10-KPeriod: FY2015

CENTENE CORP Annual Report, Year Ended Dec 31, 2015

Filed February 22, 2016For Securities:CNC

Summary

Centene Corporation's 2015 10-K filing highlights a year of significant growth, marked by a 36% increase in premium and service revenues to $21.3 billion and a 33% rise in net earnings to $356 million, primarily driven by membership expansion across government-sponsored programs like Medicaid and CHIP. The company reported a substantial 26% increase in total membership, reaching 5.1 million by year-end. A pivotal development during the year was the announcement of Centene's definitive merger agreement with Health Net, Inc., a transaction valued at approximately $5.5 billion. This strategic move aims to significantly expand Centene's scale and market reach, particularly into Medicare Advantage and federal government contracts. The company emphasizes its decentralized, local approach supported by a centralized infrastructure as a key competitive strength, enabling it to effectively serve under-insured and uninsured populations.

Financial Highlights

52 data points
Beta

Revenue

$22.76B

Net Income

$355.00M

1.6% Net Margin

EPS (Diluted)

$1.44

Total Assets

$7.34B

Cash & Equivalents

$1.76B

Free Cash Flow

$508.00M

Financial Statements
Beta
Revenue$22.76B
SG&A Expenses$1.80B
Operating Expenses$22.05B
Operating Income$705.00M
Interest Expense$43.00M
Net Income$355.00M
EPS (Basic)$1.49
EPS (Diluted)$1.44
Shares Outstanding (Basic)238.20M
Shares Outstanding (Diluted)246.13M

Key Highlights

  • 1Achieved 36% revenue growth, reaching $21.3 billion in premium and service revenues for 2015.
  • 2Increased net earnings by 33% to $356 million, with diluted EPS growing to $2.89.
  • 3Expanded managed care membership by 26% to 5.1 million members by year-end 2015.
  • 4Announced a $5.5 billion merger agreement with Health Net, Inc., a significant strategic move to enhance scale and market presence.
  • 5Demonstrated strong operational performance with Adjusted EBITDA growing 49% to $948 million.
  • 6Continued to diversify its business lines, with specialty services showing significant revenue growth.
  • 7Maintained a strong focus on a localized approach with centralized support, contributing to operational efficiency and member satisfaction.

Frequently Asked Questions

In 2015, Centene Corporation experienced substantial growth, with premium and service revenues increasing by 36% to $21.3 billion and net earnings from continuing operations rising by 33% to $356 million. Diluted earnings per share (EPS) grew to $2.89. The company also saw a 26% increase in its managed care membership, reaching 5.1 million.

Centene announced a definitive agreement to acquire Health Net, Inc. for approximately $5.5 billion. This strategic acquisition is expected to significantly expand Centene's market presence, particularly in Medicare Advantage and federal government contracts, and will add substantial membership and revenue to the company, reinforcing its position as a leading healthcare enterprise focused on government-sponsored programs.

Centene employs a unique 'localized approach with centralized support infrastructure.' This means it has locally-based staff to provide member and provider services, ensuring cultural sensitivity and accessibility, while leveraging a centralized system for functions like finance, IT, and claims processing. This dual approach helps manage costs, integrate growth, and deliver quality care tailored to community needs.

Centene operates in two main segments: Managed Care, which accounts for 90% of revenues and includes government-sponsored programs like Medicaid, CHIP, and Health Insurance Marketplaces, and Specialty Services, which comprises diversified healthcare services and products. The primary revenue driver is premium revenue from government contracts.