Item 1. Financial Statements.

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

			June 30, 2025						December 31, 2024
			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents			$	14,513					$	14,063
Premium and trade receivables			21,552						19,713
Short-term investments			2,768						2,622
Other current assets			1,556						1,601
Total current assets			40,389						37,999
Long-term investments			18,797						17,429
Restricted deposits			1,411						1,390
Property, software and equipment, net			2,122						2,067
Goodwill			17,558						17,558
Intangible assets, net			5,010						5,409
Other long-term assets			1,108						593
Total assets			$	86,395					$	82,445
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY
Current liabilities:
Medical claims liability			$	20,117					$	18,308
Accounts payable and accrued expenses			13,520						13,174
Return of premium payable			2,442						2,008
Unearned revenue			682						661
Current portion of long-term debt			25						110
Total current liabilities			36,786						34,261
Long-term debt			17,552						18,423
Deferred tax liability			651						684
Other long-term liabilities			3,903						2,567
Total liabilities			58,892						55,935
Commitments and contingencies
Redeemable noncontrolling interests			11						10
Stockholders' equity:
Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or outstanding at June 30, 2025 and December 31, 2024			—						—
Common stock, $0.001 par value; authorized 800,000 shares; 622,834 issued and 491,128 outstanding at June 30, 2025, and 620,195 issued and 495,907 outstanding at December 31, 2024			1						1
Additional paid-in capital			20,671						20,562
Accumulated other comprehensive (loss)			(231)						(504)
Retained earnings			16,406						15,348
Treasury stock, at cost (131,706 and 124,288 shares, respectively)			(9,441)						(8,997)
Total Centene stockholders' equity			27,406						26,410
Nonredeemable noncontrolling interest			86						90
Total stockholders' equity			27,492						26,500
Total liabilities, redeemable noncontrolling interests and stockholders' equity			$	86,395					$	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 June 30,												Six Months Ended June 30,
			2025						2024						2025						2024
Revenues:
Premium			$	41,740					$	35,140					$	83,452					$	70,669
Service			727						833						1,504						1,641
Premium and service revenues			42,467						35,973						84,956						72,310
Premium tax			6,275						3,863						10,406						7,933
Total revenues			48,742						39,836						95,362						80,243
Expenses:
Medical costs			38,808						30,765						75,311						61,697
Cost of services			641						680						1,339						1,349
Selling, general and administrative expenses			3,036						2,894						6,389						6,112
Depreciation expense			141						133						283						268
Amortization of acquired intangible assets			173						173						346						346
Premium tax expense			6,346						3,962						10,563						8,123
Impairment			55						—						55						13
Total operating expenses			49,200						38,607						94,286						77,908
Earnings (loss) from operations			(458)						1,229						1,076						2,335
Other income (expense):
Investment and other income			371						463						753						1,008
Interest expense			(170)						(176)						(340)						(354)
Earnings (loss) before income tax			(257)						1,516						1,489						2,989
Income tax expense			2						370						434						685
Net earnings (loss)			(259)						1,146						1,055						2,304
Loss attributable to noncontrolling interests			6						—						3						5
Net earnings (loss) attributable to Centene Corporation			$	(253)					$	1,146					$	1,058					$	2,309
Net earnings (loss) per common share attributable to Centene Corporation:
Basic earnings (loss) per common share			$	(0.51)					$	2.16					$	2.14					$	4.34
Diluted earnings (loss) per common share			$	(0.51)					$	2.16					$	2.13					$	4.32
Weighted average number of common shares outstanding:
Basic			493,548						529,602						494,896						532,385
Diluted			493,548						530,755						496,328						534,517

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 June 30,												Six Months Ended June 30,
			2025						2024						2025						2024
Net earnings (loss)			$	(259)					$	1,146					$	1,055					$	2,304
Change in unrealized gain (loss) on investments			136						(26)						352						(107)
Change in unrealized gain (loss) on investments, tax effect			(32)						6						(82)						21
Change in unrealized gain (loss) on investments, net of tax			104						(20)						270						(86)
Reclassification adjustment, net of tax			2						4						3						92
Other comprehensive earnings (loss)			106						(16)						273						6
Comprehensive earnings (loss)			(153)						1,130						1,328						2,310
Comprehensive loss attributable to noncontrolling interests			6						—						3						5
Comprehensive earnings (loss) attributable to Centene Corporation			$	(147)					$	1,130					$	1,331					$	2,315

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 and Six Months Ended June 30, 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 (loss)			—						—						—						—						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
Comprehensive Earnings (Loss):
Net earnings (loss)			—						—						—						—						(253)						—						—						(5)						(258)
Other comprehensive earnings, net of $33 tax			—						—						—						106						—						—						—						—						106
Common stock issued for employee benefit plans			340						—						9						—						—						—						—						—						9
Common stock repurchases			(17)						—						(4)						—						—						6,713						(403)						—						(407)
Stock compensation expense			—						—						35						—						—						—						—						—						35
Balance, June 30, 2025			622,834						$	1					$	20,671					$	(231)					$	16,406					131,706						$	(9,441)					$	86					$	27,492

Three and Six Months Ended June 30, 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
Comprehensive Earnings:
Net earnings (loss)			—						—						—						—						1,146						—						—						—						1,146
Other comprehensive loss, net of $(5) tax			—						—						—						(16)						—						—						—						—						(16)
Common stock issued for employee benefit plans			322						—						11						—						—						—						—						—						11
Common stock repurchases			—						—						—						—						—						10,704						(810)						—						(810)
Stock compensation expense			—						—						62						—						—						—						—						—						62
Balance, June 30, 2024			619,495						$	1					$	20,461					$	(646)					$	14,352					93,494						$	(6,817)					$	90					$	27,441

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)

			Six Months Ended June 30,
			2025						2024
Cash flows from operating activities:
Net earnings			$	1,055					$	2,304
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation and amortization			629						614
Stock compensation expense			94						132
Impairment			55						13
Deferred income taxes			(116)						40
(Gain) loss on divestitures, net			10						(103)
Other adjustments, net			16						(11)
Changes in assets and liabilities
Premium and trade receivables			(1,801)						(1,059)
Other assets			(543)						(404)
Medical claims liabilities			1,809						173
Unearned revenue			21						(118)
Accounts payable and accrued expenses			209						(1,704)
Other long-term liabilities			1,857						1,838
Other operating activities, net			—						4
Net cash provided by operating activities			3,295						1,719
Cash flows from investing activities:
Capital expenditures			(343)						(337)
Purchases of investments			(3,593)						(3,434)
Sales and maturities of investments			2,508						2,497
Divestiture proceeds, net of divested cash			—						959
Net cash (used in) investing activities			(1,428)						(315)
Cash flows from financing activities:
Proceeds from long-term debt			750						350
Payments and repurchases of long-term debt			(1,707)						(565)
Common stock repurchases			(473)						(954)
Proceeds from common stock issuances			18						25
Other financing activities, net			(12)						(4)
Net cash (used in) financing activities			(1,424)						(1,148)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			—						7
Net increase in cash, cash equivalents and restricted cash and cash equivalents			443						263
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			$	14,599					$	17,715
Supplemental disclosures of cash flow information:
Interest paid			$	320					$	352
Income taxes paid, net			$	504					$	551
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:
			June 30,
			2025						2024
Cash and cash equivalents			$	14,513					$	17,605
Restricted cash and cash equivalents, included in restricted deposits			86						110
Total cash, cash equivalents and restricted cash and cash equivalents			$	14,599					$	17,715

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):

						June 30, 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						$	566					$	3					$	(2)					$	567					$	593					$	2					$	(4)					$	591
Corporate securities						11,641						127						(224)						11,544						10,820						47						(360)						10,507
Restricted certificates of deposit						2						—						—						2						4						—						—						4
Restricted cash equivalents						86						—						—						86						93						—						—						93
Short-term time deposits						574						—						—						574						425						—						—						425
Municipal securities						4,151						21						(108)						4,064						4,174						7						(151)						4,030
Asset-backed securities						1,985						19						(12)						1,992						1,820						13						(21)						1,812
Residential mortgage-backed securities						1,861						7						(95)						1,773						1,807						1						(129)						1,679
Commercial mortgage-backed securities						1,314						9						(43)						1,280						1,298						3						(62)						1,239
Equity securities						13						—						—						13						14						—						—						14
Private equity investments						877						—						—						877						851						—						—						851
Life insurance contracts						204						—						—						204						196						—						—						196
Total						$	23,274					$	186					$	(484)					$	22,976					$	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 June 30, 2025, 99% of the Company's investments in rated securities carry an investment grade rating by nationally recognized statistical rating organizations. At June 30, 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 $191 million and $178 million at June 30, 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 June 30, 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):

			June 30, 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			$	—					$	97					$	(2)					$	86					$	(1)					$	60					$	(3)					$	144
Corporate securities			(7)						1,031						(217)						4,120						(41)						2,621						(319)						4,782
Municipal securities			(6)						706						(102)						1,871						(16)						1,217						(135)						2,073
Asset-backed securities			(1)						287						(11)						252						(4)						301						(17)						331
Residential mortgage-backed securities			(6)						440						(89)						709						(18)						786						(111)						738
Commercial mortgage-backed securities			(1)						165						(42)						573						(4)						210						(58)						666
Short-term time deposits			—						24						—						—						—						—						—						—
Total			$	(21)					$	2,750					$	(463)					$	7,611					$	(84)					$	5,195					$	(643)					$	8,734

As of June 30, 2025, the gross unrealized losses were generated from 4,214 positions out of a total of 6,779 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):

			June 30, 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			$	2,576					$	2,562					$	529					$	529					$	2,383					$	2,365					$	477					$	475
One year through five years			8,315						8,196						525						512						7,799						7,563						610						593
Five years through ten years			4,548						4,515						327						327						4,343						4,172						301						291
Greater than ten years			157						153						43						43						165						160						31						31
Asset-backed securities			5,160						5,045						—						—						4,925						4,730						—						—
Total			$	20,756					$	20,471					$	1,424					$	1,411					$	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 June 30, 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			$	14,513					$	—					$	—					$	14,513
Investments:
U.S. Treasury securities and obligations of U.S. government corporations and agencies			$	72					$	—					$	—					$	72
Corporate securities			—						11,534						—						11,534
Municipal securities			—						3,246						—						3,246
Short-term time deposits			—						574						—						574
Asset-backed securities			—						1,992						—						1,992
Residential mortgage-backed securities			—						1,773						—						1,773
Commercial mortgage-backed securities			—						1,280						—						1,280
Equity securities			12						1						—						13
Total investments			$	84					$	20,400					$	—					$	20,484
Restricted deposits:
Cash and cash equivalents			$	86					$	—					$	—					$	86
U.S. Treasury securities and obligations of U.S. government corporations and agencies			495						—						—						495
Corporate securities			—						10						—						10
Certificates of deposit			—						2						—						2
Municipal securities			—						818						—						818
Total restricted deposits			$	581					$	830					$	—					$	1,411
Total assets at fair value			$	15,178					$	21,230					$	—					$	36,408

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 $1,081 million and $1,047 million as of June 30, 2025 and December 31, 2024, respectively.

4. Medical Claims Liability

The following table summarizes the change in medical claims liability for the six months ended June 30, 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			42,377						16,186						17,160						1,038						76,761
Prior years			(953)						(341)						(429)						(24)						(1,747)
Total incurred			41,424						15,845						16,731						1,014						75,014
Paid related to:
Current year			33,532						12,858						12,987						882						60,259
Prior years			7,745						2,252						3,083						158						13,238
Total paid			41,277						15,110						16,070						1,040						73,497
Plus: Premium deficiency reserve			—						297						—						—						297
Balance, June 30, 2025, net			10,428						4,390						5,077						162						20,057
Plus: Reinsurance recoverable			14						—						46						—						60
Balance, June 30, 2025			$	10,442					$	4,390					$	5,123					$	162					$	20,117

The following table summarizes the change in medical claims liability for the six months ended June 30, 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			39,398						10,953						12,274						758						63,383
Prior years			(1,136)						(316)						(326)						7						(1,771)
Total incurred			38,262						10,637						11,948						765						61,612
Paid related to:
Current year			30,696						8,093						9,143						633						48,565
Prior years			7,918						2,562						2,367						121						12,968
Total paid			38,614						10,655						11,510						754						61,533
Plus: Premium deficiency reserve			—						85						—						—						85
Balance, June 30, 2024, net			10,457						3,679						3,854						125						18,115
Plus: Reinsurance recoverable			15						—						43						—						58
Balance, June 30, 2024			$	10,472					$	3,679					$	3,897					$	125					$	18,173

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 $69 million and $88 million as a reduction to premium revenue in the six months ended June 30, 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 June 30, 2025 was $13,353 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. The premium deficiency reserve was increased to $270 million in the first quarter of 2025 and to $389 million in the second quarter of 2025 based on the progression of earnings during the year (with higher earnings at the beginning of the year and lower at the end of the year, given cost sharing progression), 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 and to $335 million in the second quarter of 2024 consistent with the progression of earnings during the year.

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):

			June 30, 2025						December 31, 2024
Risk adjustment receivable			$	2,132					$	1,434
Risk adjustment payable			(2,769)						(1,605)
Minimum medical loss ratio			(1,062)						(688)
Cost sharing reduction receivable			19						305
Cost sharing reduction payable			(79)						(74)

In June 2025, the Centers for Medicare and Medicaid Services (CMS) announced the final risk adjustment transfers for the 2024 benefit year. Based on the Company's estimate of the final settlement, the risk adjustment net receivable was increased by $490 million in the first half of 2025. After consideration of minimum MLR and other related impacts, the net pre-tax benefit recognized was $211 million in the six months ended June 30, 2025.

As of June 30, 2025, the Company's 2025 net risk adjustment payable was $985 million.

6. Debt

Debt consists of the following ($ in millions):

			June 30, 2025						December 31, 2024
$2,500 million 4.25% Senior Notes due December 15, 2027			$	2,399					$	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			15,678						15,677
Term Loan Facility			2,000						2,006
Revolving Credit Agreement			—						950
Debt issuance costs			(101)						(100)
Total debt			17,577						18,533
Less: current portion			(25)						(110)
Long-term debt			$	17,552					$	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 and is primarily a linear progression corresponding to the Company's credit rating as defined in the New Credit Agreement. The applicable margin for base rate loans changes in increments of 0.25% increasing or decreasing between pricing levels at the corresponding rating level.

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 June 30, 2025, the Company had a remaining amount of $1,830 million available under the stock repurchase program.

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

						Three Months Ended June 30,																		Six Months Ended June 30,
						2025									2024									2025									2024
						Shares			Cost						Shares			Cost						Shares			Cost						Shares			Cost
Share buybacks						6,713			$	400					10,660			$	800					6,713			$	400					11,341			$	851
Income tax withholding						—			—						44			3						705			41						1,346			103
Total share repurchases (1)						6,713			$	400					10,704			$	803					7,418			$	441					12,687			$	954
(1)			Excludes year-to-date share repurchase excise tax of approximately $3 million and $7 million accrued as of June 30, 2025 and 2024, respectively.

Prior to the adoption of the 2025 Stock Incentive Plan in May 2025, shares repurchased for income tax withholding were shares withheld in connection with employee stock plans to meet applicable tax withholding requirements. These shares were typically included in the Company's treasury stock. After the adoption of the 2025 Stock Incentive Plan, shares repurchased for income tax withholding are typically recorded as a reduction to additional paid-in capital.

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 June 30,												Six Months Ended June 30,
						2025						2024						2025						2024
Earnings (loss) attributable to Centene Corporation						$	(253)					$	1,146					$	1,058					$	2,309
Shares used in computing per share amounts:
Weighted average number of common shares outstanding						493,548						529,602						494,896						532,385
Common stock equivalents (as determined by applying the treasury stock method)						—						1,153						1,432						2,132
Weighted average number of common shares and potential dilutive common shares outstanding						493,548						530,755						496,328						534,517
Net earnings (loss) per common share attributable to Centene Corporation:
Basic earnings (loss) per common share						$	(0.51)					$	2.16					$	2.14					$	4.34
Diluted earnings (loss) per common share						$	(0.51)					$	2.16					$	2.13					$	4.32

The calculation of diluted earnings per common share for the three months ended June 30, 2025 excludes 2,464 thousand shares related to stock options, restricted stock and restricted stock units as their effect would have been anti-dilutive due to the net loss for the quarter. The three months ended June 30, 2024 excludes 271 thousand shares related to anti-dilutive stock options, restricted stock and restricted stock units.

The calculation of diluted earnings per common share for the six months ended June 30, 2025 and 2024 excludes 1,660 thousand shares and 267 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 June 30, 2025, is as follows ($ in millions):

						Medicaid						Medicare						Commercial						Other/Eliminations												Consolidated Total
Premium						$	21,697					$	9,450					$	10,070					$	523											$	41,740
Service						26						—						—						701												727
Premium and service revenues						21,723						9,450						10,070						1,224												42,467
Premium tax						6,275						—						—						—												6,275
Total external revenues						27,998						9,450						10,070						1,224												48,742
Internal revenues						—						—						—						3,967												3,967
Eliminations						—						—						—						(3,967)												(3,967)
Total revenues						$	27,998					$	9,450					$	10,070					$	1,224											$	48,742
Medical costs						$	20,581					$	8,587					$	9,124					$	516											$	38,808
Cost of services						25						—						—						616												641
Other operating expenses (1)																																				9,751
Other income (expense) (2)																																				201
Earnings before income tax expense																																				$	(257)
Segment gross margin (3)						$	1,117					$	863					$	946					$	92											$	3,018
(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 June 30, 2024, is as follows ($ in millions):

						Medicaid						Medicare						Commercial						Other/Eliminations												Consolidated Total
Premium						$	20,229					$	5,978					$	8,534					$	399											$	35,140
Service						21						—						1						811												833
Premium and service revenues						20,250						5,978						8,535						1,210												35,973
Premium tax						3,863						—						—						—												3,863
Total external revenues						24,113						5,978						8,535						1,210												39,836
Internal revenues						—						—						—						4,081												4,081
Eliminations						—						—						—						(4,081)												(4,081)
Total revenues						$	24,113					$	5,978					$	8,535					$	1,210											$	39,836
Medical costs						$	18,767					$	5,333					$	6,268					$	397											$	30,765
Cost of services						22						—						—						658												680
Other operating expenses (1)																																				7,162
Other income (expense) (2)																																				287
Earnings before income tax expense																																				$	1,516
Segment gross margin (3)						$	1,461					$	645					$	2,267					$	155											$	4,528
(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 six months ended June 30, 2025, is as follows ($ in millions):

						Medicaid						Medicare						Commercial						Other/Eliminations												Consolidated Total
Premium						$	43,972					$	18,209					$	20,218					$	1,053											$	83,452
Service						50						—						1						1,453												1,504
Premium and service revenues						44,022						18,209						20,219						2,506												84,956
Premium tax						10,406						—						—						—												10,406
Total external revenues						54,428						18,209						20,219						2,506												95,362
Internal revenues						—						—						—						8,131												8,131
Eliminations						—						—						—						(8,131)												(8,131)
Total revenues						$	54,428					$	18,209					$	20,219					$	2,506											$	95,362
Medical costs						$	41,424					$	16,142					$	16,731					$	1,014											$	75,311
Cost of services						49						—						—						1,290												1,339
Other operating expenses (1)																																				17,636
Other income (expense) (2)																																				413
Earnings before income tax expense																																				$	1,489
Segment gross margin (3)						$	2,549					$	2,067					$	3,488					$	202											$	8,306
(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 six months ended June 30, 2024, is as follows ($ in millions):

						Medicaid						Medicare						Commercial						Other/Eliminations												Consolidated Total
Premium						$	41,667					$	11,913					$	16,284					$	805											$	70,669
Service						43						—						2						1,596												1,641
Premium and service revenues						41,710						11,913						16,286						2,401												72,310
Premium tax						7,933						—						—						—												7,933
Total external revenues						49,643						11,913						16,286						2,401												80,243
Internal revenues						—						—						—						8,161												8,161
Eliminations						—						—						—						(8,161)												(8,161)
Total revenues						$	49,643					$	11,913					$	16,286					$	2,401											$	80,243
Medical costs						$	38,262					$	10,722					$	11,948					$	765											$	61,697
Cost of services						43						—						—						1,306												1,349
Other operating expenses (1)																																				14,862
Other income (expense) (2)																																				654
Earnings before income tax expense																																				$	2,989
Segment gross margin (3)						$	3,405					$	1,191					$	4,338					$	330											$	9,264
(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 CMS Medicare and Marketplace regulations, including risk adjustment, prior authorizations 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 corrective action plans, awards of damages, fines or penalties, which could be substantial, and/or could require changes to the Company's business and cause reputational harm. 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. Except for the matter discussed below, 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.

Federal Securities Class Action

On July 9, 2025, a putative federal securities class action, Brock Lunstrom v. Centene Corp., et al., was filed against the Company and certain of its executives in the U.S. District Court for the Southern District of New York. The plaintiffs in the lawsuit allege that the Company made false and misleading statements with respect to the Company's 2025 earnings guidance in violation of federal securities laws. The Company denies any wrongdoing and is vigorously defending itself against these claims. Nevertheless, this matter is subject to many uncertainties and the Company cannot predict how long this litigation will last, whether additional litigation will be filed with similar claims, or what the ultimate outcome will be, and an adverse outcome in this matter could potentially have a materially adverse impact on the Company's financial position and results of operations, cash flow or liquidity.

11. Subsequent Events

As a result of market conditions subsequent to June 30, 2025, including the One Big Beautiful Bill Act, the Company plans to perform a quantitative impairment analysis to determine whether goodwill, intangibles or other assets are impaired, which may result in an impairment charge in a future period. While management cannot predict if or when future impairments may occur, such impairments could have a material impact on the Company's results of operations and shareholders' equity in the period in which the impairment occurs.