Attached files
| file | filename |
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| 8-K - FORM 8-K - CENTENE CORP | form8k.htm |
Exhibit 99.1
N E W S R E L E A S E
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Contact:
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Investor Relations Inquiries
Edmund E. Kroll
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Senior Vice President, Finance & Investor Relations
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(212) 759-0382
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Media Inquiries
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Deanne Lane
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Senior Director, Media Affairs
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(314) 725-4477
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FOR IMMEDIATE RELEASE
CENTENE CORPORATION REPORTS 2010 SECOND QUARTER EARNINGS
ST. LOUIS, MISSOURI (July 27, 2010) -- 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
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—
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Quarter-end managed care at-risk membership of 1,531,800, an increase of 242,800 members, or 18.8% year over year.
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—
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Premium and Service Revenues of $1.051 billion, representing 12.8% year over year growth.
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—
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Health Benefits Ratio (HBR) of 83.8%, compared to 83.1% in the prior year.
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—
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General and Administrative (G&A) expense ratio of 12.7%, compared to 13.9% in the prior year.
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—
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Earnings from operations of $41.7 million, compared to $31.4 million in the prior year.
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—
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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.
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—
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Diluted earnings per share from continuing operations of $0.45.
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—
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Days in claims payable of 48.2, including pharmacy claims payable.
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—
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Estimated 2010 composite premium rate increase between 1% and 3%.
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Other Events
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—
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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.
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—
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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.
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—
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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.
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—
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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.
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Centene Corporation Reports 2010 Second Quarter Results July 27, 2010 / Page 2
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, | ||||||||
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2010
|
2009
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|||||||
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Arizona
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19,300 | 16,200 | ||||||
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Florida
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113,100 | 22,300 | ||||||
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Georgia
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295,600 | 292,800 | ||||||
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Indiana
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212,700 | 196,100 | ||||||
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Massachusetts
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30,100 | — | ||||||
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Ohio
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159,300 | 141,200 | ||||||
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South Carolina
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92,600 | 46,000 | ||||||
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Texas
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475,500 | 443,200 | ||||||
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Wisconsin
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133,600 | 131,200 | ||||||
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Total at-risk membership
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1,531,800 | 1,289,000 | ||||||
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Non-risk membership
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50,900 | 114,000 | ||||||
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Total
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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, | ||||||||
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2010
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2009
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|||||||
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Medicaid
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1,135,500 | 958,600 | ||||||
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CHIP & Foster Care
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272,400 | 261,400 | ||||||
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ABD & Medicare
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93,800 | 69,000 | ||||||
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Other State programs
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30,100 | — | ||||||
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Total at-risk membership
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1,531,800 | 1,289,000 | ||||||
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Non-risk membership
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50,900 | 114,000 | ||||||
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Total
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1,582,700 | 1,403,000 | ||||||
Statement of Operations
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·
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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.
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·
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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:
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Second Quarter 2009
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83.1
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%
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||
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New markets reserved at higher rates
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0.6
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|||
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Net changes in existing markets
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0.1
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|||
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Second Quarter 2010
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83.8
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%
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||
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·
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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.
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·
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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.
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·
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Earnings per diluted share from continuing operations were $0.45, compared to $0.47 in the second quarter of 2009.
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Centene Corporation Reports 2010 Second Quarter Results July 27, 2010 / Page 3
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) $57.7 million increase in premium and related receivables for June premium payments deferred by several states until July 2010. During the second half of 2010, we expect cash flow from operations to return to historical levels, although the timing of premium payments from each state can vary from period to period.
A reconciliation of the change in days in claims payable from the immediately preceding quarter-end is presented below:
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Days in claims payable, March 31, 2010
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47.7 | |||
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Timing of claims payments
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0.8 | |||
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Payment of annual provider bonuses
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(0.5 | ) | ||
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Impact of new business
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0.3 | |||
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Pharmacy payment timing
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(0.1 | ) | ||
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Days in claims payable, June 30, 2010
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48.2 | |||
Outlook
The table below depicts our guidance from continuing operations for 2010:
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Full Year 2010
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|||||
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Low
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High
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||||
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Premium and Service revenues (in millions)
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$ 4,350
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$ 4,450
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|||
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Earnings per diluted share (EPS)
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$ 1.78
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$ 1.86
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|||
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HBR %
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83.5%
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84.5%
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|||
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G&A %
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12.4%
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12.9%
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|||
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Diluted Shares Outstanding (in thousands)
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50,500
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||||
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.
Centene Corporation Reports 2010 Second Quarter Results July 27, 2010 / Page 4
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.
[Tables Follow]
Centene Corporation Reports 2010 Second Quarter Results July 27, 2010 / Page 5
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
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June 30,
2010
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December 31,
2009
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|||||||
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ASSETS
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||||||||
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Current assets:
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||||||||
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Cash and cash equivalents of continuing operations, including $5,154 and $8,667, respectively, from consolidated variable interest entities
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$ | 264,723 | $ | 400,951 | ||||
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Cash and cash equivalents of discontinued operations
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877 | 2,801 | ||||||
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Total cash and cash equivalents
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265,600 | 403,752 | ||||||
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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
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164,420 | 103,456 | ||||||
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Short-term investments, at fair value (amortized cost $29,542 and $39,230, respectively)
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29,660 | 39,554 | ||||||
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Other current assets, including $3,918 and $4,507, respectively, from consolidated variable interest entities
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83,843 | 64,866 | ||||||
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Current assets of discontinued operations other than cash
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2,314 | 4,506 | ||||||
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Total current assets
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545,837 | 616,134 | ||||||
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Long-term investments, at fair value (amortized cost $522,589 and $514,256, respectively)
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537,399 | 525,497 | ||||||
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Restricted deposits, at fair value (amortized cost $20,485 and $20,048, respectively)
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20,570 | 20,132 | ||||||
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Property, software and equipment, net of accumulated depreciation of $118,995 and $103,883, respectively, including $138,998 and $89,219, respectively, from consolidated variable interest entities
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313,839 | 230,421 | ||||||
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Goodwill
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244,304 | 224,587 | ||||||
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Intangible assets, net
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24,589 | 22,479 | ||||||
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Other long-term assets
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35,557 | 36,829 | ||||||
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Long-term assets of discontinued operations
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11,442 | 26,285 | ||||||
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Total assets
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$ | 1,733,537 | $ | 1,702,364 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
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Current liabilities:
|
||||||||
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Medical claims liability
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$ | 455,375 | $ | 470,932 | ||||
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Accounts payable and accrued expenses, including $30,366 and $14,020, respectively, from consolidated variable interest entities
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167,613 | 132,001 | ||||||
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Unearned revenue
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5,695 | 91,644 | ||||||
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Current portion of long-term debt
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771 | 646 | ||||||
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Current liabilities of discontinued operations
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7,365 | 20,685 | ||||||
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Total current liabilities
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636,819 | 715,908 | ||||||
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Long-term debt
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252,028 | 307,085 | ||||||
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Other long-term liabilities
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64,870 | 59,561 | ||||||
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Long-term liabilities of discontinued operations
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652 | 383 | ||||||
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Total liabilities
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954,369 | 1,082,937 | ||||||
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Commitments and contingencies
|
||||||||
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Stockholders’ equity:
|
||||||||
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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
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52 | 46 | ||||||
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Additional paid-in capital
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395,926 | 281,806 | ||||||
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Accumulated other comprehensive income:
|
||||||||
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Unrealized gain on investments, net of tax
|
9,400 | 7,348 | ||||||
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Retained earnings
|
405,682 | 358,907 | ||||||
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Treasury stock, at cost (2,444,036 and 2,414,010 shares, respectively)
|
(47,830 | ) | (47,262 | ) | ||||
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Total Centene Corporation stockholders’ equity
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763,230 | 600,845 | ||||||
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Noncontrolling interest
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15,938 | 18,582 | ||||||
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Total stockholders’ equity
|
779,168 | 619,427 | ||||||
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Total liabilities and stockholders’ equity
|
$ | 1,733,537 | $ | 1,702,364 | ||||
Centene Corporation Reports 2010 Second Quarter Results July 27, 2010 / Page 6
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||
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2010
|
2009
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2010
|
2009
|
||||||||||
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Revenues:
|
|||||||||||||
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Premium
|
$
|
1,025,928
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$
|
909,698
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$
|
2,025,243
|
$
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1,794,704
|
|||||
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Service
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24,682
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21,591
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47,589
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45,440
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|||||||||
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Premium and service revenues
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1,050,610
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931,289
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2,072,832
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1,840,144
|
|||||||||
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Premium tax
|
26,162
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108,180
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72,661
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131,760
|
|||||||||
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Total revenues
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1,076,772
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1,039,469
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2,145,493
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1,971,904
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|||||||||
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Expenses:
|
|||||||||||||
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Medical costs
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859,335
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755,706
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1,699,043
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1,495,046
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|||||||||
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Cost of services
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15,707
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14,559
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32,859
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30,521
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|||||||||
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General and administrative expenses
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133,470
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129,221
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268,977
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251,500
|
|||||||||
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Premium tax
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26,551
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108,548
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73,294
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132,490
|
|||||||||
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Total operating expenses
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1,035,063
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1,008,034
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2,074,173
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1,909,557
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|||||||||
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Earnings from operations
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41,709
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31,435
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71,320
|
62,347
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|||||||||
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Other income (expense):
|
|||||||||||||
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Investment and other income
|
4,142
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4,418
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11,199
|
8,031
|
|||||||||
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Interest expense
|
(3,869
|
)
|
(4,160
|
)
|
(7,682
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)
|
(8,146
|
)
|
|||||
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Earnings from continuing operations, before income tax expense
|
41,982
|
31,693
|
74,837
|
62,232
|
|||||||||
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Income tax expense
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17,254
|
11,789
|
29,779
|
22,634
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|||||||||
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Earnings from continuing operations, net of income tax expense
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24,728
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19,904
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45,058
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39,598
|
|||||||||
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Discontinued operations, net of income tax (benefit) expense of $(90), $(196), $4,350 and $(356), respectively
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(226
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)
|
(485
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)
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3,694
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(934
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)
|
||||||
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Net earnings
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24,502
|
19,419
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48,752
|
38,664
|
|||||||||
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Noncontrolling interest (loss)
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1,729
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(811
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)
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1,977
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(24
|
)
|
|||||||
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Net earnings attributable to Centene Corporation
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$
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22,773
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$
|
20,230
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$
|
46,775
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$
|
38,688
|
|||||
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Amounts attributable to Centene Corporation common stockholders:
|
|||||||||||||
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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
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)
|
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 Reports 2010 Second Quarter Results July 27, 2010 / Page 7
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 Reports 2010 Second Quarter Results July 27, 2010 / Page 8
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.
|
||||||||||||||
Centene Corporation Reports 2010 Second Quarter Results July 27, 2010 / Page 9
|
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.