Delaware
|
001-31826
|
42-1406317
|
||
(State or Other Jurisdiction
of Incorporation)
|
(Commission
File Number)
|
(IRS Employer
Identification No.)
|
7700 Forsyth Blvd.,
St. Louis, Missouri
|
63105
|
|
(Address of Principal Executive Offices)
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(Zip Code)
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.001 Par Value
|
CNC
|
New York Stock Exchange
|
Item 8.01
|
OTHER EVENTS
|
Item 9.01
|
FINANCIAL STATEMENTS AND EXHIBITS
|
(a)
|
Financial statements of businesses acquired.
|
(d)
|
Exhibits.
|
Exhibit
Number
|
Description
|
|
Unaudited consolidated financial statements of Fidelis Care as of June 30, 2018 and for the six months ended June 30,
2018 and 2017.
|
CENTENE CORPORATION
|
||||||
Dated: May 3, 2019
|
By:
|
/s/ Jeffrey A. Schwaneke
|
||||
Name:
|
Jeffrey A. Schwaneke
|
|||||
Title:
|
Executive Vice President & Chief Financial Officer
|
Page
|
|
CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2018 AND FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED):
|
|
Balance Sheets
|
1
|
Statements of Operations
|
2
|
Statements of Comprehensive Income
|
3
|
Statements of Cash Flows
|
4
|
Notes to Consolidated Financial Statements
|
5–17
|
CONSOLIDATED BALANCE SHEETS
|
||||||||
AS OF JUNE 30, 2018 AND DECEMBER 31, 2017 (UNAUDITED)
|
||||||||
(In thousands)
|
||||||||
June 30,
2018
|
December 31,
2017
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
2,342,027
|
$
|
1,848,710
|
||||
Short-term investments—other
|
-
|
550,561
|
||||||
Investments
|
766,924
|
780,114
|
||||||
Premium receivables—net
|
345,391
|
209,850
|
||||||
Pharmacy rebates receivable
|
90,176
|
96,398
|
||||||
Other receivables
|
14,235
|
12,354
|
||||||
Reinsurance receivables
|
98,734
|
88,282
|
||||||
Prepaid expenses and other current assets
|
22,358
|
13,023
|
||||||
Total current assets
|
3,679,845
|
3,599,292
|
||||||
RESTRICTED DEPOSITS
|
492,347
|
449,447
|
||||||
INVESTMENTS—Noncurrent
|
-
|
182
|
||||||
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS—Net
|
218,879
|
210,106
|
||||||
GOODWILL AND INTANGIBLES—Net
|
15,850
|
15,850
|
||||||
TOTAL
|
$
|
4,406,921
|
$
|
4,274,877
|
||||
LIABILITIES AND NET ASSETS
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Claims payable
|
$
|
1,313,196
|
$
|
1,359,589
|
||||
Accounts payable and accrued expenses
|
174,386
|
247,577
|
||||||
Premiums received in advance
|
115,041
|
30,785
|
||||||
Long-term debt—current portion
|
-
|
14,286
|
||||||
Due to third parties
|
430,196
|
429,700
|
||||||
Total current liabilities
|
2,032,819
|
2,081,937
|
||||||
LONG-TERM DEBT
|
-
|
71,429
|
||||||
Total liabilities
|
2,032,819
|
2,153,366
|
||||||
COMMITMENTS & CONTINGENCIES (NOTE 9)
|
||||||||
NET ASSETS—Total net assets
|
2,374,102
|
2,121,511
|
||||||
TOTAL
|
$
|
4,406,921
|
$
|
4,274,877
|
||||
See notes to unaudited consolidated financial statements.
|
June 30,
2018
|
June 30,
2017
|
|||||||
REVENUES:
|
||||||||
Premium revenues
|
$
|
5,327,318
|
$
|
4,803,951
|
||||
Other
|
21,016
|
14,198
|
||||||
Total revenues
|
5,348,334
|
4,818,149
|
||||||
EXPENSES:
|
4,768,219
|
4,343,055
|
||||||
Cost of health care provided
|
||||||||
General and administrative
|
315,727
|
251,422
|
||||||
Depreciation and amortization
|
19,760
|
15,958
|
||||||
Total expenses
|
5,103,706
|
4,610,435
|
||||||
OTHER INCOME/(EXPENSE):
|
||||||||
Investment income and losses—net
|
11,467
|
46,098
|
||||||
Interest expense
|
(2,573
|
)
|
(1,184
|
)
|
||||
Charitable donations and grants
|
(466
|
)
|
(2,500
|
)
|
||||
Total other income/(expense)
|
8,428
|
42,414
|
||||||
EXCESS OF REVENUES OVER EXPENSES
|
$
|
253,056
|
$
|
250,128
|
||||
See notes to unaudited consolidated financial statements.
|
June 30,
2018
|
June 30,
2017
|
|||||||
CHANGE IN NET ASSETS
|
$
|
252,591
|
$
|
250,046
|
||||
PENSION PLAN:
|
||||||||
Net (loss)/gain arising during the period
|
(2,398
|
)
|
2,000
|
|||||
Other comprehensive income
|
(2,398
|
)
|
2,000
|
|||||
COMPREHENSIVE INCOME
|
$
|
250,193
|
$
|
252,046
|
||||
See notes to unaudited consolidated financial statements.
|
June 30,
2018
|
June 30,
2017
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Change in net assets
|
$
|
252,591
|
$
|
250,046
|
||||
Adjustments to reconcile change in net assets to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
19,760
|
15,958
|
||||||
Net realized and unrealized losses (gains) on trading securities
|
9,180
|
(32,198
|
)
|
|||||
Net realized and unrealized (gains) losses on investments, other
than trading
|
(14
|
)
|
61,598
|
|||||
Write-off of investments—other than trading securities
|
182
|
-
|
||||||
Purchases of investments—trading securities
|
(369,070
|
)
|
(682,177
|
)
|
||||
Proceeds from sale of investments—trading securities
|
373,080
|
667,888
|
||||||
Provision for bad debts
|
7,545
|
3,403
|
||||||
Changes in:
|
||||||||
Premium receivables
|
(143,086
|
)
|
(85,742
|
)
|
||||
Pharmacy rebates receivable
|
6,222
|
(1,365
|
)
|
|||||
Other receivables
|
(1,881
|
)
|
(547
|
)
|
||||
Reinsurance receivables
|
(10,452
|
)
|
(23,280
|
)
|
||||
Prepaid expenses and other current assets
|
(9,335
|
)
|
(6,528
|
)
|
||||
Claims payable
|
(46,393
|
)
|
196,515
|
|||||
Accounts payable and accrued expenses
|
(74,485
|
)
|
(30,364
|
)
|
||||
Premiums received in advance
|
84,256
|
81,664
|
||||||
Due to third parties
|
496
|
55,154
|
||||||
Net cash provided by operating activities
|
98,596
|
470,025
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases of investments and restricted deposits
|
(42,900
|
)
|
(83,085
|
)
|
||||
Proceeds from sale of short-term investments—other
|
550,575
|
-
|
||||||
Purchases of short-term investments—other
|
-
|
(154,210
|
)
|
|||||
Acquisition of property, equipment and leasehold improvements
|
(27,239
|
)
|
(136,231
|
)
|
||||
Net cash provided by (used in) investing activities
|
480,436
|
(373,526
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments of notes payable
|
(85,715
|
)
|
(7,143
|
)
|
||||
Payments of capital lease obligations
|
-
|
(34
|
)
|
|||||
Net cash used in financing activities
|
(85,715
|
)
|
(7,177
|
)
|
||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
493,317
|
89,322
|
||||||
CASH AND CASH EQUIVALENTS—Beginning of period
|
1,848,710
|
1,358,759
|
||||||
CASH AND CASH EQUIVALENTS—End of period
|
$
|
2,342,027
|
$
|
1,448,081
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Cash paid during the period for interest
|
$
|
2,573
|
$
|
1,184
|
||||
Accrual for acquisition of equipment
|
$
|
1,294
|
$
|
8,660
|
1. |
BASIS OF PRESENTATION
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
3. |
PREMIUM REVENUE
|
4. |
INVESTMENTS AND RESTRICTED DEPOSITS
|
June 30,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Short-term investments—other
|
$
|
-
|
$
|
550,561
|
||||
Investments:
|
||||||||
Debt securities:
|
||||||||
U.S. government and agency obligations
|
$
|
75,773
|
$
|
87,466
|
||||
U.S. agency mortgage-backed securities
|
41,972
|
39,825
|
||||||
State and municipal obligations
|
1,604
|
1,346
|
||||||
Corporate obligations
|
118,808
|
104,314
|
||||||
Non-U.S. agency mortgage-backed securities
|
12,736
|
13,166
|
||||||
Non-U.S. agency asset-backed securities
|
25,635
|
25,100
|
||||||
Total debt securities
|
276,528
|
271,217
|
||||||
Equity securities
|
167,027
|
167,117
|
||||||
Mutual funds
|
292,101
|
310,164
|
||||||
Alternative investments
|
31,268
|
31,616
|
||||||
Total investments
|
$
|
766,924
|
$
|
780,114
|
||||
Restricted deposits:
|
||||||||
Certificates of deposit
|
$
|
492,347
|
$
|
449,447
|
||||
Total restricted deposits
|
$
|
492,347
|
$
|
449,447
|
||||
Investments—noncurrent
|
$
|
-
|
$
|
182
|
5. |
FAIR VALUE MEASUREMENTS
|
• |
Quoted prices for similar assets in active markets
|
• |
Quoted prices for identical or similar assets in nonactive markets (few transactions, limited information, noncurrent prices, high variability over time, etc.)
|
• |
Inputs other than quoted prices that are observable for the asset (interest rates, yield curves, volatilities, default rates, etc.)
|
• |
Inputs that are derived principally from or corroborated by other observable market data
|
6. |
GOODWILL
|
Balance—January 1, 2018
|
$
|
15,850
|
||
Acquisitions
|
-
|
|||
Balance—June 30, 2018
|
$
|
15,850
|
7. |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
|
June 30,
2018
|
December 31,
2017
|
|||||||
Accounts payable
|
$
|
47
|
$
|
7,788
|
||||
Accrued expenses
|
174,339
|
239,789
|
||||||
$
|
174,386
|
$
|
247,577
|
|
8.
|
LONG-TERM DEBT
|
9. |
COMMITMENTS AND CONTINGENCIES
|
10. |
CLAIMS PAYABLE
|
June 30,
2018
|
December 31,
2017
|
|||||||
Claims payable—beginning of year
|
$
|
1,359,589
|
$
|
1,077,035
|
||||
Medical expenses:
|
||||||||
Current year
|
4,933,790
|
9,085,009
|
||||||
Prior years
|
(165,571
|
)
|
(206,504
|
)
|
||||
Total medical expenses
|
4,768,219
|
8,878,505
|
||||||
Paid claims:
|
||||||||
Current year
|
(3,898,784
|
)
|
(7,775,563
|
)
|
||||
Prior years
|
(908,984
|
)
|
(825,757
|
)
|
||||
Total paid claims
|
(4,807,768
|
)
|
(8,601,320
|
)
|
||||
Reinsurance receivable
|
8,153
|
(12,887
|
)
|
|||||
NYS surcharges and other assessments
|
(14,997
|
)
|
18,256
|
|||||
Claims payable—end of year
|
$
|
1,313,196
|
$
|
1,359,589
|
||||
Net Incurred Medical Expenses
|
||||||||
Six Months Ended
June 30,
|
Year Ended
December 31
|
|||||||
Year
|
2018
|
2017
|
||||||
2016 | $ | 7,650,742 |
||||||
2017
|
$
|
8,919,438
|
9,085,009
|
|||||
2018
|
4,933,790
|
|||||||
Total
|
$
|
13,853,228
|
$
|
16,735,751
|
Net Cumulative Medical Payments
|
||||||||
Six Months Ended
June 30,
|
Year Ended
December 31,
|
|||||||
Year
|
2018
|
2017
|
||||||
2016 | $ |
(7,609,236 |
) | |||||
2017
|
$
|
(8,649,724
|
)
|
(7,775,563
|
)
|
|||
2018
|
(3,898,784
|
)
|
||||||
Total
|
$
|
(12,548,508
|
)
|
$
|
(15,384,799
|
)
|
||
Net remaining outstanding payable prior
|
||||||||
to 2016 and 2017
|
$
|
15,320
|
$
|
3,268
|
||||
Reinsurance receivable
|
8,153
|
(12,887
|
)
|
|||||
NYS surcharges and other assessments
|
(14,997
|
)
|
18,256
|
|||||
Total claims payable
|
$
|
1,313,196
|
$
|
1,359,589
|
11. |
CONCENTRATIONS OF CREDIT RISK
|
12. |
SUBSEQUENT EVENTS
|