Centene reports diluted earnings per share of $0.54 for second quarter 2011

Centene Corporation (NYSE: CNC) today announced its financial results for the quarter ended June 30, 2011.  The discussions below, with the exception of cash flow information, are in the context of continuing operations and all financial ratios exclude premium taxes.

Second Quarter Highlights

• Quarter-end managed care at-risk membership of 1,580,500, an increase of 45,900 members year over year.
• Premium and Service Revenues of $1.3 billion, representing 21.6% year over year growth.
• Health Benefits Ratio of 83.0%, compared to 83.8% in the prior year and 83.0% in the first quarter of 2011.  
• General and Administrative expense ratio (G&A ratio) of 13.0%, compared to 12.7% in the prior year.  The G&A ratio for the six months ended June 30, 2011 was 13.4%, compared to 13.0% in the prior year.
• Diluted earnings per share from continuing operations of $0.54, including $(0.10) of debt extinguishment costs, compared to $0.45 in the prior year.
• Recognition of Mississippi revenue and medical costs for the period January 1, 2011 through June 30, 2011 during the second quarter of 2011 (includes $0.07 per diluted share benefit for period from January 1, 2011 - March 31, 2011 recognized in the second quarter of 2011).

Other Events

• In July 2011, Louisiana Healthcare Connections, our joint venture subsidiary, was selected to contract with the Louisiana Department of Health and Hospitals to provide healthcare services to Medicaid enrollees participating in the Medicaid Coordinated Care Network project in all three of the state’s geographical services areas for a three year term.  Services for these members are expected to begin in the first quarter of 2012, with a three-phased membership roll-out ending in the second quarter of 2012.  
• In July 2011, our subsidiary, Kentucky Spirit Health Plan, announced it was awarded a three-year contract with the Kentucky Finance and Administration Cabinet (KFAC) to serve Medicaid beneficiaries.  Kentucky Spirit Health Plan will provide integrated healthcare, behavioral health, pharmacy, vision and dental services to Medicaid recipients.  Operations are expected to commence in the fourth quarter of 2011.
• In June 2011, CeltiCare Health Plan of Massachusetts, Inc. announced the extension of its contract with the Commonwealth of Massachusetts to serve Commonwealth Care Bridge members on an exclusive basis, effective July 1, 2011.  
• In June 2011, our subsidiary, Managed Health Services was awarded the 2011 National Environmental Leadership Award in Asthma Management from the Environmental Protection Agency.  
• In May 2011, the Company called its $175 million 7.25% Senior Notes and recorded debt extinguishment costs of $(0.10) per diluted share for the call premium and the write off of unamortized debt issuance costs.  The Company replaced the notes with new $250 million 5.75% Senior Notes due June 2017 and entered into interest rate swap agreements, converting the Senior Notes to a floating rate of interest at the three month LIBOR rate plus 3.50%.  
• In May 2011, Bridgeway Health Solutions announced it was awarded a contract to deliver Long-term Care services in three geographic service areas in Arizona effective October 1, 2011.  This contract award represents an estimated 50% increase in Bridgeway's Long-term Care at-risk membership.

Michael F. Neidorff, Centene’s Chairman and Chief Executive Officer, stated, “We are especially pleased with our results for the second quarter and the continuation of our positive operating momentum as well as our success in winning profitable new growth opportunities.”