Attached files
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| 8-K - FORM 8-K - CENTENE CORP | form8k.htm |
Exhibit 99.1
NEWS RELEASE
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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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Vice President, Media Affairs
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(314) 725-4477
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FOR IMMEDIATE RELEASE
– CENTENE CORPORATION REPORTS 2011 THIRD QUARTER EARNINGS OF $0.55 PER DILUTED SHARE –
ST. LOUIS, MISSOURI (October 25, 2011) -- 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
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·
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Quarter-end managed care at-risk membership of 1,615,700, an increase of 141,900 members year over year.
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·
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Premium and Service Revenues of $1.3 billion, representing 17.0% year over year growth.
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·
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Health Benefits Ratio of 83.0%, compared to 84.2% in the prior year and 83.0% in the second quarter of 2011.
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·
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General and Administrative expense ratio (G&A ratio) of 13.3%, compared to 12.2% in the prior year.
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·
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Diluted earnings per share from continuing operations increased 25.0% from the prior year to $0.55.
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·
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Employees increased 25.0% from the prior year to 5,000 at September 30, 2011, reflecting our continued business expansions.
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Other Events
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·
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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.
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·
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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.
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·
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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.
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Centene Corporation Reports 2011 Third Quarter Results October 25, 2011 / Page 2
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:
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September 30,
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||||||||
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2011
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2010
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|||||||
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Arizona
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22,800 | 22,300 | ||||||
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Florida
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188,600 | 116,300 | ||||||
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Georgia
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298,000 | 300,900 | ||||||
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Illinois
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13,600 | — | ||||||
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Indiana
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205,300 | 213,300 | ||||||
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Massachusetts
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34,700 | 34,400 | ||||||
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Mississippi
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30,600 | — | ||||||
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Ohio
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162,200 | 161,800 | ||||||
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South Carolina
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86,500 | 90,600 | ||||||
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Texas
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494,500 | 428,100 | ||||||
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Wisconsin
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78,900 | 106,100 | ||||||
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Total at-risk membership
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1,615,700 | 1,473,800 | ||||||
| Non-risk membership | 10,600 | 35,900 | ||||||
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Total
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1,626,300 | 1,509,700 | ||||||
The following table depicts membership in Centene’s managed care organizations, by member category:
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September 30,
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||||||||
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2011
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2010
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|||||||
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Medicaid
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1,189,900 | 1,122,800 | ||||||
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CHIP & Foster Care
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210,600 | 219,100 | ||||||
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ABD & Medicare
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171,700 | 94,500 | ||||||
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Hybrid Programs
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38,400 | 34,400 | ||||||
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Long-term Care
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5,100 | 3,000 | ||||||
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Total at-risk membership
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1,615,700 | 1,473,800 | ||||||
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Non-risk membership
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10,600 | 35,900 | ||||||
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Total
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1,626,300 | 1,509,700 | ||||||
Statement of Operations: Three Months Ended September 30, 2011
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·
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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.
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·
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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%.
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·
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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.
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·
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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.
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·
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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.
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Centene Corporation Reports 2011 Third Quarter Results October 25, 2011 / Page 3
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 $89.7 million, or 1.1 times net earnings.
A reconciliation of the Company’s change in days in claims payable from the immediately preceding quarter-end is presented below:
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Days in claims payable, June 30, 2011
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44.4 | |||
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Impact of new business
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0.2 | |||
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Days in claims payable, September 30, 2011
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44.6 |
Outlook
The table below depicts the Company’s updated annual guidance from continuing operations for 2011:
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Full Year 2011
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Low
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High
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|||||
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Premium and Service Revenues (in millions)
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$ |
5,100
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$ |
5,200
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Diluted EPS
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$ |
2.09
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$ |
2.13
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Consolidated HBR
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83.2%
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83.6%
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||||
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General & Administrative expense ratio
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12.9%
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13.4%
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||||
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Diluted Shares Outstanding (in thousands)
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52,400
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|||||
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 Reports 2011 Third Quarter Results October 25, 2011 / Page 4
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
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September 30,
2011
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December 31,
2010
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ASSETS
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Current assets:
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Cash and cash equivalents of continuing operations
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$ | 451,657 | $ | 433,914 | ||||
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Cash and cash equivalents of discontinued operations
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— | 252 | ||||||
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Total cash and cash equivalents
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451,657 | 434,166 | ||||||
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Premium and related receivables, net of allowance for uncollectible accounts of $592 and $17, respectively
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139,467 | 136,243 | ||||||
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Short-term investments, at fair value (amortized cost $104,914 and $21,141, respectively)
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106,344 | 21,346 | ||||||
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Other current assets
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68,908 | 64,154 | ||||||
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Current assets of discontinued operations other than cash
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— | 912 | ||||||
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Total current assets
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766,376 | 656,821 | ||||||
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Long-term investments, at fair value (amortized cost $521,229 and $585,862, respectively)
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530,452 | 595,879 | ||||||
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Restricted deposits, at fair value (amortized cost $26,697 and $22,755, respectively)
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26,768 | 22,758 | ||||||
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Property, software and equipment, net of accumulated depreciation of $166,442 and $138,629, respectively
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345,600 | 326,341 | ||||||
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Goodwill
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281,981 | 278,051 | ||||||
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Intangible assets, net
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28,795 | 29,109 | ||||||
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Other long-term assets
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57,526 | 30,057 | ||||||
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Long-term assets of discontinued operations
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— | 4,866 | ||||||
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Total assets
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$ | 2,037,498 | $ | 1,943,882 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Medical claims liability
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$ | 498,705 | $ | 456,765 | ||||
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Accounts payable and accrued expenses
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173,708 | 185,218 | ||||||
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Unearned revenue
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54,764 | 117,344 | ||||||
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Current portion of long-term debt
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3,203 | 2,817 | ||||||
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Current liabilities of discontinued operations
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— | 3,102 | ||||||
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Total current liabilities
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730,380 | 765,246 | ||||||
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Long-term debt
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348,093 | 327,824 | ||||||
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Other long-term liabilities
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54,926 | 53,378 | ||||||
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Long-term liabilities of discontinued operations
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— | 379 | ||||||
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Total liabilities
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1,133,399 | 1,146,827 | ||||||
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Commitments and contingencies
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||||||||
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Stockholders’ equity:
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||||||||
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Common stock, $.001 par value; authorized 100,000,000 shares; 52,921,255 issued and 50,377,774 outstanding at September 30, 2011, and 52,172,037 issued and 49,616,824 outstanding at December 31, 2010
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53 | 52 | ||||||
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Additional paid-in capital
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411,924 | 384,206 | ||||||
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Accumulated other comprehensive income:
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||||||||
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Unrealized gain on investments, net of tax
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6,478 | 6,424 | ||||||
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Retained earnings
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534,849 | 453,743 | ||||||
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Treasury stock, at cost (2,543,481 and 2,555,213 shares, respectively)
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(50,594 | ) | (50,486 | ) | ||||
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Total Centene stockholders’ equity
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902,710 | 793,939 | ||||||
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Noncontrolling interest
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1,389 | 3,116 | ||||||
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Total stockholders’ equity
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904,099 | 797,055 | ||||||
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Total liabilities and stockholders’ equity
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$ | 2,037,498 | $ | 1,943,882 | ||||
Centene Corporation Reports 2011 Third Quarter Results October 25, 2011 / Page 5
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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|||||||||||
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2011
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2010
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2011
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2010
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Revenues:
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||||||||||||
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Premium
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$
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1,239,464
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$
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1,060,559
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$
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3,640,829
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$
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3,085,802
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||||
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Service
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25,817
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20,954
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81,629
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68,543
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||||||||
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Premium and service revenues
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1,265,281
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1,081,513
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3,722,458
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3,154,345
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||||||||
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Premium tax
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36,754
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40,348
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110,948
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113,009
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||||||||
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Total revenues
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1,302,035
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1,121,861
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3,833,406
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3,267,354
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Expenses:
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||||||||||||
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Medical costs
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1,028,586
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893,281
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3,021,400
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2,592,324
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||||||||
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Cost of services
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20,229
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14,646
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60,717
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47,505
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||||||||
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General and administrative expenses
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167,668
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132,095
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496,674
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401,072
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||||||||
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Premium tax
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37,005
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41,591
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111,668
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114,885
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Total operating expenses
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1,253,488
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1,081,613
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3,690,459
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3,155,786
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Earnings from operations
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48,547
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40,248
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142,947
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111,568
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Other income (expense):
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||||||||||||
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Investment and other income
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2,697
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713
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9,379
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11,912
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||||||||
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Debt extinguishment costs
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—
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—
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(8,488
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)
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—
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|||||||
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Interest expense
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(4,572
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)
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(4,858
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)
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(15,523
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)
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(12,540
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)
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||||
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Earnings from continuing operations, before income tax expense
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46,672
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36,103
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128,315
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110,940
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||||||||
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Income tax expense
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18,459
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13,163
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49,216
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42,942
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||||||||
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Earnings from continuing operations, net of income tax expense
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28,213
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22,940
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79,099
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67,998
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||||||||
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Discontinued operations, net of income tax expense of $0, $26, $0 and $4,376, respectively
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—
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260
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—
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3,954
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||||||||
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Net earnings
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28,213
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23,200
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79,099
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71,952
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||||||||
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Noncontrolling interest (loss)
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(774
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)
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538
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(2,007
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)
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2,515
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||||||
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Net earnings attributable to Centene Corporation
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$
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28,987
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$
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22,662
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$
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81,106
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$
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69,437
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||||
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Amounts attributable to Centene Corporation common stockholders:
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||||||||||||
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Earnings from continuing operations, net of income tax expense
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$
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28,987
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$
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22,402
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$
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81,106
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$
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65,483
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||||
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Discontinued operations, net of income tax expense
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—
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260
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—
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3,954
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||||||||
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Net earnings
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$
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28,987
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$
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22,662
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$
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81,106
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$
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69,437
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||||
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Net earnings per common share attributable to Centene Corporation:
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||||||||||||
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Basic:
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||||||||||||
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Continuing operations
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$
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0.58
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$
|
0.46
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$
|
1.62
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$
|
1.35
|
||||
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Discontinued operations
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—
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—
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—
|
0.08
|
||||||||
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Earnings per common share
|
$
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0.58
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$
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0.46
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$
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1.62
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$
|
1.43
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||||
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Diluted:
|
||||||||||||
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Continuing operations
|
$
|
0.55
|
$
|
0.44
|
$
|
1.55
|
$
|
1.30
|
||||
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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 Reports 2011 Third Quarter Results October 25, 2011 / Page 6
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
Nine Months EndedSeptember 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 Reports 2011 Third Quarter Results October 25, 2011 / Page 7
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 | |||||||||||
Centene Corporation Reports 2011 Third Quarter Results October 25, 2011 / Page 8
|
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.