Item 1. Financial Statements.

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Item 1. Financial Statements.

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except shares in thousands and per share data in dollars)


	March 31, 2025		December 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	14,815	$	14,063
Premium and trade receivables	22,436		19,713
Short-term investments	2,472		2,622
Other current assets	1,565		1,601
Total current assets	41,288		37,999
Long-term investments	18,268		17,429
Restricted deposits	1,409		1,390
Property, software and equipment, net	2,044		2,067

Goodwill	17,558		17,558
Intangible assets, net	5,236		5,409
Other long-term assets	1,241		593
Total assets	$	87,044	$	82,445
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY
Current liabilities:
Medical claims liability	$	19,911	$	18,308
Accounts payable and accrued expenses	13,948		13,174
Return of premium payable	2,403		2,008
Unearned revenue	869		661
Current portion of long-term debt	12		110
Total current liabilities	37,143		34,261
Long-term debt	18,308		18,423
Deferred tax liability	708		684
Other long-term liabilities	2,866		2,567
Total liabilities	59,025		55,935
Commitments and contingencies
Redeemable noncontrolling interests	12		10
Stockholders' equity:
Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or outstanding at March 31, 2025 and December 31, 2024	—		—
Common stock, $0.001 par value; authorized 800,000 shares; 622,511 issued and 497,518 outstanding at March 31, 2025, and 620,195 issued and 495,907 outstanding at December 31, 2024	1		1
Additional paid-in capital	20,631		20,562
Accumulated other comprehensive (loss)	(337)		(504)
Retained earnings	16,659		15,348
Treasury stock, at cost (124,993 and 124,288 shares, respectively)	(9,038)		(8,997)
Total Centene stockholders' equity	27,916		26,410
Nonredeemable noncontrolling interest	91		90
Total stockholders' equity	28,007		26,500
Total liabilities, redeemable noncontrolling interests and stockholders' equity	$	87,044	$	82,445

The accompanying notes to the consolidated financial statements are an integral part of these statements.

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except shares in thousands and per share data in dollars)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Revenues:
Premium	$	41,712	$	35,529
Service	777		808
Premium and service revenues	42,489		36,337
Premium tax	4,131		4,070
Total revenues	46,620		40,407
Expenses:
Medical costs	36,503		30,932
Cost of services	698		669
Selling, general and administrative expenses	3,353		3,218
Depreciation expense	142		135
Amortization of acquired intangible assets	173		173
Premium tax expense	4,217		4,161

Impairment	—		13

Total operating expenses	45,086		39,301
Earnings from operations	1,534		1,106
Other income (expense):
Investment and other income	382		545

Interest expense	(170)		(178)
Earnings before income tax	1,746		1,473
Income tax expense	432		315
Net earnings	1,314		1,158
(Earnings) loss attributable to noncontrolling interests	(3)		5
Net earnings attributable to Centene Corporation	$	1,311	$	1,163

Net earnings per common share attributable to Centene Corporation:
Basic earnings per common share	$	2.64	$	2.17
Diluted earnings per common share	$	2.63	$	2.16

Weighted average number of common shares outstanding:
Basic	496,214		535,109
Diluted	498,180		538,060

The accompanying notes to the consolidated financial statements are an integral part of these statements.

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

(In millions, unaudited)


	Three Months Ended March 31,
	2025		2024
Net earnings	$	1,314	$	1,158
Change in unrealized gain (loss) on investments	216		(81)
Change in unrealized gain (loss) on investments, tax effect	(50)		15
Change in unrealized gain (loss) on investments, net of tax	166		(66)

Reclassification adjustment, net of tax	1		88


Other comprehensive earnings	167		22
Comprehensive earnings	1,481		1,180
Comprehensive (earnings) loss attributable to noncontrolling interests	(3)		5
Comprehensive earnings attributable to Centene Corporation	$	1,478	$	1,185

The accompanying notes to the consolidated financial statements are an integral part of these statements.

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In millions, except shares in thousands and per share data in dollars)

(Unaudited)

Three Months Ended March 31, 2025


	Centene Stockholders' Equity
	Common Stock									Treasury Stock
	$0.001 Par Value Shares	Amt		Additional Paid-in Capital		Accumulated Other Comprehensive Earnings (Loss)		Retained Earnings		$0.001 Par Value Shares	Amt		Noncontrolling Interest		Total
Balance, December 31, 2024	620,195	$	1	$	20,562	$	(504)	$	15,348	124,288	$	(8,997)	$	90	$	26,500
Comprehensive Earnings:
Net earnings	—	—		—		—		1,311		—	—		1		1,312
Other comprehensive earnings, net of $50 tax	—	—		—		167		—		—	—		—		167


Common stock issued for employee benefit plans	2,316	—		10		—		—		—	—		—		10
Common stock repurchases	—	—		—		—		—		705	(41)		—		(41)
Stock compensation expense	—	—		59		—		—		—	—		—		59





Balance, March 31, 2025	622,511	$	1	$	20,631	$	(337)	$	16,659	124,993	$	(9,038)	$	91	$	28,007

Three Months Ended March 31, 2024


	Centene Stockholders' Equity
	Common Stock									Treasury Stock
	$0.001 Par Value Shares	Amt		Additional Paid-in Capital		Accumulated Other Comprehensive Earnings (Loss)		Retained Earnings		$0.001 Par Value Shares	Amt		Noncontrolling Interest		Total
Balance, December 31, 2023	615,291	$	1	$	20,304	$	(652)	$	12,043	80,807	$	(5,856)	$	97	$	25,937
Comprehensive Earnings:
Net earnings (loss)	—	—		—		—		1,163		—	—		(4)		1,159
Other comprehensive earnings, net of $(12) tax	—	—		—		22		—		—	—		—		22
Common stock issued for employee benefit plans	3,882	—		14		—		—		—	—		—		14
Common stock repurchases	—	—		—		—		—		1,983	(151)		—		(151)
Stock compensation expense	—	—		70		—		—		—	—		—		70
Divestiture of non-controlling interest	—	—		—		—		—		—	—		(3)		(3)
Balance, March 31, 2024	619,173	$	1	$	20,388	$	(630)	$	13,206	82,790	$	(6,007)	$	90	$	27,048

The accompanying notes to the consolidated financial statements are an integral part of these statements.

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions, unaudited)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net earnings	$	1,314	$	1,158
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities
Depreciation and amortization	314		308
Stock compensation expense	59		70
Impairment	—		13


Deferred income taxes	(27)		104
(Gain) loss on divestitures, net	10		(98)

Other adjustments, net	5		(2)
Changes in assets and liabilities
Premium and trade receivables	(2,684)		(1,211)
Other assets	(669)		(474)

Medical claims liabilities	1,603		108
Unearned revenue	208		(34)
Accounts payable and accrued expenses	563		(1,411)
Other long-term liabilities	814		1,013

Net cash provided by (used in) operating activities	1,510		(456)
Cash flows from investing activities:
Capital expenditures	(135)		(151)
Purchases of investments	(1,630)		(1,317)
Sales and maturities of investments	1,236		1,441

Divestiture proceeds, net of divested cash	—		879

Net cash (used in) provided by investing activities	(529)		852
Cash flows from financing activities:
Proceeds from long-term debt	750		350
Payments and repurchases of long-term debt	(958)		(187)

Common stock repurchases	(41)		(151)
Proceeds from common stock issuances	10		14



Other financing activities, net	(11)		(3)
Net cash (used in) provided by financing activities	(250)		23
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—		6
Net increase in cash, cash equivalents and restricted cash and cash equivalents	731		425

Cash, cash equivalents and restricted cash and cash equivalents, beginning of period	14,156		17,452
Cash, cash equivalents and restricted cash and cash equivalents, end of period	$	14,887	$	17,877
Supplemental disclosures of cash flow information:
Interest paid	$	129	$	155
Income taxes paid, net	$	7	$	13


The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported within the Consolidated Balance Sheets to the totals above:
	March 31,
	2025		2024
Cash and cash equivalents	$	14,815	$	17,585
Restricted cash and cash equivalents, included in restricted deposits	72		292
Total cash, cash equivalents and restricted cash and cash equivalents	$	14,887	$	17,877

The accompanying notes to the consolidated financial statements are an integral part of these statements.

CENTENE CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Operations

Basis of Presentation

The accompanying interim financial statements have been prepared under the presumption that users of the interim financial information have either read or have access to the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The unaudited interim financial statements herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, footnote disclosures that would substantially duplicate the disclosures contained in the December 31, 2024 audited financial statements have been omitted from these interim financial statements, where appropriate. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of the interim periods presented.

Certain 2024 amounts in the consolidated financial statements and notes to the consolidated financial statements have been reclassified to conform to the 2025 presentation. These reclassifications have no effect on net earnings or stockholders' equity as previously reported.

Recent Accounting Guidance Not Yet Adopted

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update 2024-03 - Income Statement - Reporting Comprehensive Income: Disaggregation of Income Statement Expenses which expands disclosures about specific expense categories presented on the face of the Statement of Operations. The new standard is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the effect of the new disclosure requirements.

2. Short-term and Long-term Investments, Restricted Deposits

Short-term and long-term investments and restricted deposits by investment type consist of the following ($ in millions):


	March 31, 2025								December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	571	$	3	$	(2)	$	572	$	593	$	2	$	(4)	$	591
Corporate securities	11,350		82		(275)		11,157		10,820		47		(360)		10,507
Restricted certificates of deposit	4		—		—		4		4		—		—		4
Restricted cash equivalents	72		—		—		72		93		—		—		93
Short-term time deposits	193		—		—		193		425		—		—		425
Municipal securities	4,187		14		(125)		4,076		4,174		7		(151)		4,030
Asset-backed securities	1,955		18		(15)		1,958		1,820		13		(21)		1,812
Residential mortgage-backed securities	1,841		7		(99)		1,749		1,807		1		(129)		1,679
Commercial mortgage-backed securities	1,330		6		(50)		1,286		1,298		3		(62)		1,239
Equity securities	13		—		—		13		14		—		—		14
Private equity investments	878		—		—		878		851		—		—		851
Life insurance contracts	191		—		—		191		196		—		—		196
Total	$	22,585	$	130	$	(566)	$	22,149	$	22,095	$	73	$	(727)	$	21,441

The Company's investments are debt securities classified as available-for-sale with the exception of equity securities, certain private equity investments and life insurance contracts. Private equity investments include direct investments in private equity securities as well as private equity funds. The Company's investment policies are designed to provide liquidity, preserve capital and maximize total return on invested assets with a focus on high credit quality securities. The Company limits the size of investment in any single issuer other than U.S. treasury securities and obligations of U.S. government corporations and agencies. As of March 31, 2025, 99% of the Company's investments in rated securities carry an investment grade rating by nationally recognized statistical rating organizations. At March 31, 2025, the Company held certificates of deposit, equity securities, private equity investments and life insurance contracts, which did not carry a credit rating. Accrued interest income on available-for-sale debt securities was $183 million and $178 million at March 31, 2025 and December 31, 2024, respectively, and is included in other current assets in the Consolidated Balance Sheets.

The Company's residential mortgage-backed securities are primarily issued by the Federal National Mortgage Association, Government National Mortgage Association or Federal Home Loan Mortgage Corporation, which carry implicit or explicit guarantees of the U.S. government. The Company's commercial mortgage-backed securities are primarily senior tranches with a weighted average rating of AA+ and a weighted average duration of 3 years at March 31, 2025.

The fair value of available-for-sale debt securities with gross unrealized losses by investment type and length of time that individual securities have been in a continuous unrealized loss position were as follows ($ in millions):


	March 31, 2025								December 31, 2024
	Less Than 12 Months				12 Months or More				Less Than 12 Months				12 Months or More
	Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	—	$	83	$	(2)	$	99	$	(1)	$	60	$	(3)	$	144
Corporate securities	(17)		1,783		(258)		4,443		(41)		2,621		(319)		4,782
Municipal securities	(9)		790		(116)		2,075		(16)		1,217		(135)		2,073
Asset-backed securities	(1)		258		(14)		286		(4)		301		(17)		331
Residential mortgage-backed securities	(6)		426		(93)		729		(18)		786		(111)		738
Commercial mortgage-backed securities	(2)		248		(48)		624		(4)		210		(58)		666

Total	$	(35)	$	3,588	$	(531)	$	8,256	$	(84)	$	5,195	$	(643)	$	8,734

As of March 31, 2025, the gross unrealized losses were generated from 4,683 positions out of a total of 6,741 positions. The change in fair value of available-for-sale debt securities is primarily a result of movement in interest rates subsequent to the purchase of the security.

For each security in an unrealized loss position, the Company assesses whether it intends to sell the security or if it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If the security meets this criterion, the decline in fair value is recorded in earnings. The Company does not intend to sell these securities prior to maturity and it is not likely that the Company will be required to sell these securities prior to maturity; therefore, the Company did not record an impairment for these securities.

In addition, the Company monitors available-for-sale debt securities for credit losses. Certain investments have experienced a decline in fair value due to changes in credit quality, market interest rates and/or general economic conditions. The Company recognizes an allowance when evidence demonstrates that the decline in fair value is credit related. Evidence of a credit-related loss may include rating agency actions, adverse conditions specifically related to the security or failure of the issuer of the security to make scheduled payments.

The contractual maturities of short-term and long-term debt securities and restricted deposits are as follows ($ in millions):


	March 31, 2025								December 31, 2024
	Investments				Restricted Deposits				Investments				Restricted Deposits
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	2,249	$	2,231	$	463	$	463	$	2,383	$	2,365	$	477	$	475
One year through five years	8,132		7,958		594		578		7,799		7,563		610		593
Five years through ten years	4,413		4,324		284		281		4,343		4,172		301		291
Greater than ten years	155		152		87		87		165		160		31		31
Asset-backed securities	5,126		4,993		—		—		4,925		4,730		—		—
Total	$	20,075	$	19,658	$	1,428	$	1,409	$	19,615	$	18,990	$	1,419	$	1,390

Actual maturities may differ from contractual maturities due to call or prepayment options. Equity securities, private equity investments and life insurance contracts are excluded from the table above because they do not have a contractual maturity. The Company has an option to redeem substantially all of the securities included in the greater than ten years category listed above at amortized cost.

3. Fair Value Measurements

Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are categorized based upon observable or unobservable inputs used to estimate fair value. Level inputs are as follows:


Level Input:						Input Definition:
Level I						Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

Level II						Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.

Level III						Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The following table summarizes fair value measurements by level at March 31, 2025, for assets and liabilities measured at fair value on a recurring basis ($ in millions):


	Level I		Level II		Level III		Total
Assets
Cash and cash equivalents	$	14,815	$	—	$	—	$	14,815
Investments:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	66	$	—	$	—	$	66
Corporate securities	—		11,155		—		11,155
Municipal securities	—		3,251		—		3,251
Short-term time deposits	—		193		—		193
Asset-backed securities	—		1,958		—		1,958
Residential mortgage-backed securities	—		1,749		—		1,749
Commercial mortgage-backed securities	—		1,286		—		1,286
Equity securities	12		1		—		13
Total investments	$	78	$	19,593	$	—	$	19,671
Restricted deposits:
Cash and cash equivalents	$	72	$	—	$	—	$	72
U.S. Treasury securities and obligations of U.S. government corporations and agencies	506		—		—		506
Corporate securities	—		2		—		2
Certificates of deposit	—		4		—		4
Municipal securities	—		825		—		825
Total restricted deposits	$	578	$	831	$	—	$	1,409


Total assets at fair value	$	15,471	$	20,424	$	—	$	35,895

The following table summarizes fair value measurements by level at December 31, 2024, for assets and liabilities measured at fair value on a recurring basis ($ in millions):


	Level I		Level II		Level III		Total
Assets
Cash and cash equivalents	$	14,063	$	—	$	—	$	14,063
Investments:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	58	$	—	$	—	$	58
Corporate securities	—		10,505		—		10,505
Municipal securities	—		3,272		—		3,272
Short-term time deposits	—		425		—		425
Asset-backed securities	—		1,812		—		1,812
Residential mortgage-backed securities	—		1,679		—		1,679
Commercial mortgage-backed securities	—		1,239		—		1,239
Equity securities	13		1		—		14
Total investments	$	71	$	18,933	$	—	$	19,004
Restricted deposits:
Cash and cash equivalents	$	93	$	—	$	—	$	93
U.S. Treasury securities and obligations of U.S. government corporations and agencies	533		—		—		533
Corporate securities	—		2		—		2
Certificates of deposit	—		4		—		4
Municipal securities	—		758		—		758
Total restricted deposits	$	626	$	764	$	—	$	1,390



Total assets at fair value	$	14,760	$	19,697	$	—	$	34,457

The Company utilizes matrix-pricing services to estimate fair value for securities which are not actively traded on the measurement date. The Company designates these securities as Level II fair value measurements. In addition, the aggregate carrying amount of the Company's private equity investments and life insurance contracts, which approximates fair value, was $1,069 million and $1,047 million as of March 31, 2025 and December 31, 2024, respectively.

4. Medical Claims Liability

The following table summarizes the change in medical claims liability for the three months ended March 31, 2025 ($ in millions):


	Medicaid		Medicare		Commercial		Other		Consolidated Total
Balance, January 1, 2025	$	10,299	$	3,358	$	4,463	$	188	$	18,308
Less: Reinsurance recoverable	18		—		47		—		65
Balance, January 1, 2025, net	10,281		3,358		4,416		188		18,243

Incurred related to:
Current year	21,419		7,553		7,972		514		37,458
Prior years	(576)		(176)		(365)		(16)		(1,133)
Total incurred	20,843		7,377		7,607		498		36,325
Paid related to:
Current year	12,996		5,243		4,731		359		23,329
Prior years	6,849		1,923		2,648		150		11,570
Total paid	19,845		7,166		7,379		509		34,899
Plus: Premium deficiency reserve	—		178		—		—		178
Balance, March 31, 2025, net	11,279		3,747		4,644		177		19,847
Plus: Reinsurance recoverable	18		—		46		—		64
Balance, March 31, 2025	$	11,297	$	3,747	$	4,690	$	177	$	19,911

The following table summarizes the change in medical claims liability for the three months ended March 31, 2024 ($ in millions):


	Medicaid		Medicare		Commercial		Other		Consolidated Total
Balance, January 1, 2024	$	10,814	$	3,612	$	3,460	$	114	$	18,000
Less: Reinsurance recoverable	5		—		44		—		49
Balance, January 1, 2024, net	10,809		3,612		3,416		114		17,951

Incurred related to:
Current year	20,179		5,495		5,884		373		31,931
Prior years	(684)		(156)		(204)		(5)		(1,049)
Total incurred	19,495		5,339		5,680		368		30,882
Paid related to:
Current year	12,823		3,266		3,339		258		19,686
Prior years	6,993		2,050		1,973		108		11,124
Total paid	19,816		5,316		5,312		366		30,810
Plus: Premium deficiency reserve	—		50		—		—		50
Balance, March 31, 2024, net	10,488		3,685		3,784		116		18,073
Plus: Reinsurance recoverable	4		—		32		—		36
Balance, March 31, 2024	$	10,492	$	3,685	$	3,816	$	116	$	18,109

Reinsurance recoverables related to medical claims are included in premium and trade receivables. Changes in estimates of incurred claims for prior years are primarily attributable to reserving under moderately adverse conditions. Additionally, as a result of development within "Incurred related to: Prior years," the Company recorded $34 million and $54 million as a reduction to premium revenue in the three months ended March 31, 2025 and 2024, respectively, for minimum medical loss ratio (MLR) and other return of premium programs.

Incurred but not reported (IBNR) plus expected development on reported claims as of March 31, 2025 was $13,389 million. Total IBNR plus expected development on reported claims represents estimates for claims incurred but not reported, development on reported claims and estimates for the costs necessary to process unpaid claims at the end of each period. The Company estimates its 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.

The Company reviews actual and anticipated experience compared to the assumptions used to establish medical costs. The Company establishes premium deficiency reserves if actual and anticipated experience indicates that existing policy liabilities together with the present value of future gross premiums will not be sufficient to cover the present value of future benefits, settlement and maintenance costs. For purposes of determining premium deficiencies, contracts are grouped in a manner consistent with the method of acquiring, servicing and measuring the profitability of such contracts and expected investment income is excluded. In December 2024, the Company recorded a premium deficiency reserve of $92 million related to the 2025 Medicare Advantage contract year. In the first quarter of 2025, the premium deficiency reserve was increased to $270 million due to the intra-year flow of seasonality, including anticipated impacts of the Inflation Reduction Act to the Part D benefit within the Company's Medicare Advantage business. In December 2023, the Company recorded a premium deficiency reserve of $250 million related to the 2024 Medicare Advantage contract year, which was increased to $300 million in the first quarter of 2024 due to the intra-year flow of seasonality.

5. Affordable Care Act

The Affordable Care Act established risk spreading premium stabilization programs as well as a minimum annual MLR and cost sharing reductions.

The Company's net receivables (payables) for each of the programs are as follows ($ in millions):


	March 31, 2025		December 31, 2024
Risk adjustment receivable	$	2,088	$	1,434
Risk adjustment payable	(2,263)		(1,605)
Minimum medical loss ratio	(821)		(688)
Cost sharing reduction receivable	18		305
Cost sharing reduction payable	(79)		(74)

6. Debt

Debt consists of the following ($ in millions):


	March 31, 2025		December 31, 2024
$2,500 million 4.25% Senior Notes due December 15, 2027	$	2,398	$	2,398
$2,300 million 2.45% Senior Notes due July 15, 2028	2,302		2,302
$3,500 million 4.625% Senior Notes due December 15, 2029	3,277		3,277
$2,000 million 3.375% Senior Notes due February 15, 2030	2,000		2,000
$2,200 million 3.00% Senior Notes due October 15, 2030	2,200		2,200
$2,200 million 2.50% Senior Notes due March 1, 2031	2,200		2,200
$1,300 million 2.625% Senior Notes due August 1, 2031	1,300		1,300

Total senior notes	15,677		15,677
Term Loan Facility	2,000		2,006
Revolving Credit Agreement	750		950

Debt issuance costs	(107)		(100)
Total debt	18,320		18,533
Less: current portion	(12)		(110)
Long-term debt	$	18,308	$	18,423

Revolving Credit Facility and Term Loan Credit Facility

On March 5, 2025, the Company entered into a new Credit Agreement (New Credit Agreement) and terminated all outstanding commitments and repaid all outstanding obligations under the Fourth Amended and Restated Credit Agreement, dated as of August 16, 2021 (as amended).

The New Credit Agreement provides for (i) a revolving credit facility in the principal amount of $4,000 million (the Revolving Credit Facility) and (ii) a term loan facility in the principal amount of $2,000 million (the Term Loan Facility). The maturity date for the New Credit Agreement is March 5, 2030. Loans under the Revolving Credit Facility may be denominated in U.S. dollars, Euros, Sterling, Swiss Francs, Yen, Australian dollars and Canadian dollars and each other currency which has been approved under the terms of the New Credit Agreement.

Borrowings under the New Credit Agreement will bear interest at a fluctuating rate per annum equal to a benchmark rate applicable to the currency composing such borrowing plus an applicable margin. The applicable margin is in each case based on the rating of Centene's corporate debt obligations by S&P and Moody's.

The Company is subject to a financial covenant under the New Credit Agreement, tested quarterly, whereby the debt-to-capital ratio may not exceed 0.60 to 1.00, with a step-up, upon the Company's election, following the consummation of a material acquisition, to 0.65 to 1.00 during certain specified periods.

7. Stockholders' Equity

The Company's Board of Directors has authorized a stock repurchase program of the Company's common stock from time to time on the open market or through privately negotiated transactions. The Company is authorized to repurchase up to $10,000 million, inclusive of past authorizations. As of March 31, 2025, the Company had a remaining amount of $2,230 million available under the stock repurchase program.

The following represents the Company's share repurchase activity ($ in millions, shares in thousands):


	Three Months Ended March 31,
	2025			2024
	Shares	Cost		Shares	Cost
Share buybacks	—	$	—	681	$	51
Income tax withholding	705	41		1,302	100
Total share repurchases	705	$	41	1,983	$	151

Shares repurchased for income tax withholding are shares withheld in connection with employee stock plans to meet applicable tax withholding requirements. These shares are typically included in the Company's treasury stock.

8. Earnings Per Share

The following table sets forth the calculation of basic and diluted net earnings per common share ($ in millions, except per share data in dollars and shares in thousands):


	Three Months Ended March 31,
	2025		2024

Earnings attributable to Centene Corporation	$	1,311	$	1,163

Shares used in computing per share amounts:
Weighted average number of common shares outstanding	496,214		535,109
Common stock equivalents (as determined by applying the treasury stock method)	1,966		2,951
Weighted average number of common shares and potential dilutive common shares outstanding	498,180		538,060

Net earnings per common share attributable to Centene Corporation:
Basic earnings per common share	$	2.64	$	2.17
Diluted earnings per common share	$	2.63	$	2.16

The calculation of diluted earnings per common share for the three months ended March 31, 2025 and 2024 excludes 2,380 thousand shares and 684 thousand shares, respectively, related to anti-dilutive stock options, restricted stock and restricted stock units.

9. Segment Information

The Company operates in four segments: (1) a Medicaid segment, (2) a Medicare segment, (3) a Commercial segment and (4) an Other segment. The Medicaid, Medicare and Commercial segments primarily represent the government-sponsored or subsidized programs under which the Company offers managed healthcare services. The Other segment includes the Company's pharmacy operations, vision and dental services, clinical healthcare, behavioral health, and corporate management company, among others.

Factors used in determining the reportable business segments include the nature of operating activities, the existence of separate senior management teams and the type of information presented to the Company's chief operating decision-maker (CODM) to evaluate all results of operations. The Company's CODM is its Chief Executive Officer. The Company's CODM focuses primarily on each segment's ability to generate sufficient revenues and manage expenses associated with health benefits and cost of services (including estimated costs incurred). As such, the CODM measures operating performance at the segment level based on gross margin, including evaluation of budget to actual variances, to determine the allocation of financial and capital resources for each segment. The Company does not report total assets by segment since this is not a metric used by the Company's CODM to allocate resources or evaluate segment performance.

Segment information for the three months ended March 31, 2025, is as follows ($ in millions):


		Medicaid		Medicare		Commercial		Other/Eliminations		Consolidated Total
Premium		$	22,275	$	8,759	$	10,148	$	530	$	41,712
Service		24		—		1		752		777
Premium and service revenues		22,299		8,759		10,149		1,282		42,489
Premium tax		4,131		—		—		—		4,131
Total external revenues		26,430		8,759		10,149		1,282		46,620
Internal revenues		—		—		—		4,164		4,164
Eliminations		—		—		—		(4,164)		(4,164)
Total revenues		$	26,430	$	8,759	$	10,149	$	1,282	$	46,620

Medical costs		$	20,843	$	7,555	$	7,607	$	498	$	36,503
Cost of services		24		—		—		674		698
Other operating expenses (1)										7,885
Other income (expense) (2)										212
Earnings before income tax expense										$	1,746

Segment gross margin (3)		$	1,432	$	1,204	$	2,542	$	110	$	5,288

(1)	Other operating expenses include selling, general and administrative expenses, depreciation, amortization, premium tax expense and impairment.
(2)	Other income (expense) includes investment and other income, debt extinguishment and interest expense.
(3)	Segment gross margin represents premium and service revenues less medical costs and cost of services.

Segment information for the three months ended March 31, 2024, is as follows ($ in millions):


		Medicaid		Medicare		Commercial		Other/Eliminations		Consolidated Total
Premium		$	21,438	$	5,935	$	7,750	$	406	$	35,529
Service		22		—		1		785		808
Premium and service revenues		21,460		5,935		7,751		1,191		36,337
Premium tax		4,070		—		—		—		4,070
Total external revenues		25,530		5,935		7,751		1,191		40,407
Internal revenues		—		—		—		4,080		4,080
Eliminations		—		—		—		(4,080)		(4,080)
Total revenues		$	25,530	$	5,935	$	7,751	$	1,191	$	40,407

Medical costs		$	19,495	$	5,389	$	5,680	$	368	$	30,932
Cost of services		21		—		—		648		669
Other operating expenses (1)										7,700
Other income (expense) (2)										367
Earnings before income tax expense										$	1,473


Segment gross margin (3)		$	1,944	$	546	$	2,071	$	175	$	4,736

(1)	Other operating expenses include selling, general and administrative expenses, depreciation, amortization, premium tax expense and impairment.
(2)	Other income (expense) includes investment and other income, debt extinguishment and interest expense.
(3)	Segment gross margin represents premium and service revenues less medical costs and cost of services.

10. Contingencies

The Company is routinely subjected to legal and regulatory proceedings in the normal course of business. These matters can include, without limitation:

periodic compliance and other reviews and investigations by various federal and state regulatory agencies with respect to requirements applicable to the Company's business, including, without limitation, those related to payment of out-of-network claims, compliance with the Centers for Medicare and Medicaid Services Medicare and Marketplace regulations, including risk adjustment and broker compensation, compliance with the False Claims Act, the calculation of minimum MLR and rebates related thereto, submissions to state agencies related to payments or state false claims acts, pre-authorization penalties, timely review of grievances and appeals, timely and accurate payment of claims, provider directory accuracy, cybersecurity issues, including those related to the Company's or the Company's third-party vendors' information systems, and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal and state fraud, waste and abuse laws;
litigation arising out of general business activities, such as tax matters, disputes related to healthcare benefits coverage or reimbursement, putative securities class actions, and medical malpractice, privacy, real estate, intellectual property, vendor disputes and employment-related claims; and
disputes regarding reinsurance arrangements, claims arising out of the acquisition or divestiture of various assets, class actions and claims relating to the performance of contractual and non-contractual obligations to providers, members, employer groups, vendors and others, including, but not limited to, the alleged failure to properly pay claims and challenges to the manner in which the Company processes claims, claims related to network adequacy and claims alleging that the Company has engaged in unfair business practices.

Among other things, these matters may result in awards of damages, fines or penalties, which could be substantial, and/or could require changes to the Company's business. The Company intends to vigorously defend itself against legal and regulatory proceedings to which it is currently a party; however, these proceedings are subject to many uncertainties. In some of the cases pending against the Company, substantial non-economic or punitive damages are being sought.

The Company records reserves and accrues costs for certain legal proceedings and regulatory matters to the extent that it determines an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. While such reserves and accrued costs reflect the Company's best estimate of the probable loss for such matters, the recorded amounts may differ materially from the actual amount of any such losses. In some cases, no estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because of the inherently unpredictable nature of legal and regulatory proceedings, which may be exacerbated by various factors, including but not limited to, they may involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or legal uncertainties; involve disputed facts; represent a shift in regulatory policy; involve a large number of parties, claimants or regulatory bodies; are in the early stages of the proceedings; involve a number of separate proceedings and/or a wide range of potential outcomes; or result in a change of business practices.

As of the date of this report, amounts accrued for legal proceedings and regulatory matters were not material. The Company believes that the ultimate outcome of any of the regulatory and legal proceedings that are currently pending against it should not have a material adverse effect on financial condition, results of operations, cash flow or liquidity. However, it is possible that in a particular quarter or annual period the Company's financial condition, results of operations, cash flow and/or liquidity could be materially adversely affected by an ultimate unfavorable resolution of or development in legal and/or regulatory proceedings.

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