Centene(US:CNC)2023-02-20 16:00Membership and Revenue Growth - Year-end membership reached 27.1 million, an increase of 1.2 million members, or 5% over 2021[255] - Total revenues for 2022 were $144.5 billion, representing a 15% growth year-over-year[255] - Premium and service revenues amounted to $135.5 billion, also reflecting a 15% growth year-over-year[255] - Managed care membership increased by 1.2 million, or 5%, from December 31, 2021, to December 31, 2022, totaling 27,061,400 members[273] - Total revenues for the year ended December 31, 2022, were $144,547 million, a 15% increase from $125,982 million in 2021[275] - Medicaid revenues rose to $93,157 million in 2022, an 11% increase from $84,139 million in 2021[277] - Medicare revenues increased by 28% to $22,484 million in 2022, up from $17,512 million in 2021[277] - Total revenues for 2022 reached $144,547 million, an increase of 14.7% from $125,982 million in 2021[371] - Premium revenues increased to $127,131 million in 2022, up 12.5% from $112,319 million in 2021[371] Financial Performance - Adjusted diluted earnings per share (EPS) for 2022 were $5.78, up from $5.15 in 2021[255] - Net earnings attributable to Centene Corporation for 2022 were $1,202 million, a decrease of 10.8% compared to $1,347 million in 2021[371] - Basic earnings per common share decreased to $2.09 in 2022 from $2.31 in 2021, a decline of 9.5%[371] - The company reported a comprehensive loss of $7 million in 2022, compared to comprehensive earnings of $1,087 million in 2021[373] - The company experienced an impairment expense of $2,318 million in 2022, significantly higher than $229 million in 2021[371] - Net earnings for 2022 were $1,202 million, a decrease from $1,336 million in 2021 and $1,794 million in 2020[378] Expenses and Liabilities - The health benefits ratio (HBR) for 2022 was 87.7%, slightly improved from 87.8% in 2021[255] - The SG&A expense ratio increased to 8.6% for 2022, compared to 8.1% for 2021[255] - Selling, general, and administrative (SG&A) expenses increased to $11,589 million in 2022, a 21% rise from $9,601 million in 2021[275] - Medical costs for 2022 were $111,529 million, representing an increase of 12.9% from $98,602 million in 2021[371] - Total liabilities increased to $52,633 million in 2022, up 2.5% from $51,353 million in 2021[369] Cash Flow and Investments - Operating cash flows for 2022 were $6.3 billion, or 5.2 times net earnings[255] - Cash used in investing activities was $2.9 billion in 2022, down from $3.3 billion in 2021, mainly due to the acquisition of Magellan and net additions to the investment portfolio[296] - Financing activities used cash of $4.2 billion in 2022, driven by stock repurchases of $3.0 billion and debt redemptions[300] - The company repurchased 35.7 million shares for $3.0 billion in 2022, with $2.8 billion remaining under the stock repurchase program as of December 31, 2022[302] - Total cash, cash equivalents, and restricted cash and cash equivalents at the end of 2022 were $12,330 million, down from $13,214 million at the end of 2021[378] Acquisitions and Divestitures - In January 2022, the company acquired Magellan Health, Inc. for a total consideration of $2.5 billion[246] - The divestiture of PANTHERx in July 2022 generated a gain of $490 million, while the divestiture of Magellan Rx in December 2022 resulted in a gain of $269 million[247] - The Company acquired Magellan for a total consideration of $2,491 million, consisting of $2,431 million in cash and $60 million related to equity awards[427] - The divestiture of Magellan Rx was completed for $1,337 million, with a recognized gain of $269 million, or $99 million after-tax[432] Medical Claims and Liabilities - The total medical claims liability balance as of December 31, 2022, was $16.745 billion, an increase from $14.243 billion in 2021[339] - The incurred medical claims for the current year were $112.896 billion for 2022, compared to $100.385 billion for 2021[339] - Medical claims liabilities rose to $2,397 million in 2022, up from $1,802 million in 2021[378] - The company’s medical claims liability estimates are based on actuarial methods and are continuously monitored and refined monthly[332] Strategic Initiatives and Future Outlook - The company expects Medicaid eligibility redeterminations to begin in April 2023, extending over a 14-month period[267] - The Health Insurance Marketplace product, Ambetter Health, expanded into Alabama and over 60 counties across 12 existing states in January 2023[269] - The company plans to continue evaluating strategic actions to improve productivity and optimize capital deployment as part of its Value Creation Plan[313] - Expected net dividends from regulated subsidiaries for 2023 are approximately $2.1 billion, with planned capital expenditures of $845 million[311] Risk Management and Compliance - The company is subject to interest rate risk, with a hypothetical 1% increase in market interest rates potentially decreasing the fair value of fixed income investments by approximately $583 million[353] - The company’s revenue recognition is influenced by state requirements for maintaining minimum HBR and performance metrics, which may lead to revenue reductions[343] - The Company adjusts medical claims liability estimates monthly as new claims information becomes available, ensuring consistent application of its reserving methodology[403]