Centene Corporation

Good day and welcome to the Centene Corporation third quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance today, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. I would now like to turn the conference over to Jen Gilligan, Senior Vice President, Finance and Investment Relations. Please go ahead, ma'am.

Thank you, Rocco, and good morning, everyone. Thank you for joining us on our third quarter 2021 Earnings Results Conference Call. Michael Neidorf, Chairman and Chief Executive Officer, Sarah London, Vice Chairman, and Drew Asher, Executive Vice President and Chief Financial Officer, of Centene will host this morning's call, which can also be accessed through our website at centene.com. Any remarks that Centene may make about future expectations, plans, and prospects constitute forward-looking statements for the purpose of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements, as a result of various important factors, including those discussed in Centene's most recent Form 10-Q filed today and the Form 10-K dated February 22, 2021, and other public SEC filings, including the risks and uncertainties described with respect to the potential impacts of COVID-19 on our business and results of operations. Centene anticipates that subsequent events and developments may cause its estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. The call will also refer to certain non-GAAP measures. A reconciliation of these measures with the most directly comparable GAAP measures can be found in our third quarter 2021 press release, which is available on the company's website under the Investors section. Additionally, please mark your calendars for our upcoming 2022 guidance meeting to be held on December 10th. We will invite sell-side analysts to participate in person in New York and ask others to participate virtually. With that, I would like to turn the call over to our chairman and CEO, Michael Neidorf. Michael?

Thank you, Jennifer. Good morning and thank you for joining 17's third quarter earnings call. Thank you. As you will notice today, we are evolving our presentation format to a streamlined version. and with essential facts and commentary. I'm pleased to have Sarah London and Drew Asher joining me today. Brent Layton has a conflict that could not be avoided, but you can expect him to join us on future calls. First, on the quarter, we were pleased with the results and the fact that the matrix was straightforward with minimum noise. In the quarter, we generated revenue of $32.4 billion, an HBR of 88.1%, and adjusted earnings for share of $1.26. Drew will provide additional context. Overall, the numbers reflect a return toward normal utilization, while still covering reasonable amounts of COVID costs, which seem to have peaked in August. Importantly, our performance provides a strong foundation for our value creation plan, and we remain committed to our margin goals. Further supporting our strategic progress during the quarter, we announced a series of organizational changes, including appointing Sarah London as Vice Chairman of the Board of Directors and Brent Layton as the company's President and Chief Operating Officer. I would also like to acknowledge that David Stewart, an 18-year veteran of our board of directors, retired to pursue personal business interests. We do not plan to replace his position as we continue to work on refreshing and streamlining the board to a size of 9 to 13 members. Turning to the current landscape, overall, the portfolio is performing well. We delivered a strong membership increase in Medicaid, our position for continued growth in Medicare, and we continue to stay the course in Marketplace. Sarah will provide further details. We are working closely with states on the timing of redetermination, which has so far been extended until January, with the opportunity for additional extensions three months at a time. As redeterminations do resume, I would like to remind you that not all states will be doing so at the same time. In addition, we look forward to offering members who no longer qualify for Medicaid the opportunity to enroll in our marketplace products. We expect that advanced premium tax credits will keep costs in line for these members, and we value the opportunity to support continuity of care and preserve provider relationships which in the long term leads to higher quality care, which is much more cost effective. Looking ahead to 2022, there are several additional factors we continue to monitor and evaluate. These include the pace of the RFP pipeline, ongoing growth in Medicare, the opportunity for improvement in marketplace watches, as well as the COVID landscape overall. we will provide full detail on these factors and their potential impact as headwinds and tailwinds at our Investor Day in December. In addition, we are committed to achieving an investment grade rating and a disciplined capital allocation framework that takes into consideration our priorities, including investing in our business, debt management, and share repurchases. Before I close, I'd like to highlight the importance of vaccine mandates in stopping the transmission of COVID and protecting those who cannot yet safely receive inoculations, particularly the immunologically compromised and young children for whom vaccine access is getting closer but still pending. Centene has been a leader on this critical issue, mandating vaccinations as a condition of employment. We also continue to support our members in assessing the vaccine through national outreach and campaigns and creative participation, such as the Pro Football Hall of Fame and NASCAR. I would also like to remind you that this platform for vaccines has been in development for the past 25 years, and scientists are indicating it is likely one of the safest vaccines ever developed. In closing, we are pleased with our third quarter results and the sustained momentum across the enterprise. We remain focused on executing across the Value Creation Playbook we have in place. As always, we intend to continue to provide transparent updates as we progress through our initiatives, and I look forward to seeing many of you at our December Investor Day. Finally, I'd like to thank all our employees for their unwavering commitment and service throughout these unprecedented times. Thank you for your continuous consenting, and I will turn the call over to Sarah.