CENTENE CORP – 10-K – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Edgar Online, Inc.

 The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this filing. The discussion contains forward-looking statements that involve known and unknown risks and uncertainties, including those set forth under Part I, Item 1A."Risk Factors" of this Form 10-K.                                       OVERVIEW

Our financial performance for 2011 is summarized as follows:

· Year-end at-risk managed care membership of 1,816,000, an increase of 282,500

members, or 18.4% year over year.

· Premium and service revenues from continuing operations of $5.2 billion,

representing 20.9% growth year over year.

· Health Benefits Ratio from continuing operations of 85.2%, compared to 85.5%

in 2010.

· General and Administrative expense ratio of 11.3%, compared to 11.2% in 2010.

· Diluted net earnings per share from continuing operations of $2.12, including

$(0.10) of debt extinguishment costs.

· Total operating cash flows of $261.7 million, or 2.4 times net earnings.

The following items contributed to our revenue and membership growth over the last two years:

· Arizona. In December 2010, Cenpatico Behavioral Health of Arizona began

operating under an expanded contract to manage behavioral healthcare services

for an additional four counties. In October 2011, Bridgeway Health Solutions,

began operating under an expanded contract to deliver long-term care services

in three geographic service areas of Arizona.

· Florida. In December 2010, we completed the conversion of non-risk managed

care membership from Access Health Solutions LLC to our subsidiary, Sunshine

State Health Plan. Additionally, in December 2010, we completed the

acquisition of Citrus Health Care, Inc., a Medicaid and long-term care health

    plan.    

· Illinois. In May 2011, our new subsidiary, IlliniCare Health Plan, began

providing managed care services for older adults and adults with disabilities

under the Integrated Care Program in six counties.

· Kentucky. In November 2011, our subsidiary, Kentucky Spirit Health Plan, began

providing managed care services under a three-year contract with the Kentucky

Finance and Administration Cabinet to serve Medicaid beneficiaries.

· Massachusetts. In April 2010, we began offering an individual insurance

product, under the names of Commonwealth Choice and CeltiCare Direct, for

residents who do not qualify for other state funded insurance programs.

· Mississippi. In January 2011, we began operating through the Mississippi

Coordinated Access Network program to serve Medicaid beneficiaries.

· Ohio. In October 2011, Buckeye Community Health Plan began operating under an

amended contract with the Ohio Department of Job and Family Services which

includes the management of the pharmacy benefit for Buckeye's members.

· South Carolina. In June 2010, we completed the acquisition of Carolina

Crescent Health Plan.

· Texas. In February 2011, we began operating under an additional STAR+PLUS ABD

contract in the Dallas service area and in September 2011, added additional

membership through the contiguous county expansion.

We expect the following items to contribute to our future growth potential:

· 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

   Bayou Health Program in all three of the state's geographical services    areas. Services for these members commenced in February 2012, with a    three-phase membership roll-out ending in the second quarter of 2012.   

· In August 2011, we were awarded renewed and expanded contracts by the Texas

Health and Human Services Commission. The contracts expand Superior's STAR,

STAR+PLUS and CHIP product offerings to include the new 10 county Hidalgo

Service Area (STAR and STAR+PLUS), Medicaid RSA West Texas, Medicaid RSA

Central Texas, Medicaid RSA North-East Texas and Lubbock (STAR+PLUS). All of

the service areas and products will now include the management of the pharmacy

benefit for Superior's members. In addition, the state has added inpatient

facility services to the managed care structure for the STAR+PLUS

program. Operations in the expanded areas are expected to commence late in the

    first quarter of 2012.    

· In 2012, we expect to realize the full year benefit of business commenced

   during 2011 in Arizona, Illinois, Kentucky, Ohio and Texas, as discussed    above.   

· In 2012, we announced that we were selected to contract with the Washington

Health Care Authority to serve Medicaid beneficiaries in the state.    Operations are expected to commence in the third quarter of 2012.     

In 2010, we filed a legal challenge to the state of Wisconsin's decision on the southeast region reprocurement. In September 2011, the Wisconsin Court of Appeals denied our appeal.

  As part of an RFP process, the state of Texas added a second vendor to the rural CHIP product in September 2010, which we previously managed under an exclusive contract. As a result, our December 31, 2010 membership in this product decreased by approximately 50,000 as compared to the prior year.  In March 2010, the Patient Protection and Affordable Care Act and the accompanying Health Care and Education Affordability Reconciliation Act, or the Acts, were enacted in the United States. The Acts contain provisions we expect will have a significant effect on our business in coming years including expanding Medicaid eligibility beginning in 2014 to recipients with incomes below 133% of the federal poverty level, retaining the CHIP program in its current form, and requiring state-based exchanges similar to our experience in Massachusetts in the future. The Acts allow states to receive the same level of rebates from pharmaceutical companies for their Medicaid programs, whether or not the states participate in managed care. The Acts also impose an excise tax on health insurers beginning in 2014 based upon relative market share. Effective in 2011, minimum health benefit cost ratios became mandated for commercial, fully-insured major medical health plans in the individual market, such as our Celtic subsidiary. The minimum health benefit cost ratio for these commercial plans will be set at 80% of premium revenue, adjusted for certain taxes, fees, assessments, risk premium and a credibility factor based upon both the number of covered life years and an average plan cost sharing adjustment calculated for each state. Certain states have filed and been granted waivers allowing for minimum heath benefit cost ratios at levels below 80%.  If the actual health benefit cost ratios do not meet the minimum calculated for any state, rebates will be paid to those policyholders. Celtic expects to pay minimal rebates based on its 2011 results.  Due to its complexity and lack of comprehensive interpretive guidance and implementation regulations, the ultimate impact of the Acts on Celtic is not yet fully known. The health benefit cost ratio minimum does not apply to other Centene subsidiaries.                                     MEMBERSHIP  From December 31, 2009 to December 31, 2011, we increased our at-risk managed care membership by 24.5%. The following table sets forth our membership by state for our managed care organizations:                                          20

--------------------------------------------------------------------------------

  Table of Contents                                                 December 31,                                         2011        2010        2009              Arizona                     23,700      22,400      20,700              Florida                    198,300     194,900     102,600              Georgia                    298,200     305,800     309,700              Illinois                    16,300           -           -              Indiana                    206,900     215,800     208,100              Kentucky                   180,700           -           -              Massachusetts               35,700      36,200      27,800              Mississippi                 31,600           -           -              Ohio                       159,900     160,100     150,800              South Carolina              82,900      90,300      48,600              Texas                      503,800     433,100     455,100              Wisconsin                   78,000      74,900     134,800              Total at-risk membership 1,816,000   1,533,500   1,458,200              Non-risk membership          4,900       4,200      63,700              Total                    1,820,900   1,537,700   1,521,900   

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

                                                 December 31,                                         2011        2010        2009              Medicaid                 1,336,800   1,177,100   1,081,400              CHIP & Foster Care         213,900     210,500     263,600              ABD & Medicare             218,000     104,600      82,800              Hybrid Programs             40,500      36,200      27,800              Long-term Care               6,800       5,100       2,600              Total at-risk membership 1,816,000   1,533,500   1,458,200              Non-risk membership          4,900       4,200      63,700              Total                    1,820,900   1,537,700   1,521,900   

The following table provides information for other membership categories:

                                                   December 31,                                             2011      2010      2009               Cenpatico Behavioral Health:               Arizona                      168,900   174,600   120,100               Kansas                        46,200    39,200    41,400   

From December 31, 2010 to December 31, 2011 our membership increased as a result of:

· operations commenced in Illinois, Kentucky and Mississippi

· contract awards and geographic expansion in Texas

· expanded contract awards in Arizona

From December 31, 2009 to December 31, 2010 our membership changed as a result of:

· acquisitions in Florida and South Carolina

· continued conversion of non-risk membership from Access to at-risk under

Sunshine State Health Plan in Florida

· decreased membership in Texas and Wisconsin resulting from reprocurements

                            RESULTS OF CONTINUING OPERATIONS  

The following discussion and analysis is based on our consolidated statements of operations, which reflect our results of operations for the years ended December 31, 2011, 2010 and 2009, as prepared in accordance with generally accepted accounting principles in the United States.

  Summarized comparative financial data for 2011, 2010 and 2009 are as follows ($ in millions):                                                                                         % Change          % Change                                              2011          2010          2009         2010 - 2011       2009 - 2010 Premium                                    $ 5,077.2     $ 4,192.2     $ 3,786.5              21.1 %            10.7 % Service                                        103.8          91.6          91.8              13.2 %           (0.1) % Premium and service revenues                 5,181.0       4,283.8       3,878.3              20.9 %            10.5 % Premium tax                                    159.6         164.5         224.6             (3.0) %          (26.8) % Total revenues                               5,340.6       4,448.3       4,102.9              20.1 %             8.4 % Medical costs                                4,324.8       3,584.5       3,230.1              20.7 %            11.0 % Cost of services                                78.1          63.9          60.8              22.2 %             5.1 % General and administrative expenses            587.0         477.7         448.0              22.9 %             6.7 % Premium tax expense                            160.4         165.1         225.9             (2.9) %          (26.9) % Earnings from operations                       190.3         157.1         138.1              21.2 %            13.7 % Investment and other income, net               (15.4 )        (2.8 )        (0.6 )           454.0 %           344.5 % Earnings from continuing operations, before income tax expense                      174.9         154.3         137.5              13.4 %            12.2 % Income tax expense                              66.5          59.9          48.8              11.1 %            22.6 % Earnings from continuing operations, net of income tax expense                          108.4          94.4          88.7              14.8 %             6.4 % Discontinued operations, net of income tax expense (benefit) of $0, $4.4, and $(1.2) respectively                                -           3.9          (2.4 )         (100.0) %         (260.6) % Net earnings                                   108.4          98.3          86.3              10.3 %            13.9 % Noncontrolling interest                         (2.8 )         3.5           2.6           (183.1) %            33.4 % Net earnings attributable to Centene Corporation                                $   111.2     $    94.8     $    83.7              17.3 %            13.3 %  Amounts attributable to Centene Corporation common shareholders: Earnings from continuing operations, net of income tax expense                      $   111.2     $    90.9     $    86.1              22.3 %             5.6 % Discontinued operations, net of income tax expense (benefit)                              -           3.9          (2.4 )         (100.0) %         (260.6) % Net earnings                               $   111.2     $    94.8     $    83.7              17.3 %            13.3 %  Diluted earnings (loss) per common share attributable to Centene Corporation: Continuing operations                      $    2.12     $    1.80     $    1.94              17.8 %           (7.2) % Discontinued operations                            -          0.08         

(0.05 ) (100.0) % (260.0) % Total diluted earnings per common share $ 2.12$ 1.88$ 1.89

              12.8 %           (0.5) %                                           21 

--------------------------------------------------------------------------------

Table of Contents

Overview

Revenues and Revenue Recognition

  Our health plans generate revenues primarily from premiums we receive from the states in which we operate. We receive a fixed premium per member per month pursuant to our state contracts. We generally receive premium payments and recognize premium revenue during the month in which we are obligated to provide services to our members. In some instances, our base premiums are subject to an adjustment, or risk score, based on the acuity of our membership. Generally, the risk score is determined by the state analyzing submissions of processed claims data to determine the acuity of our membership relative to the entire state's membership. Some contracts allow for additional premium associated with certain supplemental services provided such as maternity deliveries.  Revenues are recorded based on membership and eligibility data provided by the states, which is adjusted on a monthly basis by the states for retroactive additions or deletions to membership data. These eligibility adjustments are reflected in the period known. We continuously review and update those estimates as new information becomes available. It is possible that new information could require us to make additional adjustments, which could be significant, to these estimates.  Our specialty services generate revenues under contracts with state programs, healthcare organizations, and other commercial organizations, as well as from our own subsidiaries. Revenues are recognized when the related services are provided or as ratably earned over the covered period of services.  Premium and service revenues collected in advance are recorded as unearned revenue. For performance-based contracts, we do not recognize revenue subject to refund until data is sufficient to measure performance. Premium and service revenues due to us are recorded as premium and related receivables and are recorded net of an allowance based on historical trends and our management's judgment on the collectibility of these accounts. As we generally receive payments during the month in which services are provided, the allowance is typically not significant in comparison to total revenues and does not have a material impact on the presentation of our financial condition or results of operations.  Some states enact premium taxes, similar assessments and provider and hospital pass-through payments, collectively, premium taxes, and these taxes are recorded as a component of revenues as well as operating expenses. We exclude premium taxes from our key ratios as we believe the premium tax is a pass-through of costs and not indicative of our operating performance.  The Centers for Medicare and Medicaid Services (CMS) deploys a risk adjustment model that retroactively apportions Medicare premiums paid according to health severity and certain demographic factors. The model pays more for members whose medical history indicates they have certain medical conditions. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis data from hospital inpatient, hospital outpatient, physician treatment settings as well as prescription drug events. The Company estimates the amount of risk adjustment based upon the diagnosis and pharmacy data submitted and expected to be submitted to CMS and records revenues on a risk adjusted basis.  Operating Expenses  Medical Costs  Medical costs include payments to physicians, hospitals, and other providers for healthcare and specialty services claims. Medical costs also include estimates of medical expenses incurred but not yet reported, or IBNR, and estimates of the cost to process unpaid claims. We use our judgment to determine the assumptions to be used in the calculation of the required IBNR estimate. The assumptions we consider include, without limitation, claims receipt and payment experience (and variations in that experience), changes in membership, provider billing practices, healthcare service utilization trends, cost trends, product mix, seasonality, prior authorization of medical services, benefit changes, known outbreaks of disease or increased incidence of illness such as influenza, provider contract changes, changes to Medicaid fee schedules, and the incidence of high dollar or catastrophic claims.  Our development of the IBNR estimate is a continuous process which we monitor and refine on a monthly basis as claims receipts and payment information becomes available. As more complete information becomes available, we adjust the amount of the estimate, and include the changes in estimates in medical expense in the period in which the changes are identified.  Additionally, we contract with independent actuaries to review our estimates on a quarterly basis. The independent actuaries provide us with a review letter that includes the results of their analysis of our medical claims liability. We do not solely rely on their report to adjust our claims liability. We utilize their calculation of our claims liability only as additional information, together with management's judgment, to determine the assumptions to be used in the calculation of our liability for medical costs.  While we believe our IBNR estimate is appropriate, it is possible future events could require us to make significant adjustments for revisions to these estimates. Accordingly, we cannot assure you that healthcare claim costs will not materially differ from our estimates.  Results of operations depend on our ability to manage expenses associated with health benefits and to accurately predict costs incurred. The health benefits ratio, or HBR, represents medical costs as a percentage of premium revenues (excluding premium taxes) and reflects the direct relationship between the premium received and the medical services provided.  During 2011, we reclassified certain Medical Costs and General & Administrative Expenses to more closely align with the new National Association of Insurance Commissioners (NAIC) definitions of medical costs. We have reclassified all periods presented to conform to the new presentation. The table below presents the impact of the reclassification on consolidated Medical Costs and HBR for the years ended December 31, 2011, 2010 and 2009.                                 2011                       2010                       2009                         Medical                    Medical                    Medical                          Costs         HBR          Costs         HBR          Costs         HBR    Historical         $ 4,227,916       83.3 %   $ 3,514,394       83.8 %   $ 3,163,523       83.5 %

Reclassification

   impact                  96,830        1.9          70,058        1.7          66,608        1.8    Revised            $ 4,324,746       85.2 %   $ 3,584,452       85.5 %   $ 3,230,131       85.3 %    Cost of Services  Cost of services expense includes the pharmaceutical costs associated with our pharmacy benefit manager's external revenues and certain direct costs to support the functions responsible for generation of our services revenues. These expenses consist of the salaries and wages of the professionals who provide the services and associated expenses.  

General and Administrative Expenses

  General and administrative expenses, or G&A, primarily reflect wages and benefits, including stock compensation expense, and other administrative costs associated with our health plans, specialty companies and centralized functions that support all of our business units. Our major centralized functions are finance, information systems and claims processing. G&A expenses also include business expansion costs, such as wages and benefits for administrative personnel, contracting costs, and information technology buildouts, incurred prior to the commencement of a new contract or health plan.  The G&A expense ratio represents G&A expenses as a percentage of premium and service revenues, and reflects the relationship between revenues earned and the costs necessary to earn those revenues.  As mentioned above, during 2011, we reclassified certain Medical Costs and G&A Expenses to more closely align with the new NAIC definitions. We have reclassified all periods presented to conform to the new presentation of medical costs. The table below presents the impact of the reclassification on consolidated G&A Expense and the G&A expense ratio for the years ended December 31, 2011, 2010 and 2009.                               2011                          2010                           2009                                       G&A                           G&A                            G&A                     G&A Expense      Ratio        G&A Expense      Ratio         G&A Expense      Ratio Historical         $     683,834       13.2 %    $     547,823       12.8 %     $     514,529       13.3 % Reclassification impact                   (96,830 )     (1.9 )          (70,058 )     (1.6 )           (66,608 )     (1.7 ) Revised            $     587,004       11.3 %    $     477,765       11.2 %     $     447,921       11.6 %                                            22

--------------------------------------------------------------------------------

Table of Contents

Other Income (Expense)

Other income (expense) consists principally of investment income from cash and investments, earnings in equity method investments, and interest expense on debt.

Discontinued Operations

  In November 2008, we announced our intention to sell certain assets of UHP, our New Jersey health plan. Accordingly, the results of operations for UHP are reported as discontinued operations for all periods presented. We completed the sale in the first quarter of 2010.  

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

Revenues

  Premium and service revenues increased 20.9% in 2011 over 2010 as a result of membership growth discussed under the heading "Membership". The premium rates specified in our state contracts are generally updated on an annual basis through contract amendments. In 2011, we received premium rate adjustments which yielded a net 0.9% composite decrease across all of our markets.  

Operating Expenses

Medical Costs

  The table below depicts the HBR for our external membership by member category:                                           Year Ended December 31,                                          2011               2010                  Medicaid and CHIP          82.4 %             85.0 %                  ABD and Medicare           89.8               87.1                  Specialty Services         89.1               86.2                  Total                      85.2               85.5   

The consolidated HBR of 85.2% for 2011 represented a 0.3% decrease from the 2010 consolidated HBR of 85.5%. The decrease is primarily due to lower levels of utilization and contract enhancements.

General and Administrative Expenses

  The consolidated G&A expense ratio for the years ended December 31, 2011 and 2010 was 11.3% and 11.2%, respectively. The increase in the ratio in 2011 primarily reflects increased business expansion costs to support new business in Illinois, Kentucky, Louisiana and Texas, partially offset by the leveraging of our expenses over higher revenues.  

Investment and Other Income, Net

    The following table summarizes the components of investment and other income,   net ($ in millions):                                                         Year Ended December 31,                                                        2011              2010       Investment income                            $        13.1       $   14.9

      Net gain on sale of investments                        0.3           

2.5

      Impairment of investment                                 ?          

(5.5 )

      Gain on Reserve Primary Fund distributions               ?           

3.3

      Debt extinguishment costs                             (8.5 )         

?

      Interest expense                                     (20.3 )       

(18.0 )          Investment and other income, net          $       (15.4 )     $   (2.8 )   

Investment income. The decrease in investment income in 2011 reflects the continued low market interest rates, partially offset by an increase in investment balances.

Net gain on sale of investments. As a result of tightening our investment criteria for municipal securities, we sold municipal securities resulting in net gains of $2.5 million during 2010.

Impairment of investment. During 2010, we determined we had an other-than-temporary impairment of our cost method investment in Casenet, LLC, and recorded an impairment charge of $5.5 million.

Gain on Reserve Primary Fund distributions. In 2010, we received distributions from the Reserve Primary Fund of $5.7 million resulting in a gain of $3.3 million recorded for the distributions received in excess of our adjusted basis.

  Debt extinguishment costs. In May 2011, the Company redeemed its $175.0 million 7.25% Senior Notes due April 1, 2014 at 103.625% and wrote off unamortized debt issuance costs. Debt extinguishment costs totaled $8.5 million, or $0.10 per diluted share.  Interest expense. Interest expense for 2011 increased by $2.3 million from 2010 primarily due to borrowings on the mortgage loan associated with the real estate development including our corporate headquarters. The real estate development was placed in service in the third quarter of 2010 and, accordingly, we ceased capitalizing interest on the project. The increase in interest expense was partially offset by reduced interest expense reflecting the refinancing our Senior Notes and lower interest rate as a result of the execution of the associated interest rate swap agreements in 2011.  

Income Tax Expense

  Excluding the amounts attributable to noncontrolling interest, our effective tax rate in 2011 was 37.4% compared to 39.7% in 2010.  The decrease in the effective tax rate was driven by a higher rate in 2010 resulting from legislation enacted in May 2010 in the state of Georgia which replaced the state income tax with a premium tax for Medicaid managed care organizations effective July 1, 2010. Accordingly, a deferred tax asset of $1.7 million related to Georgia state net operating loss carry forwards was written off during 2010. Additionally, the higher effective tax rate in 2010 was also related to a decrease in tax exempt interest and an increase in state income taxes.                                          23

--------------------------------------------------------------------------------

Table of Contents

Segment Results

  The following table summarizes our operating results by segment ($ in millions):                                                                       % Change                                           2011          2010         2010-2011

Premium and Service Revenues

          Medicaid Managed Care          $ 4,515.5     $ 3,740.5            20.7 %          Specialty Services               1,484.3       1,112.1            33.5 %          Eliminations                      (818.8 )      (568.8 )          44.0 %          Consolidated Total             $ 5,181.0     $ 4,283.8            20.9 % 

Earnings from Operations

          Medicaid Managed Care          $   153.0     $   117.1            

30.6 %

          Specialty Services                  37.3          40.0            

(6.6 ) %

          Consolidated Total             $   190.3     $   157.1            21.1 %    Medicaid Managed Care  Premium and service revenues increased 20.7% in 2011 due to the addition of the Mississippi, Illinois and Kentucky contracts, the Texas market expansion, and overall membership growth. Earnings from operations increased 30.6% in 2011 reflecting overall growth in our membership, reduced HBR and leveraging of our general and administrative expenses.  

Specialty Services

  Premium and service revenues increased 33.5% in 2011 primarily due to the growth in our Medicaid segment and the associated specialty services provided to this increased membership. Earnings from operations decreased 6.6% in 2011 reflecting the addition of the care management software business which operates at a loss and lower earnings in our individual health insurance business.  

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

Revenues

  Premium and service revenues increased 10.5% in 2010 over 2009 as a result of membership growth discussed under the heading "Membership", and net premium rate increases in 2010. In 2010, we received premium rate adjustments in certain markets which yielded a net 2.3% composite increase across all of our markets. The increase in premium and service revenues was moderated by the removal of pharmacy services in two states in 2010. These pharmacy carve outs had the effect of reducing revenue by approximately $185.0 million during 2010.  Operating Expenses  Medical Costs  The table below depicts the HBR for our external membership by member category:                                           Year Ended December 31,                                          2010               2009                  Medicaid and CHIP          85.0 %             86.1 %                  ABD and Medicare           87.1               83.5                  Specialty Services         86.2               83.1                  Total                      85.5               85.3     The consolidated HBR of 85.5% for 2010 represented a 0.2% increase from the 2009 consolidated HBR of 85.3%. The increase is mainly due to a member mix shift to less favorable HBR categories, partially offset by provider network and utilization management initiatives.  

General and Administrative Expenses

The consolidated G&A expense ratio for the years ended December 31, 2010 and 2009 was 11.2% and 11.5%, respectively. The decrease in the ratio in 2010 primarily reflects the leveraging of our expenses over higher revenues.

Investment and Other Income, Net

    The following table summarizes the components of investment and other income,   net ($ in millions):                                                          Year Ended December 31,                                                       2010               2009      Investment income                            $       14.9       $       15.6

     Net gain on sale of investments                       2.5             

0.1

     Impairment of investment                             (5.5 )                -      Gain on Reserve Primary Fund distributions            3.3                  -      Interest expense                                    (18.0 )           

(16.3 )

Investment and other income, net $ (2.8 ) $

(0.6 )

Investment income. The decrease in investment income in 2010 reflects the decline in market interest rates.

Net gain on sale of investments. As a result of tightening our investment criteria for municipal securities, we sold municipal securities resulting in net gains of $2.5 million during 2010.

  Impairment of investment. During 2010, we determined we had an other-than-temporary impairment of our cost method investment in Casenet, LLC$5.5 million, including $3.5 million of convertible promissory notes.  

Gain on Reserve Primary Fund distributions. In 2010, we received distributions from the Reserve Primary Fund of $5.7 million resulting in a gain of $3.3 million recorded for the distributions received in excess of our adjusted basis.

  Interest expense. Interest expense increased reflecting the borrowings on the loans associated with the construction of our corporate headquarters. The real estate development was placed in service in the third quarter 2010 and accordingly we ceased capitalizing interest on the project. The increase was partially offset by the reduction in debt outstanding under our revolving credit agreement as a result of the equity offering completed during the first quarter of 2010.                                          24

--------------------------------------------------------------------------------

Table of Contents

Income Tax Expense

  Excluding the amounts attributable to noncontrolling interest, our effective tax rate in 2010 was 39.7% compared to 36.2% in 2009.  The increase in 2010 was primarily driven by legislation enacted in May 2010 in the state of Georgia which replaced the state income tax with a premium tax for Medicaid managed care organizations effective July 1, 2010. Accordingly, a deferred tax asset of $1.7 million related to Georgia state net operating loss carry forwards was written off during 2010. Additionally, the increase in the effective tax rate in 2010 was also related to a decrease in tax exempt interest and an increase in state income taxes.  Discontinued Operations  Pre-tax earnings related to discontinued operations (consisting solely of the New Jersey health plan operations) were $8.3 million in 2010 compared to a pre-tax loss of $3.6 million in 2009. As a result of the sale of certain assets of the New Jersey operations in March 2010, we recognized a pre-tax gain of $8.2 million, which was $3.9 million after tax, or $0.08 per diluted share. Additionally, we recognized $1.2 million of restructuring costs associated with the exit primarily due to lease termination costs and employee retention programs. The total revenue associated with UHP included in results from discontinued operations was $21.8 million and $145.1 million for 2010 and 2009, respectively.  Segment Results  The following table summarizes our operating results by segment ($ in millions):                                                                       % Change                                           2010          2009         2009-2010

Premium and Service Revenues

          Medicaid Managed Care          $ 3,740.5     $ 3,464.8             8.0 %          Specialty Services               1,112.1       1,049.5             6.0 %          Eliminations                      (568.8 )      (636.0 )         (10.6 ) %          Consolidated Total             $ 4,283.8     $ 3,878.3            10.5 % 

Earnings from Operations

          Medicaid Managed Care          $   117.1     $    99.3            

17.9 %

          Specialty Services                  40.0          38.8             

2.9 %

          Consolidated Total             $   157.1     $   138.1            13.7 %    Medicaid Managed Care  Premium and service revenues increased 8.0% in 2010 due to membership growth and net premium rate increases in 2010. Earnings from operations increased 17.9% in 2010 reflecting overall growth in our membership and leveraging of our general and administrative expenses.  

Specialty Services

  Premium and service revenues increased 6.0% in 2010 primarily due to growth of our operations in Massachusetts, as well as membership growth in our Medicaid segment and the associated specialty services provided to this increased membership. Earnings from operations increased 2.9% in 2010 reflecting the growth in service revenue for lower margin services, higher HBR in 2010, and the effect of pharmacy carve outs in two states.                          LIQUIDITY AND CAPITAL RESOURCES   Shown below is a condensed schedule of cash flows for the years ended December 31, 2011, 2010 and 2009, that we use throughout our discussion of liquidity and capital resources ($ in millions).                                                         Year Ended December 

31,

                                                     2011         2010       

2009

Net cash provided by operating activities $ 261.7$ 168.9$ 248.2

Net cash used in investing activities (129.1 ) (210.6 )

(270.1 )

      Net cash provided by financing activities        6.9         72.1         46.6       Net increase in cash and cash equivalents   $  139.5     $   30.4     $   24.7   

Cash Flows Provided by Operating Activities

  Normal operations are funded primarily through operating cash flows and borrowings under our revolving credit facility. Operating activities provided cash of $261.7 million in 2011, compared to $168.9 million in 2010 and $248.2 million in 2009.  

Cash flows from operations in each year were impacted by the timing of payments we receive from our states. States may prepay the following month premium payment which we record as unearned revenue, or they may delay our premium payment by several days until the following month which we record as a receivable.

The table below details the impact to cash flows from operations from the timing of payments from our states ($ in millions).

                                                            Year Ended 

December 31,

                                                       2011         2010         2009     Premium and related receivables                  $  (11.3 )    $ (23.4 )    $  2.4     Unearned revenue                                   (109.1 )       25.7        78.3     Net (decrease) increase in operating cash flow   $ (120.4 )    $   2.3      $ 80.7    Net cash provided by operating activities in 2011 was negatively impacted by the timing of payments from our states by $120.4 million. As of December 31, 2011, we had received all December 2011 capitation payments from our states and had not received any prepayments of January 2012 capitation. This was offset by an increase in medical claims liabilities related to the start up of our Mississippi, Illinois and Kentucky health plans, as well as expansion of our Texas health plan in 2011.  Net cash provided by operating activities benefited in 2010 and 2009 as a result of prepayments from several of our states. Cash flows from operations in 2010 also reflected an increase in premium and related receivables and medical claims liability primarily due to increased business in Florida, Massachusetts and South Carolina.  

Cash Flows Used in Investing Activities

  Investing activities used cash of $129.1 million in 2011, $210.6 million in 2010 and $270.1 million in 2009. Cash flows for each year primarily consisted of additions to the investment portfolio of our regulated subsidiaries, including transfers from cash and cash equivalents to long-term investments, and capital expenditures. In 2009, cash flows from investing activities also included membership conversion fees in Florida and acquisitions in Florida and South Carolina.  Our investment policies are designed to provide liquidity, preserve capital and maximize total return on invested assets within our guidelines. Net cash provided by and used in investing activities will fluctuate from year to year due to the timing of investment purchases, sales and maturities. As of December 31, 2011, our investment portfolio consisted primarily of fixed-income securities with an average duration of 2.0 years. These securities generally are actively traded in secondary markets and the reported fair market value is determined based on recent trading activity, recent trading activity in similar securities and other observable inputs. Our investment guidelines comply with the regulatory restrictions enacted in each state.                                         25

--------------------------------------------------------------------------------

Table of Contents

  The following table summarizes our cash and investment balances as of December 31, ($ in millions):                                                              2011          2010     Cash, cash equivalents and short-term investments     $   704.2     $   455.2     Long-term investments                                     506.1         595.9     Restricted deposits                                        26.8          22.8

Total cash, investments and restricted deposits $ 1,237.1$ 1,073.9

Regulated cash, investments and restricted deposits $ 1,198.9$ 1,043.0

    Unregulated cash and investments                           38.2        

 30.9     Consolidated Total                                    $ 1,237.1     $ 1,073.9    We spent $64.4 million, $31.7 million and $23.2 million in 2011, 2010 and 2009 respectively, on capital expenditures for system enhancements, a new datacenter and market expansions. We also spent $4.6 million, $31.6 million, and $0.5 million in 2011, 2010 and 2009, respectively, for costs associated with our headquarters development including land, tenant improvements and furniture. We anticipate spending approximately $55 million on capital expenditures in 2012 primarily associated with system enhancements and market expansions.  During 2009, we executed an agreement as a joint venture partner in Centene Center LLC that began construction of a real estate development that included the Company's corporate headquarters. During 2010, the development was placed in service and we acquired the remaining ownership interest in Centene Center LLC. For the years ended December 31, 2011, 2010 and 2009, Centene Center LLC had capital expenditures of $4.7 million, $55.3 million and $59.4 million, respectively, for costs associated with the real estate development. We anticipate spending approximately $3 million on capital expenditures in 2012 associated with the real estate development.  

Cash Flows Provided by Financing Activities

  Our financing activities provided cash of $6.9 million in 2011, $72.1 million in 2010 and $46.6 million in 2009. During 2011, our financing activities primarily related to repayments and proceeds of long term debt as discussed below. During 2010, our financing activities primarily related to proceeds from our stock offering and resulting payoff of our revolving credit facility discussed below, as well as borrowings for the construction of the real estate development discussed above. During 2009, our financing activities primarily related to proceeds from borrowings under our $300 million credit facility and construction financing of the real estate development discussed above.  In June 2009, Centene Center LLC executed a $95 million construction loan associated with the real estate development that included our corporate headquarters. In December 2010, we refinanced the $95 million construction loan with an $80 million 10 year mortgage note payable. The mortgage note is non-recourse to the Company, bears a 5.14% interest rate and has a financial covenant requiring a minimum debt service coverage ratio.  During the first quarter of 2010, we completed the sale of 5.75 million shares of common stock for $19.25 per share. Net proceeds from the sale of the shares were approximately $104.5 million. A portion of the net proceeds was used to repay the outstanding indebtedness under our $300 million revolving credit loan facility ($84.0 million as of December 31, 2009). The remaining net proceeds were used to fund our acquisition in South Carolina as well as capital expenditures.  In January 2011, we replaced our $300 million revolving credit agreement with a new $350 million revolving credit facility, or the revolver. The revolver is unsecured and has a five-year maturity with non-financial and financial covenants, including requirements of minimum fixed charge coverage ratios, maximum debt to EBITDA ratios and minimum net worth. Borrowings under the revolver will bear interest based upon LIBOR rates, the Federal funds rate, or the prime rate. There is a commitment fee on the unused portion of the agreement that ranges from 0.25% to 0.50% depending on the total debt to EBITDA ratio. As of December 31, 2011, we had no borrowings outstanding under the agreement, leaving availability of $350.0 million. As of December 31, 2011, we were in compliance with all covenants.  In May 2011, we exercised our option to redeem the $175 million 7.25% Senior Notes due April 1, 2014 ($175 million Notes). We redeemed the $175 million Notes at 103.625% and wrote off unamortized debt issuance costs, resulting in a pre-tax expense of $8.5 million.  In May 2011, pursuant to a shelf registration statement, we issued $250 million of non-callable 5.75% Senior Notes due June 1, 2017 ($250 million Notes) at a discount to yield 6%. The indenture governing the $250 million Notes contains non-financial and financial covenants, including requirements of a minimum fixed charge coverage ratio. Interest is paid semi-annually in June and December. We used a portion of the net proceeds from the offering to repay the $175 million Notes and call premium and to repay approximately $50 million outstanding on our revolving credit facility. The additional proceeds were used for general corporate purposes. In connection with the issuance, we entered into $250 million notional amount of interest rate swap agreements (Swap Agreements) that are scheduled to expire June 1, 2017. Under the Swap Agreements, we receive a fixed rate of 5.75% and pay a variable rate of LIBOR plus 3.5% adjusted quarterly, which allows us to adjust the $250 million Notes to a floating rate. We do not hold or issue any derivative instrument for trading or speculative purposes.  At December 31, 2011, we had working capital, defined as current assets less current liabilities, of $102.4 million, as compared to $(108.4) million at December 31, 2010. We manage our short-term and long-term investments with the goal of ensuring that a sufficient portion is held in investments that are highly liquid and can be sold to fund short-term requirements as needed. Our working capital is negative from time to time due to our efforts to increase investment returns through purchases of investments that have maturities of greater than one year and, therefore, are classified as long-term.  At December 31, 2011, our debt to capital ratio, defined as total debt divided by the sum of total debt and total equity, was 27.3%, compared to 29.3% at December 31, 2010. Excluding the $77.8 million Non-Recourse Mortgage Note, our debt to capital ratio is 22.6%. We utilize the debt to capital ratio as a measure, among others, of our leverage and financial flexibility.  We have a stock repurchase program authorizing us to repurchase up to four million shares of common stock from time to time on the open market or through privately negotiated transactions. No duration has been placed on the repurchase program. We reserve the right to discontinue the repurchase program at any time. We did not make any repurchases under this plan during 2011 or 2010.  During the year ended December 31, 2011, 2010 and 2009, we received dividends of $69.1 million, $67.9 million, $19.1 million, respectively, from our regulated subsidiaries.  Based on our operating plan, we expect that our available cash, cash equivalents and investments, cash from our operations and cash available under our credit facility will be sufficient to finance our general operations and capital expenditures for at least 12 months from the date of this filing.                              CONTRACTUAL OBLIGATIONS  The following table summarizes future contractual obligations. These obligations contain estimates and are subject to revision under a number of circumstances. Our debt consists of borrowings from our senior notes, credit facility, mortgages and capital leases. The purchase obligations consist primarily of software purchase and maintenance contracts. The contractual obligations and estimated period of payment over the next five years and beyond are as follows (in thousands):                                                               Payments Due by Period                                                       Less Than         1-3          3-5        More Than                                          Total          1 Year         Years        Years        5 Years Medical claims liability              $   607,985     $  607,985     $       -     $      -     $        - Debt and interest                         467,225         21,814        51,397       42,176        351,838 Operating lease obligations                96,002         21,187        33,307       24,504         17,004 Purchase obligations                       36,271         17,086        15,546        3,439            200 Reserve for uncertain tax positions         9,601              -         8,034        1,567              - Other long-term liabilities 1              58,359          3,651        10,810        8,614         35,284 Total                                 $ 1,275,443     $  671,723     $ 119,094     $ 80,300     $  404,326  

________________________________

1 Includes $7,868 separate account liabilities from third party reinsurance that will not be settled in cash.

                                       26

--------------------------------------------------------------------------------

Table of Contents

                  REGULATORY CAPITAL AND DIVIDEND RESTRICTIONS  Our operations are conducted through our subsidiaries. As managed care organizations, these subsidiaries are subject to state regulations that, among other things, require the maintenance of minimum levels of statutory capital, as defined by each state, and restrict the timing, payment and amount of dividends and other distributions that may be paid to us. Generally, the amount of dividend distributions that may be paid by a regulated subsidiary without prior approval by state regulatory authorities is limited based on the entity's level of statutory net income and statutory capital and surplus.  Our subsidiaries are required to maintain minimum capital requirements prescribed by various regulatory authorities in each of the states in which we operate. As of December 31, 2011, our subsidiaries had aggregate statutory capital and surplus of $619.9 million, compared with the required minimum aggregate statutory capital and surplus requirements of $342.0 million and we estimate our Risk Based Capital, or RBC, percentage to be in excess of 350% of the Authorized Control Level.  The National Association of Insurance Commissioners has adopted rules which set minimum risk-based capital requirements for insurance companies, managed care organizations and other entities bearing risk for healthcare coverage. As of December 31, 2011, each of our health plans were in compliance with the risk-based capital requirements enacted in those states.                          RECENT ACCOUNTING PRONOUNCEMENTS

For this information, refer to Note 2, Summary of Significant Accounting Policies, in the Notes to the Consolidated Financials Statements, included herein.

                   CRITICAL ACCOUNTING POLICIES AND ESTIMATES  Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements which have been prepared in accordance with GAAP. In connection with the preparation of our consolidated financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors we believe to be relevant at the time we prepared our consolidated financial statements. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.  Our significant accounting policies are more fully described in Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements included elsewhere herein. Our accounting policies regarding medical claims liability and intangible assets are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management. As a result, they are subject to an inherent degree of uncertainty. We have reviewed these critical accounting policies and related disclosures with the Audit Committee of our Board of Directors.  

Medical claims liability

  Our medical claims liability includes claims reported but not yet paid, or inventory, estimates for claims incurred but not reported, or IBNR, and estimates for the costs necessary to process unpaid claims at the end of each period. We estimate our medical claims liability using actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. These actuarial methods consider factors such as historical data for payment patterns, cost trends, product mix, seasonality, utilization of healthcare services and other relevant factors.  Actuarial Standards of Practice generally require that the medical claims liability estimates be adequate to cover obligations under moderately adverse conditions. Moderately adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of estimate. In many situations, the claims amounts ultimately settled will be different than the estimate that satisfies the Actuarial Standards of Practice. We include in our IBNR an estimate for medical claims liability under moderately adverse conditions which represents the risk of adverse deviation of the estimates in our actuarial method of reserving.  We use our judgment to determine the assumptions to be used in the calculation of the required estimates. The assumptions we consider when estimating IBNR include, without limitation, claims receipt and payment experience (and variations in that experience), changes in membership, provider billing practices, healthcare service utilization trends, cost trends, product mix, seasonality, prior authorization of medical services, benefit changes, known outbreaks of disease or increased incidence of illness such as influenza, provider contract changes, changes to fee schedules, and the incidence of high dollar or catastrophic claims.      We apply various estimation methods depending on the claim type and the period for which claims are being estimated. For more recent periods, incurred non-inpatient claims are estimated based on historical per member per month claims experience adjusted for known factors. Incurred hospital inpatient claims are estimated based on known inpatient utilization data and prior claims experience adjusted for known factors. For older periods, we utilize an estimated completion factor based on our historical experience to develop IBNR estimates. The completion factor is an actuarial estimate of the percentage of claims incurred during a given period that have been received or adjudicated as of the reporting period to the estimate of the total ultimate incurred costs. When we commence operations in a new state or region, we have limited information with which to estimate our medical claims liability. See "Risk Factors - Failure to accurately predict our medical expenses could negatively affect our financial position, results of operations or cash flows." These approaches are consistently applied to each period presented.  Additionally, we contract with independent actuaries to review our estimates on a quarterly basis. The independent actuaries provide us with a review letter that includes the results of their analysis of our medical claims liability. We do not solely rely on their report to adjust our claims liability. We utilize their calculation of our claims liability only as additional information, together with management's judgment, to determine the assumptions to be used in the calculation of our liability for claims.  Our development of the medical claims liability estimate is a continuous process which we monitor and refine on a monthly basis as additional claims receipts and payment information becomes available. As more complete claim information becomes available, we adjust the amount of the estimates, and include the changes in estimates in medical costs in the period in which the changes are identified. In every reporting period, our operating results include the effects of more completely developed medical claims liability estimates associated with previously reported periods. We consistently apply our reserving methodology from period to period. As additional information becomes known to us, we adjust our actuarial models accordingly to establish medical claims liability estimates.  The paid and received completion factors, claims per member per month and per diem cost trend factors are the most significant factors affecting the IBNR estimate. The following table illustrates the sensitivity of these factors and the estimated potential impact on our operating results caused by changes in these factors based on December 31, 2011 data:                 Completion Factors (1):                                    

Cost Trend Factors (2):

                                         Increase                                              Increase          (Decrease)                   (Decrease) in             (Decrease)                   (Decrease) in           Increase                    Medical Claims             Increase                   Medical Claims          in Factors                    Liabilities              in Factors                    Liabilities                                       (in thousands)                                         (in thousands)                 (2.0 )%             $           67,000             (2.0 )%             $             (16,600 )                 (1.5 )                          49,900             (1.5 )                            (12,600 )                 (1.0 )                          33,000             (1.0 )                             (8,400 )                 (0.5 )                          16,500             (0.5 )                             (4,200 )                  0.5                           (16,400 )            0.5                                4,200                  1.0                           (32,400 )            1.0                                8,500                  1.5                           (48,500 )            1.5                               12,700                  2.0                           (64,300 )            2.0                               17,000 

(1) Reflects estimated potential changes in medical claims liability caused by changes in completion factors. (2) Reflects estimated potential changes in medical claims liability caused by changes in cost trend factors

for the most recent periods.

    While we believe our estimates are appropriate, it is possible future events could require us to make significant adjustments for revisions to these estimates. For example, a 1% increase or decrease in our estimated medical claims liability would have affected net earnings by $3.8 million for the year ended December 31, 2011. The estimates are based on our historical experience, terms of existing contracts, our observance of trends in the industry, information provided by our providers and information available from other outside sources.                                          27

--------------------------------------------------------------------------------

Table of Contents

  The change in medical claims liability is summarized as follows (in thousands):                                                   Year Ended December 31,                                           2011            2010            2009        Balance, January 1              $   456,765     $   470,932     $   384,360        Incurred related to:        Current year                      4,390,123       3,652,521       3,283,141        Prior years                         (65,377 )       (68,069 )       (53,010 )        Total incurred                    4,324,746       3,584,452       3,230,131        Paid related to:        Current year                      3,788,808       3,203,585       2,819,591        Prior years                         384,718         395,034         323,968        Total paid                        4,173,526       3,598,619       3,143,559        Balance, December 31            $   607,985     $   456,765     $   470,932 

Claims inventory, December 31 495,500 434,900 423,400

         Days in claims payable 1               45.3            44.7          

49.1

________________________

 1 Days in claims payable is a calculation of medical claims liability at the end of the period divided by average expense per calendar day for the fourth quarter of each year.  Medical claims are usually paid within a few months of the member receiving service from the physician or other healthcare provider. As a result, the liability generally is described as having a "short-tail," which causes less than 5% of our medical claims liability as of the end of any given year to be outstanding the following year. We believe that substantially all the development of the estimate of medical claims liability as of December 31, 2011 will be known by the end of 2012.  Changes in estimates of incurred claims for prior years are primarily attributable to reserving under moderately adverse conditions. In addition, claims processing initiatives yielded increased claim payment recoveries and coordination of benefits related to prior year dates of service. Changes in medical utilization and cost trends and the effect of medical management initiatives may also contribute to changes in medical claim liability estimates. While we have evidence that medical management initiatives are effective on a case by case basis, medical management initiatives primarily focus on events and behaviors prior to the incurrence of the medical event and generation of a claim. Accordingly, any change in behavior, leveling of care, or coordination of treatment occurs prior to claim generation and as a result, the costs prior to the medical management initiative are not known by us. Additionally, certain medical management initiatives are focused on member and provider education with the intent of influencing behavior to appropriately align the medical services provided with the member's acuity. In these cases, determining whether the medical management initiative changed the behavior cannot be determined. Because of the complexity of our business, the number of states in which we operate, and the volume of claims that we process, we are unable to practically quantify the impact of these initiatives on our changes in estimates of IBNR.  

The following medical management initiatives may have contributed to the favorable development through lower medical utilization and cost trends:

· Appropriate leveling of care for neonatal intensive care unit hospital

admissions, other inpatient hospital admissions, and observation admissions,

in accordance with Interqual criteria.

· Tightening of our pre-authorization list and more stringent review of durable

medical equipment and injectibles.

· Emergency department, or ED, program designed to collaboratively work with

hospitals to steer non-emergency care away from the costly ED setting (through

patient education, on-site alternative urgent care settings, etc.)

· Increase emphasis on case management and clinical rounding where case managers

are nurses or social workers who are employed by the health plan to assist

selected patients with the coordination of healthcare services in order to

meet a patient's specific healthcare needs.

· Incorporation of disease management which is a comprehensive,

multidisciplinary, collaborative approach to chronic illnesses such as asthma.

Goodwill and Intangible Assets

We have made several acquisitions that have resulted in our recording of intangible assets. These intangible assets primarily consist of customer relationships, purchased contract rights, provider contracts, trade names and goodwill. At December 31, 2011, we had $282.0 million of goodwill and $27.4 million of other intangible assets.

Intangible assets are amortized using the straight-line method over the following periods:

                      Intangible Asset        Amortization Period                  Purchased contract rights      5 - 15 years                  Provider contracts             7 - 10 years                  Customer relationships         5 - 15 years                  Trade names                    7 - 20 years    Our management evaluates whether events or circumstances have occurred that may affect the estimated useful life or the recoverability of the remaining balance of goodwill and other identifiable intangible assets. If the events or circumstances indicate that the remaining balance of the intangible asset or goodwill may be impaired, the potential impairment will be measured based upon the difference between the carrying amount of the intangible asset or goodwill and the fair value of such asset. Our management must make assumptions and estimates, such as the discount factor, future utility and other internal and external factors, in determining the estimated fair values. While we believe these assumptions and estimates are appropriate, other assumptions and estimates could be applied and might produce significantly different results.  Goodwill is reviewed annually during the fourth quarter for impairment. In addition, an impairment analysis of intangible assets would be performed based on other factors. These factors include significant changes in membership, state funding, medical contracts and provider networks and contracts. The fair value of all reporting units with material amounts of goodwill was substantially in excess of the carrying value as of our annual impairment testing date.                                          28

--------------------------------------------------------------------------------

Table of Contents

Wordcount:

8985