Good morning. My name is Tim and I’ll be your conference operator today. At this time I’d like to welcome everyone to the CNC 2008, fourth quarter and year end financial results. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I will now turn the call over to Ed Kroll, Senior Vice President of Finance and Investor Relations for Centene Corp. Sir, you may begin.

Thank you and good morning everyone. I’m Ed Kroll, Senior Vice President of Finance and Investor Relations at Centene. Thank you for joining us on today’s fourth quarter earnings call. Michael Neidorff, Chairman and Chief Executive Officer; and Eric Slusser, Executive Vice President and Chief Financial Officer of Centene, will host this morning’s call. The call is expected to last about 45 minutes and may be accessed through our website at www.centene.com. A replay will be available shortly after this call’s completion, also on our website at www.centene.com or by dialing 800-642-1687 in the United States and Canada and 706-645-9291 from all other countries and for both, you enter access code 81401888. Any remarks that Centene may make about future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor Provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements, as a result of various important factors, including those discussed in Centene’s Form 10-Q dated October 28, 2008 and other public SEC filings. Centene anticipates that subsequent events and developments will 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. With that, I’d like to turn the call over to our Chairman and CEO, Michael Neidorff.

Thank you, Ed. Good morning everyone and thank you for joining Centene’s fourth quarter and full year 2008 earnings call. I will briefly review some of the highlights of the fourth quarter and then turn the call over to Eric, who will walk you through the financial results. Before I comment on what I feel was another solid quarter, I would like to reflect on the new era that the 2008 financial crisis ushered in and what this global realignment in finance and business structure means for Centene. One, we must be balance sheet managers and continue to be balance sheet managers. Liquidity and capital adequacy are prerequisites for the success of any business at any time as measured by our RBC levels, debt to total cap and days claims payable. Secondly, our relationship with suppliers, i.e. providers, will require collaboration and we will only work with those who effectively balance quality and cost effectiveness. Thirdly, we will be selective in our pursuit of new opportunities. Fourth, we will seek or attempt to err on the side of conservators; and finally, we value systems enhancements that will enable us to be more efficient. We believe that Centene is well positioned to help their citizens maintain access to quality healthcare services in these difficult times, when state budgets are a very sensitive and critical issue. States are more reliant than ever on Medicaid managed care companies, to help them stretch their budget dollars as far as possible. They are dependent on us to provide their Medicaid beneficiaries with access to quality care in the most equality and cost effective manner. We believe that Centene’s unique multi-line strategy with our specialty companies and breadth of products gives us a compelling, competitive advantage. For example with Celtic as part of the Centene family,…

Thank you Michael and good morning everyone. Before I discuss the financial results from continuing operations, I would like to address the impact of reclassifying the New Jersey plan as a discontinued operation to help you reconcile to our previously issued 2008 financial guidance. As discussed on our December 19, 2008 guidance call, the results of operations for University Health Plans, our New Jersey Health Plan, are now shown in the financial statements as a discontinued operation, as a result of our intent to sell the business. For fiscal 2008, New Jersey had approximately $147.6 million of premium revenue and earnings from operations that equated to $0.03 of earnings per share. The $0.03 of earnings from operations for the year were offset by exit and other one-time charges in the fourth quarter of 2008, which equated to $0.05 of loss per share, together netting to $0.02 of loss from discontinued operations for the full year. The New Jersey revenue and earnings from operations amounts for the year were included in our previous 2008 guidance numbers, but have been moved to discontinued operations in our financial statements in accordance with Generally Accepted Accounting Principles. The financial results discussed throughout the remainder of this call will be in the context of continuing operations unless noted otherwise. For the quarter ended December 31, 2008, revenues net of premium taxes grew to $878.8 million, which represents 22.2% growth compared to the fourth quarter of 2007. The revenue increase was driven by the following items: First, full risk membership growth in most of our states. Second, the April 1 start-up of our Texas foster care contract. Third, the acquisition of Celtic, which closed on July 1. Fourth, our new Arizona acute care contract that commenced during the quarter. Fifth, average premium rate increases in the…

(Operator Instructions) And your first question comes from Daryn Miller from Goldman Sachs, your line is now open.

Good morning.

Good morning.

Hey, a quick question, is it possible to get the enrollment number for New Jersey?

Yes, 55,000 members approximately.

And then can you guys talk specifically on Ohio, how much MCR improvement did you see sequentially in the fourth quarter in the ABD population?

Fourth quarter Ohio was essentially flat from third quarter. As we noted, we saw a significant improvement from where we were a year ago at this time, but a lot of that improvement was first quarter to second quarter to third quarter. Again, it was relatively flat to the fourth quarter.

And that was ABD or that was the entire population?

That was ABD.

And then, looking at what you’re seeing so far in 2009 in terms of enrollment growth, can you guys talk about that a little bit?

Like I said, we would really like to talk about enrollment at the end of the quarter, Darren, versus what’s occurring in the quarter because it varies month to month and you’re reconciling the premium received with the members. So I think it might be a little early to talk about that.

Okay, and then just in terms of the period end claims as per member, it continues to come down. Can you just talk about what’s driving that down?

Yes, that’s driven a lot by timing of payments, because that’s claims that have been submitted for payment. It just so happened with the timing around year end that all of our plans had a check run at the end of December, around the holidays. In addition, we had one state that has changed their compliance requirements for processing first claim and they reduced that requirement by nine days. Those two items together are the main drivers of that reduction.

Which plan pushed that change through?

Indiana.

And then just looking at the trend over the course of 2008, it continued to come down over the year. What was driving that longer term trend?

Just, as we’ve talked about in all of our calls, we continue to focus on operational improvements and the claims and claim processing area has been a particular focus around process improvements and best practices. So it is simply a combination of that, combined with timing, and again a lot of times if you get close to the end of the month, that’s an end of month, end of quarter figure, so the timing of your payments will drive that, but over the year improvement is a lot of process improvement and focus.

And we’re getting more claims electronically as well and we are working with our providers to get them in electronically, because they tend to be more accurate and we can pay it that much faster. So there’s a lot of that.

Just following up on that, did you guys implement any new systems or are more of your providers implementing systems? Is this a kind of a broader trend we’re seeing across the Medicaid space?

Well, in the case of our business, we do see more providers as, I said, to do it electronically and we’re working with them to help them do that. Our systems enhancements were starting to kick in, but I would attribute it more to the work we do with the providers to get it in and getting away from the manual side of things.

Okay, great. Thank you very much.

Thank you.

And your next question comes from Greg Genova with Deutsche Bank.

Good morning.

Good morning, Greg.

First on SCHIP, you said that’s been factored into your guidance, but can you talk about which states have the most membership there? And then on the stimulus plan, granted that’s not in your guidance and it’s a bit early, but as you look at it right now the way it stands maybe in the house version, let’s say, how that will work its way through with rate increases and/or membership, just how we should think about that and let’s say it gets signed soon.

On the SCHIP, I think $2 million of the $4 billion fall was in the states we’re in, but $1.2 million of it alone is in Texas, and so we knew it was coming. It was clear that the SCHIP was going to be, so when we were putting it in our budget, we did consider that kind of factors we alluded to on the guidance for ‘09, but it’s kind of early to say what the impact will be as we have to see how Texas implements it; what they do about it, as well as the other states. While it’s effective now, it needs more definition around it and what we’ve said is it’s kind of an input/output, the puts and takes in our overall guidance when we consider that. Relatively to the F-Map, even more so, so we have to wait and see how it’s implemented and the timing of it. We believe that initially the greatest benefit will be to stabilize the state’s costs and the medical expense as they have had increased enrollment from the uninsured and things of that nature. So we see it initially as stabilizing. We do not expect additional rate increases as a result of it, but I think it will allow the states to maintain their adequacy of rates that is required actuarially.

Thanks and then maybe can you run through any rate updates since last time when we spoke. I think maybe Wisconsin, I don’t know if that has been finalized or Ohio ended up being 11.

Yes, as I think we talked about it, the year end guidance call, they have been finalized for Indiana, Wisconsin and Ohio and really after that there’s nothing else on the horizon until the July 1 Georgia rate increase that will be out there. So the three other states were finalized low single digits as we had expected effective January 1.

Okay and last question, on the days, do you expect that to be steady going forward? Is there any impact for New Jersey that should cause that to shift as that's discontinued or is that factored into the current days and that should be pretty steady?

Yes, the current day’s metric as you see in the press release is a continuing operations. So one of the things if you notice, the rate or the days as of September 30 that are in there changed slightly, that’s due to taking New Jersey out of there. So throughout the press release everything has been moved to continuing operations, which excludes New Jersey. I would expect as we have been, we will continue to see days claims payable in that range that we’ve been at, the 49 give or take, half a day in there.

Great, thank you.

And your next question is from Joshua Raskin with Barclays.

Thanks, good morning. First question, just relates to your expectation for 2009 membership growth. What sort of organic membership growth I guess are you looking for?

We haven’t talked specific organic growth, Josh. That’s something we got to wait for because as we cross-sell products, it can become a very contingent number. So that’s something several years ago we said “look, we’ll give you revenue, we’ll give you” -- I mean you look at Florida conversion and things of that nature. It could become misleading.

Okay. I guess you’ve given your sort of rate expectations and you’ve given the revenue, so we can sort of back into an organic membership number, but I guess my question maybe directionally then, is there any increase in expectations due to the economy and how should we think about that?

Yes, we expect some growth in membership and planned for that. Just as you saw in the numbers this past year, we just saw membership grow absent Wisconsin. So we expect some growth, but we also have new products we’re talking to the states about. So, that’s why it gets difficult to talk specifically organic growth.

And then maybe Eric, what was the day claims payable in the New Jersey plan specifically?

Days claims payable in New Jersey averages around 70 days. It’s driven by regulatory requirements there and they also have a significant SSI population, which tends to have a much longer claims processing time. So give or take, it’s right around 70 days average.

Okay, perfect. That makes sense to your statement. I guess this last question, why is New Jersey discontinued?

Well, we have what we believe was a valid contract and which is now being litigated and until such times those results, sound practices, say you’ll leave it in discontinued under the accounting.

Yes, like I indicated in my comments, it is our intent to sell the business and under Generally Accepted Accounting Principles around discontinued operations, that requires us to now classify it as discontinued because of our intent.

Okay. So we should assume that despite the sort of termination or whatever, the litigation with Amerigroup, may be there’s a process built in place to sell those assets. Is that what we should assume or is that still based on the contract with Amerigroup?

We have what we believe to be a valid contract with Anerigroup and I’ll leave it at that.

Okay, and then I’m sorry, last question; New Jersey, what is the expectation for the discontinued operations in 2009? Is that going to be a positive or a negative contributor?

We addressed that on the guidance call and right now given the activities going on with New Jersey and the litigation, we’re not going to give out any further information related to New Jersey.

We did tell you we had a penny profit.

We showed $0.03 of profit for ‘08 fiscal year and a penny in Q4.

All right. So we can just use those as run rates maybe with lack of any sort of addition. Okay, thanks.

And your next question is from Greg Nersessian with Credit Suisse.

Hey, good morning. I guess the first question was just on the reserve roll forward. It looked like there was an increase sequentially. I know you guys do this on a rolling 12 month basis, but was there a bolus of favorable reserve development this quarter or was there something that rolled off as of the last quarter; if you could just talk to that a little bit?

Sure. There’s pretty well a blend throughout the quarters. At any one time in this business, the reserves are an estimation process. You’re going to see both positive and negative prior period development, but there’s no significant portion of that that fell in any one particular quarter the. Again we every quarter throughout plan see positive, negative development against our estimates.

I mean it’s fair to say, as Eric just said Greg, it’s throughout the course of the year.

Yes, it’s just that if I look at the third quarter number it was $7 million over a four quarter period and this quarter was almost $19 million. So $12 million delta in one quarter; I’m just trying to figure out how much of that was related to an increase. I mean typically in the fourth quarter you don’t see that much favorable reserves development. So I’m just trying to figure out how much was this quarter versus something that happened a year ago that rolled off.

I think if we get to look at it, it was sort of both, because you have to look at the base year four quarters back, which could have been lower.

Also, that also is going to be driven by pulling New Jersey out of there.

Okay, so you may have had some negative reserve development last year in New Jersey or something like that?

Possible. I don’t have that last year’s figures in front of me.

Okay, and then I forget if you mentioned this on the guidance call, but the cash flow from operations expectation for 2009, it came in a little higher than expected in ‘08. Is there anything, any payments that were accelerated this quarter? I guess what’s your expectation for ‘09 CFFO, what’s your net income ratio?

I don’t have a 2009 number here, but as we indicated, we expect to continue to see strong cash flows in the business. It has been historically, again it was for 2008 and we expect that trend to continue. We have seen throughout the year, state payments as I indicated here, that may lag rather than at the end of the month to the beginning of the following month, which impacts your quarter-to-quarter metrics, but the year end total, again we saw strong cash flows and we would just expect that trend to continue. We see nothing out there that would cause us to believe otherwise.

It’s typically been 1.5 to 2 times. That’s the range of net income and of course as we highlighted in this quarter, it was a function of some (Inaudible) from a couple of states.

And then I was a little curious why the Arizona business, the long term care business, I guess the bridge way business, was classified under your specialty services. I mean that seems like mostly a premium based business.

Well we’ve had the long term care business in Arizona since October 1, 2006 classified in the specialty segment. The acute care which we added on October 1, the 14,000 some odd members, is folded into bridge way as part of our operations there. So we continue to classify that there and that’s really more of an administrative convenience at this point than really a technical point.

It's 14,000 members; it’s half the population available. We didn’t see any swings back and forth across it and its being managed by bridge way is what, is worth really saying. So we said 14,000 was up until we start breaking it out.

Was that the main driver or the specialty MLR was up significantly this quarter, or did something happen with Celtic?

I think there’s a combination of both adding Celtic in and the acute care business. As we said in the comments, in the first six months, particularly of a new line, we are very conservative in what we put into reserves and so that would apply obviously for the fourth quarter of 2008 for the acute care business.

Okay, great and just a final question, do you intend to break out your Celtic either membership or revenue or anything going forward, any details?

Specifically we’ve been talking about it probably as it continues to grow, becomes more material, we would end up and say “maybe we need that insurance segment.” Right now it was not that material to start breaking it out, but I expect as it starts to grow, there’ll be a reason we’ll expect that at some point Greg.

Okay, thanks.

And your next question is from Tom Carroll with Stifel Nicolaus.

Hi, good morning. I jumped on late, so I apologize if this has been discussed already and just tell me so and I’ll refer to the transcripts, but I guess two quick things. From discontinued operations in ‘07, I’m seeing that $0.72 number. Maybe if you could just refresh our memory on why that just seems very high; and then secondly, your accounts payable doubled into ‘08. I was wondering if we could get color on that. That certainly helped cash flow from ops quite a bit in 2008. Thanks.

Yes, on the first question; last year, that discontinued operations and the sizable number related to our first guard operations that we had abandoned in the previous years, that operation is pretty well gone as the claims have tailed out, but it had a significant impact in those prior years. As far as the payables, let me just get my number here, so that we’re both looking at the same number. Just so we’re clear, you’re talking about the accounts payable in the accrued expenses line?

Yes.

Okay. So several things in there, big drivers; one is the consolidation of Celtic that’s driving that. Second thing is at the end of any period we have checks that have been submitted, but not turned in to the bank. So those drafts get reclassified as payables. There’s about $35 million that’s attributable to that ongoing, just increases in payroll accruals that, just because of timing of payroll versus year end, etc, and beyond that, those are most of the largest drivers of it. Again, a lot of it’s just timing of year end and payment activity versus when our cycles are, etc.

Okay. Thank you very much.

Thank you.

And at this time, there are no other questions in queue.

Well, if there are no other questions, then we thank you all for participating and look forward to the Q1 call in April. Thank you everyone.

This concludes today’s conference call. You may now disconnect.