10-KPeriod: FY2021

CENTENE CORP Annual Report, Year Ended Dec 31, 2021

Filed February 22, 2022For Securities:CNC

Summary

Centene Corporation (CNC) reported a significant year of growth and strategic acquisitions in its 2021 10-K filing. Total revenues reached $126.0 billion, marking a 13% increase year-over-year, driven primarily by Medicaid membership growth and expansion in Medicare offerings. A key strategic move was the acquisition of Magellan Health for approximately $2.6 billion, aimed at expanding Centene's integrated healthcare solutions for complex populations. The company also reported strong operating cash flows of $4.2 billion, demonstrating its ability to generate cash from its core business activities. Despite the revenue growth, the company's net earnings attributable to Centene decreased by 25% to $1.3 billion, or $2.28 per diluted share, from $1.8 billion in the prior year. This decrease was largely due to a $1.25 billion legal settlement reserve related to its pharmacy benefits manager subsidiary, Envolve. Looking ahead, Centene is focused on its Value Creation Plan, designed to drive margin expansion through SG&A savings, gross margin improvements, and strategic capital management, including share repurchases and portfolio optimization.

Financial Highlights

54 data points
Beta

Revenue

$125.98B

11.5% Gross Margin

Net Income

$1.35B

1.1% Net Margin

EPS (Diluted)

$2.28

Total Assets

$78.38B

Cash & Equivalents

$13.21B

Free Cash Flow

$3.29B

Financial Statements
Beta
Revenue$125.98B
Cost of Revenue$4.89B
Gross Profit$14.49B
SG&A Expenses$9.60B
Operating Expenses$124.20B
Operating Income$1.78B
Interest Expense$665.00M
Net Income$1.35B
EPS (Basic)$2.31
EPS (Diluted)$2.28
Shares Outstanding (Basic)582.83M
Shares Outstanding (Diluted)590.52M

Key Highlights

  • 1Total revenues increased by 13% to $126.0 billion in 2021.
  • 2Managed care membership grew by 4% to 26.6 million by year-end 2021.
  • 3Acquired Magellan Health in January 2022 for approximately $2.6 billion to enhance integrated healthcare solutions.
  • 4Operating cash flow was strong at $4.2 billion for the year.
  • 5Net earnings attributable to Centene Corporation decreased by 25% to $1.3 billion, or $2.28 per diluted share, primarily due to a significant legal settlement reserve.
  • 6The company is executing a Value Creation Plan focused on SG&A savings, gross margin expansion, and strategic capital management.
  • 7Medicare membership saw a significant increase, contributing to revenue growth.

Frequently Asked Questions

In 2021, Centene reported total revenues of $126.0 billion, a 13% increase year-over-year, driven by membership growth and acquisitions. However, net earnings attributable to Centene decreased by 25% to $1.3 billion, or $2.28 per diluted share, mainly due to a large legal settlement reserve.

Centene's key strategic initiatives included the significant acquisition of Magellan Health for $2.6 billion, which aims to bolster its integrated healthcare offerings. The company also continued to focus on its Value Creation Plan, designed to improve operational efficiencies, expand margins, and manage capital strategically.

Centene experienced a 4% increase in managed care membership, reaching 26.6 million by the end of 2021. This growth was primarily driven by increases in Medicaid membership and expansion in Medicare offerings.

The primary driver for the decrease in net earnings was a significant legal settlement reserve of $1.25 billion related to services provided by Envolve, its pharmacy benefits manager subsidiary. This reserve impacted the company's profitability for the year.

Centene is focused on executing its Value Creation Plan to drive sustainable profitable growth. The company anticipates continued growth through its diversified business lines, strategic acquisitions, and efforts to improve operational efficiency and cost management.