8-KEarnings & ResultsExhibits & Filings

CENTENE CORP 8-K Report, Financial Results (Oct 15, 2008)

Filed October 15, 2008For Securities:CNC

Summary

Centene Corporation (CNC) filed an 8-K on October 15, 2008, to report on its third-quarter 2008 financial results and condition. The most significant disclosure pertains to impairment losses expected to impact diluted earnings per share (EPS) by $0.07. These losses stem primarily from Centene's investment in the Reserve Primary money market fund, which held securities backed by Lehman Brothers Holdings, Inc. The company reassured investors that these impairments represent a small portion (less than 1%) of its total investment portfolio and that it anticipates recovering approximately 95% of its investment in the Reserve Primary Fund.

Key Highlights

  • 1Centene Corporation expects third-quarter 2008 results to include $0.07 per diluted share in impairment losses.
  • 2The impairment losses are primarily due to an investment in the Reserve Primary money market fund.
  • 3The Reserve Primary Fund's NAV declined due to its holdings of securities backed by Lehman Brothers Holdings, Inc.
  • 4The impairment represents less than 1% of Centene's investment portfolio as of June 30, 2008.
  • 5Centene expects to recover approximately 95% of its Reserve Primary Fund investments.
  • 6The company maintains adequate liquidity and expects to remain well in excess of capital adequacy levels.
  • 7Centene reaffirms its 2008 diluted EPS guidance of $1.87 to $1.97, excluding the impairment charge.

Frequently Asked Questions

The impairment losses are primarily due to Centene's investment in the Reserve Primary money market fund, which experienced a decline in its Net Asset Value (NAV) below $1.00 per share because it held securities backed by Lehman Brothers Holdings, Inc.

The impairment losses are expected to reduce diluted EPS by $0.07 and represent less than 1% of Centene's investment portfolio as of June 30, 2008. The company also anticipates recovering approximately 95% of these specific investments.

Yes, Centene stated that it has more than adequate liquidity to fund its operations and its total investment portfolio of $709.9 million as of June 30, 2008, puts the company well in excess of required capital adequacy levels under state insurance regulations.

No, Centene is reaffirming its previous 2008 diluted EPS guidance of $1.87 to $1.97, excluding the impact of the noted $0.07 impairment charge.