortgage note. Cash flows from operations for the nine months
ended September 30, 2011 were
$89.7 million, or 1.1 times net
earnings.
A reconciliation of the Company’s change in days in claims
payable from the immediately preceding quarter-end is presented
below:
Days in claims payable, June 30,
2011
|
44.4
|
|
|
Impact of new
business
|
0.2
|
|
|
Days in claims payable,
September 30, 2011
|
44.6
|
|
|
|
|
|
|
|
Outlook
The table below depicts the Company’s updated annual guidance
from continuing operations for 2011:
|
|
Full Year
2011
|
|
|
|
|
Low
|
|
High
|
|
|
Premium and Service Revenues (in
millions)
|
|
$ 5,100
|
|
$ 5,200
|
|
|
Diluted EPS
|
|
$ 2.09
|
|
$ 2.13
|
|
|
Consolidated HBR
|
|
83.2%
|
|
83.6%
|
|
|
General & Administrative
expense ratio
|
|
12.9%
|
|
13.4%
|
|
|
|
|
|
|
|
|
|
Diluted Shares Outstanding (in
thousands)
|
|
52,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call
As previously announced, the Company will host a conference call
Tuesday, October 25, 2011, at
8:30 A.M. (Eastern Time) to review
the financial results for the third quarter ended September 30, 2011, and to discuss its 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
1-800-860-2442 in the U.S. and Canada; +1-412-858-4600 from abroad; or via a
live, audio webcast on the Company’s website at www.centene.com,
under the Investors section. A webcast replay will be
available for on-demand listening shortly after the completion of
the call for the next twelve months or until 11:59 p.m. (Eastern Time) on Tuesday, October 23, 2012, at the aforementioned
URL. In addition, a digital audio playback will be available until
9:00 a.m. (Eastern Time) on
Thursday, November 3, 2011, by
dialing 1-877-344-7529 in the U.S. and Canada, or +1-412-317-0088 from abroad, and
entering access code 10004770.
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/hybrid 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, membership and revenue projections, timing of
regulatory contract approval, 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.
[Tables Follow]
CENTENE
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In
thousands, except share data)
(Unaudited)
|
|
|
|
September
30,
2011
|
|
December
31,
2010
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
of continuing operations
|
|
$
|
451,657
|
$
|
433,914
|
|
|
Cash and cash equivalents
of discontinued operations
|
|
|
—
|
|
252
|
|
|
Total cash and cash
equivalents
|
|
|
451,657
|
|
434,166
|
|
|
Premium and
related receivables, net of allowance for uncollectible accounts of
$592 and $17, respectively
|
|
|
139,467
|
|
136,243
|
|
|
Short-term investments, at
fair value (amortized cost $104,914 and $21,141,
respectively)
|
|
|
106,344
|
|
21,346
|
|
|
Other current
assets
|
|
|
68,908
|
|
64,154
|
|
|
Current assets of
discontinued operations other than cash
|
|
|
—
|
|
912
|
|
|
Total current
assets
|
|
|
766,376
|
|
656,821
|
|
|
Long-term investments, at fair
value (amortized cost $521,229 and $585,862,
respectively)
|
|
|
530,452
|
|
595,879
|
|
|
Restricted deposits, at fair
value (amortized cost $26,697 and $22,755, respectively)
|
|
|
26,768
|
|
22,758
|
|
|
Property, software and
equipment, net of accumulated depreciation of $166,442 and
$138,629, respectively
|
|
|
345,600
|
|
326,341
|
|
|
Goodwill
|
|
|
281,981
|
|
278,051
|
|
|
Intangible assets,
net
|
|
|
28,795
|
|
29,109
|
|
|
Other long-term
assets
|
|
|
57,526
|
|
30,057
|
|
|
Long-term assets of discontinued
operations
|
|
|
—
|
|
4,866
|
|
|
Total assets
|
|
$
|
2,037,498
|
$
|
1,943,882
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Medical claims
liability
|
|
$
|
498,705
|
$
|
456,765
|
|
|
Accounts payable and
accrued expenses
|
|
|
173,708
|
|
185,218
|
|
|
Unearned
revenue
|
|
|
54,764
|
|
117,344
|
|
|
Current portion of
long-term debt
|
|
|
3,203
|
|
2,817
|
|
|
Current liabilities of
discontinued operations
|
|
|
—
|
|
3,102
|
|
|
Total current
liabilities
|
|
|
730,380
|
|
765,246
|
|
|
Long-term debt
|
|
|
348,093
|
|
327,824
|
|
|
Other long-term
liabilities
|
|
|
54,926
|
|
53,378
|
|
|
Long-term liabilities of
discontinued operations
|
|
|
—
|
|
379
|
|
|
Total
liabilities
|
|
|
1,133,399
|
|
1,146,827
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common stock, $.001 par
value; authorized 100,000,000 shares; 52,921,255 issued and
50,377,774 outstanding at September 30, 2011, and 52,172,037 issued
and 49,616,824 outstanding at December 31, 2010
|
|
|
53
|
|
52
|
|
|
Additional paid-in
capital
|
|
|
411,924
|
|
384,206
|
|
|
Accumulated other
comprehensive income:
|
|
|
|
|
|
|
|
Unrealized gain on
investments, net of tax
|
|
|
6,478
|
|
6,424
|
|
|
Retained
earnings
|
|
|
534,849
|
|
453,743
|
|
|
Treasury stock, at cost
(2,543,481 and 2,555,213 shares, respectively)
|
|
|
(50,594)
|
|
(50,486)
|
|
|
Total
Centene stockholders' equity
|
|
|
902,710
|
|
793,939
|
|
|
Noncontrolling
interest
|
|
|
1,389
|
|
3,116
|
|
|
Total stockholders'
equity
|
|
|
904,099
|
|
797,055
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
2,037,498
|
$
|
1,943,882
|
|
|
|
|
|
|
|
|
|
|
|
CENTENE
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In
thousands, except share data)
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
|
2011
|
|
|
2010
|
|
2011
|
|
|
2010
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium
|
$
|
1,239,464
|
|
|
$
|
1,060,559
|
|
$
|
3,640,829
|
|
|
$
|
3,085,802
|
|
|
Service
|
|
25,817
|
|
|
|
20,954
|
|
|
81,629
|
|
|
|
68,543
|
|
|
Premium and
service revenues
|
|
1,265,281
|
|
|
|
1,081,513
|
|
|
3,722,458
|
|
|
|
3,154,345
|
|
|
Premium tax
|
|
36,754
|
|
|
|
40,348
|
|
|
110,948
|
|
|
|
113,009
|
|
|
Total
revenues
|
|
1,302,035
|
|
|
|
1,121,861
|
|
|
3,833,406
|
|
|
|
3,267,354
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical costs
|
|
1,028,586
|
|
|
|
893,281
|
|
|
3,021,400
|
|
|
|
2,592,324
|
|
|
Cost of services
|
|
20,229
|
|
|
|
14,646
|
|
|
60,717
|
|
|
|
47,505
|
|
|
General and administrative
expenses
|
|
167,668
|
|
|
|
132,095
|
|
|
496,674
|
|
|
|
401,072
|
|
|
Premium tax
|
|
37,005
|
|
|
|
41,591
|
|
|
111,668
|
|
|
|
114,885
|
|
|
Total
operating expenses
|
|
1,253,488
|
|
|
|
1,081,613
|
|
|
3,690,459
|
|
|
|
3,155,786
|
|
|
Earnings
from operations
|
|
48,547
|
|
|
|
40,248
|
|
|
142,947
|
|
|
|
111,568
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and other
income
|
|
2,697
|
|
|
|
713
|
|
|
9,379
|
|
|
|
11,912
|
|
|
Debt extinguishment
costs
|
|
—
|
|
|
|
—
|
|
|
(8,488)
|
|
|
|
—
|
|
|
Interest expense
|
|
(4,572)
|
|
|
|
(4,858)
|
|
|
(15,523)
|
|
|
|
(12,540)
|
|
|
Earnings from continuing
operations, before income tax expense
|
|
46,672
|
|
|
|
36,103
|
|
|
128,315
|
|
|
|
110,940
|
|
|
Income tax
expense
|
|
18,459
|
|
|
|
13,163
|
|
|
49,216
|
|
|
|
42,942
|
|
|
Earnings from continuing
operations, net of income tax expense
|
|
28,213
|
|
|
|
22,940
|
|
|
79,099
|
|
|
|
67,998
|
|
|
Discontinued operations, net of
income tax expense of $0, $26, $0 and $4,376,
respectively
|
|
—
|
|
|
|
260
|
|
|
—
|
|
|
|
3,954
|
|
|
Net earnings
|
|
28,213
|
|
|
|
23,200
|
|
|
79,099
|
|
|
|
71,952
|
|
|
Noncontrolling interest
(loss)
|
|
(774)
|
|
|
|
538
|
|
|
(2,007)
|
|
|
|
2,515
|
|
|
Net earnings
attributable to Centene Corporation
|
$
|
28,987
|
|
|
$
|
22,662
|
|
$
|
81,106
|
|
|
$
|
69,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Centene
Corporation common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing
operations, net of income tax expense
|
$
|
28,987
|
|
|
$
|
22,402
|
|
$
|
81,106
|
|
|
$
|
65,483
|
|
|
Discontinued operations,
net of income tax expense
|
|
—
|
|
|
|
260
|
|
|
—
|
|
|
|
3,954
|
|
|
Net earnings
|
$
|
28,987
|
|
|
$
|
22,662
|
|
$
|
81,106
|
|
|
$
|
69,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share
attributable to Centene Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.58
|
|
|
$
|
0.46
|
|
$
|
1.62
|
|
|
$
|
1.35
|
|
|
Discontinued
operations
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
0.08
|
|
|
Earnings per
common share
|
$
|
0.58
|
|
|
$
|
0.46
|
|
$
|
1.62
|
|
|
$
|
1.43
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.55
|
|
|
$
|
0.44
|
|
$
|
1.55
|
|
|
$
|
1.30
|
|
|
Discontinued
operations
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
0.08
|
|
|
Earnings per
common share
|
$
|
0.55
|
|
|
$
|
0.44
|
|
$
|
1.55
|
|
|
$
|
1.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
50,345,512
|
|
|
|
49,238,406
|
|
|
50,089,845
|
|
|
|
48,552,135
|
|
|
Diluted
|
|
52,620,350
|
|
|
|
50,938,357
|
|
|
52,320,906
|
|
|
|
50,192,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CENTENE
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
Nine Months
Ended September
30,
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
|
Net earnings
|
$
|
79,099
|
|
$
|
71,952
|
|
|
Adjustments to reconcile
net earnings to net cash provided by operating
activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
43,055
|
|
|
38,620
|
|
|
Stock compensation
expense
|
|
13,263
|
|
|
10,224
|
|
|
Gain on sale of
investments, net
|
|
(213)
|
|
|
(6,331)
|
|
|
Debt extinguishment
costs
|
|
8,488
|
|
|
—
|
|
|
Gain on sale of
UHP
|
|
—
|
|
|
(8,201)
|
|
|
Impairment of
investment
|
|
—
|
|
|
5,531
|
|
|
Deferred income
taxes
|
|
(223)
|
|
|
7,012
|
|
|
Changes in assets and
liabilities
|
|
|
|
|
|
|
|
Premium and related
receivables
|
|
(13,306)
|
|
|
(68,125)
|
|
|
Other current
assets
|
|
(6,667)
|
|
|
(2,932)
|
|
|
Other assets
|
|
(1,230)
|
|
|
(990)
|
|
|
Medical claims
liabilities
|
|
40,476
|
|
|
(29,304)
|
|
|
Unearned
revenue
|
|
(65,183)
|
|
|
(38,708)
|
|
|
Accounts payable and
accrued expenses
|
|
(11,414)
|
|
|
(3,174)
|
|
|
Other operating
activities
|
|
3,528
|
|
|
(1,267)
|
|
|
Net cash provided by (used
in) operating activities
|
|
89,673
|
|
|
(25,693)
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(52,931)
|
|
|
(50,353)
|
|
|
Capital expenditures of
Centene Center LLC
|
|
(4,007)
|
|
|
(41,607)
|
|
|
Purchases of
investments
|
|
(201,145)
|
|
|
(382,730)
|
|
|
Proceeds from asset
sales
|
|
—
|
|
|
13,420
|
|
|
Sales and maturities of
investments
|
|
180,124
|
|
|
452,128
|
|
|
Investments
in acquisitions, net of cash acquired
|
|
(3,192
|
|
|
(26,847)
|
|
|
Net cash used in investing
activities
|
|
(81,151)
|
|
|
(35,989)
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
Proceeds from exercise of
stock options
|
|
13,582
|
|
|
2,394
|
|
|
Proceeds from
borrowings
|
|
419,183
|
|
|
53,812
|
|
|
Proceeds from stock
offering
|
|
—
|
|
|
104,534
|
|
|
Payment of long-term
debt
|
|
(415,475)
|
|
|
(97,467)
|
|
|
Contributions from
(distributions to) noncontrolling interest
|
|
569
|
|
|
(7,387)
|
|
|
Excess tax benefits from
stock compensation
|
|
1,632
|
|
|
424
|
|
|
Common stock
repurchases
|
|
(1,280)
|
|
|
(714)
|
|
|
Debt issue
costs
|
|
(9,242)
|
|
|
—
|
|
|
Net cash provided by
financing activities
|
|
8,969
|
|
|
55,596
|
|
|
Net increase (decrease) in
cash and cash equivalents
|
|
17,491
|
|
|
(6,086)
|
|
|
Cash and cash
equivalents, beginning of period
|
|
434,166
|
|
|
403,752
|
|
|
Cash and cash
equivalents, end of period
|
$
|
451,657
|
|
$
|
397,666
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash
flow information:
|
|
|
|
|
|
|
|
Interest paid
|
$
|
16,097
|
|
$
|
9,501
|
|
|
Income taxes
paid
|
$
|
49,996
|
|
$
|
44,407
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of
non-cash investing and financing activities:
|
|
|
|
|
|
|
|
Contribution from
noncontrolling interest
|
$
|
—
|
|
$
|
306
|
|
|
Capital
expenditures
|
$
|
(4,833)
|
|
$
|
15,291
|
|
|
|
|
|
|
|
|
|
|
|
CENTENE
CORPORATION
CONTINUING
OPERATIONS SUPPLEMENTAL FINANCIAL DATA
|
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Q4
|
|
Q3
|
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2010
|
|
MEMBERSHIP
|
|
|
|
|
|
|
|
|
|
|
Managed Care:
|
|
|
|
|
|
|
|
|
|
|
Arizona
|
22,800
|
|
22,800
|
|
22,600
|
|
22,400
|
|
22,300
|
|
Florida
|
188,600
|
|
190,600
|
|
188,800
|
|
194,900
|
|
116,300
|
|
Georgia
|
298,000
|
|
303,100
|
|
303,300
|
|
305,800
|
|
300,900
|
|
Illinois
|
13,600
|
|
700
|
|
—
|
|
—
|
|
—
|
|
Indiana
|
205,300
|
|
206,700
|
|
209,400
|
|
215,800
|
|
213,300
|
|
Massachusetts
|
34,700
|
|
32,900
|
|
34,100
|
|
36,200
|
|
34,400
|
|
Mississippi
|
30,600
|
|
30,800
|
|
—
|
|
—
|
|
—
|
|
Ohio
|
162,200
|
|
159,900
|
|
160,900
|
|
160,100
|
|
161,800
|
|
South Carolina
|
86,500
|
|
82,800
|
|
84,900
|
|
90,300
|
|
90,600
|
|
Texas
|
494,500
|
|
470,400
|
|
456,700
|
|
433,100
|
|
428,100
|
|
Wisconsin
|
78,900
|
|
79,800
|
|
81,800
|
|
74,900
|
|
106,100
|
|
Total at-risk
membership
|
1,615,700
|
|
1,580,500
|
|
1,542,500
|
|
1,533,500
|
|
1,473,800
|
|
Non-risk
membership
|
10,600
|
|
10,400
|
|
10,400
|
|
4,200
|
|
35,900
|
|
TOTAL
|
1,626,300
|
|
1,590,900
|
|
1,552,900
|
|
1,537,700
|
|
1,509,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicaid
|
1,189,900
|
|
1,172,400
|
|
1,169,700
|
|
1,177,100
|
|
1,122,800
|
|
CHIP & Foster
Care
|
210,600
|
|
211,400
|
|
208,900
|
|
210,500
|
|
219,100
|
|
ABD &
Medicare
|
171,700
|
|
156,300
|
|
123,800
|
|
104,600
|
|
94,500
|
|
Hybrid Programs
|
38,400
|
|
35,500
|
|
35,200
|
|
36,200
|
|
34,400
|
|
Long-term Care
|
5,100
|
|
4,900
|
|
4,900
|
|
5,100
|
|
3,000
|
|
Total at-risk
membership
|
1,615,700
|
|
1,580,500
|
|
1,542,500
|
|
1,533,500
|
|
1,473,800
|
|
Non-risk
membership
|
10,600
|
|
10,400
|
|
10,400
|
|
4,200
|
|
35,900
|
|
TOTAL
|
1,626,300
|
|
1,590,900
|
|
1,552,900
|
|
1,537,700
|
|
1,509,700
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty
Services(a):
|
|
|
|
|
|
|
|
|
|
|
Cenpatico Behavioral
Health
|
|
|
|
|
|
|
|
|
|
|
Arizona
|
175,500
|
|
173,200
|
|
172,700
|
|
174,600
|
|
121,300
|
|
Kansas
|
45,600
|
|
45,000
|
|
44,000
|
|
39,200
|
|
39,800
|
|
TOTAL
|
221,100
|
|
218,200
|
|
216,700
|
|
213,800
|
|
161,100
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes external membership
only.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE PER MEMBER PER
MONTH(b)
|
$
|
245.27
|
|
$
|
240.57
|
|
$
|
238.31
|
|
$
|
239.66
|
|
$
|
224.62
|
|
|
|
|
|
|
|
|
|
|
|
|
CLAIMS(b)
|
|
|
|
|
|
|
|
|
|
|
Period-end
inventory
|
482,900
|
|
415,700
|
|
527,100
|
|
434,900
|
|
469,000
|
|
Average
inventory
|
312,400
|
|
332,300
|
|
347,900
|
|
304,700
|
|
307,500
|
|
Period-end inventory per
member
|
0.30
|
|
0.26
|
|
0.34
|
|
0.28
|
|
0.32
|
|
(b) Revenue per member and
claims information are presented for the Managed Care at-risk
members.
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER OF
EMPLOYEES
|
5,000
|
|
4,800
|
|
4,500
|
|
4,200
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Q4
|
|
Q3
|
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
DAYS IN CLAIMS
PAYABLE (c)
|
44.6
|
|
44.4
|
|
44.4
|
|
45.6
|
|
47.1
|
|
(c) 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
|
$
|
1,079.3
|
|
$
|
1,061.9
|
|
$
|
1,096.3
|
|
$
|
1,043.0
|
|
$
|
895.4
|
|
Unregulated
|
|
35.9
|
|
|
36.5
|
|
|
31.7
|
|
|
30.9
|
|
|
32.7
|
|
TOTAL
|
$
|
1,115.2
|
|
$
|
1,098.4
|
|
$
|
1,128.0
|
|
$
|
1,073.9
|
|
$
|
928.1
|
|
|
|
|
|
|
|
|
|
|
|
|
DEBT TO
CAPITALIZATION
|
28.0%
|
|
28.1%
|
|
26.9%
|
|
29.3%
|
|
24.7%
|
|
DEBT TO CAPITALIZATION EXCLUDING
NON-RECOURSE DEBT(d)
|
23.2%
|
|
23.0%
|
|
21.4%
|
|
23.9%
|
|
|
|
Debt to Capitalization is
calculated as follows: total debt divided by (total
debt + total equity).
(d) The non-recourse debt
represents our mortgage note payable of $78.4 million at September
30, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING RATIOS:
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2011
|
|
|
2010
|
|
2011
|
|
|
2010
|
|
Health Benefits
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicaid and
CHIP
|
80.0
|
%
|
|
|
83.2
|
%
|
|
80.8
|
%
|
|
|
84.0
|
%
|
|
ABD and
Medicare
|
89.1
|
|
|
|
85.9
|
|
|
87.6
|
|
|
|
84.3
|
|
|
Specialty
Services
|
84.9
|
|
|
|
87.9
|
|
|
84.5
|
|
|
|
83.4
|
|
|
Total
|
83.0
|
|
|
|
84.2
|
|
|
83.0
|
|
|
|
84.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total General &
Administrative Expense Ratio
|
13.3
|
%
|
|
|
12.2
|
%
|
|
13.3
|
%
|
|
|
12.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MEDICAL
CLAIMS LIABILITY (In thousands)
The changes in medical
claims liability are summarized as follows:
|
|
Balance,
September 30, 2010
|
$
|
457,085
|
|
|
|
|
|
Incurred related
to:
|
|
|
|
|
|
|
|
Current period
|
|
3,991,598
|
|
|
|
|
|
Prior period
|
|
(48,128)
|
|
|
|
|
|
Total incurred
|
|
3,943,470
|
|
|
|
|
|
Paid related
to:
|
|
|
|
|
|
|
|
Current period
|
|
3,497,216
|
|
|
|
|
|
Prior period
|
|
404,634
|
|
|
|
|
|
Total paid
|
|
3,901,850
|
|
|
|
|
|
Balance,
September 30, 2011
|
$
|
498,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
represents favorable development and 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, receipts from other third party payors
related to coordination of benefits and lower medical utilization
and cost trends for dates of service prior to September 30, 2010.
SOURCE Centene Corporation