ST. LOUIS, Feb. 4, 2014 /PRNewswire/ -- Centene Corporation (NYSE: CNC) today announced its financial results for the quarter and year ended December 31, 2013. Our subsidiary, Kentucky Spirit Health Plan (KSHP), ceased serving Medicaid members in Kentucky as of July 6, 2013. Accordingly, the results of operations for KSHP are classified as discontinued operations. The following discussions, with the exception of cash flow information, are in the context of continuing operations.
|
2013 Results |
||||||||
|
Q4 |
Full Year |
|||||||
|
Premium and Service Revenues (in millions) |
$ |
2,859 |
$ |
10,526 |
||||
|
Consolidated Health Benefits Ratio |
88.1% |
88.6% |
||||||
|
General & Administrative expense ratio |
8.9% |
8.8% |
||||||
|
Diluted earnings per share (EPS) |
$ |
0.84 |
$ |
2.87 |
||||
|
Diluted EPS excluding AcariaHealth transaction costs |
$ |
0.84 |
$ |
2.95 |
||||
|
Total cash flow from operations (in millions) |
$ |
170.9 |
$ |
382.5 |
||||
Michael F. Neidorff, Centene's Chairman and Chief Executive Officer, stated, "We are pleased with the strong financial performance and development of our organization and business in 2013. This sets the stage for continued positive momentum in 2014 and beyond."
Fourth Quarter and Full Year Highlights
- December 31, 2013 at-risk managed care membership of 2,723,200, an increase of 298,700 members, or 12% year over year.
- Premium and service revenues for the fourth quarter of $2.9 billion, representing 31% growth compared to the fourth quarter of 2012 and $10.5 billion for 2013, representing 37% growth year over year.
- Health Benefits Ratio of 88.1% for the fourth quarter 2013, compared to 90.7% in the fourth quarter of 2012 and 88.6% for the full year 2013 compared to 89.6% for 2012.
- General and Administrative expense ratio of 8.9% for the fourth quarter of 2013, compared to 8.4% in the fourth quarter of 2012 and 8.8% for both of the full years 2013 and 2012.
- Operating cash flow of $170.9 million and $382.5 million for the fourth quarter and full year of 2013, representing 3.1 and 2.3 times net earnings, respectively.
- Diluted EPS for the fourth quarter of 2013 of $0.84, compared to $0.35 in 2012.
Other Events
- In November 2013, our South Carolina subsidiary, Absolute Total Care, was selected by the South Carolina Department of Health and Human Services to serve dual-eligible members as part of the state's pilot program to provide integrated and coordinated care for individuals who are eligible for both Medicare and Medicaid. Operations are expected to commence in the second half of 2014.
- In December 2013, our California subsidiary, California Health and Wellness Plan (CHWP), began operating under a new contract with the California Department of Health Care Services to serve Medicaid beneficiaries in 18 rural counties under the state's Medi-Cal Managed Care Rural Expansion program. Also in December 2013, CHWP began operating under a new contract to serve Medi-Cal beneficiaries in Imperial County.
- In December 2013, we signed a definitive agreement to purchase a majority stake in Fidelis SecureCare of Michigan, Inc. (Fidelis), a subsidiary of Fidelis SeniorCare, Inc. The transaction is expected to close in the fourth quarter of 2014, subject to certain closing conditions including regulatory approvals, and will involve cash purchase price payments contingent on the performance of the plan over the course of 2015. Fidelis was recently selected by the Michigan Department of Community Health to provide integrated healthcare services to members who are dually eligible for Medicare and Medicaid in Macomb and Wayne counties. Enrollment is expected to commence in the fourth quarter of 2014.
- In December 2013, our subsidiary, New Hampshire Healthy Families, began operating under a new contract with the Department of Health and Human Services to serve Medicaid beneficiaries.
- In January 2014, we acquired a majority interest in U.S. Medical Management, LLC, a management services organization and provider of in-home health services for high acuity populations, for approximately $200.0 million. The transaction consideration was financed through a combination of cash on hand and 2,243,217 shares of Centene common stock.
- In January 2014, we began serving members enrolled in Health Insurance Marketplaces in certain regions of 9 states: Arkansas, Florida, Georgia, Indiana, Massachusetts, Mississippi, Ohio, Texas and Washington.
- In January 2014, our CeltiCare subsidiary began operating under a new contract with the Massachusetts Executive Office of Health and Human Services to participate in the MassHealth CarePlus program in all five regions.
- In January 2014, Centurion began operating under a new agreement with the Minnesota Department of Corrections to provide managed healthcare services to offenders in the state's correctional facilities.
- In February 2014, our Mississippi subsidiary, Magnolia Health Plan, was awarded a statewide managed care contract to continue serving members enrolled in the Mississippi Coordinated Access Network (MississippiCAN) program, as one of two contractors. Under the new contract, Magnolia will continue providing outpatient, behavioral health, pharmacy, vision and dental services, and will also begin providing non-emergency transportation as of July 1, 2014.
The following table sets forth the Company's membership by state for its managed care organizations:
|
December 31, |
|||||
|
2013 |
2012 |
||||
|
Arizona |
7,100 |
23,500 |
|||
|
California |
97,200 |
— |
|||
|
Florida |
222,000 |
214,000 |
|||
|
Georgia |
318,700 |
313,700 |
|||
|
Illinois |
22,300 |
18,000 |
|||
|
Indiana |
195,500 |
204,000 |
|||
|
Kansas |
139,900 |
— |
|||
|
Louisiana |
152,300 |
165,600 |
|||
|
Massachusetts |
22,600 |
21,500 |
|||
|
Mississippi |
78,300 |
77,200 |
|||
|
Missouri |
59,200 |
59,600 |
|||
|
New Hampshire |
33,600 |
— |
|||
|
Ohio |
173,200 |
157,800 |
|||
|
South Carolina |
91,900 |
90,100 |
|||
|
Tennessee |
20,700 |
— |
|||
|
Texas |
935,100 |
949,900 |
|||
|
Washington |
82,100 |
57,200 |
|||
|
Wisconsin |
71,500 |
72,400 |
|||
|
Total |
2,723,200 |
2,424,500 |
|||
Membership by line of business:
|
December 31, |
|||||
|
2013 |
2012 |
||||
|
Medicaid |
2,054,700 |
1,877,100 |
|||
|
CHIP & Foster Care |
275,100 |
235,200 |
|||
|
ABD & Medicare |
305,300 |
274,600 |
|||
|
Hybrid Programs |
19,000 |
29,100 |
|||
|
LTC |
37,800 |
8,500 |
|||
|
Correctional Services |
31,300 |
— |
|||
|
Total |
2,723,200 |
2,424,500 |
|||
Dual eligible membership (included in tables above):
|
December 31, |
|||||
|
2013 |
2012 |
||||
|
ABD |
71,700 |
62,600 |
|||
|
LTC |
28,800 |
7,700 |
|||
|
Medicare |
6,500 |
5,100 |
|||
|
Total |
107,000 |
75,400 |
|||
At December 31, 2013, the Company also served 156,600 members under its behavioral health contract in Arizona, compared to 157,900 members in 2012.
Statement of Operations: Three Months Ended December 31, 2013
- For the fourth quarter of 2013, Premium and Service Revenues increased 31% to $2.9 billion from $2.2 billion in the fourth quarter of 2012. The increase was primarily driven as a result of the addition of the Kansas, California and New Hampshire contracts, increased premium rates in Texas, expansions in Mississippi, Ohio and Florida, the acquisition of AcariaHealth and the commencement of the correctional health care contracts in Massachusetts and Tennessee.
- Consolidated HBR of 88.1% for the fourth quarter of 2013 represents a decrease from 90.7% in the comparable period in 2012 and an increase from 87.8% in the third quarter of 2013. The HBR improvement compared to 2012 reflects the rate increase in Texas and ongoing medical management initiatives. The increase from the prior quarter is due to normal seasonality.
- The following table compares the results for new business and existing business for the quarters ended December 31:
|
2013 |
2012 |
||||
|
Premium and Service Revenue |
|||||
|
New business |
17% |
31% |
|||
|
Existing business |
83% |
69% |
|||
|
HBR |
|||||
|
New business |
95.4% |
95.3% |
|||
|
Existing business |
86.6% |
88.7% |
|||
- Consolidated G&A expense ratio for the fourth quarter of 2013 was 8.9%, compared to 8.4% in the prior year. The year over year increase reflects an increase in performance based compensation expense in 2013 and higher start-up costs, partially offset by the benefits of leveraging of expenses over higher revenue in 2013 and our efforts to control costs.
- Earnings from operations were $85.1 million in the fourth quarter of 2013 compared to $25.9 million in the fourth quarter of 2012. Net earnings attributable to Centene Corporation were $53.2 million in the fourth quarter of 2013, compared to $9.1 million in the fourth quarter of 2012.
- Diluted EPS of $0.84 in the fourth quarter of 2013, compared to $0.35 in 2012.
Statement of Operations: Year Ended December 31, 2013
- Premium and service revenues increased 37.0% in the year ended December 31, 2013 over the corresponding period in 2012 as a result of the Texas, Mississippi, Louisiana and Florida expansions, pharmacy carve-ins in Texas and Louisiana, the additions of the Kansas, Missouri, Washington, California and New Hampshire contracts, commencement of the correctional service contracts in Massachusetts and Tennessee, rate increases in several of our markets and the acquisition of AcariaHealth.
- The consolidated HBR for the year ended December 31, 2013, of 88.6% was a decrease of 100 basis points over the comparable period in 2012. The 2013 HBR reflects performance improvement in Texas and our individual insurance business from 2012.
- The consolidated G&A expense ratio for the years ended December 31, 2013 and 2012 was 8.8%. The G&A expense ratio reflects an increase in performance based compensation expense in 2013 as well as AcariaHealth transaction costs, offset by the benefits of leveraging of expenses over higher revenue in 2013 and our efforts to control costs.
- Diluted net earnings per share for 2013 of $2.87 including AcariaHealth transaction costs of $0.08 per diluted share, compared to $1.65 in 2012.
Balance Sheet and Cash Flow
At December 31, 2013, the Company had cash, investments and restricted deposits of $1,915.3 million, including $44.7 million held by its unregulated entities. Medical claims liabilities totaled $1,111.7 million, representing 42.4 days in claims payable. Total debt was $668.8 million which includes $150.0 million of borrowings on the $500 million revolving credit facility at quarter end. Debt to capitalization was 32.4% at December 31, 2013, excluding the $72.8 million non-recourse mortgage note. Cash flow from operations for the three months ended December 31, 2013, was $170.9 million, or 3.1 times net earnings.
A reconciliation of the Company's change in days in claims payable from the immediately preceding quarter-end is presented below:
|
Days in claims payable, September 30, 2013 |
40.6 |
||
|
Timing of claim payments |
1.1 |
||
|
ACA provider parity payments in process |
0.7 |
||
|
Days in claims payable, December 31, 2013 |
42.4 |
||
Outlook
The table below depicts the Company's annual guidance for 2014.
|
Full Year 2014 |
|||||||||
|
Low |
High |
||||||||
|
Premium and Service Revenues (in millions) |
$ |
13,800 |
$ |
14,300 |
|||||
|
Diluted EPS |
$ |
3.50 |
$ |
3.80 |
|||||
|
Consolidated Health Benefits Ratio |
88.7% |
89.2% |
|||||||
|
General & Administrative expense ratio |
8.5% |
9.0% |
|||||||
|
Effective Tax Rate |
50.0% |
51.0% |
|||||||
|
Diluted Shares Outstanding (in thousands) |
59,700 |
60,200 |
|||||||
The guidance in the table above includes the impact of the acquisition of U.S. Medical Management and related transaction costs as well as the ACA health insurer fee.
Conference Call
As previously announced, the Company will host a conference call Tuesday, February 4, 2014, at 8:30 A.M. (Eastern Time) to review the financial results for the fourth quarter and year ended December 31, 2013, 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 1-877-270-2148 in the U.S. and Canada; +1-412-902-6510 from abroad; or via a live, audio webcast on the Company's website at www.centene.com , under the Investors section. Or, participants can register for the conference call in advance by navigating to
http://dpregister.com/10039178 , which includes a calendar entry and PIN code to be activated one hour before the call. 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 PM (Eastern Time) on Tuesday, February 3, 2015, at the aforementioned URL. In addition, a digital audio playback will be available until 9:00 AM Eastern Time on Wednesday, February 12, 2014, by dialing 1-877-344-7529 in the U.S. and Canada, or +1-412-317-0088 from abroad, and entering access code 10039178.
Other Information
The discussion in the third bullet under the heading "Statement of Operations: Three Months Ended December 31, 2013" contains financial information for new and existing businesses. Existing businesses are primarily state markets or significant geographic expansion in an existing state or product that we have managed for four complete quarters. New businesses are primarily new state markets or significant geographic expansion in an existing state or product that conversely, we have not managed for four complete quarters.
Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures in this release as the Company believes that these figures are helpful in allowing individuals to more accurately assess the ongoing nature of the Company's operations and measure the Company's performance more consistently. The Company uses the presented non-GAAP financial measures such as internally to allow management to focus on period-to-period changes in the Company's core business operations. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
About Centene Corporation
Centene Corporation, a Fortune 500 company, is a leading multi-line healthcare enterprise that provides programs and services to government sponsored healthcare programs, focusing on 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 (LTC), in addition to other state-sponsored/hybrid programs, and Medicare (Special Needs Plans). 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, care management software, correctional systems healthcare, in-home health services, life and health management, managed vision, pharmacy benefits management, specialty pharmacy and telehealth services.
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 and reserves, competition, membership and revenue projections, timing of regulatory contract approval, changes in healthcare practices, changes in federal or state laws or regulations, changes in expected contract start dates, inflation, provider and state 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, as well as those factors disclosed in the Company's publicly filed documents. The expiration, cancellation or suspension of Centene's Medicaid Managed Care contracts, or the loss of any appeal of or protest to any such expiration, cancellation or suspension, by state governments would also negatively affect Centene.
[Tables Follow]
|
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) |
|||||||
|
December 31, |
December 31, |
||||||
|
ASSETS |
|||||||
|
Current assets: |
|||||||
|
Cash and cash equivalents of continuing operations |
$ |
974,304 |
$ |
745,933 |
|||
|
Cash and cash equivalents of discontinued operations |
63,769 |
98,019 |
|||||
|
Total cash and cash equivalents |
1,038,073 |
843,952 |
|||||
|
Premium and related receivables |
428,570 |
251,473 |
|||||
|
Short term investments |
102,126 |
138,101 |
|||||
|
Other current assets |
217,661 |
93,322 |
|||||
|
Other current assets of discontinued operations |
13,743 |
78,977 |
|||||
|
Total current assets |
1,800,173 |
1,405,825 |
|||||
|
Long term investments |
791,900 |
554,770 |
|||||
|
Restricted deposits |
46,946 |
34,286 |
|||||
|
Property, software and equipment, net |
395,407 |
375,893 |
|||||
|
Goodwill |
348,432 |
256,288 |
|||||
|
Intangible assets, net |
48,780 |
20,268 |
|||||
|
Other long term assets |
59,357 |
64,278 |
|||||
|
Long term assets of discontinued operations |
38,305 |
62,297 |
|||||
|
Total assets |
$ |
3,529,300 |
$ |
2,773,905 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Medical claims liability |
$ |
1,111,709 |
$ |
815,161 |
|||
|
Accounts payable and accrued expenses |
375,862 |
219,066 |
|||||
|
Unearned revenue |
38,191 |
34,597 |
|||||
|
Current portion of long-term debt |
3,065 |
3,373 |
|||||
|
Current liabilities of discontinued operations |
30,294 |
157,116 |
|||||
|
Total current liabilities |
1,559,121 |
1,229,313 |
|||||
|
Long term debt |
665,697 |
535,481 |
|||||
|
Other long term liabilities |
60,015 |
54,987 |
|||||
|
Long term liabilities of discontinued operations |
1,028 |
357 |
|||||
|
Total liabilities |
2,285,861 |
1,820,138 |
|||||
|
Commitments and contingencies |
|||||||
|
Stockholders' equity: |
|||||||
|
Common stock, $.001 par value; authorized 100,000,000 shares; 58,673,215 issued and 55,319,239 outstanding at December 31, 2013, and 55,339,160 issued and 52,329,248 outstanding at December 31, 2012 |
59 |
55 |
|||||
|
Additional paid-in capital |
594,326 |
450,856 |
|||||
|
Accumulated other comprehensive income: |
|||||||
|
Unrealized (loss) gain on investments, net of tax |
(2,620) |
5,189 |
|||||
|
Retained earnings |
731,919 |
566,820 |
|||||
|
Treasury stock, at cost (3,353,976 and 3,009,912 shares, respectively) |
(89,643) |
(69,864) |
|||||
|
Total Centene stockholders' equity |
1,234,041 |
953,056 |
|||||
|
Noncontrolling interest |
9,398 |
711 |
|||||
|
Total stockholders' equity |
1,243,439 |
953,767 |
|||||
|
Total liabilities and stockholders' equity |
$ |
3,529,300 |
$ |
2,773,905 |
|||
|
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share data) (Unaudited) |
||||||||||||
|
Three Months Ended |
Year Ended December 31, |
|||||||||||
|
2013 |
2012 |
2013 |
2012 |
|||||||||
|
Revenues: |
||||||||||||
|
Premium |
$ |
2,737,942 |
$ |
2,148,189 |
$ |
10,153,460 |
$ |
7,568,889 |
||||
|
Service |
121,290 |
28,680 |
372,580 |
112,742 |
||||||||
|
Premium and service revenues |
2,859,232 |
2,176,869 |
10,526,040 |
7,681,631 |
||||||||
|
Premium tax |
72,508 |
95,181 |
337,289 |
428,665 |
||||||||
|
Total revenues |
2,931,740 |
2,272,050 |
10,863,329 |
8,110,296 |
||||||||
|
Expenses: |
||||||||||||
|
Medical costs |
2,412,195 |
1,948,304 |
8,994,641 |
6,781,081 |
||||||||
|
Cost of services |
108,080 |
20,808 |
326,924 |
87,705 |
||||||||
|
General and administrative expenses |
255,355 |
182,519 |
931,137 |
677,157 |
||||||||
|
Premium tax expense |
71,022 |
94,482 |
333,210 |
428,354 |
||||||||
|
Impairment loss |
— |
— |
— |
28,033 |
||||||||
|
Total operating expenses |
2,846,652 |
2,246,113 |
10,585,912 |
8,002,330 |
||||||||
|
Earnings from operations |
85,088 |
25,937 |
277,417 |
107,966 |
||||||||
|
Other income (expense): |
||||||||||||
|
Investment and other income |
5,358 |
3,172 |
18,457 |
35,285 |
||||||||
|
Interest expense |
(6,696) |
(6,067) |
(26,957) |
(20,460) |
||||||||
|
Earnings from continuing operations, before income tax expense |
83,750 |
23,042 |
268,917 |
122,791 |
||||||||
|
Income tax expense |
34,143 |
8,785 |
107,080 |
47,412 |
||||||||
|
Earnings from continuing operations, net of income tax expense |
49,607 |
14,257 |
161,837 |
75,379 |
||||||||
|
Discontinued operations, net of income tax expense (benefit) of $3,254, $(3,046), $2,284, and $(47,741), respectively |
5,275 |
(9,618) |
3,881 |
(86,674) |
||||||||
|
Net earnings |
54,882 |
4,639 |
165,718 |
(11,295) |
||||||||
|
Noncontrolling interest |
1,642 |
(4,422) |
619 |
(13,154) |
||||||||
|
Net earnings attributable to Centene Corporation |
$ |
53,240 |
$ |
9,061 |
$ |
165,099 |
$ |
1,859 |
||||
|
Amounts attributable to Centene Corporation common shareholders: |
||||||||||||
|
Earnings from continuing operations, net of income tax expense |
$ |
47,965 |
$ |
18,679 |
$ |
161,218 |
$ |
88,533 |
||||
|
Discontinued operations, net of income tax expense (benefit) |
5,275 |
(9,618) |
3,881 |
(86,674) |
||||||||
|
Net earnings |
$ |
53,240 |
$ |
9,061 |
$ |
165,099 |
$ |
1,859 |
||||
|
Net earnings (loss) per common share attributable to Centene Corporation: |
||||||||||||
|
Basic: |
||||||||||||
|
Continuing operations |
$ |
0.87 |
$ |
0.36 |
$ |
2.98 |
$ |
1.72 |
||||
|
Discontinued operations |
0.10 |
(0.19) |
0.07 |
(1.68) |
||||||||
|
Basic earnings per common share |
$ |
0.97 |
$ |
0.17 |
$ |
3.05 |
$ |
0.04 |
||||
|
Diluted: |
||||||||||||
|
Continuing operations |
$ |
0.84 |
$ |
0.35 |
$ |
2.87 |
$ |
1.65 |
||||
|
Discontinued operations |
0.09 |
(0.18) |
0.07 |
(1.62) |
||||||||
|
Diluted earnings per common share |
$ |
0.93 |
$ |
0.17 |
$ |
2.94 |
$ |
0.03 |
||||
|
Weighted average number of common shares outstanding: |
||||||||||||
|
Basic |
54,906,274 |
51,817,066 |
54,126,545 |
51,509,366 |
||||||||
|
Diluted |
57,078,257 |
54,055,209 |
56,247,173 |
53,714,375 |
||||||||
|
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|||||
|
Year Ended December 31, |
|||||
|
2013 |
2012 |
||||
|
Cash flows from operating activities: |
|||||
|
Net earnings (loss) |
$ |
165,718 |
$ |
(11,295) |
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities |
|||||
|
Depreciation and amortization |
67,420 |
65,866 |
|||
|
Stock compensation expense |
36,656 |
25,332 |
|||
|
Impairment loss |
— |
28,033 |
|||
|
Gain on sale of investment in convertible note |
— |
(17,880) |
|||
|
Deferred income taxes |
(2,293) |
(14,438) |
|||
|
Changes in assets and liabilities |
|||||
|
Premium and related receivables |
(142,977) |
(116,558) |
|||
|
Other current assets |
(79,588) |
(36,818) |
|||
|
Other assets |
(736) |
2,825 |
|||
|
Medical claims liabilities |
171,569 |
359,792 |
|||
|
Unearned revenue |
2,724 |
24,707 |
|||
|
Accounts payable and accrued expenses |
151,712 |
(21,474) |
|||
|
Other operating activities |
12,321 |
(9,401) |
|||
|
Net cash provided by operating activities |
382,526 |
278,691 |
|||
|
Cash flows from investing activities: |
|||||
|
Capital expenditures |
(67,835) |
(82,144) |
|||
|
Purchases of investments |
(790,653) |
(695,687) |
|||
|
Sales and maturities of investments |
579,161 |
589,921 |
|||
|
Investments in acquisitions, net of cash acquired |
(62,773) |
— |
|||
|
Net cash used in investing activities |
(342,100) |
(187,910) |
|||
|
Cash flows from financing activities: |
|||||
|
Proceeds from exercise of stock options |
8,983 |
15,912 |
|||
|
Proceeds from borrowings |
180,000 |
400,500 |
|||
|
Proceeds from stock offering |
15,225 |
— |
|||
|
Payment of long term debt |
(41,593) |
(218,234) |
|||
|
Excess tax benefits from stock compensation |
6,380 |
10,996 |
|||
|
Common stock repurchases |
(19,779) |
(12,741) |
|||
|
Contribution from noncontrolling interest |
8,068 |
1,092 |
|||
|
Purchase of noncontrolling interest |
— |
(14,429) |
|||
|
Debt issue costs |
(3,589) |
(3,623) |
|||
|
Net cash provided by financing activities |
153,695 |
179,473 |
|||
|
Net increase in cash and cash equivalents |
194,121 |
270,254 |
|||
|
Cash and cash equivalents, beginning of period |
843,952 |
573,698 |
|||
|
Cash and cash equivalents, end of period |
$ |
1,038,073 |
$ |
843,952 |
|
|
Supplemental disclosures of cash flow information: |
|||||
|
Interest paid |
$ |
30,009 |
$ |
21,605 |
|
|
Income taxes paid |
$ |
84,681 |
$ |
42,877 |
|
|
Equity issued in connection with acquisition |
$ |
75,425 |
$ |
— |
|
|
CENTENE CORPORATION SUPPLEMENTAL FINANCIAL DATA FROM CONTINUING OPERATIONS |
|||||||||||||||||||
|
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
|||||||||||||||
|
2013 |
2013 |
2013 |
2013 |
2012 |
|||||||||||||||
|
AT-RISK MEMBERSHIP |
|||||||||||||||||||
|
Managed Care: |
|||||||||||||||||||
|
Arizona |
7,100 |
23,700 |
23,200 |
23,300 |
23,500 |
||||||||||||||
|
California |
97,200 |
— |
— |
— |
— |
||||||||||||||
|
Florida |
222,000 |
217,800 |
216,200 |
214,600 |
214,000 |
||||||||||||||
|
Georgia |
318,700 |
314,100 |
316,600 |
314,000 |
313,700 |
||||||||||||||
|
Illinois |
22,300 |
22,800 |
18,000 |
18,000 |
18,000 |
||||||||||||||
|
Indiana |
195,500 |
198,400 |
200,000 |
202,400 |
204,000 |
||||||||||||||
|
Kansas |
139,900 |
137,700 |
137,500 |
133,700 |
— |
||||||||||||||
|
Louisiana |
152,300 |
152,600 |
153,700 |
162,900 |
165,600 |
||||||||||||||
|
Massachusetts |
22,600 |
23,200 |
15,200 |
17,300 |
21,500 |
||||||||||||||
|
Mississippi |
78,300 |
76,900 |
77,300 |
77,000 |
77,200 |
||||||||||||||
|
Missouri |
59,200 |
58,200 |
58,800 |
57,900 |
59,600 |
||||||||||||||
|
New Hampshire |
33,600 |
— |
— |
— |
— |
||||||||||||||
|
Ohio |
173,200 |
170,900 |
156,700 |
157,700 |
157,800 |
||||||||||||||
|
South Carolina |
91,900 |
89,400 |
88,800 |
90,100 |
90,100 |
||||||||||||||
|
Tennessee |
20,700 |
20,400 |
— |
— |
— |
||||||||||||||
|
Texas |
935,100 |
957,300 |
960,400 |
948,400 |
949,900 |
||||||||||||||
|
Washington |
82,100 |
77,100 |
67,600 |
63,500 |
57,200 |
||||||||||||||
|
Wisconsin |
71,500 |
72,000 |
73,400 |
72,600 |
72,400 |
||||||||||||||
|
TOTAL |
2,723,200 |
2,612,500 |
2,563,400 |
2,553,400 |
2,424,500 |
||||||||||||||
|
Medicaid |
2,054,700 |
1,953,300 |
1,953,600 |
1,951,300 |
1,877,100 |
||||||||||||||
|
CHIP & Foster Care |
275,100 |
274,900 |
273,200 |
265,400 |
235,200 |
||||||||||||||
|
ABD & Medicare |
305,300 |
302,000 |
289,800 |
288,400 |
274,600 |
||||||||||||||
|
Hybrid Programs |
19,000 |
19,600 |
22,400 |
24,600 |
29,100 |
||||||||||||||
|
Long-term Care |
37,800 |
31,600 |
24,400 |
23,700 |
8,500 |
||||||||||||||
|
Correctional Services |
31,300 |
31,100 |
— |
— |
— |
||||||||||||||
|
TOTAL |
2,723,200 |
2,612,500 |
2,563,400 |
2,553,400 |
2,424,500 |
||||||||||||||
|
Specialty Services(a): |
|||||||||||||||||||
|
Cenpatico Behavioral Health |
|||||||||||||||||||
|
Arizona |
156,600 |
160,700 |
157,100 |
156,200 |
157,900 |
||||||||||||||
|
Kansas |
— |
— |
— |
— |
49,800 |
||||||||||||||
|
TOTAL |
156,600 |
160,700 |
157,100 |
156,200 |
207,700 |
||||||||||||||
|
(a) Includes external membership only. |
|||||||||||||||||||
|
REVENUE PER MEMBER PER MONTH(b) |
$ |
335 |
$ |
328 |
$ |
306 |
$ |
304 |
$ |
291 |
|||||||||
|
CLAIMS(b) |
|||||||||||||||||||
|
Period-end inventory |
622,200 |
698,900 |
703,400 |
940,200 |
619,200 |
||||||||||||||
|
Average inventory |
511,700 |
505,800 |
510,000 |
555,800 |
515,600 |
||||||||||||||
|
Period-end inventory per member |
0.23 |
0.27 |
0.27 |
0.37 |
0.26 |
||||||||||||||
|
(b) Revenue per member and claims information are presented for the Managed Care at-risk members. |
|||||||||||||||||||
|
NUMBER OF EMPLOYEES |
8,800 |
8,200 |
7,900 |
7,100 |
6,800 |
||||||||||||||
|
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
|||||||||||||||
|
2013 |
2013 |
2013 |
2013 |
2012 |
|||||||||||||||
|
DAYS IN CLAIMS PAYABLE (c) |
42.4 |
40.6 |
41.5 |
39.7 |
38.5 |
||||||||||||||
|
(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 |
$ |
1,870.6 |
$ |
1,612.9 |
$ |
1,502.9 |
$ |
1,494.0 |
$ |
1,435.8 |
|||||||||
|
Unregulated |
44.7 |
37.6 |
33.8 |
45.5 |
37.3 |
||||||||||||||
|
TOTAL |
$ |
1,915.3 |
$ |
1,650.5 |
$ |
1,536.7 |
$ |
1,539.5 |
$ |
1,473.1 |
|||||||||
|
DEBT TO CAPITALIZATION |
35.0% |
30.5% |
32.9% |
35.2% |
36.1% |
||||||||||||||
|
DEBT TO CAPITALIZATION EXCLUDING NON-RECOURSE DEBT(d) |
32.4% |
27.4% |
29.8% |
31.9% |
32.7% |
||||||||||||||
|
Debt to Capitalization is calculated as follows: total debt divided by (total debt + total equity). |
|||||||||||||||||||
|
(d) The non-recourse debt represents the Company's mortgage note payable ($72.8 million at December 31, 2013). |
|||||||||||||||||||
|
Operating Ratios: |
|||||||
|
Three Months Ended |
Year Ended |
||||||
|
2013 |
2012 |
2013 |
2012 |
||||
|
Health Benefits Ratios: |
|||||||
|
Medicaid and CHIP |
86.5% |
91.5% |
87.5% |
88.8% |
|||
|
ABD and Medicare |
90.4 |
89.3 |
90.4 |
90.7 |
|||
|
Specialty Services |
87.7 |
91.3 |
85.4 |
92.0 |
|||
|
Total |
88.1 |
90.7 |
88.6 |
89.6 |
|||
|
Total General & Administrative Expense Ratio |
8.9% |
8.4% |
8.8% |
8.8% |
|||
|
MEDICAL CLAIMS LIABILITY (In thousands) The changes in medical claims liability are summarized as follows: |
|||
|
Balance, December 31, 2012 |
$ |
815,161 |
|
|
Incurred related to: |
|||
|
Current period |
9,072,867 |
||
|
Prior period |
(78,226) |
||
|
Total incurred |
8,994,641 |
||
|
Paid related to: |
|||
|
Current period |
7,975,367 |
||
|
Prior period |
722,726 |
||
|
Total paid |
8,698,093 |
||
|
Balance, December 31, 2013 |
$ |
1,111,709 |
|
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 December 31, 2012.
SOURCE Centene Corporation