Centene Corporation Reports 2011 Second Quarter Earnings of $0.54 Per Diluted Share
- Includes $(0.10) per diluted share charge for Debt Extinguishment Costs -
- Includes $0.07 per diluted share benefit recognized for Q1 Mississippi Earnings -
ST. LOUIS, July 26, 2011 /PRNewswire/ -- Centene Corporation (NYSE: CNC) today announced its financial results for the quarter ended June 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.
Second Quarter Highlights
- Quarter-end managed care at-risk membership of 1,580,500, an increase of 45,900 members year over year.
- Premium and Service Revenues of $1.3 billion, representing 21.6% year over year growth.
- Health Benefits Ratio of 83.0%, compared to 83.8% in the prior year and 83.0% in the first quarter of 2011.
- General and Administrative expense ratio (G&A ratio) of 13.0%, compared to 12.7% in the prior year. The G&A ratio for the six months ended June 30, 2011 was 13.4%, compared to 13.0% in the prior year.
- Diluted earnings per share from continuing operations of $0.54, including $(0.10) of debt extinguishment costs, compared to $0.45 in the prior year.
- Recognition of Mississippi revenue and medical costs for the period January 1, 2011 through June 30, 2011 during the second quarter of 2011 (includes $0.07 per diluted share benefit for period from January 1, 2011 - March 31, 2011 recognized in the second quarter of 2011).
Other Events
- In July 2011, Louisiana Healthcare Connections, our joint venture subsidiary, was selected to contract with the Louisiana Department of Health and Hospitals to provide healthcare services to Medicaid enrollees participating in the Medicaid Coordinated Care Network project in all three of the state’s geographical services areas for a three year term. Services for these members are expected to begin in the first quarter of 2012, with a three-phased membership roll-out ending in the second quarter of 2012.
- In July 2011, our subsidiary, Kentucky Spirit Health Plan, announced it was awarded a three-year contract with the Kentucky Finance and Administration Cabinet (KFAC) to serve Medicaid beneficiaries. Kentucky Spirit Health Plan will provide integrated healthcare, behavioral health, pharmacy, vision and dental services to Medicaid recipients. Operations are expected to commence in the fourth quarter of 2011.
- In June 2011, CeltiCare Health Plan of Massachusetts, Inc. announced the extension of its contract with the Commonwealth of Massachusetts to serve Commonwealth Care Bridge members on an exclusive basis, effective July 1, 2011.
- In June 2011, our subsidiary, Managed Health Services was awarded the 2011 National Environmental Leadership Award in Asthma Management from the Environmental Protection Agency.
- In May 2011, the Company called its $175 million 7.25% Senior Notes and recorded debt extinguishment costs of $(0.10) per diluted share for the call premium and the write off of unamortized debt issuance costs. The Company replaced the notes with new $250 million 5.75% Senior Notes due June 2017 and entered into interest rate swap agreements, converting the Senior Notes to a floating rate of interest at the three month LIBOR rate plus 3.50%.
- In May 2011, Bridgeway Health Solutions announced it was awarded a contract to deliver Long-term Care services in three geographic service areas in Arizona effective October 1, 2011. This contract award represents an estimated 50% increase in Bridgeway's Long-term Care at-risk membership.
Michael F. Neidorff, Centene’s Chairman and Chief Executive Officer, stated, “We are especially pleased with our results for the second quarter and the continuation of our positive operating momentum as well as our success in winning profitable new growth opportunities.”
The following table depicts membership in Centene’s managed care organizations, by state, at June 30, 2011 and 2010:
June 30, |
||||||
2011 |
2010 |
|||||
Arizona |
22,800 |
22,100 |
||||
Florida |
190,600 |
113,100 |
||||
Georgia |
303,100 |
295,600 |
||||
Illinois |
700 |
-- |
||||
Indiana |
206,700 |
212,700 |
||||
Massachusetts |
32,900 |
30,100 |
||||
Mississippi |
30,800 |
-- |
||||
Ohio |
159,900 |
159,300 |
||||
South Carolina |
82,800 |
92,600 |
||||
Texas |
470,400 |
475,500 |
||||
Wisconsin |
79,800 |
133,600 |
||||
Total at-risk membership |
1,580,500 |
1,534,600 |
||||
Non-risk membership |
10,400 |
50,900 |
||||
Total |
1,590,900 |
1,585,500 |
||||
The following table depicts membership in Centene’s managed care organizations, by member category, at June 30, 2011 and 2010:
June 30, |
||||||
2011 |
2010 |
|||||
Medicaid |
1,172,400 |
1,135,500 |
||||
CHIP & Foster Care |
211,400 |
272,400 |
||||
ABD & Medicare |
156,300 |
93,800 |
||||
Hybrid Programs |
35,500 |
30,100 |
||||
Long-term Care |
4,900 |
2,800 |
||||
Total at-risk membership |
1,580,500 |
1,534,600 |
||||
Non-risk membership |
10,400 |
50,900 |
||||
Total |
1,590,900 |
1,585,500 |
||||
Statement of Operations: Three Months Ended June 30, 2011
- For the second quarter of 2011, Premium and Service Revenues increased 21.6% to $1,278.0 million from $1,050.6 million in the second quarter of 2010. The increase was primarily driven by the addition of our Mississippi contract, membership growth and premium rate increases during the second half of 2010. During the second quarter of 2011, premium revenue from the Mississippi contract of $100.4 million was recognized for the period January 1, 2011 through June 30, 2011, of which $52.8 million related to the first quarter of 2011.
- Consolidated HBR of 83.0% for the second quarter of 2011 represents a decrease of 0.8% from the comparable period in 2010. The year over year improvement in HBR is due to lower utilization levels in 2011. Consolidated HBR was consistent with the first quarter of 2011 at 83.0%.
- Consolidated G&A expense ratio for the first and second quarters in 2011 has been impacted by the timing of the recognition of our Mississippi contract. For the three months ended June 30, 2011, our G&A expense ratio was 13.0%, compared to 12.7% in the prior year and 13.8% in the first quarter of 2011. For the six months ended June 30, 2011, our G&A expense ratio was 13.4%, compared to 13.0% in the prior year. The overall increase is due to additional business expansion costs compared to the prior year.
- Earnings from operations increased to $55.3 million in 2011 from $41.7 million in 2010, or 32.6% year over year. Net earnings from continuing operations were $28.4 million, compared to $23.0 million in the second quarter of 2010.
- Earnings per diluted share increased to $0.54 in the second quarter of 2011, which included a $(0.10) per diluted share charge for debt extinguishment costs as well as the benefit of $0.07 per diluted share from the recognition of Q1 2011 Mississippi earnings, compared to $0.45 per diluted share in the second quarter of 2010.
Balance Sheet and Cash Flow
At June 30, 2011, the Company had cash and investments of $1,098.4 million, including $1,061.9 million held by its regulated entities and $36.5 million held by its unregulated entities. Medical claims liabilities totaled $482.9 million, representing 44.4 days in claims payable, consistent with March 31, 2011. Total debt was $339.6 million and debt to capitalization was 23.0% at June 30, 2011 excluding the $79.0 million non-recourse mortgage note. Cash flows from operations for the six months ended June 30, 2011 were $53.2 million, or 1.0 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, March 31, 2011 |
44.4 |
||
Reduced time of claims processing and payment |
(0.4) |
||
Payment of annual provider bonuses |
(0.1) |
||
Impact of new business |
0.5 |
||
Days in claims payable, June 30, 2011 |
44.4 |
||
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) |
$ 5,000 |
$ 5,200 |
||||
Diluted EPS |
$ 2.03 |
$ 2.13 |
||||
Consolidated HBR |
83.0% |
84.0% |
||||
General & Administrative expense ratio |
12.8% |
13.3% |
||||
Diluted Shares Outstanding (in thousands) |
52,500 |
|||||
The updated guidance reflects the Senior Note issuance, the expected commencement of the Kentucky contract during the fourth quarter of 2011 and start up costs for the second half of 2011 related to Louisiana Healthcare Connections, our Louisiana health plan.
Conference Call
As previously announced, the Company will host a conference call Tuesday, July 26, 2011, at 8:30 A.M. (Eastern Time) to review the financial results for the second quarter ended June 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, July 24, 2012, at the aforementioned URL. In addition, a digital audio playback will be available until 9:00 a.m. (Eastern Time) on Thursday, August 4, 2011, by dialing 1-877-344-7529 in the U.S. and Canada, or +1-412-317-0088 from abroad, and entering access code 10001393.
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) |
|||||||
June 30, 2011 |
December 31, 2010 |
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents of continuing operations |
$ |
474,450 |
$ |
433,914 |
|||
Cash and cash equivalents of discontinued operations |
— |
252 |
|||||
Total cash and cash equivalents |
474,450 |
434,166 |
|||||
Premium and related receivables, net of allowance for uncollectible accounts of $574 and $17, respectively |
152,135 |
136,243 |
|||||
Short-term investments, at fair value (amortized cost $77,560 and $21,141, respectively) |
78,808 |
21,346 |
|||||
Other current assets |
69,143 |
64,154 |
|||||
Current assets of discontinued operations other than cash |
— |
912 |
|||||
Total current assets |
774,536 |
656,821 |
|||||
Long-term investments, at fair value (amortized cost $508,299 and $585,862, respectively) |
518,490 |
595,879 |
|||||
Restricted deposits, at fair value (amortized cost $26,615 and $22,755, respectively) |
26,662 |
22,758 |
|||||
Property, software and equipment, net of accumulated depreciation of $157,706 and $138,629, respectively |
340,392 |
326,341 |
|||||
Goodwill |
281,981 |
278,051 |
|||||
Intangible assets, net |
30,342 |
29,109 |
|||||
Other long-term assets |
38,041 |
30,057 |
|||||
Long-term assets of discontinued operations |
— |
4,866 |
|||||
Total assets |
$ |
2,010,444 |
$ |
1,943,882 |
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Medical claims liability |
$ |
482,913 |
$ |
456,765 |
|||
Accounts payable and accrued expenses |
152,578 |
185,218 |
|||||
Unearned revenue |
111,110 |
117,344 |
|||||
Current portion of long-term debt |
3,172 |
2,817 |
|||||
Current liabilities of discontinued operations |
— |
3,102 |
|||||
Total current liabilities |
749,773 |
765,246 |
|||||
Long-term debt |
336,468 |
327,824 |
|||||
Other long-term liabilities |
53,899 |
53,378 |
|||||
Long-term liabilities of discontinued operations |
— |
379 |
|||||
Total liabilities |
1,140,140 |
1,146,827 |
|||||
Commitments and contingencies |
|||||||
Stockholders' equity: |
|||||||
Common stock, $.001 par value; authorized 100,000,000 shares; 52,831,462 issued and 50,295,329 outstanding at June 30, 2011, and 52,172,037 issued and 49,616,824 outstanding at December 31, 2010 |
53 |
52 |
|||||
Additional paid-in capital |
405,711 |
384,206 |
|||||
Accumulated other comprehensive income: |
|||||||
Unrealized gain on investments, net of tax |
7,183 |
6,424 |
|||||
Retained earnings |
505,862 |
453,743 |
|||||
Treasury stock, at cost (2,536,133 and 2,555,213 shares, respectively) |
(50,343) |
(50,486) |
|||||
Total Centene stockholders' equity |
868,466 |
793,939 |
|||||
Noncontrolling interest |
1,838 |
3,116 |
|||||
Total stockholders' equity |
870,304 |
797,055 |
|||||
Total liabilities and stockholders' equity |
$ |
2,010,444 |
$ |
1,943,882 |
|||
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share data) (Unaudited) |
|||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2011 |
2010 |
2011 |
2010 |
||||||||||||
Revenues: |
|||||||||||||||
Premium |
$ |
1,248,588 |
$ |
1,025,928 |
$ |
2,401,365 |
$ |
2,025,243 |
|||||||
Service |
29,428 |
24,682 |
55,812 |
47,589 |
|||||||||||
Premium and service revenues |
1,278,016 |
1,050,610 |
2,457,177 |
2,072,832 |
|||||||||||
Premium tax |
36,998 |
26,162 |
74,194 |
72,661 |
|||||||||||
Total revenues |
1,315,014 |
1,076,772 |
2,531,371 |
2,145,493 |
|||||||||||
Expenses: |
|||||||||||||||
Medical costs |
1,035,740 |
859,335 |
1,992,814 |
1,699,043 |
|||||||||||
Cost of services |
20,312 |
15,707 |
40,488 |
32,859 |
|||||||||||
General and administrative expenses |
166,425 |
133,470 |
329,006 |
268,977 |
|||||||||||
Premium tax |
37,234 |
26,551 |
74,663 |
73,294 |
|||||||||||
Total operating expenses |
1,259,711 |
1,035,063 |
2,436,971 |
2,074,173 |
|||||||||||
Earnings from operations |
55,303 |
41,709 |
94,400 |
71,320 |
|||||||||||
Other income (expense): |
|||||||||||||||
Investment and other income |
2,933 |
4,142 |
6,682 |
11,199 |
|||||||||||
Debt extinguishment costs |
(8,488) |
— |
(8,488) |
— |
|||||||||||
Interest expense |
(5,256) |
(3,869) |
(10,951) |
(7,682) |
|||||||||||
Earnings from continuing operations, before income tax expense |
44,492 |
41,982 |
81,643 |
74,837 |
|||||||||||
Income tax expense |
16,429 |
17,254 |
30,757 |
29,779 |
|||||||||||
Earnings from continuing operations, net of income tax expense |
28,063 |
24,728 |
50,886 |
45,058 |
|||||||||||
Discontinued operations, net of income tax expense (benefit) of $0, $(90), $0 and $4,350, respectively |
— |
(226) |
— |
3,694 |
|||||||||||
Net earnings |
28,063 |
24,502 |
50,886 |
48,752 |
|||||||||||
Noncontrolling interest (loss) |
(311) |
1,729 |
(1,233) |
1,977 |
|||||||||||
Net earnings attributable to Centene Corporation |
$ |
28,374 |
$ |
22,773 |
$ |
52,119 |
$ |
46,775 |
|||||||
Amounts attributable to Centene Corporation common stockholders: |
|||||||||||||||
Earnings from continuing operations, net of income tax expense |
$ |
28,374 |
$ |
22,999 |
$ |
52,119 |
$ |
43,081 |
|||||||
Discontinued operations, net of income tax (benefit) expense |
— |
(226) |
— |
3,694 |
|||||||||||
Net earnings |
$ |
28,374 |
$ |
22,773 |
$ |
52,119 |
$ |
46,775 |
|||||||
Net earnings (loss) per common share attributable to Centene Corporation: |
|||||||||||||||
Basic: |
|||||||||||||||
Continuing operations |
$ |
0.57 |
$ |
0.46 |
$ |
1.04 |
$ |
0.89 |
|||||||
Discontinued operations |
— |
— |
— |
0.08 |
|||||||||||
Earnings per common share |
$ |
0.57 |
$ |
0.46 |
$ |
1.04 |
$ |
0.97 |
|||||||
Diluted: |
|||||||||||||||
Continuing operations |
$ |
0.54 |
$ |
0.45 |
$ |
1.00 |
$ |
0.86 |
|||||||
Discontinued operations |
— |
— |
— |
0.08 |
|||||||||||
Earnings per common share |
$ |
0.54 |
$ |
0.45 |
$ |
1.00 |
$ |
0.94 |
|||||||
Weighted average number of shares outstanding: |
|||||||||||||||
Basic |
50,167,052 |
49,135,552 |
49,959,892 |
48,203,312 |
|||||||||||
Diluted |
52,489,414 |
50,866,318 |
52,171,213 |
49,807,084 |
|||||||||||
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|||||||
Six Months Ended June 30, |
|||||||
2011 |
2010 |
||||||
Cash flows from operating activities: |
|||||||
Net earnings |
$ |
50,886 |
$ |
48,752 |
|||
Adjustments to reconcile net earnings to net cash provided by operating activities |
|||||||
Depreciation and amortization |
28,567 |
24,918 |
|||||
Stock compensation expense |
8,839 |
6,888 |
|||||
Gain on sale of investments, net |
(107) |
(3,987) |
|||||
Debt extinguishment costs |
8,488 |
— |
|||||
Gain on sale of UHP |
— |
(8,201) |
|||||
Deferred income taxes |
(3,529) |
4,928 |
|||||
Changes in assets and liabilities |
|||||||
Premium and related receivables |
(16,146) |
(57,718) |
|||||
Other current assets |
(4,001) |
948 |
|||||
Other assets |
(878) |
1,719 |
|||||
Medical claims liabilities |
24,684 |
(28,868) |
|||||
Unearned revenue |
(12,465) |
(85,950) |
|||||
Accounts payable and accrued expenses |
(34,739) |
(3,536) |
|||||
Other operating activities |
3,555 |
1,851 |
|||||
Net cash provided by (used in) operating activities |
53,154 |
(98,256) |
|||||
Cash flows from investing activities: |
|||||||
Capital expenditures |
(31,744) |
(31,177) |
|||||
Capital expenditures of Centene Center LLC |
(3,384) |
(32,425) |
|||||
Purchases of investments |
(103,239) |
(306,124) |
|||||
Proceeds from asset sales |
— |
13,420 |
|||||
Sales and maturities of investments |
120,448 |
291,735 |
|||||
Investments in acquisitions, net of cash acquired |
(3,192) |
(21,473) |
|||||
Net cash used in investing activities |
(21,111) |
(86,044) |
|||||
Cash flows from financing activities: |
|||||||
Proceeds from exercise of stock options |
12,264 |
1,759 |
|||||
Proceeds from borrowings |
419,183 |
42,161 |
|||||
Proceeds from stock offering |
— |
104,534 |
|||||
Payment of long-term debt |
(414,695) |
(97,193) |
|||||
Contributions from (distributions to) noncontrolling interest |
244 |
(4,840) |
|||||
Excess tax benefits from stock compensation |
1,369 |
295 |
|||||
Common stock repurchases |
(1,029) |
(568) |
|||||
Debt issue costs |
(9,095) |
— |
|||||
Net cash provided by financing activities |
8,241 |
46,148 |
|||||
Net increase (decrease) in cash and cash equivalents |
40,284 |
(138,152) |
|||||
Cash and cash equivalents, beginning of period |
434,166 |
403,752 |
|||||
Cash and cash equivalents, end of period |
$ |
474,450 |
$ |
265,600 |
|||
Supplemental disclosures of cash flow information: |
|||||||
Interest paid |
$ |
11,822 |
$ |
7,320 |
|||
Income taxes paid |
$ |
40,111 |
$ |
27,940 |
|||
Supplemental disclosure of non-cash investing and financing activities: |
|||||||
Contribution from noncontrolling interest |
$ |
— |
$ |
306 |
|||
Capital expenditures |
$ |
1,381 |
$ |
36,280 |
|||
CENTENE CORPORATION CONTINUING OPERATIONS SUPPLEMENTAL FINANCIAL DATA |
|||||||||||||||
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
|||||||||||
2011 |
2011 |
2010 |
2010 |
2010 |
|||||||||||
MEMBERSHIP |
|||||||||||||||
Managed Care: |
|||||||||||||||
Arizona |
22,800 |
22,600 |
22,400 |
22,300 |
22,100 |
||||||||||
Florida |
190,600 |
188,800 |
194,900 |
116,300 |
113,100 |
||||||||||
Georgia |
303,100 |
303,300 |
305,800 |
300,900 |
295,600 |
||||||||||
Illinois |
700 |
— |
— |
— |
— |
||||||||||
Indiana |
206,700 |
209,400 |
215,800 |
213,300 |
212,700 |
||||||||||
Massachusetts |
32,900 |
34,100 |
36,200 |
34,400 |
30,100 |
||||||||||
Mississippi |
30,800 |
— |
— |
— |
— |
||||||||||
Ohio |
159,900 |
160,900 |
160,100 |
161,800 |
159,300 |
||||||||||
South Carolina |
82,800 |
84,900 |
90,300 |
90,600 |
92,600 |
||||||||||
Texas |
470,400 |
456,700 |
433,100 |
428,100 |
475,500 |
||||||||||
Wisconsin |
79,800 |
81,800 |
74,900 |
106,100 |
133,600 |
||||||||||
Total at-risk membership |
1,580,500 |
1,542,500 |
1,533,500 |
1,473,800 |
1,534,600 |
||||||||||
Non-risk membership |
10,400 |
10,400 |
4,200 |
35,900 |
50,900 |
||||||||||
TOTAL |
1,590,900 |
1,552,900 |
1,537,700 |
1,509,700 |
1,585,500 |
||||||||||
Medicaid |
1,172,400 |
1,169,700 |
1,177,100 |
1,122,800 |
1,135,500 |
||||||||||
CHIP & Foster Care |
211,400 |
208,900 |
210,500 |
219,100 |
272,400 |
||||||||||
ABD & Medicare |
156,300 |
123,800 |
104,600 |
94,500 |
93,800 |
||||||||||
Hybrid Programs |
35,500 |
35,200 |
36,200 |
34,400 |
30,100 |
||||||||||
Long-term Care |
4,900 |
4,900 |
5,100 |
3,000 |
2,800 |
||||||||||
Total at-risk membership |
1,580,500 |
1,542,500 |
1,533,500 |
1,473,800 |
1,534,600 |
||||||||||
Non-risk membership |
10,400 |
10,400 |
4,200 |
35,900 |
50,900 |
||||||||||
TOTAL |
1,590,900 |
1,552,900 |
1,537,700 |
1,509,700 |
1,585,500 |
||||||||||
Specialty Services(a): |
|||||||||||||||
Cenpatico Behavioral Health |
|||||||||||||||
Arizona |
173,200 |
172,700 |
174,600 |
121,300 |
119,700 |
||||||||||
Kansas |
45,000 |
44,000 |
39,200 |
39,800 |
39,100 |
||||||||||
TOTAL |
218,200 |
216,700 |
213,800 |
161,100 |
158,800 |
||||||||||
(a) Includes external membership only. |
|||||||||||||||
REVENUE PER MEMBER PER MONTH(b) |
$ |
240.57 |
$ |
238.31 |
$ |
239.66 |
$ |
224.62 |
$ |
218.40 |
|||||
CLAIMS(b) |
|||||||||||||||
Period-end inventory |
415,700 |
527,100 |
434,900 |
469,000 |
480,400 |
||||||||||
Average inventory |
332,300 |
347,900 |
304,700 |
307,500 |
306,900 |
||||||||||
Period-end inventory per member |
0.26 |
0.34 |
0.28 |
0.32 |
0.31 |
||||||||||
(b) Revenue per member and claims information are presented for the Managed Care at-risk members. |
|||||||||||||||
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
|||||||||||
2011 |
2011 |
2010 |
2010 |
2010 |
|||||||||||
DAYS IN CLAIMS PAYABLE (c) |
44.4 |
44.4 |
45.6 |
47.1 |
48.2 |
||||||||||
(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 (Days in Claims Payable for Q2 2011 reflects the most recent three months of Mississippi medical expense). |
|||||||||||||||
CASH AND INVESTMENTS (in millions) |
|||||||||||||||
Regulated |
$ |
1,061.9 |
$ |
1,096.3 |
$ |
1,043.0 |
$ |
895.4 |
$ |
813.0 |
|||||
Unregulated |
36.5 |
31.7 |
30.9 |
32.7 |
39.4 |
||||||||||
TOTAL |
$ |
1,098.4 |
$ |
1,128.0 |
$ |
1,073.9 |
$ |
928.1 |
$ |
852.4 |
|||||
DEBT TO CAPITALIZATION |
28.1% |
26.9% |
29.3% |
24.7% |
24.5% |
||||||||||
DEBT TO CAPITALIZATION EXCLUDING NON-RECOURSE DEBT(d) |
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 $79.0 million at June 30, 2011, $79.6 million at March 31, 2011 and $80.0 million at December 31, 2010. |
|||||||||||||||
OPERATING RATIOS: |
||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||||
Health Benefits Ratios: |
||||||||||||||
Medicaid and CHIP |
80.1 |
% |
83.4 |
% |
81.3 |
% |
84.5 |
% |
||||||
ABD and Medicare |
88.0 |
86.5 |
86.8 |
83.4 |
||||||||||
Specialty Services |
85.8 |
81.7 |
84.2 |
81.2 |
||||||||||
Total |
83.0 |
83.8 |
83.0 |
83.9 |
||||||||||
Total General & Administrative Expense Ratio |
13.0 |
% |
12.7 |
% |
13.4 |
% |
13.0 |
% |
||||||
MEDICAL CLAIMS LIABILITY (In thousands) The changes in medical claims liability are summarized as follows: |
||||
Balance, June 30, 2010 |
$ |
455,375 |
||
Incurred related to: |
||||
Current period |
3,870,465 |
|||
Prior period |
(62,300) |
|||
Total incurred |
3,808,165 |
|||
Paid related to: |
||||
Current period |
3,398,570 |
|||
Prior period |
382,057 |
|||
Total paid |
3,780,627 |
|||
Balance, June 30, 2011 |
$ |
482,913 |
||
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, 2010. |
|
SOURCE Centene Corporation
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