More annual reports from Centene:
2023 ReportPeers and competitors of Centene:
Cell ImpactReaching for the Summit 2012 Annual Review 1 16 states with health plan operations in 2012 2.6 million members Centene Corporation is a leading multi-line healthcare enterprise that provides access to quality care for the rising number of under-insured and uninsured individuals. Centene offers unique, cost-effective coverage solutions for low-income populations through locally based health plans and a wide range of specialty services. Centene Corporation 41% inCrease in at-risk managed Care membership Table of Contents 01 —— 2012 Year in Review 02 —— Letter from the Chairman 04 —— Company and Financial Summary 06 —— 2012 At a Glance 08 —— Awards and Recognition Strategic Partnerships 10 —— Centene Today: Delivering Quality Care 12 —— Looking Ahead: A Future of Opportunity 14 —— Quarterly and Selected Financial Information 16 —— Corporate Information 6,800 employees 2012 year in review 59% revenue growth over previous year 9 health plan ContraCt wins in 2012 2 letter from the Chairman Michael F. Neidorff Chairman, President and Chief Executive Officer Amidst ongoing changes in the healthcare landscape, Centene has maintained focus on our promise of delivering the highest quality of care, while reducing costs. We also continue to deliver on our growth strategy—increasing membership by 41% and revenues by 59% from 2011. Now operating health plans in 16 states, we serve 2.6 million members across the country. We were successful in winning nine contracts in 2012 and have continued in 2013 with the long- term care program recommendations in Florida. With the pending acquisition of AcariaHealth, we will expand our ability to manage the costs of specialized pharmacy benefit services for complex diseases. We believe the growth and initiatives accomplished in 2012 will drive earnings in 2013 and beyond. All of these efforts demonstrate the hard work and dedication of more than 6,800 employees nationwide. We remain committed to strengthening our executive leadership team to ensure Centene has the necessary bandwidth, resources and talent to support and effectively manage the significant growth opportunities that lie ahead. Key management additions in 2012 included David Minifie as Executive Vice President of Business Integration and Chief Marketing Officer; Robert Hitchcock as Executive Vice President, Health Plan Business Unit; and Rone Baldwin as Executive Vice President, Insurance Group Business Unit and head of the Company's newly formed insurance group to oversee products associated with Exchanges. These appointments round out our seasoned executive team and add key expertise that will lead us into the new healthcare arena. Centene’s success over the years did not come by chance, nor did it come without challenges. As part of our valued partnership with our states, we have helped to uncover and resolve problematic issues which impact us both. For example, in the fourth quarter of 2012, we experienced higher-than-expected medical costs in Texas. This was related to the transfer of high acuity members in the Hidalgo Service Area from another health plan, in addition to higher-than-anticipated utilization in the inpatient category in the rural service area. We continue to work with the state to obtain premium adequacy and have implemented a margin improvement plan for the Hidalgo expansion area. In June, we also reported a higher level of medical costs in our Celtic individual business. Our corrective actions to improve performance included a new national network contract as well as targeted rate increases in the second half of 2012, and our Health Benefits Ratio (HBR) has improved. In the midst of growth, reform and debate around our nation’s healthcare, one issue remains constant — states continue to face budget pressures, and many are looking for ways to curtail costs. Centene’s strategy is clear, consistent, and effective — enter a state with a cost- effective solution, then look to build broader services within each market. We believe there is significant opportunity to further leverage this approach in the future. Going forward, our priorities include innovating in our approach to improve care for our members, expanding our geographic reach, and growing organically in our existing markets through Medicaid expansion and contracts for Medicaid/Medicare Dual-eligibles and Exchange- based solutions. During this unprecedented time of rising costs and increasing healthcare needs, we see several new states transitioning into managed care from fee-for-service. States already using managed care are expanding coverage to high-acuity populations, other currently unmanaged populations and new programs. As we have shown over the past several years, we have been highly successful at winning and expanding our presence within existing markets. However, while we remain proactive, Centene will maintain a disciplined and prudent approach when evaluating all opportunities. Critical to Centene’s growth strategy is our ability to add services and programs that complement our core strengths. Our specialty companies continue to play an important role in expanding and diversifying our business, contributing to external sales growth as well as improving the efficiency and cost-effectiveness of our health plan operations. From 2011 to 2012, total premium and service revenue from our specialty business grew 71.9%. Early in 2013, we announced that we signed a definitive agreement to acquire AcariaHealth, a comprehensive specialty pharmacy company. Specialty pharmacy is a vital component in the overall health delivery model at Centene and will continue to grow as a percentage of our overall medical expense, particularly as it relates to the management of complex diseases in our higher acuity members. This strategic acquisition will enhance our suite of specialty services and improve how we manage conditions including Hepatitis C, Hemophilia, Multiple Sclerosis, Rheumatoid Arthritis and Oncology. Adding the capabilities of AcariaHealth to our portfolio furthers our goal of developing more integrated solutions which drive better health outcomes for our members. As 2012 drew to a close, I began elaborating upon our existing business and new business operations. Existing businesses are defined primarily as 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 we have managed for fewer than four complete quarters. 3 premium and serviCe revenue from new business 40% 30% 20% 10% 0 ,11 q1 ,11 q2 ,11 q3 ,11 q4 ,12 q1 ,12 q2 ,12 q3 ,12 q4 Centene’s success over the years did not come by chance, nor did it come without challenges. As illustrated, we have an increasing percentage of our total premium and revenues associated with new businesses in 2012 compared to 2011. New businesses represented approximately 35% of our total premium and service revenues in the fourth quarter of 2012. This is a result of the success we have had executing our growth strategy. However, new businesses also have an HBR that is significantly higher. This means, as we have historically stated, that when managing new businesses, it takes time to achieve normalized operating margins. In closing, Centene has had a year full of growth, industry changes and our own preparation for the evolving healthcare industry. We feel we are in a strong position to benefit from the significant market opportunities that lie ahead. We believe our experience, innovative approach, dynamic leadership and solid infrastructure position Centene for success as we enter this new era of healthcare. Sincerely, MICHAEL F. NEIDORFF Chairman, President and Chief Executive Officer Centene Corporation centene corporation 2012 annual report 4 Company and finanCial summary Centene continues to expand into new regions and product categories States with health plan operations in 2012 States with health plan implementation in 2013 States with specialty company operations or service centers finanCial highlights in thousands 2012 2011 2010 2009 2008 5 Premium and Service Revenues $8,238,947 $ 5,181,007 $ 4,283,833 $ 3,878,283 $ 3,274,313 Earnings (loss) from Operations (27,121) 190,324 157,069 138,135 131,561 Centene Corporation Headquarters Net Earnings from Continuing Operations(1) 1,859 111,218 90,947 86,093 84,181 Total Assets 2,741,682 2,190,336 1,943,882 1,702,364 1,451,152 (1) Attributable to Centene Corporation. healthCare Coverage solutions Government Solutions aZ ar fl ga il in ks ky la ma ms mo oh sC tX wa wi TANF CHIP ABD (non duals) ABD (dual-eligible) Long-Term Care Foster Care Medicare Special Needs Plan Hybrid Specialty Health Solutions Pharmacy Benefits Behavioral & Specialty Therapies Life & Health Management Managed Vision Telehealth • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • premium and serviCe revenues in millions Cash flow from operating aCtivities in thousands at-risk membership in thousands $ 10,000 $ 300,000 8,000 6,000 4,000 2,000 0 225,000 150,000 75,000 0 3,000 2,250 1,500 750 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 centene corporation 2012 annual report 6 centene corporation 2012 annual report c h M a r April 7 2012 at a glanCe Q1 February Q2 M a y y r a u n a J r e b m e c e D Q4 Selected for Medicaid contract in the state of Washington Began phased implementation of operations in Louisiana Texas subsidiary, Superior HealthPlan, awarded an Excellent Accreditation rating by the National Committee for Quality Assurance Awarded Managed Care contract in Missouri Awarded contract to serve Medicaid beneficiaries in New Hampshire Appointed C. David Minifie as Chief Marketing Officer Centene won in three categories at the Case In Point Platinum Awards Buckeye Community Health Plan recommended for expanded Ohio Medicaid contract Centene awarded statewide Kansas Medicaid contract Initiated termination of Medicaid contract with Commonwealth of Kentucky Issued $175 million 5.75% Senior Notes due 2017 at a premium to yield 4.29% Appointed Robert T. Hitchcock as EVP of Health Plan Business Unit Selected to serve Dual- eligible members in the Greater Chicago Region as part of Illinois’ Medicare- Medicaid Alignment Initiative Appointed K. Rone Baldwin as EVP, Insurance Group Business Unit Commenced operations of Medicaid contract in Washington Began operations of Medicaid contract in Missouri Buckeye Community Health Plan selected to serve Medicaid members in a three-year, Dual-eligible demonstration program in Ohio J u n e J uly r e b m e v o N August Q3 October S e p t ember 8 awards and reCognition 2012 accreditations It is our objective to provide access to the highest quality of care for our members. The NCQA Health Plan Accreditation and URAC Health Plan Accreditation programs provide unbiased, third party reviews to verify and publicly report results on specific quality care metrics. While we have achieved or are pursuing accreditation for all of our plans, accreditation is only one measure of our ability to provide access to quality care for our members. 2012 awards Dorland Health Case In Point Award Asthma Management Program; CentAccount; ER Case Management, Peach State Health Plan; NICU/ Special Care Nursery Breast Pump Program; Foster Care Discharge Planning, Centene and Superior HealthPlan (HM); Emergency Department Case Management Program, Peach State Health Plan (HM); HRA for Serious Mental Illness, Nurse Wise/Nurse Response (HM) Hermes Awards My Route to Health; Off the Chain; Sickle Cell National Health Information Awards My Route to Health; Super Centeam 5 Cookbook; Smart Start for Your Baby – A Guide to Your Baby’s Care the First Year; Off the Chain; Living Well with Sickle Cell; Smokey Yuckpack; Adventures from Puffletown National Environmental Leadership Award Adventures from Puffletown 2012 National Urban League Health Innovator Award OptiCare – NCQA, Utilization Management and Credentialing Celticare Health Plan – NCQA, New Health Plan Superior Health Plan – NCQA, “Excellent” Accreditation Rating URAC Best Practices in Health Care Consumer Empowerment and Protection Awards Centene Corporation/Nurtur, Asthma Solutions for a Managed Medicaid Population Medicaid Health Plans of America - Best Practices Awards 2012 Outreach Award: Nurtur Diabetes Program Case-in-Point Platinum Awards Centene has won in the Women and Children category 3 years in a row (in 2012 for our breastfeeding program) and the Medicaid Case Management category for the past 2 years (in 2012 for our CentAccount program and our ER program in Georgia) Information Week 500 – top 100 ranking and top 10 Healthcare IT Innovators for 2012 Convergence Customer Excellence Award People’s Choice Award – Centene was awarded the first ever “People’s Choice Award” at the National Association of Community Health Centers (NACHC) Community Health Institute and EXPO in Orlando, Florida. strategiC partnerships As a national leader in government-sponsored healthcare programs, Centene appreciates the opportunity to partner with national and local organizations to share its insight and unique experience with key stakeholders. With health reform top of mind in 2012, Centene partnered with the Alliance for Health Reform, a non-partisan organization, to develop a series of briefings, focused specifically on the Medicaid program, for congressional staffers in Washington, DC. To date, the briefings have focused on important areas such as health information technology; children’s health; Medicaid innovation; behavioral health; community health centers and program integrity. Our subsidiaries also participate in strategic partnerships that directly impact our members. For example, Cenpatico partnered with the National Urban League to participate in the organization’s Annual Youth Leadership Summit. During the Summit, Cenpatico CEO Sam Donaldson was joined by a distinguished panel of experts and youth leaders to discuss topics of concern to teens such as bullying, self-esteem, social media and health and nutrition. Smaller break-out sessions allowed the teens to discuss these and other topics with their peers and health experts, and explore solutions and interventions that they could take back to their local communities. 9 Delivering on our promise of better healthcare—today and tomorrow Centene’s continued success is based on a proven track record of providing solutions that meet the complex healthcare and financial challenges the nation faces today. When states seek to ensure quality coverage for their constituents, our expertise in delivering truly integrated and proactive care makes Centene a valuable partner in reducing overall healthcare costs. centene corporation 2012 annual report 10 11 Centene today Delivering Quality Care Our health plans and specialty companies continue to raise the bar for innovative, quality care across the country. Last year we continued our trajectory of growth with new operations in Louisiana, Washington and Missouri. Although the expansion of our geographic footprint has been significant – from seven states with health plans in 2008 to 16 states in 2012 – a large part of Centene’s growth has been the capacity to extend the depth of our solution set within our markets. For example, in 2012, we successfully secured Dual-eligible contracts in markets where we already had a Medicaid presence, including Ohio and Illinois. Both programs are expected to commence in the fourth quarter of 2013. In 2012, we also significantly expanded our operations in Texas with the expansion of the Hildago Medicaid Rural Service Areas (MRSA), and implemented pharmacy carve- in benefits in both Texas and Louisiana. Above all, we remain committed to putting the care of our membership first. Strong investments in technology, medical management, and a dedicated employee base ensure we are equipped to address the unique challenges our members face on the path to better health. Centene's health plan membership + 41% Membership growth led by new markets in Louisiana, Missouri, Washington and Texas expansion. 3,000,000 2,400,000 1,800,000 1,200,000 600,000 0 2011 2012 investing in proaCtive Case management 36% increase in case management in 2012 Case management for members allow for greater proactive care and decreased medical costs. delivering more healthy babies, nationwide 97,616 total deliveries in 2012 66,808 Notification of pregnancies filled out during the year (allows earlier identification and assistance to expecting mothers). number of low birthweights Continue to deCrease (% <2500g) Analysis of health plans since 2008 12% 11% 10% 9% 2008 2009 2010 2011 2012 flu vaCCination rates among pregnant women Flu Season, September – April 20% 15% 10% 5% 0% 2008- 2009- 2010- 2011- 2011 2012 2009 2010 Centene’s influenza program, Fluvention®, works closely with our award-winning Start Smart For Your Baby® program to increase flu vaccination rates among pregnant women. Centene’s CliniCal programs focus on education, engagement and prevention, using a variety of ways to reach our members. For example, our Fluvention program is designed to promote healthy behaviors including immunization and hygiene practices that can protect our members from seasonal influenza. Using educational materials, incentives, texting programs and automated phone calls, we are able to target our high-risk members such as pregnant women or members with chronic conditions. “Educating and incenting our members to better manage their health makes a real difference in the lives of the people we serve, while also reducing medical costs.” Mary Mason, M.D. Senior Vice President & Chief Medical Officer centene corporation 2012 annual report 12 13 looking ahead: A Future of Opportunity One of the biggest factors influencing healthcare today is the implementation of the Patient Protection and Affordable Care Act. State decision-makers face the challenge of providing more residents with quality healthcare under tight budget constraints. More and more states are turning to managed care to serve their expanding Medicaid populations as well as other low-income individuals with complex healthcare needs. As this trend continues, our leadership in delivering coordinated healthcare solutions makes Centene a valuable ally for our state partners. Centene has nearly three decades of experience providing comprehensive, integrated healthcare to individuals receiving benefits under Medicaid and other government-sponsored programs. Our integrated approach incorporates the member’s physical health, behavioral health and pharmacy services, connecting traditionally fragmented practices and offering a more seamless experience for our members. Beginning in 2014, Dual-eligibles (low- income seniors and younger persons with disabilities who are eligible for both Medicare and Medicaid) will begin to shift into state Medicaid programs. We believe our experience with Special Needs Plans and other high-acuity populations position us for growth in this area. In 2012, we had success in securing Dual-eligible contracts in markets where we already have a Medicaid presence, including Ohio and Illinois. Both programs are expected to commence in the fourth quarter of 2013. In 2014, millions of Americans are expected to begin purchasing health insurance through newly-created marketplaces known as Exchanges. The Exchange market is projected to be one of the largest expansions of health coverage in United States history. We feel Centene has a strong competitive position to capitalize on this opportunity given our acquisition of Celtic in 2008, which provides us with insurance licenses in 49 states. In addition, our participation in Exchanges in Massachusetts, Indiana and Texas give us unique, practical experience with Exchange- based solutions. Furthermore, our work in Exchanges allows us to expand our solution set beyond Centene’s traditional Medicaid population. We will be able to provide insurance alternatives for individuals above 133% of the FederalPoverty Level. Participation in Exchanges allows us to expand our solution set beyond Centene’s traditional Medicaid population. eXpanded solution set for the low-inCome uninsured/under-insured While all of our members have unique backgrounds and circumstances, Centene believes that each is entitled to receive quality healthcare at an affordable price. Both independent studies and Centene’s experience confirm that as many as 40% of adults experience a loss of Medicaid eligibility within six months of entering a Medicaid program. For example, if a Medicaid member gets a part-time job, he or she may be ineligible for Medicaid coverage. In 2014, if an individual loses eligibility, there will be alternatives with subsidized exchanges. Centene’s Exchange solutions will help to eliminate a gap in coverage and ensure little or no disruption to the beneficiary’s provider relationships as he or she moves up or down in income level. Our Exchange participation will also be instrumental when assisting families with only certain members eligible for Medicaid. These families will now have healthcare options for their entire household under the Centene umbrella. According to the Urban Institute, nearly a third of the 96 million people who will qualify for either Medicaid or Exchange subsidies will change eligibility from one year to the next. centene corporation 2012 annual report 14 15 Quarterly seleCted finanCial information (unaudited) For the Quarter Ended, 2012 seleCted finanCial information Year ended December 31 (in thousands, except share data and membership data) March 31 June 30 September 30 December 31 (in thousands, except share data) 2012 2011 2010 2009 2008 Total revenues $ 1,712,148 $ 2,110,746 $ 2,448,121 $ 2,396,597 Net earnings attributable to Centene Corporation common shareholders: $ 23,978 $ (34,999 ) $ 3,819 $ 9,061 Net earnings (loss) per share attributable to Centene Corporation: Basic earnings (loss) per common share Diluted earnings (loss) per common share Health Benefits Ratio General & Administrative Expense Ratio Period end at-risk membership $ $ 0.47 0.45 $ $ ) (0.68 (0.68 ) $ $ 0.07 0.07 $ $ 88.2% 9.8% 92.9% 8.2% 93.3% 8.2% 0.17 0.17 91.3% 8.4% 2,149,500 2,397,500 2,503,000 2,560,300 (in thousands, except share data and membership data) March 31 June 30 September 30 December 31 For the Quarter Ended, 2011 Revenues Premium Service Premium and service revenues Premium tax Total revenues Expenses Medical costs Cost of services General and administrative expenses Premium tax expense Impairment loss Total operating expenses Earnings (loss) from operations Total revenues $ 1,216,357 $ 1,315,014 $ 1,302,035 $ 1,507,176 Other income (expense) Net earnings attributable to Centene Corporation common shareholders: $ 23,745 $ 28,374 $ 28,987 $ 30,112 Net earnings per share attributable to Centene Corporation: Basic earnings per common share Diluted earnings per common share Health Benefits Ratio General & Administrative Expense Ratio Period end at-risk membership $ 0.48 $ 0.57 $ 0.58 $ 0.60 $ 0.46 $ 0.54 $ 0.55 $ 0.57 84.9% 12.0% 84.8% 11.2% 85.0% 11.3% 85.9% 11.0% 1,542,500 1,580,500 1,615,700 1,816,000 Investment and other income Debt extinguishment costs Interest expense Earnings (loss) from continuing operations, before income tax expense Income tax expense (benefit) Earnings (loss) from continuing operations, net of income tax expense Discontinued operations, net of income tax expense (benefit) of $ 0, $ 0, $4,388, $(1,204), and $(281), respectively Net earnings Noncontrolling interest Net earnings attributable to Centene Corporation Amounts attributable to Centene Corporation common shareholders Earnings from continuing operations, net of income tax expense Discontinued operations, net of income tax expense (benefit) Net earnings Net earnings (loss) per common share attributable to Centene Corporation Basic: Continuing operations Discontinued operations Basic earnings per common share Diluted: Continuing operations Discontinued operations Diluted earnings per common share Weighted average number of common shares outstanding Basic Diluted (in thousands) Consolidated Balance Sheet Data Cash and cash equivalents Investments and restricted deposits Total Assets Medical Claims Liability Long-term debt Total stockholders’ equity $ 8,126,205 $ 5,077,242 $ 4,192,172 $ 3,786,525 $ 3,199,360 112,742 103,765 91,661 91,758 74,953 8,238,947 5,181,007 4,283,833 3,878,283 3,274,313 428,665 159,575 164,490 224,581 90,202 8,667,612 5,340,582 4,448,323 4,102,864 3,364,515 7,446,037 4,324,746 3,584,452 3,230,131 2,704,647 87,705 704,604 428,354 28,033 78,114 587,004 160,394 — 63,919 477,765 165,118 — 60,789 447,921 225,888 — 56,920 380,421 90,966 — 8,694,733 5,150,258 4,291,254 3,964,729 3,232,954 (27,121 ) 190,324 157,069 138,135 131,561 35,957 — (20,460 ) (11,624 ) (329 ) (11,295 ) — (11,295 ) (13,154 ) 13,369 ) (8,488 ) (20,320 174,885 66,522 108,363 — 108,363 ) (2,855 15,205 — ) (17,992 154,282 59,900 94,382 3,889 98,271 3,435 15,691 — (16,318 ) 137,508 48,841 88,667 (2,422 ) 86,245 2,574 21,728 — ) (16,673 136,616 52,435 84,181 (684 ) 83,497 — 1,859 $ 111,218 $ 94,836 $ 83,671 $ 83,497 1,859 $ 111,218 $ 90,947 $ 86,093 $ 84,181 — — 3,889 (2,422 ) (684 ) 1,859 $ 111,218 $ 94,836 $ 83,671 $ 83,497 0.04 $ 2.22 $ 1.87 $ 2.00 $ — — 0.04 $ 2.22 $ 0.03 $ 2.12 $ — — 0.03 $ 2.12 $ 0.08 1.95 1.80 0.08 1.88 $ $ $ (0.06 ) 1.94 $ 1.94 $ (0.05 ) 1.89 $ 1.95 (0.02 ) 1.93 1.90 ) (0.02 1.88 $ $ $ $ $ $ $ 51,509,366 50,198,954 48,754,947 43,034,791 43,275,187 53,714,375 52,474,238 50,447,888 44,316,467 44,398,955 2012 2011 2010 2009 2008 December 31 $ 843,952 $ 573,698 $ 434,166 $ 403,752 $ 379,099 788,634 663,457 639,983 585,183 451,058 2,741,682 2,190,336 1,943,882 1,702,364 1,451,152 926,302 535,481 953,767 607,985 348,344 936,419 456,765 327,824 797,055 470,932 307,085 619,427 384,360 264,637 501,272 centene corporation 2012 annual report 16 other information transfer agent 1 Corporate information stoCk performanCe graph dollars Our common stock has been listed for trading on the New York Stock Exchange under the symbol “CNC” since October 16, 2003. The graph to the right compares the cumulative total stockholder return on our common stock for the period from December 31, 2007 to December 31, 2012, with the cumulative total return of the New York Stock Exchange Composite Index, and the Morgan Stanley Health Care Payor Index over the same period. The graph assumes an investment of $100 on December 31, 2007 in our common stock (at the last reported sale price on such date), the New York Stock Exchange Composite Index and the Morgan Stanley Health Care Payor Index, and assumes the reinvestment of any dividends. 165 130 95 60 25 2007 2008 2009 2010 2011 2012 Centene Corporation Morgan Stanley Health Care Payor Index New York Stock Exchange Composite Index board of direCtors Michael F. Neidorff Chairman, President and CEO; Centene Corporation Robert K. Ditmore Former President and COO; United Healthcare Corporation Orlando Ayala Corporate Vice President, Chairman Emerging Markets, Chief Strategist, National Competitiveness; Microsoft Corporation Frederick H. Eppinger President and CEO; The Hanover Insurance Group, Inc. Richard A. Gephardt Chief Executive Officer of Gephardt and Associates; Former Majority Leader of the U.S. House of Representatives Pamela A. Joseph Vice Chairman; U.S. Bancorp John R. Roberts Retired Regional Managing Partner; Arthur Andersen LLP David L. Steward Founder and Chairman of the Board; World Wide Technology, Inc. Tommy G. Thompson Former Health and Human Services Secretary; Former Governor of Wisconsin senior management Michael F. Neidorff Chairman, President and Chief Executive Officer Jason M. Harrold Executive Vice President, Specialty Company Business Unit Donald G. Imholz Executive Vice President and Chief Information Officer William N. Scheffel Executive Vice President, Chief Financial Officer and Treasurer K. Rone Baldwin Executive Vice President, Insurance Group Business Unit Robert T. Hitchcock Executive Vice President, Health Plan Business Unit Edmund E. Kroll, Jr. Senior Vice President, Finance and Investor Relations Jeffrey A. Schwaneke Senior Vice President, Corporate Controller and Chief Accounting Officer Carol E. Goldman Executive Vice President and Chief Administrative Officer Jesse N. Hunter Executive Vice President, Chief Business Development Officer C. David Minifie Executive Vice President, Business Integration & Chief Marketing Officer Keith H. Williamson Executive Vice President, General Counsel and Secretary Included in this 2012 Annual Review are financial and operating highlights and summary financial statements. For complete financial statements, including notes, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the Securities and Exchange Commission (the “2012 Form 10-K”), which also includes Management’s Discussion and Analysis of Financial Condition and Results of Operations. This 2012 Annual Review, together with our 2012 Form 10-K, constitute our annual report to security holders for purposes of Rule 14a-3(b) of the Securities Exchange Act of 1934, as amended. Our 2012 Form 10-K may be obtained by accessing the investor section of our Company’s Web site at www.centene.com, or by going to the SEC’s Web site at www.sec.gov. form 10-K The Company has filed an Annual Report on Form 10-K for the year ended December 31, 2012, with the Securities and Exchange Commission. Stockholders may obtain a copy of this report, without charge, by writing: Investor Relations Centene Corporation 7700 Forsyth Boulevard St. Louis, MO 63105 www.centene.com Broadridge Corporate Issuer Solutions, Inc. 1717 Arch Street, Suite 1300 Philadelphia, PA 19103 855.627.5087 www.broadridge.com/TransferAgent annual meeting The Annual Meeting of Stockholders will be held on Tuesday, April 23, 2013, at 10:00 a.m. at Centene Corporation, 7700 Forsyth Boulevard, St. Louis, MO 63105 in the Auditorium, 314.725.4477. DiViDenD PoliCY The Company has not paid any dividends on its common stock and expects that its earnings will continue to be retained for use in the operation and expansion of its business. Common stoCK information Centene common stock is traded and quoted on the New York Stock Exchange under the symbol “CNC”. 2012 Stock Price 2011 Stock Price High Low High Low First Quarter $ 50.36 $ 38.97 $ 32.99 $ 25.08 Second Quarter $ 50.98 $ 24.26 $ 39.25 $ 31.34 Third Quarter $ 42.46 $ 28.86 $ 39.35 $ 25.64 Fourth Quarter $ 46.44 $ 34.73 $ 40.81 $ 25.28 Cautionary statement on forward-looking statements All statements, other than statements of current or historical fact, contained in of important factors, including (i) our ability to accurately predict and effectively this 2012 Annual Review and, in particular, in the Chairman’s Letter, are forward- manage health benefits and other operating expenses; (ii) competition; (iii) looking statements. We have attempted to identify these statements by terminology membership and revenue projections; (iv) timing of regulatory contract approval; (v) including “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “seek,” changes in healthcare practices; (vi) changes in federal or state laws or regulations, “target,” “goal,” “may,” “will,” “should,” “can,” “continue” and other similar words or including the Patient Protection and Affordable Care Act and the Health Care and expressions in connection with, among other things, any discussion of future operating Education Affordability Reconciliation Act and any regulations enacted thereunder; or financial performance. In particular, these statements include statements about our (vii) inflation; (viii) provider contract changes; (ix) new technologies; (x) reduction in market opportunity, our growth strategy, competition, expected activities and future provider payments by governmental payors; (xi) major epidemics; (xii) disasters and acquisitions, investments and the adequacy of our available cash resources. Readers numerous other factors affecting the delivery and cost of healthcare; (xiii) the are cautioned that matters subject to forward-looking statements involve known and expiration, cancellation or suspension of our Medicaid managed care contracts by unknown risks and uncertainties, including economic, regulatory, competitive and state governments; (xiv) availability of debt and equity financing, on terms that are other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels favorable to us; (xv) general economic and market conditions; as well as those factors disclosed in our publicly filed documents. We disclaim any current intention or of activity, performance or achievements expressed or implied by these forward- obligation to update or revise any forward-looking statements, whether as a result of looking statements. These statements are not guarantees of future performance and new information, future events or otherwise. Due to these important factors and risks, are subject to risks, uncertainties and assumptions. All forward-looking statements we cannot give assurances with respect to our future premium levels or our ability to included in this annual review are based on information available to us on the date of control our future medical costs. its publication. Actual results may differ from projections or estimates due to a variety centene corporation 2012 annual report 7700 Forsyth Boulevard St. Louis, MO 63105 p 314.725.4477 f 314.445.0218 www.centene.com
Continue reading text version or see original annual report in PDF format above