ST. LOUIS, Feb. 9, 2016 /PRNewswire/ -- Centene Corporation (NYSE: CNC) today announced its financial results for the fourth quarter and year ended December 31, 2015, which are consistent with the results provided in our press release dated January 26, 2016. The following discussions, with the exception of cash flow information, are in the context of continuing operations.


                                            2015 Results
                                            ------------

                                      Q4              Full Year
                                     ---              ---------

    Premium and Service Revenues (in
     millions)                               $5,857                   $21,265

    Consolidated Health Benefits
     Ratio                            88.0%                     88.9%

    General & Administrative expense
     ratio excluding Health Net
     merger related expenses           8.7%                      8.5%

    Diluted earnings per share (EPS)          $0.91                     $2.89

    Diluted EPS excluding Health Net
     merger related expenses                  $0.95                     $3.03

    Total cash flow from operations
     (in millions)                             $201                      $658
    -------------------------------            ----                      ----

Michael F. Neidorff, Centene's Chairman and Chief Executive Officer, stated, "2015 marked another year of growth and accomplishment for Centene - capped off by an especially strong fourth quarter. We look forward to closing our Health Net acquisition and maintaining this positive momentum in 2016 and beyond."

Fourth Quarter and Full Year Highlights


    --  December 31, 2015 managed care membership of 5.1 million, an increase of
        over 1.0 million members, or 26% over 2014.
    --  Premium and service revenues for the fourth quarter of $5.9 billion,
        representing 33% growth compared to the fourth quarter of 2014 and $21.3
        billion for the full year 2015, representing 36% growth year over year.
    --  Health Benefits Ratio of 88.0% for the fourth quarter of 2015, compared
        to 89.3% in the fourth quarter of 2014 and 88.9% for the full year 2015
        compared to 89.3% for the full year 2014.
    --  General and Administrative expense ratio excluding Health Net merger
        related expenses of 8.7% for the fourth quarter of 2015, compared to
        8.2% in the fourth quarter of 2014 and 8.5% for the full year 2015
        compared to 8.4% for 2014.
    --  Operating cash flow of $201 million and $658 million for the fourth
        quarter and full year of 2015, respectively, representing 1.8 times net
        earnings for both periods.
    --  Diluted EPS for the fourth quarter of 2015 of $0.91, or $0.95 excluding
        $0.04 of diluted EPS associated with Health Net merger related expenses,
        compared to $0.87 in 2014, or $0.63 when excluding a $0.24 benefit for
        recording the health insurer fee reimbursement for Texas for all of 2014
        in the fourth quarter.

Other Events


    --  In February 2016, our Nebraska subsidiary, Nebraska Total Care, was
        recommended by the Nebraska Department of Health and Human Services'
        Division of Medicaid and Long-Term Care as one of three managed care
        organizations to administer its new Heritage Health program for Medicaid
        and CHIP enrollees. The contract is expected to commence in the first
        quarter of 2017, pending regulatory approvals.
    --  In February 2016, Centurion of Florida, LLC reached a formal agreement
        to provide correctional healthcare services for the Florida Department
        of Corrections in Regions 1, 2 and 3. The contract is expected to
        commence in the second quarter of 2016.
    --  In January 2016, the Company announced the pricing of an offering by its
        a wholly owned subsidiary, Centene Escrow Corporation (Escrow Issuer),
        of $1.4 billion of 5.625% Senior Notes due 2021 at par and $1.0 billion
        of 6.125% Senior Notes due 2024 at par. The Company intends to use the
        net proceeds of the offering, along with borrowings under the revolving
        credit facility and cash on hand, to fund the cash consideration for the
        Health Net merger, to pay merger and offering related fees and expenses,
        and for general corporate purposes. The proceeds of the debt issuance
        will be held in escrow until the closing of the Health Net merger. If
        the Health Net merger is not consummated, the Escrow Issuer will be
        required to redeem each series of Notes at a redemption price equal to
        100% of the principal amount of such series of Notes, plus accrued and
        unpaid interest to the redemption date.
    --  In January 2016, the governor of Louisiana signed an executive order to
        expand Medicaid coverage under the Affordable Care Act by July 1, 2016.
    --  In December 2015, our Louisiana subsidiary, Louisiana Healthcare
        Connections, began operating under an expanded contract to include
        behavioral health benefits.
    --  In December 2015, our Mississippi subsidiary, Magnolia Health, began
        operating under an expanded contract to include the inpatient benefit
        for Medicaid and ABD members.

Accreditations & Awards


    --  In January 2016, our Arkansas subsidiary, Arkansas Health & Wellness
        Solutions, received Accreditation from the National Committee for
        Quality Assurance for its Health Insurance Marketplace Exchange plan,
        Ambetter of Arkansas.
    --  In December 2015, two of our subsidiaries were recognized for their
        programs by the Medicaid Health Plans of America. U.S. Medical
        Management received the Long Term Services and Supports Award for their
        Home-Based Primary Care Program, and our Ohio subsidiary, Buckeye Health
        Plan, received the Maternal Health Award for their Addiction in
        Pregnancy Program.
    --  In November 2015, Centene and Cenpatico received national recognition by
        Modern Healthcare and Advertising Age for their anti-bullying campaign,
        "No Bullying Zone." The companies received the Gold Award for Community
        Outreach Campaign of the Year at Modern Healthcare's Marketing Impact
        Awards.

Membership

The following table sets forth the Company's membership by state for its managed care organizations:


                                                December 31,
                                                ------------

                                                 2015                    2014
                                                 ----                    ----

    Arizona                                   440,900                 204,000

    Arkansas                                   41,900                  38,400

    California                                186,000                 163,900

    Florida                                   510,400                 425,700

    Georgia                                   408,600                 389,100

    Illinois                                  207,500                  87,800

    Indiana                                   282,100                 197,700

    Kansas                                    141,000                 143,300

    Louisiana                                 381,900                 152,900

    Massachusetts                              61,500                  48,400

    Michigan                                    4,800                       -

    Minnesota                                   9,600                   9,500

    Mississippi                               302,200                 108,700

    Missouri                                   95,100                  71,000

    New Hampshire                              71,400                  62,700

    Ohio                                      302,700                 280,100

    Oregon                                     98,700                       -

    South Carolina                            104,000                 109,700

    Tennessee                                  20,000                  21,000

    Texas                                     983,100                 971,000

    Vermont                                     1,700                       -

    Washington                                209,400                 194,400

    Wisconsin                                  77,100                  83,200
                                               ------                  ------

    Total at-risk membership                4,941,600               3,762,500

    Non-risk membership                       166,300                 298,400
                                              -------                 -------

    Total                                   5,107,900               4,060,900
                                            =========               =========

At December 31, 2015, the Company served 449,000 members in Medicaid expansion programs in eight states compared to 201,300 members at December 31, 2014 in six states, included in the table above.

The following table sets forth our membership by line of business:


                                            December 31,
                                            ------------

                                             2015                    2014
                                             ----                    ----

    Medicaid                            3,497,500               2,754,900

    CHIP & Foster Care                    260,900                 222,700

    ABD, Medicare & Duals                 446,000                 392,700

    Long Term Care (LTC)                   75,000                  60,800

    Health Insurance Marketplaces         146,100                  74,500

    Hybrid Programs (1)                         -                 18,900

    Behavioral Health                     456,800                 197,000

    Correctional Healthcare
     Services                              59,300                  41,000
                                           ------                  ------

    Total at-risk membership            4,941,600               3,762,500

    Non-risk membership                   166,300                 298,400
                                          -------

    Total                               5,107,900               4,060,900
                                        =========               =========



    1 In February 2015, hybrid
     programs were converted
     to Medicaid expansion
     contracts.

The following table identifies our dual-eligible membership by line of business. The membership tables above include these members.


                                     December 31,
                                     ------------

                                      2015                   2014
                                      ----                   ----

    ABD                            112,300                118,300

    LTC                             55,100                 35,900

    Medicare                        11,100                  7,200

    Medicaid / Medicare Duals       26,300                  3,200
                                    ------                  -----

    Total                          204,800                164,600
                                   =======                =======

The reduction in ABD is the result of members transitioning to Medicaid / Medicare Duals.

Statement of Operations: Three Months Ended December 31, 2015


    --  For the fourth quarter of 2015, Premium and Service Revenues increased
        33% to $5.9 billion from $4.4 billion in the fourth quarter of 2014. The
        increase was primarily a result of the impact from expansions,
        acquisitions or new programs in many of our states.
    --  Consolidated HBR of 88.0% for the fourth quarter of 2015 represents a
        decrease from 89.3% in the comparable period in 2014 and a decrease from
        89.0% in the third quarter of 2015. The year over year HBR decrease is
        primarily attributable to improvement in the overall HBR for higher
        acuity membership, premium rate increases and a milder flu season in the
        fourth quarter of this year. Sequentially, consolidated HBR decreased
        from 89.0% in the third quarter of 2015, reflecting rate increases and
        adjustments received during the third and fourth quarters.
    --  The following table compares the results for new business and existing
        business for the quarters ended December 31:


                                   2015                     2014
                                   ----                     ----

    Premium and Service
     Revenue

    New business                    20%                              30%

    Existing business               80%                              70%


    HBR

    New business                  88.2%                            89.4%

    Existing business             88.0%                            89.2%

-- The new business HBR decreased compared to last year primarily due to the movement of the Florida LTC and MMA business, which operated at a higher HBR, into existing business.

    --  Consolidated G&A expense ratio for the fourth quarter of 2015 was 8.8%,
        compared to 8.2% in the prior year. The G&A ratio for the three months
        ended December 31, 2015 was 8.7% excluding the impact of the Health Net
        merger related expenses. The increase over the prior year is primarily
        related to the expansion of our Health Insurance Marketplace business
        which operates at a higher G&A ratio and incurred higher open enrollment
        costs in the fourth quarter of the current year.
    --  Diluted earnings per share for the fourth quarter of 2015 of $0.91, or
        $0.95 excluding $0.04 of diluted EPS associated with Health Net merger
        related expenses. This compares to diluted EPS for the fourth quarter of
        2014 of $0.87, or $0.63 when excluding a $0.24 benefit for recording the
        health insurer fee reimbursement for Texas for all of 2014 in the fourth
        quarter.

Statement of Operations: Year Ended December 31, 2015


    --  Premium and service revenues increased 36% in the year ended December
        31, 2015 over the corresponding period in 2014 primarily as a result of
        the impact from expansions or new programs in many of our states,
        particularly, Florida, Illinois, Indiana, Louisiana, Mississippi, Ohio
        and Texas.
    --  The consolidated HBR for the year ended December 31, 2015 was 88.9%, a
        decrease of 40 basis points over the comparable period in 2014. The
        decrease compared to last year is primarily attributable to improvement
        in medical expense in the high acuity populations (LTC/MMP) and
        membership growth in Medicaid expansion programs and Health Insurance
        Marketplace, which operate at a lower HBR than traditional Medicaid
        businesses.
    --  The consolidated G&A expense ratio excluding the Health Net merger
        expenses for the year ended December 31, 2015 was 8.5% compared to 8.4%
        in 2014. The increase over prior year is primarily related to the
        expansion of our Health Insurance Marketplace business which operates at
        a higher G&A ratio and incurred higher open enrollment costs in the
        fourth quarter of the current year.
    --  Diluted earnings per share of $2.89, or $3.03 excluding $0.14 of diluted
        EPS associated with Health Net merger related expenses. This compares to
        diluted EPS for the year ended December 31, 2014 of $2.23.

Balance Sheet and Cash Flow

At December 31, 2015, the Company had cash, investments and restricted deposits of $4.0 billion, including $78 million held by its unregulated entities. Medical claims liabilities totaled $2.3 billion. The Company's days in claims payable was 44.3. Total debt was $1.2 billion, which includes $225 million of borrowings on the $500 million revolving credit facility at quarter end. Debt to capitalization was 34.7% at December 31, 2015, excluding the $67 million non-recourse mortgage note.

Cash flow from operations for the three months ended December 31, 2015, was $201 million, or 1.8 times net earnings.

A reconciliation of the Company's change in days in claims payable from the immediately preceding quarter-end is presented below:





    Days in claims payable,
     September 30, 2015              44.5

    Timing of claim payments        (0.2)
                                     ----

    Days in claims payable,
     December 31, 2015               44.3
                                     ====

Outlook

For 2016 guidance purposes, the Company is providing combined guidance for Centene and Health Net and has adjusted the guidance to assume the Health Net transaction closes on March 1, 2016. The Health Net transaction remains subject to California regulatory approval and the Company continues to expect the transaction to close early in 2016. The guidance amounts are subject to adjustment, dependent on the actual closing date. The table below depicts the Company's annual guidance for 2016.


                                 Full Year 2016
                                 --------------

                                  Low                High
                                  ---                ----

    Total Revenues (in billions)               $40.0      $40.8

    GAAP diluted EPS                           $2.80      $3.15

    Adjusted diluted EPS(1)                    $4.05      $4.40



    (1)Adjusted earnings per diluted
     share excludes approximately
     $0.70 to $0.75 per diluted
     share of Health Net merger
     related expenses and total
     intangible amortization
     associated with acquisitions of
     $0.50 to $0.55 per diluted
     share.

The guidance in the table above includes the recently announced Centurion contract in Florida.

Conference Call

As previously announced, the Company will host a conference call Tuesday, February 9, 2016, at 8:30 AM (Eastern Time) to review the financial results for the fourth quarter and year ended December 31, 2015, and to discuss its business outlook. Michael Neidorff, William Scheffel and Jeffrey Schwaneke will host the conference call.

Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 in the U.S. and Canada; +1-412-902-6577 from abroad, including the following Elite Entry Number: 1765464 to expedite caller registration; or via a live, audio webcast on the Company's website at www.centene.com, under the Investors section. A webcast replay will be available for on-demand listening shortly after the completion of the call for the next twelve months or until 11:59 PM (Eastern Time) on Tuesday, February 9, 2017, at the aforementioned URL. In addition, a digital audio playback will be available until 9:00 AM Eastern Time on Tuesday, February 16, 2016, by dialing 1-877-344-7529 in the U.S. and Canada, or +1-412-317-0088 from abroad, and entering access code 10078696.

Other Information

The discussion in the third bullet under the heading "Statement of Operations: Three Months Ended December 31, 2015" contains financial information for new and existing businesses. Existing businesses are primarily 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 conversely, we have not managed for four complete quarters.

Non-GAAP Financial Presentation

The Company is providing certain non-GAAP financial measures in this release as the Company believes that these figures are helpful in allowing individuals to more accurately assess the ongoing nature of the Company's operations and measure the Company's performance more consistently. The Company uses the presented non-GAAP financial measures internally to allow management to focus on period-to-period changes in the Company's core business operations. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

About Centene Corporation

Centene Corporation, a Fortune 500 company, is a diversified, multi-national healthcare enterprise that provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals. Many receive benefits provided under Medicaid, including the State Children's Health Insurance Program (CHIP), as well as Aged, Blind or Disabled (ABD), Foster Care and Long Term Care (LTC), in addition to other state-sponsored/hybrid programs, and Medicare. The Company operates local health plans and offers a range of health insurance solutions. It also contracts with other healthcare and commercial organizations to provide specialty services including behavioral health management, care management software, correctional healthcare services, dental benefits management, in-home health services, life and health management, managed vision, pharmacy benefits management, specialty pharmacy and telehealth services.

Centene uses its investor relations website to publish important information about the Company, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene's investor relations website, http://www.centene.com/investors.

The information provided in this press release contains forward-looking statements that relate to future events and future financial performance of Centene. Subsequent events and developments may cause the Company's estimates to change. The Company disclaims any obligation to update this forward-looking financial information in the future. Readers are cautioned that matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, regulatory, competitive and other factors that may cause Centene's, Health Net's, or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Actual results may differ from projections or estimates due to a variety of important factors, including Centene's or Health Net's ability to accurately predict and effectively manage health benefits and other operating expenses and reserves; competition; membership and revenue projections; timing of regulatory contract approval; changes in healthcare practices; changes in federal or state laws or regulations, including the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act and any regulations enacted thereunder; changes in expected contract start dates; changes in expected closing dates, estimated purchase price and accretion for acquisitions. including our proposed merger with Health Net (Proposed Merger); inflation; foreign currency fluctuations; provider and state contract changes; new technologies; advances in medicine; reduction in provider payments by governmental payors; major epidemics; disasters and numerous other factors affecting the delivery and cost of healthcare; the expiration, cancellation or suspension of our or Health Net's managed care contracts by federal or state governments (including but not limited to Medicare and Medicaid); the outcome of our or Health Net's pending legal proceedings; availability of debt and equity financing, on terms that are favorable to us; and changes in economic, political and market conditions; the ultimate closing date of the Proposed Merger; the possibility that the expected synergies and value creation from the Proposed Merger will not be realized, or will not be realized with the expected time period; the risk that acquired businesses will not be integrated successfully; disruption from the Proposed Merger making it more difficult to maintain business and operational relationships; the risk that unexpected costs related to the Proposed Merger will be incurred; and the possibility that the Proposed Merger does not close, including, but not limited to, due to the failure to satisfy the closing conditions thereto as well as those factors disclosed in the Company's publicly filed documents.

This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain risk factors that may affect our business operations, financial condition and results of operations, in our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

[Tables Follow]


                                           CENTENE CORPORATION AND SUBSIDIARIES

                                               CONSOLIDATED BALANCE SHEETS

                                             (In millions, except share data)

                                                       (Unaudited)


                                                           December 31,           December 31,
                                                                2015                   2014
                                                          -------------           -------------

    ASSETS

    Current assets:

    Cash and cash equivalents                                              $1,760                     $1,610

    Premium and related receivables                               1,279                           912

    Short term investments                                          176                           177

    Other current assets                                            390                           252
                                                                    ---                           ---

    Total current assets                                          3,605                         2,951

    Long term investments                                         1,927                         1,280

    Restricted deposits                                             115                           100

    Property, software and equipment, net                           518                           445

    Goodwill                                                        842                           754

    Intangible assets, net                                          155                           120

    Other long term assets                                          177                           174
                                                                    ---                           ---

    Total assets                                                           $7,339                     $5,824
                                                                           ======                     ======

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

    Medical claims liability                                               $2,298                     $1,723

    Accounts payable and accrued expenses                           976                           768

    Return of premium payable                                       207                           236

    Unearned revenue                                                143                           168

    Current portion of long term debt                                 5                             5
                                                                    ---                           ---

    Total current liabilities                                     3,629                         2,900

    Long term debt                                                1,216                           874

    Other long term liabilities                                     170                           159
                                                                    ---                           ---

    Total liabilities                                             5,015                         3,933

    Commitments and contingencies

    Redeemable noncontrolling interest                              156                           148

    Stockholders' equity:

    Preferred stock, $0.001 par value;
     authorized 10,000,000 shares; no
     shares issued or outstanding at
     December 31, 2015 and December 31,
     2014                                                             -                            -

    Common stock, $.001 par value;
     authorized 400,000,000 shares;
     126,855,477 issued and 120,342,981
     outstanding at December 31, 2015, and
     124,274,864 issued and 118,433,416
     outstanding at December 31, 2014                                 -                            -

    Additional paid-in capital                                      956                           840

    Accumulated other comprehensive loss                           (10)                          (1)

    Retained earnings                                             1,358                         1,003

    Treasury stock, at cost (6,512,496 and
     5,841,448 shares, respectively)                              (147)                         (98)
                                                                   ----                           ---

    Total Centene stockholders' equity                            2,157                         1,744

    Noncontrolling interest                                          11                           (1)
                                                                    ---                           ---

    Total stockholders' equity                                    2,168                         1,743
                                                                  -----                         -----

    Total liabilities and stockholders'
     equity                                                                $7,339                     $5,824
                                                                           ======                     ======


                                                                                     CENTENE CORPORATION AND SUBSIDIARIES

                                                                                    CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                       (In millions, except share data)

                                                                                                 (Unaudited)


                                                           Three Months Ended                                      Year Ended
                                                              December 31,
                                                                                                                 December 31,
                                                                                                                 ------------

                                                           2015                     2014                       2015                  2014
                                                           ----                     ----                       ----                  ----

    Revenues:

    Premium                                                        $5,415                                             $4,016              $19,389  $14,198

    Service                                                 442                                  399                               1,876     1,469
                                                            ---                                  ---                               -----     -----

    Premium and service revenues                          5,857                                4,415                              21,265    15,667

    Premium tax and health
     insurer fee                                            445                                  310                               1,495       893
                                                            ---                                  ---                               -----       ---

    Total revenues                                        6,302                                4,725                              22,760    16,560
                                                          -----                                -----                              ------    ------

    Expenses:

    Medical costs                                         4,767                                3,585                              17,242    12,678

    Cost of services                                        387                                  345                               1,621     1,280

    General and administrative
     expenses                                               517                                  364                               1,826     1,314

    Premium tax expense                                     357                                  206                               1,151       698

    Health insurer fee expense                               54                                   31                                 215       126
                                                            ---                                  ---                                 ---       ---

    Total operating expenses                              6,082                                4,531                              22,055    16,096
                                                          -----                                -----                              ------    ------

    Earnings from operations                                220                                  194                                 705       464

    Other income (expense):

    Investment and other income                               8                                   10                                  35        28

    Interest expense                                       (11)                                (10)                               (43)     (35)
                                                            ---                                  ---                                 ---       ---

    Earnings from continuing
     operations, before income
     tax expense                                            217                                  194                                 697       457

    Income tax expense                                      105                                   90                                 339       196
                                                            ---                                  ---                                 ---       ---

    Earnings from continuing
     operations, net of income
     tax expense                                            112                                  104                                 358       261

    Discontinued operations, net
     of income tax expense
     (benefit) of $0, $0, $(1),
     and $1, respectively                                   (1)                                   1                                 (1)        3


    Net earnings                                            111                                  105                                 357       264

    (Earnings) loss attributable
     to noncontrolling interests                              -                                   2                                 (2)        7
                                                            ---                                 ---                                 ---       ---

    Net earnings attributable to
     Centene Corporation                                             $111                                               $107                 $355     $271
                                                                     ====                                               ====                 ====     ====


    Amounts attributable to Centene Corporation common shareholders:

    Earnings from continuing
     operations, net of income
     tax expense                                                     $112                                               $106                 $356     $268

    Discontinued operations, net
     of income tax expense
     (benefit)                                              (1)                                   1                                 (1)        3

    Net earnings                                                     $111                                               $107                 $355     $271
                                                                     ====                                               ====                 ====     ====


    Net earnings (loss) per common share attributable to Centene Corporation:

    Basic:

    Continuing operations                                           $0.94                                              $0.90                $2.99    $2.30

    Discontinued operations                              (0.01)                                0.01                              (0.01)     0.03

    Basic earnings per common
     share                                                          $0.93                                              $0.91                $2.98    $2.33
                                                                    =====                                              =====                =====    =====


    Diluted:

    Continuing operations                                           $0.91                                              $0.87                $2.89    $2.23

    Discontinued operations                              (0.01)                                0.01                              (0.01)     0.02

    Diluted earnings per common
     share                                                          $0.90                                              $0.88                $2.88    $2.25
                                                                    =====                                              =====                =====    =====


    Weighted average number of common shares outstanding:

    Basic                                           119,486,183              117,632,012                119,100,744           116,345,764

    Diluted                                         123,350,506              121,715,786                123,066,370           120,360,212


                                          CENTENE CORPORATION AND SUBSIDIARIES

                                         CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     (In millions)

                                                      (Unaudited)


                                                          Year Ended December 31,
                                                        -----------------------

                                                            2015                  2014
                                                            ----                  ----

    Cash flows from operating
     activities:

    Net earnings                                                      $357                        $264

    Adjustments to reconcile net earnings to net cash provided by operating activities

    Depreciation and
     amortization                                            111                             89

    Stock
     compensation
     expense                                                  71                             48

    Deferred income
     taxes                                                  (17)                          (42)

    Gain on
     contingent
     consideration                                          (44)                             -

    Goodwill and
     intangible
     adjustment                                               38                              -

    Changes in assets and liabilities

    Premium and
     related
     receivables                                           (360)                         (463)

    Other current
     assets                                                 (96)                           (5)

    Other assets                                             (9)                           (8)

    Medical claims
     liabilities                                             536                            609

    Unearned revenue                                        (27)                           129

    Accounts payable
     and accrued
     expenses                                                 39                            506

    Other long term
     liabilities                                              51                             89

    Other operating
     activities                                                8                              7
                                                             ---                            ---

    Net cash provided
     by operating
     activities                                              658                          1,223
                                                             ---                          -----

    Cash flows from investing
     activities:

    Capital
     expenditures                                          (150)                         (103)

    Purchases of
     investments                                         (1,321)                       (1,015)

    Sales and
     maturities of
     investments                                             669                            406

    Proceeds from
     asset sale                                                7                              -

    Investments in
     acquisitions,
     net of cash
     acquired                                               (18)                         (136)
                                                             ---                           ----

    Net cash used in
     investing
     activities                                            (813)                         (848)
                                                            ----                           ----

    Cash flows from financing
     activities:

    Proceeds from
     exercise of
     stock options                                            13                              8

    Proceeds from
     borrowings                                            1,925                          1,875

    Payment of long
     term debt                                           (1,583)                       (1,674)

    Excess tax
     benefits from
     stock
     compensation                                             25                             19

    Common stock
     repurchases                                            (53)                          (29)

    Contribution from
     noncontrolling
     interest                                                 11                              6

    Debt issue costs                                         (4)                           (7)

    Payment of
     contingent
     consideration
     obligation                                             (29)                             -
                                                             ---                            ---

    Net cash provided
     by financing
     activities                                              305                            198

    Effect of
     exchange rate
     changes on cash
     and cash
     equivalents                                               -                           (1)
                                                             ---                           ---

    Net increase in
     cash and cash
     equivalents                                             150                            572
                                                             ---                            ---

    Cash and cash
     equivalents,
     beginning of
     period                                                1,610                          1,038
                                                           -----                          -----

    Cash and cash
     equivalents, end
     of period                                                      $1,760                      $1,610
                                                                    ======                      ======

    Supplemental disclosures of cash
     flow information:

    Interest paid                                                      $55                         $40

    Income taxes paid                                                 $328                        $237

    Equity issued in
     connection with
     acquisitions                                                      $12                        $190


                                                                                                    CENTENE CORPORATION

                                                                                   SUPPLEMENTAL FINANCIAL DATA FROM CONTINUING OPERATIONS


                                                 Q4                   Q3                     Q2                    Q1                    Q4

                                                   2015                2015                      2015                  2015                 2014
                                                   ----                ----                      ----                  ----                 ----

    MANAGED CARE MEMBERSHIP

    Arizona                                     440,900                         223,600                            210,900                         202,200    204,000

    Arkansas                                     41,900                          40,900                             45,400                          43,200     38,400

    California                                  186,000                         183,900                            178,700                         171,200    163,900

    Florida                                     510,400                         486,500                            470,300                         463,100    425,700

    Georgia                                     408,600                         406,700                            405,000                         405,600    389,100

    Illinois                                    207,500                         211,300                            209,100                         184,800     87,800

    Indiana                                     282,100                         276,700                            250,400                         227,700    197,700

    Kansas                                      141,000                         137,500                            143,000                         143,700    143,300

    Louisiana                                   381,900                         358,800                            358,900                         359,500    152,900

    Massachusetts                                61,500                          63,700                             61,500                          64,500     48,400

    Michigan                                      4,800                           6,600                              2,700                               -         -

    Minnesota                                     9,600                           9,400                             10,900                           9,500      9,500

    Mississippi                                 302,200                         301,000                            250,600                         141,900    108,700

    Missouri                                     95,100                          88,400                             82,600                          75,600     71,000

    New Hampshire                                71,400                          71,900                             70,800                          67,500     62,700

    Ohio                                        302,700                         308,100                            287,100                         296,000    280,100

    Oregon                                       98,700                          99,800                                  -                              -         -

    South Carolina                              104,000                         104,800                            112,600                         106,000    109,700

    Tennessee                                    20,000                          20,200                             21,400                          20,800     21,000

    Texas                                       983,100                         976,500                            969,700                         974,900    971,000

    Vermont                                       1,700                           1,500                              2,800                           1,600          -

    Washington                                  209,400                         208,600                            214,100                         207,100    194,400

    Wisconsin                                    77,100                          78,100                             78,600                          82,100     83,200
                                                 ------                          ------                             ------                          ------     ------

    Total at-risk
     membership                               4,941,600                       4,664,500                          4,437,100                       4,248,500  3,762,500

    Non-risk membership                         166,300                         169,900                            176,600                         153,200    298,400
                                                -------                         -------                            -------                         -------    -------

    TOTAL                                     5,107,900                       4,834,400                          4,613,700                       4,401,700  4,060,900
                                              =========                       =========                          =========                       =========  =========


    Medicaid                                  3,497,500                       3,469,800                          3,300,600                       3,133,900  2,754,900

    CHIP & Foster Care                          260,900                         245,200                            230,500                         233,600    222,700

    ABD, Medicare & Duals                       446,000                         444,100                            414,300                         410,400    392,700

    LTC                                          75,000                          73,800                             72,800                          71,200     60,800

    Health Insurance
     Marketplaces                               146,100                         155,600                            167,400                         161,700     74,500

    Hybrid Programs                                   -                              -                                 -                              -    18,900

    Behavioral Health                           456,800                         216,700                            203,900                         195,100    197,000

    Correctional
     Healthcare Services                         59,300                          59,300                             47,600                          42,600     41,000
                                                 ------                          ------

    Total at-risk
     membership                               4,941,600                       4,664,500                          4,437,100                       4,248,500  3,762,500

    Non-risk membership                         166,300                         169,900                            176,600                         153,200    298,400
                                                -------                         -------                            -------                         -------    -------

    TOTAL                                     5,107,900                       4,834,400                          4,613,700                       4,401,700  4,060,900
                                              =========                       =========                          =========                       =========  =========



    REVENUE PER MEMBER PER
     MONTH(a)                                               $365                                         $361                                        $356             $349 $360


    CLAIMS(a)

    Period-end inventory                      1,294,159                       1,564,000                          1,501,600                       1,217,000  1,086,600

    Average inventory                         1,054,281                         989,300                            946,500                         841,000    806,000

    Period-end inventory
     per member                                    0.27                            0.34                               0.34                            0.29       0.29

    (a) Revenue per member and claims information are presented for the Managed Care at-risk members.


    NUMBER OF EMPLOYEES                          18,200                          17,100                             15,800                          14,800     13,400




                                                      Q4                    Q3                    Q2                     Q1                     Q4

                                                       2015                    2015                  2015                     2015                   2014
                                                       ----                    ----                  ----                     ----                   ----


    DAYS IN CLAIMS PAYABLE (b)                         44.3                              44.5                                45.5                             45.5              44.2

    (b) Days in Claims Payable is a calculation of Medical Claims Liabilities at the end of the period divided by average claims expense per calendar day for such period.


    CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions)

    Regulated                                                  $3,900                                       $3,834                                         $3,667                    $3,345 $3,082

    Unregulated                                          78                                91                                  82                               97                85
                                                        ---                               ---                                 ---                              ---               ---

    TOTAL                                                      $3,978                                       $3,925                                         $3,749                    $3,442 $3,167
                                                               ======                                       ======                                         ======                    ====== ======


    DEBT TO CAPITALIZATION                            36.0%                            38.4%                              37.1%                           38.0%            33.5%

    DEBT TO CAPITALIZATION
     EXCLUDING NON-RECOURSE
     DEBT(c)                                          34.7%                            37.1%                              35.7%                           36.6%            31.7%

    (c) The non-recourse debt represents the Company's mortgage note payable ($67 million at December 31, 2015).

    Debt to Capitalization is calculated as follows: total debt divided by (total debt + total equity).

Operating Ratios:


                     Three Months Ended
                        December 31,         Year Ended December 31,
                    -------------------      -----------------------

                     2015               2014                 2015        2014
                     ----               ----                 ----        ----

     Health
     Benefits
     Ratios:

     Medicaid,
     CHIP,
     Foster
     Care
     &
     Health
     Insurance
     Marketplaces   85.2%                    86.9%                   86.0%    86.3%

    ABD,
     LTC
     &
     Medicare        91.8                      92.3                     92.9      93.5

     Specialty
     Services        86.2                      87.2                     85.8      85.5

      Total          88.0                      89.3                     88.9      89.3


    Total
     General
     &
     Administrative
     Expense
     Ratio           8.8%                     8.2%                    8.6%     8.4%

MEDICAL CLAIMS LIABILITY (In millions)

The changes in medical claims liability are summarized as follows:


    Balance, December 31, 2014                                   $1,723

    Acquisitions                                           79

    Incurred related to:

    Current period                                     17,471

    Prior period                                        (229)
                                                         ----

    Total incurred                                     17,242

    Paid related to:

    Current period                                     15,279

    Prior period                                        1,467
                                                        -----

    Total paid                                         16,746
                                                       ------

    Balance, December 31, 2015                                   $2,298
                                                                 ======

Centene's claims reserving process utilizes a consistent actuarial methodology to estimate Centene's ultimate liability. Any reduction in the "Incurred related to: Prior period" amount may be offset as Centene actuarially determines "Incurred related to: Current period." As such, only in the absence of a consistent reserving methodology would favorable development of prior period claims liability estimates reduce medical costs. Centene believes it has consistently applied its claims reserving methodology in each of the periods presented. Additionally, as a result of minimum HBR and other return of premium programs, approximately $47 million of the "Incurred related to: Prior period" was recorded as a reduction to premium revenues.

The amount of the "Incurred related to: Prior period" above represents favorable development and includes the effects of reserving under moderately adverse conditions, new markets where we use a conservative approach in setting reserves during the initial periods of operations, receipts from other third party payors related to coordination of benefits and lower medical utilization and cost trends for dates of service December 31, 2014 and prior.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/centene-corporation-reports-2015-fourth-quarter-and-full-year-results-300217010.html

SOURCE Centene Corporation