Annual report pursuant to Section 13 and 15(d)

Condensed Financial Information Of Registrant

v2.4.0.8
Condensed Financial Information Of Registrant
12 Months Ended
Dec. 31, 2013
Condensed Financial Information of Registrant [Abstract]  
Condensed Financial Information of Registrant
Condensed Financial Information of Registrant

Centene Corporation (Parent Company Only)
Condensed Balance Sheets
(In thousands, except share data) 
 
December 31,
 
2013
 
2012
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
2,740

 
$
22,279

Short term investments, at fair value (amortized cost $6,000 and $6,500, respectively)
6,000

 
6,500

Other current assets
124,903

 
42,230

Total current assets
133,643

 
71,009

Long term investments, at fair value (amortized cost $8,070 and $1,356, respectively)
8,070

 
1,356

Investment in subsidiaries
1,667,258

 
1,298,648

Other long term assets
31,876

 
42,523

Total assets
$
1,840,847

 
$
1,413,536

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities
$
4,460

 
$
4,333

Long term debt
590,628

 
449,127

Other long term liabilities
2,320

 
6,309

Total liabilities
597,408

 
459,769

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 gain (loss) 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
$
1,840,847

 
$
1,413,536



See notes to condensed financial information of registrant.


Centene Corporation (Parent Company Only)
Condensed Statements of Operations
(In thousands, except share data)
 
 
Year Ended December 31,
 
2013
 
2012
 
2011
Expenses:
 
 
 
 
 
General and administrative expenses
$
4,196

 
$
4,090

 
$
4,488

Other income (expense):
 
 
 
 
 
Investment and other income
983

 
19,921

 
(8,790
)
Interest expense
(22,623
)
 
(15,757
)
 
(15,494
)
Earnings (loss) before income taxes
(25,836
)
 
74

 
(28,772
)
Income tax benefit
(15,191
)
 
(9,668
)
 
(12,825
)
Net earnings (loss) before equity in subsidiaries
(10,645
)
 
9,742

 
(15,947
)
Equity in earnings from subsidiaries
171,863

 
78,791

 
136,465

Net earnings from continuing operations
$
161,218

 
$
88,533

 
$
120,518

 
 
 
 
 
 
Net earnings per share from continuing operations:
 
 
 
 
 
Basic earnings per common share
$
2.98

 
$
1.72

 
$
2.40

Diluted earnings per common share
$
2.87

 
$
1.65

 
$
2.30

Weighted average number of shares outstanding:
 
 
 
 
 
Basic
54,126,545

 
51,509,366

 
50,198,954

Diluted
56,247,173

 
53,714,375

 
52,474,238


 
See notes to condensed financial information of registrant.

Centene Corporation (Parent Company Only)
Condensed Statements of Cash Flows
(In thousands)

 
Year Ended December 31,
 
2013
 
2012
 
2011
Cash flows from operating activities:
 
 
 
 
 
Cash provided by operating activities
$
302,242

 
$
327,940

 
$
72,754

Cash flows from investing activities:
 
 
 
 
 
Net dividends from and capital contributions to subsidiaries
(417,734
)
 
(539,575
)
 
(50,581
)
Purchase of investments
(12,518
)
 
(7,320
)
 
(21,915
)
Sales and maturities of investments
10,252

 
30,000

 
11,111

Acquisitions
(67,070
)
 

 
(1,773
)
Net cash used in investing activities
(487,070
)
 
(516,895
)
 
(63,158
)
Cash flows from financing activities:
 
 
 
 
 
Proceeds from borrowings
180,000

 
400,500

 
419,183

Payment of long term debt
(30,000
)
 
(215,000
)
 
(413,644
)
Proceeds from exercise of stock options
8,983

 
15,912

 
15,815

Proceeds from stock offering
15,225

 

 

Common stock repurchases
(19,779
)
 
(12,741
)
 
(7,809
)
Debt issue costs
(3,589
)
 
(3,623
)
 
(9,242
)
Contributions from noncontrolling interest
8,069

 
1,092

 
813

Purchase of noncontrolling interest

 
(14,429
)
 

Excess tax benefits from stock compensation
6,380

 
10,996

 
4,435

Net cash provided by financing activities
165,289

 
182,707

 
9,551

Net increase (decrease) in cash and cash equivalents
(19,539
)
 
(6,248
)
 
19,147

Cash and cash equivalents, beginning of period
22,279

 
28,527

 
9,380

Cash and cash equivalents, end of period
$
2,740

 
$
22,279

 
$
28,527



See notes to condensed financial information of registrant.

Notes to Condensed Financial Information of Registrant

Note A - Basis of Presentation and Significant Accounting Policies

The parent company only financial statements should be read in conjunction with Centene Corporation's audited consolidated financial statements and the notes to consolidated financial statements included in this Form 10-K.
    
The parent company's investment in subsidiaries is stated at cost plus equity in undistributed earnings of the subsidiaries. The parent company's share of net income of its unconsolidated subsidiaries is included in income using the equity method of accounting. Certain unrestricted subsidiaries receive monthly management fees from our restricted subsidiaries. The management and service fees received by our unrestricted subsidiaries are associated with all of the functions required to manage the restricted subsidiaries including but not limited to salaries and wages for all personnel, rent, utilities, medical management, provider contracting, compliance, member services, claims processing, information technology, cash management, finance and accounting, and other services. The management fees are based on a percentage of the restricted subsidiaries revenue.

Due to our centralized cash management function, all cash flows generated by our unrestricted subsidiaries, including management fees, are transferred to the parent company, primarily to repay borrowings on the parent company's revolving credit facility. The parent company may also utilize the cash flow to make acquisitions, fund capital contributions to subsidiaries and fund its operations. During the years ended December 31, 2013, 2012 and 2011, cash flows received by the parent from unrestricted subsidiaries was $312,887, $318,198, and $88,701 and was included in cash flows from operating activities.

Certain amounts presented in the parent company only financial statements are eliminated in the consolidated financial statements of Centene Corporation.

Note B - Dividends

During 2013, 2012 and 2011, the Registrant received dividends from its subsidiaries totaling $20,500, $29,000 and $69,100, respectively.