Centene Corporation Reports 2015 Fourth Quarter And Full Year Results

ST. LOUIS, Feb. 9, 2016 /PRNewswire/ -- Centene Corporation (NYSE: CNC) today announced its financial results for the fourth quarter and year ended December 31, 2015, which are consistent with the results provided in our press release dated January 26, 2016. The following discussions, with the exception of cash flow information, are in the context of continuing operations.

Michael F. Neidorff, Centene’s Chairman and Chief Executive Officer, stated, “2015 marked another year of growth and accomplishment for Centene - capped off by an especially strong fourth quarter. We look forward to closing our Health Net acquisition and maintaining this positive momentum in 2016 and beyond.”

Fourth Quarter and Full Year Highlights

• December 31, 2015 managed care membership of 5.1 million, an increase of over 1.0 million members, or 26% over 2014.
• Premium and service revenues for the fourth quarter of $5.9 billion, representing 33% growth compared to the fourth quarter of 2014 and $21.3 billion for the full year 2015, representing 36% growth year over year.
• Health Benefits Ratio of 88.0% for the fourth quarter of 2015, compared to 89.3% in the fourth quarter of 2014 and 88.9% for the full year 2015 compared to 89.3% for the full year 2014.
• General and Administrative expense ratio excluding Health Net merger related expenses of 8.7% for the fourth quarter of 2015, compared to 8.2% in the fourth quarter of 2014 and 8.5% for the full year 2015 compared to 8.4% for 2014.
• Operating cash flow of $201 million and $658 million for the fourth quarter and full year of 2015, respectively, representing 1.8 times net earnings for both periods.
• Diluted EPS for the fourth quarter of 2015 of $0.91, or $0.95 excluding $0.04 of diluted EPS associated with Health Net merger related expenses, compared to $0.87 in 2014, or $0.63 when excluding a $0.24 benefit for recording the health insurer fee reimbursement for Texas for all of 2014 in the fourth quarter.

Other Events

• In February 2016, our Nebraska subsidiary, Nebraska Total Care, was recommended by the Nebraska Department of Health and Human Services’ Division of Medicaid and Long-Term Care as one of three managed care organizations to administer its new Heritage Health program for Medicaid and CHIP enrollees. The contract is expected to commence in the first quarter of 2017, pending regulatory approvals.
• In February 2016, Centurion of Florida, LLC reached a formal agreement to provide correctional healthcare services for the Florida Department of Corrections in Regions 1, 2 and 3. The contract is expected to commence in the second quarter of 2016.
• In January 2016, the Company announced the pricing of an offering by its a wholly owned subsidiary, Centene Escrow Corporation (Escrow Issuer), of $1.4 billion of 5.625% Senior Notes due 2021 at par and $1.0 billion of 6.125% Senior Notes due 2024 at par. The Company intends to use the net proceeds of the offering, along with borrowings under the revolving credit facility and cash on hand, to fund the cash consideration for the Health Net merger, to pay merger and offering related fees and expenses, and for general corporate purposes. The proceeds of the debt issuance will be held in escrow until the closing of the Health Net merger. If the Health Net merger is not consummated, the Escrow Issuer will be required to redeem each series of Notes at a redemption price equal to 100% of the principal amount of such series of Notes, plus accrued and unpaid interest to the redemption date.
• In January 2016, the governor of Louisiana signed an executive order to expand Medicaid coverage under the Affordable Care Act by July 1, 2016.
• In December 2015, our Louisiana subsidiary, Louisiana Healthcare Connections, began operating under an expanded contract to include behavioral health benefits.
• In December 2015, our Mississippi subsidiary, Magnolia Health, began operating under an expanded contract to include the inpatient benefit for Medicaid and ABD members.

Accreditations & Awards

• In January 2016, our Arkansas subsidiary, Arkansas Health & Wellness Solutions, received Accreditation from the National Committee for Quality Assurance for its Health Insurance Marketplace Exchange plan, Ambetter of Arkansas.
• In December 2015, two of our subsidiaries were recognized for their programs by the Medicaid Health Plans of America. U.S. Medical Management received the Long Term Services and Supports Award for their Home-Based Primary Care Program, and our Ohio subsidiary, Buckeye Health Plan, received the Maternal Health Award for their Addiction in Pregnancy Program.
• In November 2015, Centene and Cenpatico received national recognition by Modern Healthcare and Advertising Age for their anti-bullying campaign, “No Bullying Zone.” The companies received the Gold Award for Community Outreach Campaign of the Year at Modern Healthcare’s Marketing Impact Awards.

Membership

The following table sets forth the Company’s membership by state for its managed care organizations: