Centene Corporation Reports 2017 Second Quarter Results & Raises 2017 Guidance
In summary, the 2017 second quarter results were as follows:
Total revenues (in millions) |
$ |
11,954 |
||
Health benefits ratio |
86.3 |
% |
||
SG&A expense ratio |
9.3 |
% |
||
GAAP diluted EPS |
$ |
1.44 |
||
Adjusted Diluted EPS (1) |
$ |
1.59 |
||
Total cash flow used in operations (in millions) |
$ |
(306) |
||
(1) A full reconciliation of Adjusted Diluted EPS is shown on page seven of this release. |
The following discussions, with the exception of cash flow information, are in the context of continuing operations.
Second Quarter Highlights
- June 30, 2017 managed care membership of 12.2 million, an increase of 788,300 members, or 7% compared to the second quarter of 2016.
- Total revenues for the second quarter of 2017 of
$12.0 billion , representing 10% growth, compared to the second quarter of 2016. - Health benefits ratio (HBR) of 86.3% for the second quarter of 2017, compared to 86.6% in the second quarter of 2016.
- Selling, general and administrative (SG&A) expense ratio of 9.3% for the second quarter of 2017, compared to 9.2% for the second quarter of 2016.
- Adjusted SG&A expense ratio of 9.3% for the second quarter of 2017, compared to 9.0% for the second quarter of 2016.
- Operating cash flow of
$(306) million for the second quarter of 2017 and$942 million for the six months ended June 30, 2017. - Diluted EPS for the second quarter of 2017 of
$1.44 , compared to$0.98 for the second quarter of 2016. - Adjusted Diluted EPS for the second quarter of 2017 of
$1.59 , compared to$1.29 for the second quarter of 2016.
Other Events
- In
July 2017 , we announced our partnership withSchnuck Markets, Inc. andBetty Jean Kerr People's Health Centers to launch a full-service health center located within the Schnucks supermarket inFerguson, Missouri . Scheduled to open inNovember 2017 , thePeople's Healthcare Services Clinic byHome State Health represents our continued investment in the city ofFerguson . Once the facility is fully operational, it will be able to provide services to over 8,000 people annually. - In
July 2017 , ourGeorgia subsidiary, Peach State Health Plan, began operating under a statewide managed care contract to continue serving members enrolled in the Georgia Families managed care program, including PeachCare for Kids and Planning for Healthy Babies. Through the new contract, Peach State Health Plan is one of four managed care organizations providing medical, behavioral, dental and vision health benefits for its members. - In
July 2017 , ourNevada subsidiary, SilverSummit Healthplan, began servingMedicaid recipients enrolled inNevada's Medicaid managed care program. - In
July 2017 , our specialty solutions subsidiary,Envolve, Inc. , began providing health plan management services forMedicaid operations inMaryland . - In
June 2017 , ourMississippi subsidiary,Magnolia Health , was selected by theMississippi Division of Medicaid to continue servingMedicaid recipients enrolled in the Mississippi Coordinated Access Network (MississippiCAN). Pending regulatory approval, the new three-year agreement, which also includes the option of two one-year extensions, is expected to commence midyear 2018. - In
June 2017 , we announced that we are expanding our offerings in the 2018 Health Insurance Marketplace. We are planning to enterKansas ,Missouri andNevada in 2018, and expanding our footprint in six existing markets:Florida ,Georgia ,Indiana ,Ohio ,Texas , andWashington . - In
June 2017 , Centurion began operating under an expanded contract to provide correctional healthcare services for theFlorida Department of Corrections inSouth Florida . - In
May 2017 , ourWashington subsidiary, Coordinated Care ofWashington , was selected by theWashington State Health Care Authority to provide managed care services toApple Health's Fully Integrated Managed Care (FIMC) beneficiaries in the North Central Region. The contract is expected to commenceJanuary 1, 2018 . - In
May 2017 , ourMissouri subsidiary,Home State Health , began providing managed care services to MO HealthNet Managed Care beneficiaries under an expanded statewide contract.
Accreditations & Awards
- In
July 2017 , FORTUNE magazine announcedCentene's position of #244 in its annual ranking of the largest companies globally by revenue.Centene jumped 226 spots from #470, making us the fastest growing company on the list. - In
June 2017 , FORTUNE magazine announcedCentene's position of #66 in its annual ranking of America's largest companies by revenue.Centene jumped 58 spots from #124. - In
May 2017 , atDecision Health's Eighth Annual Case in Point Platinum Awards,Centene and three of its subsidiaries (Home State Health , Centurion, andEnvolve, Inc. ) were honored for four of our innovative member programs. - In
April 2017 , our subsidiary,Health Net Federal Services, LLC , was awarded theInternational Organization for Standardization (ISO) 9001:2015 certification, an internationally recognized standard for quality management systems.
Membership
The following table sets forth the Company's membership by state for its managed care organizations:
June 30, |
|||||
2017 |
2016 |
||||
Arizona |
669,500 |
597,700 |
|||
Arkansas |
91,900 |
52,800 |
|||
California |
2,925,800 |
3,097,600 |
|||
Florida |
871,100 |
726,200 |
|||
Georgia |
540,400 |
493,300 |
|||
Illinois |
254,600 |
234,700 |
|||
Indiana |
340,000 |
291,000 |
|||
Kansas |
130,000 |
144,800 |
|||
Louisiana |
484,600 |
375,300 |
|||
Massachusetts |
54,100 |
47,100 |
|||
Michigan |
2,300 |
2,200 |
|||
Minnesota |
9,500 |
9,500 |
|||
Mississippi |
343,600 |
323,800 |
|||
Missouri |
278,300 |
102,900 |
|||
Nebraska |
78,800 |
— |
|||
New Hampshire |
77,100 |
79,700 |
|||
New Mexico |
7,100 |
7,100 |
|||
Ohio |
332,700 |
319,000 |
|||
Oregon |
213,600 |
221,500 |
|||
South Carolina |
121,000 |
113,700 |
|||
Tennessee |
22,200 |
20,800 |
|||
Texas |
1,226,800 |
1,037,000 |
|||
Vermont |
1,600 |
1,600 |
|||
Washington |
248,500 |
239,700 |
|||
Wisconsin |
70,800 |
76,100 |
|||
Total at-risk membership |
9,395,900 |
8,615,100 |
|||
TRICARE eligibles |
2,823,200 |
2,815,700 |
|||
Total |
12,219,100 |
11,430,800 |
The following table sets forth our membership by line of business:
June 30, |
|||||
2017 |
2016 |
||||
Medicaid: |
|||||
TANF, CHIP & Foster Care |
5,854,400 |
5,541,200 |
|||
ABD & LTC |
843,500 |
757,500 |
|||
Behavioral Health |
466,500 |
455,800 |
|||
Commercial |
1,743,600 |
1,391,500 |
|||
Medicare & Duals (1) |
327,500 |
332,600 |
|||
Correctional |
160,400 |
136,500 |
|||
Total at-risk membership |
9,395,900 |
8,615,100 |
|||
TRICARE eligibles |
2,823,200 |
2,815,700 |
|||
Total |
12,219,100 |
11,430,800 |
|||
(1) Membership includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and Medicare-Medicaid Plans. |
The following table sets forth additional membership statistics, which are included in the membership information above:
June 30, |
|||||
2017 |
2016 |
||||
Dual-eligible |
467,500 |
436,100 |
|||
Health Insurance Marketplace |
1,084,600 |
617,700 |
|||
Medicaid Expansion |
1,101,900 |
1,004,200 |
Statement of Operations: Three Months Ended June 30, 2017
- For the second quarter of 2017, total revenues increased 10% to
$12.0 billion from$10.9 billion in the comparable period in 2016. The increase over prior year was primarily a result of growth in the Health Insurance Marketplace business in 2017 and expansions and new programs in many of our states in 2016 and 2017, partially offset by lower membership in the commercial business inCalifornia as a result of margin improvement actions taken last year, the moratorium of the Health Insurer Fee in 2017, and lower specialty pharmacy revenues. Sequentially, total revenues increased 2% over the first quarter of 2017 mainly due to favorable risk adjustments in our Health Insurance Marketplace business recorded in the second quarter of 2017, as well as the commencement of our new contract inMissouri . - HBR of 86.3% for the second quarter of 2017 represents a decrease from 86.6% in the comparable period in 2016 and a decrease from 87.6% in the first quarter of 2017. The year over year decrease is primarily attributable to growth in the Health Insurance Marketplace business, which operates at a lower HBR. The sequential HBR decrease is primarily attributable to favorable risk adjustments in our Health Insurance Marketplace business recorded in the second quarter of 2017 and normal seasonality.
- The SG&A expense ratio was 9.3% for the second quarter of 2017, compared to 9.2% for the second quarter of 2016 and 9.8% for the first quarter of 2017. The increase in the SG&A expense ratio is primarily attributable to higher variable compensation expenses based on the performance of the business in 2017 and increased business expansion costs, partially offset by higher Health Net acquisition related expenses in 2016.
- The Adjusted SG&A expense ratio was 9.3% for the second quarter of 2017, compared to 9.0% for the second quarter of 2016. The increase in the Adjusted SG&A expense ratio is primarily attributable to higher variable compensation expenses based on the performance of the business in 2017 and increased business expansion costs. Sequentially, the Adjusted SG&A expense ratio is consistent with the first quarter of 2017.
Balance Sheet and Cash Flow
At June 30, 2017, the Company had cash, investments and restricted deposits of
Cash flow used in operations for the three months ended June 30, 2017 was
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, 2017 |
41 |
Timing of claims payments |
(1) |
Days in claims payable, June 30, 2017 |
40 |
Outlook
The table below depicts the Company's updated annual guidance for 2017. We have adjusted our guidance to reflect the following items:
- The strong performance for the second quarter;
- An increase in our business expansion cost range to
$0.42 - $0.47 per diluted share reflecting the shortening of the open enrollment period for the Health Insurance Marketplace and additional investments in growth initiatives inMedicare and Marketplace for 2018; and - An increase in our margin expectations for the Marketplace business for 2017.
Full Year 2017 |
|||||||||
Low |
High |
||||||||
Total revenues (in billions) |
$ |
46.4 |
$ |
47.2 |
|||||
GAAP diluted EPS |
$ |
3.96 |
$ |
4.29 |
|||||
Adjusted Diluted EPS (1) |
$ |
4.70 |
$ |
5.06 |
|||||
HBR |
87.0 |
% |
87.4 |
% |
|||||
SG&A expense ratio |
9.4 |
% |
9.8 |
% |
|||||
Adjusted SG&A expense ratio (2) |
9.3 |
% |
9.7 |
% |
|||||
Effective tax rate |
39.0 |
% |
41.0 |
% |
|||||
Diluted shares outstanding (in millions) |
176.3 |
177.3 |
|||||||
(1) |
Adjusted Diluted EPS excludes amortization of acquired intangible assets of $0.55 to $0.57 per diluted share, Health Net acquisition related expenses of $0.02 to $0.03 per diluted share, and Penn Treaty assessment expense of $0.17 per diluted share. |
(2) |
Adjusted SG&A expense ratio excludes Health Net acquisition related expenses of $5 million to $8 million and the Penn Treaty assessment expense of $47 million. |
Conference Call
As previously announced, the Company will host a conference call Tuesday, July 25, 2017, at approximately
Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 in the U.S. and
A webcast replay will be available for on-demand listening shortly after the completion of the call for the next twelve months or until
Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures in this release as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company's operations and measure the Company's performance more consistently across periods. The Company uses the presented non-GAAP financial measures internally to allow management to focus on period-to-period changes in the Company's core business operations. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
Specifically, the Company believes the presentation of non-GAAP financial information that excludes amortization of acquired intangible assets, Health Net acquisition related expenses, as well as other items, allows investors to develop a more meaningful understanding of the Company's performance over time. The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data):
Three Months Ended |
Six Months Ended |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
GAAP net earnings from continuing operations |
$ |
254 |
$ |
171 |
$ |
393 |
$ |
156 |
|||||||
Amortization of acquired intangible assets |
39 |
43 |
79 |
52 |
|||||||||||
Health Net acquisition related expenses |
1 |
25 |
6 |
214 |
|||||||||||
Penn Treaty assessment expense (1) |
— |
— |
47 |
— |
|||||||||||
Income tax effects of adjustments (2) |
(14) |
(14) |
(48) |
(101) |
|||||||||||
Adjusted net earnings from continuing operations |
$ |
280 |
$ |
225 |
$ |
477 |
$ |
321 |
(1) |
Additional expense of $47 million for the Company's estimated share of guaranty association assessment resulting from the liquidation of Penn Treaty. |
(2) |
The income tax effects of adjustments are based on the effective income tax rates applicable to adjusted (non-GAAP) results. |
Three Months Ended |
Six Months Ended |
Annual December 31, |
|||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||||
GAAP diluted earnings per share (EPS) |
$ |
1.44 |
$ |
0.98 |
$ |
2.23 |
$ |
1.02 |
$3.96 - $4.29 |
||||||||
Amortization of acquired intangible assets (1) |
0.14 |
0.15 |
0.28 |
0.20 |
$0.55 - $0.57 |
||||||||||||
Health Net acquisition related expenses (2) |
0.01 |
0.16 |
0.03 |
0.89 |
$0.02 - $0.03 |
||||||||||||
Penn Treaty assessment expense (3) |
— |
— |
0.17 |
— |
$0.17 |
||||||||||||
Adjusted Diluted EPS from continuing operations |
$ |
1.59 |
$ |
1.29 |
$ |
2.71 |
$ |
2.11 |
$4.70 - $5.06 |
(1) |
The amortization of acquired intangible assets per diluted share presented above are net of an income tax benefit of $0.08 and $0.10 for the three months ended June 30, 2017 and 2016, respectively, and $0.17 and $0.14 for the six months ended June 30, 2017 and 2016, respectively; and estimated $0.31 to $0.35 for the year ended December 31, 2017. |
(2) |
The Health Net acquisition related expenses per diluted share presented above are net of an income tax benefit (expense) of $0.00 and $(0.02) for the three months ended June 30, 2017 and 2016, respectively, and $0.01 and $0.52 for the six months ended June 30, 2017 and 2016, respectively; and estimated $0.01 to $0.02 for the year ended December 31, 2017. |
(3) |
The Penn Treaty assessment expense per diluted share is net of an income tax benefit of $0.09 for the six months ended June 30, 2017 and estimated for the year ended December 31, 2017. |
Three Months Ended |
Six Months Ended |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
GAAP SG&A expenses |
$ |
1,065 |
$ |
949 |
$ |
2,156 |
$ |
1,671 |
|||||||
Health Net acquisition related expenses |
1 |
25 |
6 |
214 |
|||||||||||
Penn Treaty assessment expense |
— |
— |
47 |
— |
|||||||||||
Adjusted SG&A expenses |
$ |
1,064 |
$ |
924 |
$ |
2,103 |
$ |
1,457 |
About
Forward-Looking Statements
The company and its representatives may from time to time make written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act ("PSLRA") of 1995, including statements in this and other press releases, in presentations, filings with the
[Tables Follow]
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except shares in thousands and per share data in dollars) |
|||||||
June 30, 2017 |
December 31, 2016 |
||||||
(Unaudited) |
|||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
4,425 |
$ |
3,930 |
|||
Premium and related receivables |
3,901 |
3,098 |
|||||
Short-term investments |
586 |
505 |
|||||
Other current assets |
736 |
832 |
|||||
Total current assets |
9,648 |
8,365 |
|||||
Long-term investments |
4,816 |
4,545 |
|||||
Restricted deposits |
137 |
138 |
|||||
Property, software and equipment, net |
912 |
797 |
|||||
Goodwill |
4,712 |
4,712 |
|||||
Intangible assets, net |
1,466 |
1,545 |
|||||
Other long-term assets |
149 |
95 |
|||||
Total assets |
$ |
21,840 |
$ |
20,197 |
|||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Medical claims liability |
$ |
4,170 |
$ |
3,929 |
|||
Accounts payable and accrued expenses |
4,238 |
4,377 |
|||||
Unearned revenue |
554 |
313 |
|||||
Current portion of long-term debt |
4 |
4 |
|||||
Total current liabilities |
8,966 |
8,623 |
|||||
Long-term debt |
4,716 |
4,651 |
|||||
Other long-term liabilities |
1,630 |
869 |
|||||
Total liabilities |
15,312 |
14,143 |
|||||
Commitments and contingencies |
|||||||
Redeemable noncontrolling interests |
136 |
145 |
|||||
Stockholders' equity: |
|||||||
Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or outstanding at June 30, 2017 and December 31, 2016 |
— |
— |
|||||
Common stock, $0.001 par value; authorized 400,000 shares; 178,900 issued and 172,467 outstanding at June 30, 2017, and 178,134 issued and 171,919 outstanding at December 31, 2016 |
— |
— |
|||||
Additional paid-in capital |
4,258 |
4,190 |
|||||
Accumulated other comprehensive earnings (loss) |
1 |
(36) |
|||||
Retained earnings |
2,313 |
1,920 |
|||||
Treasury stock, at cost (6,433 and 6,215 shares, respectively) |
(194) |
(179) |
|||||
Total Centene stockholders' equity |
6,378 |
5,895 |
|||||
Noncontrolling interest |
14 |
14 |
|||||
Total stockholders' equity |
6,392 |
5,909 |
|||||
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
$ |
21,840 |
$ |
20,197 |
CENTENE CORPORATION AND SUBSIDIARIES |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
Revenues: |
|||||||||||||||
Premium |
$ |
10,905 |
$ |
9,688 |
$ |
21,543 |
$ |
15,674 |
|||||||
Service |
536 |
588 |
1,063 |
1,013 |
|||||||||||
Premium and service revenues |
11,441 |
10,276 |
22,606 |
16,687 |
|||||||||||
Premium tax and health insurer fee |
513 |
621 |
1,072 |
1,163 |
|||||||||||
Total revenues |
11,954 |
10,897 |
23,678 |
17,850 |
|||||||||||
Expenses: |
|||||||||||||||
Medical costs |
9,413 |
8,385 |
18,735 |
13,696 |
|||||||||||
Cost of services |
456 |
515 |
897 |
882 |
|||||||||||
Selling, general and administrative expenses |
1,065 |
949 |
2,156 |
1,671 |
|||||||||||
Amortization of acquired intangible assets |
39 |
43 |
79 |
52 |
|||||||||||
Premium tax expense |
543 |
498 |
1,133 |
948 |
|||||||||||
Health insurer fee expense |
— |
130 |
— |
204 |
|||||||||||
Total operating expenses |
11,516 |
10,520 |
23,000 |
17,453 |
|||||||||||
Earnings from operations |
438 |
377 |
678 |
397 |
|||||||||||
Other income (expense): |
|||||||||||||||
Investment and other income |
45 |
32 |
86 |
47 |
|||||||||||
Interest expense |
(62) |
(52) |
(124) |
(85) |
|||||||||||
Earnings from continuing operations, before income tax expense |
421 |
357 |
640 |
359 |
|||||||||||
Income tax expense |
169 |
187 |
256 |
203 |
|||||||||||
Earnings from continuing operations, net of income tax expense |
252 |
170 |
384 |
156 |
|||||||||||
Discontinued operations, net of income tax (benefit) |
— |
(1) |
— |
(2) |
|||||||||||
Net earnings |
252 |
169 |
384 |
154 |
|||||||||||
Loss attributable to noncontrolling interests |
2 |
1 |
9 |
— |
|||||||||||
Net earnings attributable to Centene Corporation |
$ |
254 |
$ |
170 |
$ |
393 |
$ |
154 |
|||||||
Amounts attributable to Centene Corporation common shareholders: |
|||||||||||||||
Earnings from continuing operations, net of income tax expense |
$ |
254 |
$ |
171 |
$ |
393 |
$ |
156 |
|||||||
Discontinued operations, net of income tax (benefit) |
— |
(1) |
— |
(2) |
|||||||||||
Net earnings |
$ |
254 |
$ |
170 |
$ |
393 |
$ |
154 |
|||||||
Net earnings (loss) per common share attributable to Centene Corporation: |
|||||||||||||||
Basic: |
|||||||||||||||
Continuing operations |
$ |
1.47 |
$ |
1.00 |
$ |
2.28 |
$ |
1.05 |
|||||||
Discontinued operations |
— |
— |
— |
(0.01) |
|||||||||||
Basic earnings per common share |
$ |
1.47 |
$ |
1.00 |
$ |
2.28 |
$ |
1.04 |
|||||||
Diluted: |
|||||||||||||||
Continuing operations |
$ |
1.44 |
$ |
0.98 |
$ |
2.23 |
$ |
1.02 |
|||||||
Discontinued operations |
— |
(0.01) |
— |
(0.01) |
|||||||||||
Diluted earnings per common share |
$ |
1.44 |
$ |
0.97 |
$ |
2.23 |
$ |
1.01 |
|||||||
CENTENE CORPORATION AND SUBSIDIARIES |
|||||||
Six Months Ended June 30, |
|||||||
2017 |
2016 |
||||||
Cash flows from operating activities: |
|||||||
Net earnings |
$ |
384 |
$ |
154 |
|||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities |
|||||||
Depreciation and amortization |
173 |
111 |
|||||
Stock compensation expense |
62 |
83 |
|||||
Deferred income taxes |
(58) |
(13) |
|||||
Changes in assets and liabilities |
|||||||
Premium and related receivables |
(696) |
(1,121) |
|||||
Other assets |
65 |
(36) |
|||||
Medical claims liabilities |
243 |
188 |
|||||
Unearned revenue |
241 |
(50) |
|||||
Accounts payable and accrued expenses |
(257) |
(8) |
|||||
Other long-term liabilities |
781 |
463 |
|||||
Other operating activities, net |
4 |
6 |
|||||
Net cash provided by (used in) operating activities |
942 |
(223) |
|||||
Cash flows from investing activities: |
|||||||
Capital expenditures |
(181) |
(94) |
|||||
Purchases of investments |
(1,294) |
(956) |
|||||
Sales and maturities of investments |
990 |
593 |
|||||
Investments in acquisitions, net of cash acquired |
— |
(862) |
|||||
Other investing activities, net |
(1) |
— |
|||||
Net cash used in investing activities |
(486) |
(1,319) |
|||||
Cash flows from financing activities: |
|||||||
Proceeds from long-term debt |
810 |
5,711 |
|||||
Payments of long-term debt |
(762) |
(3,124) |
|||||
Common stock repurchases |
(15) |
(27) |
|||||
Debt issuance costs |
— |
(59) |
|||||
Other financing activities, net |
6 |
(9) |
|||||
Net cash provided by financing activities |
39 |
2,492 |
|||||
Net increase in cash and cash equivalents |
495 |
950 |
|||||
Cash and cash equivalents, beginning of period |
3,930 |
1,760 |
|||||
Cash and cash equivalents, end of period |
$ |
4,425 |
$ |
2,710 |
|||
Supplemental disclosures of cash flow information: |
|||||||
Interest paid |
$ |
99 |
$ |
36 |
|||
Income taxes paid |
$ |
205 |
$ |
222 |
|||
Equity issued in connection with acquisitions |
$ |
— |
$ |
3,105 |
CENTENE CORPORATION |
|||||||||||||||
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
|||||||||||
2017 |
2017 |
2016 |
2016 |
2016 |
|||||||||||
MANAGED CARE MEMBERSHIP BY STATE |
|||||||||||||||
Arizona |
669,500 |
684,300 |
598,300 |
601,500 |
597,700 |
||||||||||
Arkansas |
91,900 |
98,100 |
58,600 |
57,700 |
52,800 |
||||||||||
California |
2,925,800 |
2,980,100 |
2,973,500 |
3,004,500 |
3,097,600 |
||||||||||
Florida |
871,100 |
872,000 |
716,100 |
732,700 |
726,200 |
||||||||||
Georgia |
540,400 |
568,300 |
488,000 |
498,000 |
493,300 |
||||||||||
Illinois |
254,600 |
253,800 |
237,700 |
236,700 |
234,700 |
||||||||||
Indiana |
340,000 |
335,800 |
285,800 |
289,600 |
291,000 |
||||||||||
Kansas |
130,000 |
133,100 |
139,700 |
145,100 |
144,800 |
||||||||||
Louisiana |
484,600 |
484,100 |
472,800 |
455,600 |
375,300 |
||||||||||
Massachusetts |
54,100 |
44,200 |
48,300 |
45,300 |
47,100 |
||||||||||
Michigan |
2,300 |
2,100 |
2,000 |
2,100 |
2,200 |
||||||||||
Minnesota |
9,500 |
9,500 |
9,400 |
9,400 |
9,500 |
||||||||||
Mississippi |
343,600 |
349,500 |
310,200 |
313,900 |
323,800 |
||||||||||
Missouri |
278,300 |
106,100 |
105,700 |
104,700 |
102,900 |
||||||||||
Nebraska |
78,800 |
79,200 |
— |
— |
— |
||||||||||
New Hampshire |
77,100 |
77,800 |
77,400 |
78,400 |
79,700 |
||||||||||
New Mexico |
7,100 |
7,100 |
7,100 |
7,100 |
7,100 |
||||||||||
Ohio |
332,700 |
328,900 |
316,000 |
319,500 |
319,000 |
||||||||||
Oregon |
213,600 |
211,900 |
217,800 |
218,400 |
221,500 |
||||||||||
South Carolina |
121,000 |
121,900 |
122,500 |
119,700 |
113,700 |
||||||||||
Tennessee |
22,200 |
21,900 |
21,700 |
21,600 |
20,800 |
||||||||||
Texas |
1,226,800 |
1,243,900 |
1,072,400 |
1,041,600 |
1,037,000 |
||||||||||
Vermont |
1,600 |
1,600 |
1,600 |
1,700 |
1,600 |
||||||||||
Washington |
248,500 |
254,400 |
238,400 |
240,500 |
239,700 |
||||||||||
Wisconsin |
70,800 |
71,700 |
73,800 |
75,100 |
76,100 |
||||||||||
Total at-risk membership |
9,395,900 |
9,341,300 |
8,594,800 |
8,620,400 |
8,615,100 |
||||||||||
TRICARE eligibles |
2,823,200 |
2,804,100 |
2,847,000 |
2,815,700 |
2,815,700 |
||||||||||
Total |
12,219,100 |
12,145,400 |
11,441,800 |
11,436,100 |
11,430,800 |
||||||||||
Medicaid: |
|||||||||||||||
TANF, CHIP & Foster Care |
5,854,400 |
5,714,100 |
5,630,000 |
5,583,900 |
5,541,200 |
||||||||||
ABD & LTC |
843,500 |
825,600 |
785,400 |
754,900 |
757,500 |
||||||||||
Behavioral Health |
466,500 |
466,900 |
466,600 |
465,300 |
455,800 |
||||||||||
Commercial |
1,743,600 |
1,864,700 |
1,239,100 |
1,333,000 |
1,391,500 |
||||||||||
Medicare & Duals (1) |
327,500 |
328,100 |
334,300 |
333,500 |
332,600 |
||||||||||
Correctional |
160,400 |
141,900 |
139,400 |
149,800 |
136,500 |
||||||||||
Total at-risk membership |
9,395,900 |
9,341,300 |
8,594,800 |
8,620,400 |
8,615,100 |
||||||||||
TRICARE eligibles |
2,823,200 |
2,804,100 |
2,847,000 |
2,815,700 |
2,815,700 |
||||||||||
Total |
12,219,100 |
12,145,400 |
11,441,800 |
11,436,100 |
11,430,800 |
||||||||||
(1) Membership includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and Medicare-Medicaid Plans. |
|||||||||||||||
NUMBER OF EMPLOYEES |
31,500 |
30,900 |
30,500 |
29,400 |
28,900 |
||||||||||
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
|||||||||||||||
2017 |
2017 |
2016 |
2016 |
2016 |
|||||||||||||||
DAYS IN CLAIMS PAYABLE (a) |
40 |
41 |
42 |
41 |
43 |
||||||||||||||
(a) 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, INVESTMENTS AND RESTRICTED DEPOSITS (in millions) |
|||||||||||||||||||
Regulated |
$ |
9,673 |
$ |
10,034 |
$ |
8,854 |
$ |
7,825 |
$ |
7,324 |
|||||||||
Unregulated |
291 |
306 |
264 |
268 |
196 |
||||||||||||||
Total |
$ |
9,964 |
$ |
10,340 |
$ |
9,118 |
$ |
8,093 |
$ |
7,520 |
|||||||||
DEBT TO CAPITALIZATION |
42.5 |
% |
43.3 |
% |
44.1 |
% |
44.5 |
% |
44.8 |
% |
|||||||||
DEBT TO CAPITALIZATION EXCLUDING NON-RECOURSE DEBT (b) |
42.1 |
% |
43.0 |
% |
43.7 |
% |
44.1 |
% |
44.4 |
% |
|||||||||
(b) The non-recourse debt represents the Company's mortgage note payable ($63 million at June 30, 2017). |
|||||||||||||||||||
Debt to capitalization is calculated as follows: total debt divided by (total debt + total equity). |
OPERATING RATIOS
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||
HBR |
86.3 |
% |
86.6 |
% |
87.0 |
% |
87.4 |
% |
|||
SG&A expense ratio |
9.3 |
% |
9.2 |
% |
9.5 |
% |
10.0 |
% |
|||
Adjusted SG&A expense ratio |
9.3 |
% |
9.0 |
% |
9.3 |
% |
8.7 |
% |
MEDICAL CLAIMS LIABILITY
The changes in medical claims liability are summarized as follows (in millions):
Balance, June 30, 2016 |
$ |
3,950 |
||
Incurred related to: |
||||
Current period |
36,106 |
|||
Prior period |
(431) |
|||
Total incurred |
35,675 |
|||
Paid related to: |
||||
Current period |
32,109 |
|||
Prior period |
3,356 |
|||
Total paid |
35,465 |
|||
Balance, June 30, 2017, net |
4,160 |
|||
Plus: Reinsurance recoverable |
10 |
|||
Balance, June 30, 2017 |
$ |
4,170 |
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 June 30, 2016, and prior.
View original content:http://www.prnewswire.com/news-releases/centene-corporation-reports-2017-second-quarter-results--raises-2017-guidance-300493312.html
SOURCE
Investor Relations Inquiries, Edmund E. Kroll, Jr., Senior Vice President, Finance & Investor Relations, (212) 759-0382, Media Inquiries, Marcela Manjarrez-Hawn, Senior Vice President and Chief Communications Officer, (314) 445-0790