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)


	June 30, 2026		December 31, 2025
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	24,151	$	17,888
Premium and trade receivables	18,076		18,105
Short-term investments	2,906		2,432
Other current assets	1,552		1,945
Total current assets	46,685		40,370
Long-term investments	16,302		17,035
Restricted deposits	1,487		1,412
Property, software and equipment, net	2,130		2,037

Goodwill	10,835		10,835
Intangible assets, net	4,203		4,530
Other long-term assets	1,370		528
Total assets	$	83,012	$	76,747
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY
Current liabilities:
Medical claims liability	$	20,262	$	20,544
Accounts payable and accrued expenses	17,965		13,796
Return of premium payable	1,751		1,592
Unearned revenue	706		736
Current portion of long-term debt	75		50
Total current liabilities	40,759		36,718
Long-term debt	16,030		17,351
Deferred tax liability	756		833
Other long-term liabilities	2,810		1,789
Total liabilities	60,355		56,691
Commitments and contingencies
Redeemable noncontrolling interests	23		23
Stockholders' equity:
Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or outstanding at June 30, 2026 and December 31, 2025	—		—
Common stock, $0.001 par value; authorized 800,000 shares; 625,693 issued and 493,987 outstanding at June 30, 2026, and 623,463 issued and 491,757 outstanding at December 31, 2025	1		1
Additional paid-in capital	20,890		20,777
Accumulated other comprehensive (loss)	(194)		(58)
Retained earnings	11,306		8,674
Treasury stock, at cost (131,706 and 131,706 shares, respectively)	(9,441)		(9,441)
Total Centene stockholders' equity	22,562		19,953
Nonredeemable noncontrolling interest	72		80
Total stockholders' equity	22,634		20,033
Total liabilities, redeemable noncontrolling interests and stockholders' equity	$	83,012	$	76,747

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,
	2026		2025		2026		2025
Revenues:
Premium	$	43,582	$	41,740	$	87,469	$	83,452
Service	793		727		1,561		1,504
Premium and service revenues	44,375		42,467		89,030		84,956
Premium tax	9,204		6,275		14,493		10,406
Total revenues	53,579		48,742		103,523		95,362
Expenses:
Medical costs	39,029		38,808		77,332		75,311
Cost of services	729		641		1,431		1,339
Selling, general and administrative expenses	3,103		3,036		6,500		6,389
Depreciation expense	139		141		273		283
Amortization of acquired intangible assets	161		173		327		346
Premium tax expense	9,220		6,346		14,601		10,563

Impairment	—		55		—		55

Total operating expenses	52,381		49,200		100,464		94,286
Earnings (loss) from operations	1,198		(458)		3,059		1,076
Other income (expense):
Investment and other income	435		371		842		753
Gain on debt extinguishment	6		—		1		—
Interest expense	(153)		(170)		(317)		(340)
Earnings (loss) before income tax	1,486		(257)		3,585		1,489
Income tax expense	399		2		959		434
Net earnings (loss)	1,087		(259)		2,626		1,055
Loss attributable to noncontrolling interests	4		6		6		3
Net earnings (loss) attributable to Centene Corporation	$	1,091	$	(253)	$	2,632	$	1,058

Net earnings (loss) per common share attributable to Centene Corporation:
Basic earnings (loss) per common share	$	2.21	$	(0.51)	$	5.34	$	2.14
Diluted earnings (loss) per common share	$	2.19	$	(0.51)	$	5.30	$	2.13

Weighted average number of common shares outstanding:
Basic	493,819		493,548		492,949		494,896
Diluted	497,637		493,548		496,605		496,328

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,
	2026		2025		2026		2025
Net earnings (loss)	$	1,087	$	(259)	$	2,626	$	1,055
Change in unrealized gain (loss) on investments	(30)		136		(179)		352
Change in unrealized gain (loss) on investments, tax effect	7		(32)		42		(82)
Change in unrealized gain (loss) on investments, net of tax	(23)		104		(137)		270

Reclassification adjustment, net of tax	—		2		1		3


Other comprehensive earnings (loss)	(23)		106		(136)		273
Comprehensive earnings (loss)	1,064		(153)		2,490		1,328
Comprehensive loss attributable to noncontrolling interests	4		6		6		3
Comprehensive earnings (loss) attributable to Centene Corporation	$	1,068	$	(147)	$	2,496	$	1,331

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, 2026


	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, 2025	623,463	$	1	$	20,777	$	(58)	$	8,674	131,706	$	(9,441)	$	80	$	20,033
Comprehensive Earnings (Loss):
Net earnings (loss)	—	—		—		—		1,541		—	—		(4)		1,537
Other comprehensive loss, net of $(35) tax	—	—		—		(113)		—		—	—		—		(113)
Common stock issued for employee benefit plans	2,880	—		9		—		—		—	—		—		9
Common stock repurchases	(866)	—		(30)		—		—		—	—		—		(30)
Stock compensation expense	—	—		67		—		—		—	—		—		67
Contribution to non-redeemable non-controlling interest	—	—		—		—		—		—	—		(1)		(1)
Balance, March 31, 2026	625,477	$	1	$	20,823	$	(171)	$	10,215	131,706	$	(9,441)	$	75	$	21,502
Comprehensive Earnings (Loss):
Net earnings (loss)	—	—		—		—		1,091		—	—		(3)		1,088
Other comprehensive loss, net of $(7) tax	—	—		—		(23)		—		—	—		—		(23)
Common stock issued for employee benefit plans	238	—		9		—		—		—	—		—		9
Common stock repurchases	(22)	—		(1)		—		—		—	—		—		(1)
Stock compensation expense	—	—		59		—		—		—	—		—		59
Balance, June 30, 2026	625,693	$	1	$	20,890	$	(194)	$	11,306	131,706	$	(9,441)	$	72	$	22,634

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 (Loss):
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	393	—		9		—		—		—	—		—		9
Common stock repurchases	(70)	—		(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

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,
	2026		2025
Cash flows from operating activities:
Net earnings	$	2,626	$	1,055
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation and amortization	600		629
Stock compensation expense	126		94
Impairment	—		55
(Gain) loss on debt extinguishment	(1)		—

Deferred income taxes	(34)		(116)
Loss on divestitures	—		10


Changes in assets and liabilities
Premium and trade receivables	(6)		(1,801)
Other assets	(488)		(543)

Medical claims liabilities	(268)		1,809
Unearned revenue	(30)		21
Accounts payable and accrued expenses	4,249		209
Other long-term liabilities	1,162		1,857
Other operating activities, net	20		16
Net cash provided by operating activities	7,956		3,295
Cash flows from investing activities:
Capital expenditures	(374)		(343)
Purchases of investments	(2,328)		(3,593)
Sales and maturities of investments	2,438		2,508



Net cash (used in) investing activities	(264)		(1,428)
Cash flows from financing activities:
Proceeds from long-term debt	—		750
Payments and repurchases of long-term debt	(1,304)		(1,707)

Common stock repurchases	(33)		(473)
Proceeds from common stock issuances	18		18



Other financing activities, net	(3)		(12)
Net cash (used in) financing activities	(1,322)		(1,424)

Net increase in cash, cash equivalents and restricted cash and cash equivalents	6,370		443
Cash and cash equivalents reclassified (to) held for sale	(73)		—
Cash, cash equivalents and restricted cash and cash equivalents, beginning of period	17,957		14,156
Cash, cash equivalents and restricted cash and cash equivalents, end of period	$	24,254	$	14,599
Supplemental disclosures of cash flow information:
Interest paid	$	302	$	320
Income tax net payments (refunds)	$	(225)	$	504


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,
	2026		2025
Cash and cash equivalents	$	24,151	$	14,513
Restricted cash and cash equivalents, included in restricted deposits	103		86
Total cash, cash equivalents and restricted cash and cash equivalents	$	24,254	$	14,599

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, 2025. 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, 2025 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.

The Company had approximately $4,500 million and $1,182 million of pass-through payments from its state partners included in accounts payable and accrued expenses in the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, respectively. The payments received in the second quarter of 2026 will be passed through to recipients primarily during the third quarter.

Certain 2025 amounts in the consolidated financial statements and notes to the consolidated financial statements have been reclassified to conform to the 2026 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 (FASB) issued Accounting Standards Update (ASU) 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 standard update 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.

In September 2025, the FASB issued ASU 2025-06 – Intangibles – Goodwill and Other – Internal-Use Software. The standard update modernizes and clarifies the threshold for when an entity is required to start capitalizing software costs by removing stage-based and linear capitalization rules and is based on when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The standard update is effective for fiscal years and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard update.

In December 2025, the FASB issued ASU 2025-11 – Interim Reporting – Narrow-Scope Improvements which clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the standard update is to provide clarity about current interim requirements. The amendments in this standard update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The standard update is effective for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard update.

2. Acquisitions and Divestitures

Magellan Health

In December 2025, the Company signed a definitive agreement to sell the remaining Magellan Health businesses, which is included in the Other segment. As of June 30, 2026, the assets and liabilities of Magellan Health were considered held for sale resulting in $293 million of assets held for sale in other current assets and $293 million of liabilities held for sale in accounts payable and accrued expenses in the Consolidated Balance Sheet. The majority of the held for sale assets were previously reported as cash and cash equivalents, premium and trade receivables, property, software and equipment and intangible assets. The majority of the liabilities were previously reported as medical claims liabilities and accounts payable and accrued expenses.

As a result of the definitive agreement, in December 2025, the Company recorded impairment charges associated with the pending divestiture totaling $513 million, or $389 million after-tax.

3. Sale of Accounts Receivable

The Company has receivables from the Centers for Medicare and Medicaid Services (CMS) for Part D risk-sharing programs attributable to the 2025 plan year that are expected to be paid by CMS within a year after the plan year closes.

In February 2026, the Company entered into a master receivable purchase agreement (the February 2026 Receivable Purchase Agreement). Under the February 2026 Receivable Purchase Agreement, the Company may, from time to time, offer up to the full amount of its 2025 plan year stand-alone Part D risk-sharing programs receivables to the purchaser. The purchaser is not obligated to purchase any receivables unless it elects to accept a purchase request submitted by the Company. The maximum outstanding purchase amount permitted under the agreement is $4,250 million.

Receivables sold under the February 2026 Receivable Purchase Agreement represent eligible amounts arising from prescription drug events that have been estimated to be included in the CMS settlement for the 2025 plan year. The purchase price for each purchased receivable portion equals the net estimated invoice amount of such portion minus the discount, which is determined by reference to the Secured Overnight Financing Rate (SOFR) plus a spread. The Company acts as a servicer for the transferred receivables. As of June 30, 2026, the Company did not record a servicing asset or liability related to its retained responsibility, based on its assessment of the servicing fee, market values for similar transactions, and its cost of servicing the receivables sold. The February 2026 Receivable Purchase Agreement is without recourse for credit losses related to the financial condition of CMS.

The Company accounts for the transfer of all or any portion of this receivable as a sale of accounts receivable in accordance with FASB Accounting Standards Codification (ASC) 860. Accordingly, receivables (or portions thereof) sold are derecognized from the Consolidated Balance Sheets at the time of sale. The difference between the balance of the receivables (or portion thereof) sold and cash proceeds received is recorded as a loss on sale of receivables and included in selling, general and administrative expenses in the Consolidated Statements of Operations. The cash proceeds and associated loss on sale of receivables are recorded as operating cash flows.

During March 2026, the Company sold a participating interest of $1,000 million of 2025 plan year stand-alone Part D risk-sharing programs receivables and received net cash proceeds of $970 million. This transfer of a participating interest in the receivable under the February 2026 Receivable Purchase Agreement resulted in a pre-tax loss on sale of receivables of $30 million. The proceeds from the sale were used for the partial redemption of the Company's Senior Notes due December 15, 2027.

As of June 30, 2026, there were $2,657 million of 2025 plan year stand-alone Part D risk-sharing programs receivables outstanding eligible for the February 2026 Receivable Purchase Agreement, which continue to be recognized in the Consolidated Balance Sheets. As of June 30, 2026, the remaining outstanding purchase amount permitted was $3,250 million.

4. 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, 2026								December 31, 2025
	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	$	1	$	(4)	$	568	$	533	$	3	$	(1)	$	535
Corporate securities	10,925		72		(168)		10,829		10,642		166		(146)		10,662
Restricted certificates of deposit	1		—		—		1		1		—		—		1
Restricted cash equivalents	103		—		—		103		69		—		—		69
Short-term time deposits	195		—		—		195		205		—		—		205
Municipal securities	3,630		22		(66)		3,586		3,790		37		(69)		3,758
Asset-backed securities	1,529		8		(14)		1,523		1,656		20		(10)		1,666
Residential mortgage-backed securities	1,764		9		(80)		1,693		1,763		21		(70)		1,714
Commercial mortgage-backed securities	1,110		4		(32)		1,082		1,156		9		(29)		1,136
Equity securities	1		—		—		1		1		—		—		1
Private equity investments	884		—		—		884		915		—		—		915
Life insurance contracts	230		—		—		230		217		—		—		217
Total	$	20,943	$	116	$	(364)	$	20,695	$	20,948	$	256	$	(325)	$	20,879

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, 2026, 99% of the Company's investments in rated securities carry an investment grade rating by nationally recognized statistical rating organizations. At June 30, 2026, 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 $180 million at June 30, 2026 and December 31, 2025, 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, 2026.

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, 2026								December 31, 2025
	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	$	(3)	$	439	$	(1)	$	18	$	—	$	88	$	(1)	$	43
Corporate securities	(24)		2,977		(144)		2,737		(2)		464		(144)		3,226
Municipal securities	(6)		609		(60)		1,332		(1)		241		(68)		1,550
Asset-backed securities	(4)		395		(10)		146		(2)		114		(8)		180
Residential mortgage-backed securities	(5)		439		(75)		595		—		120		(70)		687
Commercial mortgage-backed securities	(3)		196		(29)		429		—		156		(29)		480

Total	$	(45)	$	5,055	$	(319)	$	5,257	$	(5)	$	1,183	$	(320)	$	6,166

As of June 30, 2026, the gross unrealized losses were generated from 3,994 positions out of a total of 6,258 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, 2026								December 31, 2025
	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	$	2,683	$	2,671	$	345	$	344	$	2,201	$	2,190	$	464	$	464
One year through five years	6,984		6,871		781		767		7,266		7,219		574		566
Five years through ten years	4,131		4,130		351		351		4,198		4,252		334		339
Greater than ten years	125		123		25		25		160		157		43		43
Asset-backed securities	4,403		4,298		—		—		4,575		4,516		—		—
Total	$	18,326	$	18,093	$	1,502	$	1,487	$	18,400	$	18,334	$	1,415	$	1,412

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.

5. 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, 2026, 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	$	24,151	$	—	$	—	$	24,151
Investments:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	63	$	—	$	—	$	63
Corporate securities	—		10,788		—		10,788
Municipal securities	—		2,749		—		2,749
Short-term time deposits	—		195		—		195
Asset-backed securities	—		1,523		—		1,523
Residential mortgage-backed securities	—		1,693		—		1,693
Commercial mortgage-backed securities	—		1,082		—		1,082
Equity securities	—		1		—		1
Total investments	$	63	$	18,031	$	—	$	18,094
Restricted deposits:
Cash and cash equivalents	$	103	$	—	$	—	$	103
U.S. Treasury securities and obligations of U.S. government corporations and agencies	505		—		—		505
Corporate securities	—		41		—		41
Certificates of deposit	—		1		—		1
Municipal securities	—		837		—		837
Total restricted deposits	$	608	$	879	$	—	$	1,487


Total assets at fair value	$	24,822	$	18,910	$	—	$	43,732

The following table summarizes fair value measurements by level at December 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	$	17,888	$	—	$	—	$	17,888
Investments:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	55	$	—	$	—	$	55
Corporate securities	—		10,652		—		10,652
Municipal securities	—		2,906		—		2,906
Short-term time deposits	—		205		—		205
Asset-backed securities	—		1,666		—		1,666
Residential mortgage-backed securities	—		1,714		—		1,714
Commercial mortgage-backed securities	—		1,136		—		1,136
Equity securities	—		1		—		1
Total investments	$	55	$	18,280	$	—	$	18,335
Restricted deposits:
Cash and cash equivalents	$	69	$	—	$	—	$	69
U.S. Treasury securities and obligations of U.S. government corporations and agencies	480		—		—		480
Corporate securities	—		10		—		10
Certificates of deposit	—		1		—		1
Municipal securities	—		852		—		852
Total restricted deposits	$	549	$	863	$	—	$	1,412



Total assets at fair value	$	18,492	$	19,143	$	—	$	37,635

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 $1,114 million and $1,132 million as of June 30, 2026 and December 31, 2025, respectively.

6. Medical Claims Liability

The following table summarizes the change in medical claims liability for the six months ended June 30, 2026 ($ in millions):


	Medicaid		Medicare		Commercial		Other		Consolidated Total
Balance, January 1, 2026	$	10,375	$	4,401	$	5,683	$	85	$	20,544
Less: Reinsurance recoverable	16		—		60		—		76
Balance, January 1, 2026, net	10,359		4,401		5,623		85		20,468

Incurred related to:
Current year	44,312		18,915		15,116		767		79,110
Prior years	(1,000)		(251)		(509)		(18)		(1,778)
Total incurred	43,312		18,664		14,607		749		77,332
Paid related to:
Current year	35,300		14,900		11,223		744		62,167
Prior years	7,872		3,654		3,826		66		15,418
Total paid	43,172		18,554		15,049		810		77,585

Balance, June 30, 2026, net	10,499		4,511		5,181		24		20,215
Plus: Reinsurance recoverable	18		—		29		—		47
Balance, June 30, 2026	$	10,517	$	4,511	$	5,210	$	24	$	20,262

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

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 $38 million and $69 million as a reduction to premium revenue in the six months ended June 30, 2026 and 2025, 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, 2026 was $12,898 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, which 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. As of June 2026, the Company did not record a premium deficiency reserve related to the 2026 Medicare Advantage contract year.

7. 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, 2026		December 31, 2025
Risk adjustment receivable	$	2,356	$	1,449
Risk adjustment payable	(2,542)		(2,087)
Minimum medical loss ratio	(334)		(294)
Cost sharing reduction receivable	10		13
Cost sharing reduction payable	(28)		(15)

In June 2026, CMS announced the final risk adjustment transfers for the 2025 benefit year. As a result of the announcement, the risk adjustment net payable was reduced by $541 million. After consideration of minimum MLR and other related impacts, the net pre-tax benefit recognized was $481 million in the six months ended June 30, 2026.

8. Debt

Debt consists of the following ($ in millions):


	June 30, 2026		December 31, 2025
$2,500 million 4.25% Senior Notes due December 15, 2027	$	1,067	$	2,211
$2,300 million 2.45% Senior Notes due July 15, 2028	2,160		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	14,204		15,490
Term Loan Facility	1,975		2,000


Debt issuance costs	(74)		(89)
Total debt	16,105		17,401
Less: current portion	(75)		(50)
Long-term debt	$	16,030	$	17,351

Senior Notes

Senior Notes due December 15, 2027

During the three and six months ended June 30, 2026, the Company repurchased $118 million and $1,147 million, respectively, of its par value Senior Notes due 2027 through the Company's senior note debt repurchase program. During the six months ended June 30, 2026, the Company recognized a $5 million pre-tax loss on the repurchase of the notes, including the impact of unamortized debt discount and issuance costs.

Senior Notes due July 15, 2028

During the three months ended June 30, 2026, the Company repurchased $142 million of its par value Senior Notes due 2028 for $135 million through the Company's senior note debt repurchase program. The Company recognized a $6 million pre-tax gain on the repurchase of the notes, including the impact of unamortized debt premium and issuance costs. In July 2026, the Company repurchased an additional $53 million of its par value Senior Notes due 2028 for $50 million through the debt repurchase program.

Senior Note Debt Repurchase Program

In June 2022, the Company's Board of Directors authorized a $1,000 million senior note debt repurchase program in preparation for future debt reductions as part of the Company's strategic initiatives, which was increased by $1,000 million in February 2026 and by $750 million in May 2026.

During the six months ended June 30, 2026, the Company repurchased $1,289 million of its par value Senior Notes due 2027 and 2028 for an aggregate amount of $1,282 million, as described above. As of June 30, 2026, there was $981 million available under the senior note debt repurchase program. In July 2026, the Company repurchased an additional $53 million of its par value Senior Notes due 2028 for $50 million through the debt repurchase program.

9. Earnings Per Share

The following table sets forth the calculation of basic and diluted net earnings (loss) 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,
	2026		2025		2026		2025

Earnings (loss) attributable to Centene Corporation	$	1,091	$	(253)	$	2,632	$	1,058

Shares used in computing per share amounts:
Weighted average number of common shares outstanding	493,819		493,548		492,949		494,896
Common stock equivalents (as determined by applying the treasury stock method)	3,818		—		3,656		1,432
Weighted average number of common shares and potential dilutive common shares outstanding	497,637		493,548		496,605		496,328

Net earnings (loss) per common share attributable to Centene Corporation:
Basic earnings (loss) per common share	$	2.21	$	(0.51)	$	5.34	$	2.14
Diluted earnings (loss) per common share	$	2.19	$	(0.51)	$	5.30	$	2.13

The calculation of diluted earnings per common share for the three months ended June 30, 2026 excludes 930 thousand shares related to anti-dilutive stock options and restricted stock units. 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 and restricted stock units as their effect would have been anti-dilutive due to the net loss for the quarter.

The calculation of diluted earnings per common share for the six months ended June 30, 2026 and 2025 excludes 2,872 thousand shares and 1,660 thousand shares, respectively, related to anti-dilutive stock options and restricted stock units.

10. 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, 2026, is as follows ($ in millions):


		Medicaid		Medicare		Commercial		Other/Eliminations		Consolidated Total
Premium		$	22,745	$	11,057	$	9,355	$	425	$	43,582
Service		21		—		1		771		793
Premium and service revenues		22,766		11,057		9,356		1,196		44,375
Premium tax		9,204		—		—		—		9,204
Total external revenues		31,970		11,057		9,356		1,196		53,579
Internal revenues		—		—		—		4,099		4,099
Eliminations		—		—		—		(4,099)		(4,099)
Total revenues		$	31,970	$	11,057	$	9,356	$	1,196	$	53,579

Medical costs		$	21,357	$	9,892	$	7,409	$	371	$	39,029
Cost of services		21		—		—		708		729
Other operating expenses (1)										12,623
Other income (expense) (2)										288
Earnings before income tax										$	1,486

Segment gross margin (3)		$	1,388	$	1,165	$	1,947	$	117	$	4,617

(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, 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
(Loss) before income tax										$	(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 six months ended June 30, 2026, is as follows ($ in millions):


		Medicaid		Medicare		Commercial		Other/Eliminations		Consolidated Total
Premium		$	46,318	$	21,383	$	18,910	$	858	$	87,469
Service		44		—		2		1,515		1,561
Premium and service revenues		46,362		21,383		18,912		2,373		89,030
Premium tax		14,493		—		—		—		14,493
Total external revenues		60,855		21,383		18,912		2,373		103,523
Internal revenues		—		—		—		8,245		8,245
Eliminations		—		—		—		(8,245)		(8,245)
Total revenues		$	60,855	$	21,383	$	18,912	$	2,373	$	103,523

Medical costs		$	43,312	$	18,664	$	14,607	$	749	$	77,332
Cost of services		44		—		—		1,387		1,431
Other operating expenses (1)										21,701
Other income (expense) (2)										526
Earnings before income tax										$	3,585

Segment gross margin (3)		$	3,006	$	2,719	$	4,305	$	237	$	10,267

(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										$	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.

11. 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 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, network adequacy, 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 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 matters 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 and Derivative Lawsuits

On July 9, 2025, a putative federal securities class action, Brock Lunstrum v. Centene Corp., et al. (the Securities Action), 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 lawsuits allege that the Company made false and misleading statements with respect to the Company's 2025 earnings guidance in violation of federal securities laws. Five related derivative lawsuits were subsequently filed — Franchi v. London, et al. (filed July 31, 2025), Keippel v. London, et al. (filed August 14, 2025), and Shipon v. London, et al. (filed August 26, 2025) in the Southern District of New York, and Nante v. London, et al. (filed September 30, 2025) in the Eastern District of Missouri and Rosenbaum v. London, et. al, (filed January 30, 2026) in the District of Delaware (together, the Derivative Actions) — against the Company, as nominal defendant, members of the board of directors, and certain officers. The plaintiffs in the Derivative Actions allege that the individual defendants breached their fiduciary duties and committed other alleged misconduct in connection with the statements at issue in the Securities Action. The Company denies any wrongdoing and is vigorously defending itself against the claims in the Securities Action and Derivative Actions. Nevertheless, these matters are subject to many uncertainties and the Company cannot predict how long these lawsuits will last, whether additional litigation will be filed with similar claims, or what the ultimate outcome will be, and an adverse outcome in any of these matters could potentially have a materially adverse impact on the Company's financial position and results of operations, cash flow or liquidity.

12. Enterprise Optimization

During the three and six months ended June 30, 2026, the Company incurred $47 million and $61 million, respectively, of third-party vendor costs and severance costs due to enterprise optimization initiatives and contract exits, which are included in selling, general and administrative expenses in the Consolidated Statements of Operations.

On July 27, 2026, the Company committed to accept employees' offers to participate in a voluntary separation program, which qualifies as a plan of termination. During the remainder of 2026, the Company estimates it will record severance costs of approximately $315 million to $365 million primarily in connection with the program.

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