[X]
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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[
]
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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|
|
Delaware
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42-1406317
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(State
or other jurisdiction of
|
(I.R.S.
Employer
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incorporation
or organization)
|
Identification
Number)
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7711
Carondelet Avenue
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St.
Louis, Missouri
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63105
|
(Address
of principal executive offices)
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(Zip
Code)
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PAGE
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|||
Part
I
|
|||||
Financial
Information
|
|||||
Item
1.
|
Financial
Statements
|
|
|||
|
Consolidated
Balance Sheets as of June 30, 2007 and December 31, 2006
(unaudited)
|
||||
|
Consolidated
Statements of Operations for the Three Months and Six Months
Ended June
30, 2007 and 2006 (unaudited)
|
||||
|
Consolidated
Statements of Cash Flows for the Six Months Ended June 30, 2007
and 2006
(unaudited)
|
||||
|
Notes
to the Consolidated Financial Statements (unaudited)
|
||||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
||||
Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
|
||||
Item
4.
|
Controls
and Procedures
|
||||
Part
II
|
|||||
Other
Information
|
|||||
Item
1.
|
Legal
Proceedings
|
||||
Item
1A.
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Risk
Factors
|
||||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
||||
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
||||
Item
6.
|
Exhibits
|
||||
Signatures
|
|||||
|
|
June
30, 2007
|
December
31, 2006
|
||||||
|
(Unaudited)
|
|||||||
ASSETS
|
|
|
||||||
Current
assets:
|
|
|
||||||
Cash
and cash equivalents
|
$ |
236,443
|
$ |
271,047
|
||||
Premium
and related receivables
|
113,491
|
91,664
|
||||||
Short-term
investments, at fair value (amortized cost $43,636 and $67,199,
respectively)
|
43,360
|
66,921
|
||||||
Other
current assets
|
46,257
|
22,189
|
||||||
Total
current assets
|
439,551
|
451,821
|
||||||
Long-term
investments, at fair value (amortized cost $288,993 and $146,980,
respectively)
|
287,719
|
145,417
|
||||||
Restricted
deposits, at fair value (amortized cost $26,328 and $25,422,
respectively)
|
26,220
|
25,265
|
||||||
Property,
software and equipment, net
|
131,829
|
110,688
|
||||||
Goodwill
|
136,316
|
135,877
|
||||||
Other
intangible assets, net
|
14,472
|
16,202
|
||||||
Other
assets
|
13,895
|
9,710
|
||||||
Total
assets
|
$ |
1,050,002
|
$ |
894,980
|
||||
|
||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Medical
claims liabilities
|
$ |
295,340
|
$ |
280,441
|
||||
Accounts
payable and accrued expenses
|
111,697
|
72,723
|
||||||
Unearned
revenue
|
42,019
|
33,816
|
||||||
Current
portion of long-term debt
|
972
|
971
|
||||||
Total
current liabilities
|
450,028
|
387,951
|
||||||
Long-term
debt
|
200,162
|
174,646
|
||||||
Other
liabilities
|
8,779
|
5,960
|
||||||
Total
liabilities
|
658,969
|
568,557
|
||||||
Stockholders’
equity:
|
||||||||
Common
stock, $.001 par value; authorized 100,000,000 shares; issued
and
outstanding 43,664,105 and 43,369,918 shares,
respectively
|
44
|
44
|
||||||
Additional
paid-in capital
|
217,705
|
209,340
|
||||||
Accumulated
other comprehensive income:
|
||||||||
Unrealized
loss on investments, net of tax
|
(1,046 | ) | (1,251 | ) | ||||
Retained
earnings
|
174,330
|
118,290
|
||||||
Total
stockholders’ equity
|
391,033
|
326,423
|
||||||
Total
liabilities and stockholders’ equity
|
$ |
1,050,002
|
$ |
894,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
For
the Three Months Ended June 30,
|
|
|
For
the Six Months Ended June 30,
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Premium
|
|
$
|
707,723
|
|
|
$
|
476,079
|
|
|
$
|
1,356,966
|
|
|
$
|
911,641
|
|
Service
|
|
20,015
|
|
|
19,214
|
|
|
41,607
|
|
|
38,730
|
|
||||
Total
revenues
|
|
727,738
|
|
|
495,293
|
|
|
1,398,573
|
|
|
950,371
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical
costs
|
|
|
574,862
|
|
|
|
400,229
|
|
|
|
1,110,268
|
|
|
|
761,901
|
|
Cost
of services
|
|
|
16,670
|
|
|
|
14,317
|
|
|
|
32,300
|
|
|
|
29,905
|
|
General
and administrative expenses
|
|
|
122,596
|
|
|
|
74,441
|
|
|
|
229,462
|
|
|
|
139,663
|
|
Gain
on sale of FirstGuard Missouri
|
|
(3,254
|
)
|
|
—
|
|
|
(7,472
|
)
|
|
—
|
|
||||
Total
operating expenses
|
|
710,874
|
|
|
488,987
|
|
|
1,364,558
|
|
|
931,469
|
|
||||
Earnings
from operations
|
|
|
16,864
|
|
|
|
6,306
|
|
|
|
34,015
|
|
|
|
18,902
|
|
Other
income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
and other income
|
|
|
5,948
|
|
|
|
3,891
|
|
|
|
10,449
|
|
|
|
7,431
|
|
Interest
expense
|
|
(4,213
|
)
|
|
(2,456
|
)
|
|
(7,345
|
)
|
|
(4,454
|
)
|
||||
Earnings
before income taxes
|
|
|
18,599
|
|
|
|
7,741
|
|
|
|
37,119
|
|
|
|
21,879
|
|
Income tax (benefit) expense | 817 | 2,776 | (18,874 | ) | 8,148 | |||||||||||
Net earnings | $ | 17,782 | $ | 4,965 | $ | 55,993 | $ | 13,731 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per common share
|
|
$
|
0.41
|
|
|
$
|
0.12
|
|
|
$
|
1.29
|
|
|
$
|
0.32
|
|
Diluted
earnings per common share
|
|
$
|
0.40
|
|
|
$
|
0.11
|
|
|
$
|
1.25
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
43,617,360
|
|
|
|
43,169,590
|
|
|
|
43,525,848
|
|
|
|
43,079,243
|
|
Diluted
|
|
|
44,815,369
|
|
|
|
44,839,149
|
|
|
|
44,871,114
|
|
|
|
44,794,558
|
|
|
Six
Months Ended June
30,
|
|||||||
|
2007
|
2006
|
||||||
|
(Unaudited)
|
|||||||
|
|
|
||||||
Cash
flows from operating activities:
|
|
|
||||||
Net
earnings
|
$ |
55,993
|
$ |
13,731
|
||||
Adjustments
to reconcile net earnings to net cash provided by operating activities
—
|
||||||||
Depreciation
and amortization
|
12,991
|
9,541
|
||||||
Stock
compensation expense
|
7,837
|
7,154
|
||||||
Deferred
income taxes
|
(327 | ) | (287 | ) | ||||
Gain
on sale of FirstGuard Missouri
|
(7,472 | ) |
—
|
|||||
Changes
in assets and liabilities —
|
||||||||
Premium
and related receivables
|
(21,823 | ) | (45,710 | ) | ||||
Other
current assets
|
(24,583 | ) |
1,859
|
|||||
Other
assets
|
(931 | ) | (1,123 | ) | ||||
Medical
claims liabilities
|
15,035
|
16,690
|
||||||
Unearned
revenue
|
8,203
|
1,705
|
||||||
Accounts
payable and accrued expenses
|
11,832
|
10,658
|
||||||
Other
operating activities
|
3,119
|
224
|
||||||
Net
cash provided by operating activities
|
59,874
|
14,442
|
||||||
Cash
flows from investing activities:
|
||||||||
Purchases
of property, software and equipment
|
(29,352 | ) | (23,472 | ) | ||||
Purchases
of investments
|
(290,962 | ) | (113,665 | ) | ||||
Sales
and maturities of investments
|
196,407
|
97,445
|
||||||
Proceeds
from asset sales
|
14,102
|
—
|
||||||
Acquisitions,
net of cash acquired
|
(5,336 | ) | (60,710 | ) | ||||
Net
cash used in investing activities
|
(115,141 | ) | (100,402 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from exercise of stock options
|
2,651
|
3,761
|
||||||
Proceeds
from borrowings
|
191,000
|
71,967
|
||||||
Payment
of long-term debt
|
(165,484 | ) | (4,487 | ) | ||||
Excess
tax benefits from stock compensation
|
797
|
1,977
|
||||||
Common
stock repurchases
|
(3,231 | ) | (3,180 | ) | ||||
Debt
issue costs
|
(5,070 | ) |
—
|
|||||
Net
cash provided by financing activities
|
20,663
|
70,038
|
||||||
Net
decrease in cash and cash equivalents
|
(34,604 | ) | (15,922 | ) | ||||
Cash
and cash equivalents, beginning of period
|
271,047
|
147,358
|
||||||
Cash
and cash equivalents, end of period
|
$ |
236,443
|
$ |
131,436
|
||||
Interest
paid
|
$ |
3,738
|
$ |
4,598
|
||||
Income
taxes paid
|
$ |
6,049
|
$ |
1,645
|
Three
Months Ended June
30,
|
Six
Months Ended June
30,
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Net
earnings
|
$ |
17,782
|
$ |
4,965
|
$ |
55,993
|
$ |
13,731
|
||||||||
Shares
used in computing per share amounts:
|
||||||||||||||||
Weighted
average number of common shares outstanding
|
43,617,360
|
43,169,590
|
43,525,848
|
43,079,243
|
||||||||||||
Common
stock equivalents (as determined by applying the treasury stock
method)
|
1,198,009
|
1,669,559
|
1,345,266
|
1,715,315
|
||||||||||||
Weighted
average number of common shares and potential dilutive common
shares
outstanding
|
44,815,369
|
44,839,149
|
44,871,114
|
44,794,558
|
||||||||||||
|
||||||||||||||||
Basic
earnings per common share
|
$ |
0.41
|
$ |
0.12
|
$ |
1.29
|
$ |
0.32
|
||||||||
|
||||||||||||||||
Diluted
earnings per common share
|
$ |
0.40
|
$ |
0.11
|
$ |
1.25
|
$ |
0.31
|
|
Medicaid
Managed Care
|
Specialty
Services
|
Eliminations
|
Consolidated
Total
|
||||||||||||
Revenue
from external customers
|
$ |
665,265
|
$ |
62,473
|
$ |
—
|
$ |
727,738
|
||||||||
Revenue
from internal customers
|
19,698
|
106,783
|
(126,481 | ) |
—
|
|||||||||||
Total
revenue
|
$ |
684,963
|
$ |
169,256
|
$ | (126,481 | ) | $ |
727,738
|
|||||||
|
||||||||||||||||
Earnings
from operations
|
$ |
11,679
|
$ |
5,185
|
$ |
—
|
$ |
16,864
|
|
Medicaid
Managed Care
|
Specialty
Services
|
Eliminations
|
Consolidated
Total
|
||||||||||||
Revenue
from external customers
|
$ |
452,061
|
$ |
43,232
|
$ |
—
|
$ |
495,293
|
||||||||
Revenue
from internal customers
|
22,230
|
48,803
|
(71,033 | ) |
—
|
|||||||||||
Total
revenue
|
$ |
474,291
|
$ |
92,035
|
$ | (71,033 | ) | $ |
495,293
|
|||||||
|
||||||||||||||||
Earnings
from operations
|
$ |
4,577
|
$ |
1,729
|
$ |
—
|
$ |
6,306
|
|
Medicaid
Managed Care
|
Specialty
Services
|
Eliminations
|
Consolidated
Total
|
||||||||||||
Revenue
from external customers
|
$ |
1,278,328
|
$ |
120,245
|
$ |
—
|
$ |
1,398,573
|
||||||||
Revenue
from internal customers
|
38,586
|
205,502
|
(244,088 | ) |
—
|
|||||||||||
Total
revenue
|
$ |
1,316,914
|
$ |
325,747
|
$ | (244,088 | ) | $ |
1,398,573
|
|||||||
|
||||||||||||||||
Earnings
from operations
|
$ |
23,162
|
$ |
10,853
|
$ |
—
|
$ |
34,015
|
|
Medicaid
Managed Care
|
Specialty
Services
|
Eliminations
|
Consolidated
Total
|
||||||||||||
Revenue
from external customers
|
$ |
863,042
|
$ |
87,329
|
$ |
—
|
$ |
950,371
|
||||||||
Revenue
from internal customers
|
43,003
|
66,480
|
(109,483 | ) |
—
|
|||||||||||
Total
revenue
|
$ |
906,045
|
$ |
153,809
|
$ | (109,483 | ) | $ |
950,371
|
|||||||
|
||||||||||||||||
Earnings
from operations
|
$ |
16,668
|
$ |
2,234
|
$ |
—
|
$ |
18,902
|
|
|
Three
Months Ended June 30,
|
|
|
Six
Months Ended June
30,
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net
earnings
|
|
$
|
17,782
|
|
|
$
|
4,965
|
|
|
$
|
55,993
|
|
|
$
|
13,731
|
|
Reclassification
adjustment, net of tax
|
|
|
18
|
|
|
|
29
|
|
|
|
69
|
|
|
|
49
|
|
Change in unrealized gain (loss) on investments, net of tax | (139 | ) | (157 | ) | 136 | (571 | ) | |||||||||
Total
comprehensive earnings
|
$ | 17,661 | $ | 4,837 | $ | 56,198 | $ | 13,209 |
|
—
|
Quarter-end
Medicaid Managed Care membership of
1,131,500.
|
|
—
|
Total
revenues of $727.7 million, a 46.9% increase over the comparable
period in
2006.
|
|
—
|
Medicaid
and SCHIP health benefits ratio, or HBR, of 80.6%, SSI HBR of 87.5%,
Specialty Services HBR of 75.9%.
|
|
—
|
Medicaid
Managed Care general and administrative, or G&A, expense ratio of
14.0% and Specialty Services G&A ratio of
15.8%.
|
|
—
|
Operating
earnings of $16.9 million.
|
—
|
Diluted earnings per share of $0.40 including an after-tax benefit of $5.7 million, or $0.13 per share, for FirstGuard activity and the related foundation contribution. |
|
—
|
Operating
cash flows of $23.9 million.
|
|
—
|
In
April 2007, we acquired PhyTrust of South Carolina, LLC, or PhyTrust,
a
physician-driven company providing service as a Medicaid Medical
Home
Network. At June 30, 2007, our membership in South Carolina was
31,100 members. Additionally, we plan to participate in the
rollout of the state’s conversion to at-risk managed care, which is
expected to commence in the second half of
2007.
|
|
—
|
In
February 2007, we began managing care for SSI recipients in the
San
Antonio and Corpus Christi markets of Texas with 31,400 members
at June
30, 2007.
|
|
—
|
In
January, February, March and April 2007, we began managing care
for SSI
members in the Northeast, Southwest, Northwest and East Central
regions of
Ohio, respectively, with 19,500 members at June 30,
2007.
|
|
—
|
In
September 2006, we expanded operations in Texas to include Medicaid
and
SCHIP members in the Corpus Christi, Austin and Lubbock markets,
with
24,300 members at June 30, 2007.
|
|
—
|
In
Georgia, we began managing care for Medicaid and SCHIP members
in the
Atlanta and Central regions in June 2006 and the Southwest region
in
September 2006. At June 30, 2007, our membership in Georgia was
281,400.
|
|
—
|
We
began operating under new contracts with the State of Ohio to manage
care
for Medicaid members by entering seven new counties in the East
Central
market in July 2006, and 17 new counties in the Northwest market
in
October 2006, with 41,100 members at June 30,
2007.
|
|
—
|
In
June 2006, we acquired MediPlan Corporation, or MediPlan, and began
managing care for additional Medicaid members in Ohio with 13,300
members at June 30, 2007. The results of operations of this entity
are
included in our consolidated financial statements beginning June
1,
2006.
|
|
—
|
During
the first quarter of 2007, we finalized the contractual terms of
the
Comprehensive Health Care for Children in Foster Care program award
with
the Texas Health and Human Services Commission, or HHSC. This statewide
program will provide managed care services to participants in the
Texas
Foster Care program. Membership operations are expected to commence
in the
first quarter of 2008.
|
|
—
|
Effective
October 1, 2006, we began performing under our contract with the
Arizona
Health Care Cost Containment System to provide long-term care services
in
the Maricopa, Yuma and LaPaz counties in
Arizona.
|
|
—
|
Effective
July 1, 2006, we acquired the managed vision business of OptiCare
Managed
Vision, Inc., or OptiCare. The results of operations of this entity
are
included in our consolidated financial statements beginning July
1,
2006.
|
|
|
Three
Months Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
||||||||||||||||||
|
|
2007
|
|
|
2006
|
|
|
%
Change 2006-2007
|
|
|
2007
|
|
|
2006
|
|
|
%
Change 2006-2007
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Premium
revenue
|
|
$
|
707.7
|
|
|
$
|
476.1
|
|
|
|
48.7
|
%
|
|
$
|
1,357.0
|
|
|
$
|
911.7
|
|
|
|
48.8
|
%
|
Service
revenue
|
|
20.0
|
|
|
19.2
|
|
|
4.2
|
%
|
|
41.6
|
|
|
38.7
|
|
|
7.4
|
%
|
||||||
Total
revenues
|
|
|
727.7
|
|
|
|
495.3
|
|
|
|
46.9
|
%
|
|
|
1,398.6
|
|
|
|
950.4
|
|
|
|
47.2
|
%
|
Medical
costs
|
|
|
574.8
|
|
|
|
400.2
|
|
|
|
43.6
|
%
|
|
|
1,110.3
|
|
|
|
761.9
|
|
|
|
45.7
|
%
|
Cost
of services
|
|
|
16.7
|
|
|
|
14.3
|
|
|
|
16.4
|
%
|
|
|
32.3
|
|
|
|
29.9
|
|
|
|
8.0
|
%
|
General
and administrative expenses
|
|
|
122.6
|
|
|
|
74.5
|
|
|
|
64.7
|
%
|
|
|
229.5
|
|
|
|
139.7
|
|
|
|
64.3
|
%
|
Gain
on sale of FirstGuard Missouri
|
|
(3.3
|
)
|
|
—
|
|
|
—
|
%
|
|
(7.5
|
)
|
|
—
|
|
|
—
|
%
|
||||||
Earnings
from operations
|
|
|
16.9
|
|
|
|
6.3
|
|
|
|
167.4
|
%
|
|
|
34.0
|
|
|
|
18.9
|
|
|
|
80.0
|
%
|
Investment
and other income, net
|
|
1.7
|
|
|
1.5
|
|
|
20.9
|
%
|
|
3.1
|
|
|
3.0
|
|
|
4.3
|
%
|
||||||
Earnings
before income taxes
|
|
|
18.6
|
|
|
|
7.8
|
|
|
|
140.3
|
%
|
|
|
37.1
|
|
|
|
21.9
|
|
|
|
69.7
|
%
|
Income
tax (benefit) expense
|
|
0.8
|
|
2.9
|
|
|
(70.6
|
)%
|
|
(18.9
|
)
|
|
8.2
|
|
|
(331.6
|
)%
|
|||||||
Net earnings | $ | 17.8 | $ | 4.9 | 258.1 | % | $ | 56.0 | $ | 13.7 | $ | 307.8 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share | $ | 0.40 | $ | 0.11 | 263.6 | % | $ | 1.25 | $ | 0.31 | 303.2 | % |
|
1.
|
Medicaid
Managed Care segment growth
|
|
June
30,
|
|||||||
|
2007
|
2006
|
||||||
Georgia
|
281,400
|
216,000
|
||||||
Indiana
|
161,700
|
193,000
|
||||||
New
Jersey
|
59,100
|
59,000
|
||||||
Ohio
|
128,200
|
73,100
|
||||||
South
Carolina
|
31,100
|
—
|
||||||
Texas
|
333,900
|
235,800
|
||||||
Wisconsin
|
136,100
|
174,600
|
||||||
Subtotal
|
1,131,500
|
951,500
|
||||||
|
||||||||
Kansas
and Missouri
|
—
|
150,000
|
||||||
Total
|
1,131,500
|
1,101,500
|
|
June
30,
|
|||||||
|
2007
|
2006
|
||||||
Medicaid
|
846,900
|
755,400
|
||||||
SCHIP
|
216,500
|
179,700
|
||||||
SSI
|
68,100
|
16,400
|
||||||
Subtotal
|
1,131,500
|
951,500
|
||||||
|
||||||||
Kansas
and Missouri Medicaid/SCHIP members
|
—
|
150,000
|
||||||
Total
|
1,131,500
|
1,101,500
|
|
2.
|
Premium
rate increases
|
|
3.
|
Specialty
Services segment growth
|
|
|
Three
Months Ended June
30,
|
|
|
Six
Months Ended June
30,
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
Medicaid
and SCHIP
|
|
|
80.6
|
%
|
|
|
84.0
|
%
|
|
|
81.5
|
%
|
|
|
83.4
|
%
|
SSI
|
|
|
87.5
|
|
|
|
87.6
|
|
|
|
87.2
|
|
|
|
87.6
|
|
Specialty
Services
|
|
|
75.9
|
|
|
|
83.7
|
|
|
|
77.5
|
|
|
|
83.9
|
|
|
|
Three
Months Ended June
30,
|
|
|
Six
Months Ended June
30,
|
|
||||||||||
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
||||
Medicaid
Managed Care
|
|
|
14.0
|
%
|
|
|
12.3
|
%
|
|
|
13.5
|
%
|
|
|
12.1
|
%
|
Specialty
Services
|
|
|
15.8
|
|
|
|
17.4
|
|
|
|
15.8
|
|
|
|
19.3
|
|
|
·
|
our
ability to accurately predict and effectively manage health benefits
and
other operating expenses;
|
|
·
|
competition;
|
|
·
|
changes
in healthcare practices;
|
|
·
|
changes
in federal or state laws or
regulations;
|
|
·
|
inflation;
|
|
·
|
provider
contract changes;
|
|
·
|
new
technologies;
|
|
·
|
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 Medicaid managed
care
contracts by state
governments;
|
|
·
|
availability
of debt and equity financing on terms that are favorable to us;
and
|
|
·
|
general
economic and market
conditions.
|
Issuer
Purchases of Equity Securities (1)
Second
Quarter 2007
|
||||||||||||||||
Period
|
Total
Number of
Shares
Purchased
|
Average
Price
Paid
per
Share
|
Total
Number
of
Shares
Purchased
as
Part
of Publicly
Announced
Plans
or
Programs
|
Maximum
Number
of Shares
that
May Yet Be
Purchased
Under
the
Plans or
Programs
|
||||||||||||
April
1 – April 30, 2007
|
41,500
|
$ |
21.52
|
41,500
|
3,523,000
|
|||||||||||
May
1 – May 31, 2007
|
20,000
|
21.61
|
20,000
|
3,503,000
|
||||||||||||
June
1 – June 30, 2007
|
51,000
|
20.61
|
51,000
|
3,452,000
|
||||||||||||
TOTAL
|
112,500
|
$ |
21.12
|
112,500
|
3,452,000
|
|||||||||||
|
||||||||||||||||
(1) On
November 7, 2005 our Board of Directors adopted a stock repurchase
program
of up to 4,000,000 shares, which extends through October 31, 2007.
During
the three months ended June 30, 2007, we did not repurchase any
shares
other than through this publicly announced program.
|
|
Total
Vote For
Each
Director
|
Total
Vote Withheld From Each Director
|
||||||
Mr.
Bartlett
|
39,761,305
|
751,616
|
||||||
Mr.
Thompson
|
35,423,568
|
5,089,353
|
·
|
the
selection of KPMG LLP as the Company’s independent registered public
accounting firm for the fiscal year ending December 31, 2007 was
ratified;
|
·
|
amendments
to the 2003 Stock Incentive Plan were approved;
and
|
·
|
the
2007 Long-Term Incentive Plan was
approved.
|
|
Total
Vote For
|
Total
Vote Against
|
Total
Vote Abstain
|
Total Broker
Non-Votes
|
||||||||||||
KPMG
LLP
|
40,277,416
|
225,228
|
10,277
|
2,958,043
|
||||||||||||
2003
Stock Incentive Plan
|
31,868,172
|
5,173,398
|
18,100
|
6,411,294
|
||||||||||||
2007
Long-Term Incentive Plan
|
32,595,557
|
4,452,961
|
11,153
|
6,411,293
|
|
Exhibits.
|
EXHIBIT NUMBER
|
DESCRIPTION
|
|
|
|
|
4.1
|
Amendment
No. 1 to Rights Agreement by and between Centene Corporation and
Mellon
Investor Services LLC, as right agent, dated April 23, 2007, incorporated
herein by reference to Exhibit 4.1 of Form 8-K filed April 26,
2007.
|
|
4.2
|
Indenture
for the 7 ¼ % Senior Notes due 2014 dated March 22, 2007 among Centene
Corporation and The Bank of New York Trust Company, N.A., as trustee,
incorporated herein by reference to Exhibit 4.3 of Form S-4 filed
May 11,
2007.
|
|
10.1
|
Notice
of Renewal for fiscal year 2008 between Peach State Health Plan,
Inc. and
Georgia Department of Community Health.
|
|
|
|
|
10.2
|
Amendment
to the Contract between the Texas Health and Human Services Commission
and
Superior HealthPlan, Inc.
|
|
|
|
|
10.3
|
Centene
Corporation Amended and Restated 2003 Stock Incentive Plan, incorporated
herein by reference to Exhibit 10.1 to Form 8-K filed April 26,
2007.
|
|
10.4
|
Centene
Corporation 2007 Long-Term Incentive Plan, incorporated herein
by
reference to Exhibit 10.2 to Form 8-K filed April 26,
2007.
|
|
10.5
|
Form
of Executive Severance and Change in Control Agreement, incorporated
herein by reference to Exhibit 10.1 to Form 8-K filed May 23,
2005.
|
|
12.1
|
Computation
of ratio of earnings to fixed charges.
|
|
|
|
|
31.1
|
Certification
of Chairman, President and Chief Executive Officer pursuant to
Rule
13(a)-14(a) under the Securities Exchange Act of 1934, as
amended.
|
|
|
|
|
31.2
|
Certification
of Executive Vice President and Chief Financial Officer pursuant
to Rule
13(a)-14(a) under the Securities Exchange Act of 1934, as
amended.
|
|
|
|
|
32.1
|
Certification
of Chairman, President and Chief Executive Officer pursuant to
18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act
of 2002.
|
|
|
|
|
32.2
|
Certification
of Executive Vice President and Chief Financial Officer pursuant
to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
|
CENTENE
CORPORATION
|
|
|
|
|
|
By:
|
/s/ MICHAEL
F. NEIDORFF
|
|
Chairman,
President and Chief Executive Officer
(principal
executive officer)
|
|
|
|
|
By:
|
/s/
ERIC R. SLUSSER
|
|
Executive Vice
President and Chief Financial Officer
(principal financial
officer)
|
|
|
|
|
By:
|
/s/
J. PER BRODIN
|
|
Senior Vice
President, Chief Accounting Officer and Treasurer
(principal
accounting officer)
|