01—Abstract
Summary
Summary of the 10-K filed February 21, 2014. Cited figures are marked; the original filing is the authoritative source.
Centene Corporation, a diversified healthcare enterprise, reported strong growth in its 2013 fiscal year, driven by expansion in existing and new state markets and acquisitions.
The company primarily serves government-sponsored healthcare programs, with Medicaid accounting for 75% of its at-risk membership. Premium and service revenues grew by 37% to $10.5 billiona, with a net earnings of $165.1 million.
The company's membership base expanded by 12.3%b to 2.7 million members, reflecting successful market penetration and new contract wins across several states, including California, Kansas, and New Hampshire. Centene's strategy emphasizes expanding its multi-line managed care approach, diversifying its service offerings, and leveraging its centralized infrastructure for efficiency.
02—Key points
Key Highlights
- Revenue growth of 37% to $10.5 billion in 2013, with total at-risk membership reaching 2.7 million.
- Significant expansion into new states and existing markets, including California, Kansas, and New Hampshire.
- Acquisition of AcariaHealth, a specialty pharmacy company, in April 2013, and a majority interest in U.S. Medical Management in January 2014, diversifying services and revenue streams.
- Focus on government-sponsored programs, with Medicaid comprising 75% of its at-risk membership.
- Health Benefits Ratio improved to 88.6% in 2013 from 89.6% in 2012, indicating better cost management.
- Strong operational cash flow of $382.5 million, demonstrating solid financial health.
- Company is subject to significant government regulation and relies heavily on state contracts, which are subject to renewal and potential changes.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 21, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $10.86B$8.11B | +33.9% |
| Operating Expenses | $10.59B$8.00B | +32.3% |
| Operating Income | $277.00M$108.00M | +156.5% |
| Interest Expense | $27.00M$20.00M | +35.0% |
| Net Income | $165.00M$2.00M | +8150.0% |
| EPS (Basic) | $0.76$0.01 | +7500.0% |
| EPS (Diluted) | $0.73$0.01 | +7250.0% |
| Shares Outstanding (Basic) | 216.51M206.04M | +5.1% |
| Shares Outstanding (Diluted) | 224.99M214.86M | +4.7% |
05—Questions
Frequently Asked Questions
What are Centene's primary sources of revenue?
Centene's primary sources of revenue are premiums received from government-sponsored healthcare programs, predominantly Medicaid (75% of at-risk membership), CHIP, and other state and federal programs. The company also generates revenue from its Specialty Services segment, which includes behavioral health, correctional healthcare, and pharmacy benefits management.
How did Centene perform financially in 2013?
In 2013, Centene experienced substantial growth, with premium and service revenues increasing by 37% to $10.5 billion and net earnings reaching $165.1 million. The company also saw a 12.3% increase in its at-risk membership to 2.7 million members.
What are the key growth strategies for Centene?
Centene's growth strategy focuses on increasing penetration in existing state markets, diversifying its business lines through acquisitions and new service offerings, addressing emerging state needs, developing and acquiring additional state markets, and leveraging its established infrastructure to enhance operating efficiencies and maintain operational discipline.
What are the main risks facing Centene according to the filing?
Key risks include reductions in government funding or changes to eligibility requirements for its programs, failure to accurately estimate and manage medical costs, the impact of healthcare reform legislation (like the ACA), regulatory changes, competition, and the potential termination or non-renewal of government contracts.
06—Continue