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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________________________
FORM 10-Q
____________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to
____________________________________________
Commission file number: 001-31826
____________________________________________
CENTENE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware42-1406317
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification Number)
7700 Forsyth Boulevard 
St. Louis,Missouri63105
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (314) 725-4477 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock $0.001 Par ValueCNCNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large Accelerated FilerAccelerated filer
Non-accelerated filer   Smaller reporting company
Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes       No  
As of October 15, 2021, the registrant had 583,502,932 shares of common stock outstanding.



CENTENE CORPORATION
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
 PAGE
  
Part I
Financial Information
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Part II
Other Information
Item 1.
Item 1A.
Item 2.
Item 6.


Table of Contents

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

All statements, other than statements of current or historical fact, contained in this filing are forward-looking statements. Without limiting the foregoing, forward-looking statements often use words such as “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “seek,” “target,” “goal,” “may,” “will,” “would,” “could,” “should,” “can,” “continue” and other similar words or expressions (and the negative thereof). Centene Corporation and its subsidiaries (Centene, the Company, our or we) intends such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with these safe-harbor provisions. In particular, these statements include, without limitation, statements about our future operating or financial performance, market opportunity, growth strategy, competition, expected activities in completed and future acquisitions, including statements about the impact of our proposed acquisition of Magellan Health (the Magellan Acquisition), our completed acquisition of WellCare Health Plans, Inc. (WellCare and such acquisition, the WellCare Acquisition), other recent and future acquisitions, investments, and the adequacy of our available cash resources. These statements may be found in the various sections of this filing, such as Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Part II, Item 1. “Legal Proceedings,” and Part II, Item 1A “Risk Factors.” 

These forward-looking statements reflect our current views with respect to future events and are based on numerous assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors we believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions.

All forward-looking statements included in this filing are based on information available to us on the date of this filing. Except as may be otherwise required by law, we undertake no obligation to update or revise the forward-looking statements included in this filing, whether as a result of new information, future events or otherwise, after the date of this filing. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables and events including, but not limited to:

the impact of COVID-19 on global markets, economic conditions, the healthcare industry and our results of operations and the response by governments and other third parties;
our ability to accurately predict and effectively manage health benefits and other operating expenses and reserves, including fluctuations in medical utilization rates due to the impact of COVID-19;
the risk that regulatory or other approvals required for the Magellan Acquisition may be delayed or not obtained or are subject to unanticipated conditions that could require the exertion of management's time and our resources or otherwise have an adverse effect on us;
the possibility that certain conditions to the consummation of the Magellan Acquisition will not be satisfied or completed on a timely basis and accordingly, the Magellan Acquisition may not be consummated on a timely basis or at all;
uncertainty as to the expected financial performance of the combined company following completion of the Magellan Acquisition;
the possibility that the expected synergies and value creation from the Magellan Acquisition or the WellCare Acquisition (or other acquired businesses) will not be realized, or will not be realized within the respective expected time periods;
the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Magellan Acquisition or that the integration of Magellan Health will be more difficult or time consuming than expected, or similar risks from other acquisitions we may announce or complete from time to time;
the risk that potential litigation in connection with the Magellan Acquisition may affect the timing or occurrence of the Magellan Acquisition or result in significant costs of defense, indemnification and liability;
disruption from the announcement, pendency, completion and/or integration of the Magellan Acquisition or from the integration of the WellCare Acquisition, or similar risks from other acquisitions we may announce or complete from time to time, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships;
a downgrade of the credit rating of our indebtedness;
the inability to retain key personnel;
competition;
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membership and revenue declines or unexpected trends;
changes in healthcare practices, new technologies and advances in medicine;
increased healthcare costs;
changes in economic, political or market conditions;
changes in federal or state laws or regulations, including changes with respect to income tax reform or government healthcare programs as well as changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act (collectively referred to as the ACA) and any regulations enacted thereunder that may result from changing political conditions, the new administration or judicial actions;
rate cuts or other payment reductions or delays by governmental payors and other risks and uncertainties affecting our government businesses;
our ability to adequately price products;
tax matters;
disasters or major epidemics;
changes in expected contract start dates;
provider, state, federal, foreign and other contract changes and timing of regulatory approval of contracts;
the expiration, suspension, or termination of our contracts with federal or state governments (including, but not limited to, Medicaid, Medicare, TRICARE or other customers);
the difficulty of predicting the timing or outcome of legal or regulatory proceedings or matters, including, but not limited to, our ability to resolve claims and/or allegations made by states with regard to past practices, including at Envolve Pharmacy Solutions, Inc. (Envolve), as our pharmacy benefits manager (PBM) subsidiary, within the reserve estimate we have recorded and on other acceptable terms, or at all, or whether additional claims, reviews or investigations relating to our PBM business will be brought by states, the federal government or shareholder litigants, or government investigations;
timing and extent of benefits from strategic value creation initiatives;
challenges to our contract awards;
cyber-attacks or other privacy or data security incidents;
the exertion of management’s time and our resources, and other expenses incurred and business changes required in connection with complying with the undertakings in connection with any regulatory, governmental or third party consents or approvals for acquisitions, including the Magellan Acquisition;
changes in expected closing dates, estimated purchase price and accretion for acquisitions;
the risk that acquired businesses will not be integrated successfully;
restrictions and limitations in connection with our indebtedness;
our ability to maintain or achieve improvement in the Centers for Medicare and Medicaid Services (CMS) Star ratings and maintain or achieve improvement in other quality scores in each case that can impact revenue and future growth;
availability of debt and equity financing, on terms that are favorable to us;
inflation; and
foreign currency fluctuations.

This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain other factors that may affect our business operations, financial condition and results of operations, in our filings with the Securities and Exchange Commission (SEC), including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Item 1A. “Risk Factors” of Part II of this filing contains a further discussion of these and other important factors that could cause actual results to differ from expectations. Due to these important factors and risks, we cannot give assurances with respect to our future performance, including without limitation our ability to maintain adequate premium levels or our ability to control our future medical and selling, general and administrative costs.

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SUMMARY OF RISK FACTORS

Our business is subject to numerous risks and uncertainties that you should be aware of in evaluating our business, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects. These risks include, but are not limited to, the following, all of which are more fully described in Part II, Item 1A "Risk Factors." This summary should be read in conjunction with the Risk Factors section and should not be relied upon as an exhaustive summary of the material risks facing our business.

Our business could be adversely affected by the effects of widespread public health pandemics, such as the spread of COVID-19;
Our Medicare programs are subject to a variety of unique risks that could adversely impact our financial results;
Failure to accurately estimate and price our medical expenses or effectively manage our medical costs or related administrative costs could negatively affect our results of operations, financial position and cash flows;
Risk-adjustment payment systems make our revenue and results of operations more difficult to estimate and could result in retroactive adjustments that have a material adverse effect on our results of operations, financial condition and cash flows;
Any failure to adequately price products offered or any reduction in products offered in the Health Insurance Marketplaces may have a negative impact on our results of operations, financial position and cash flow;
We derive a portion of our cash flow and gross margin from our prescription drug plan (PDP) operations, for which we submit annual bids for participation. The results of our bids could materially affect our results of operations, financial condition and cash flows;
Our encounter data may be inaccurate or incomplete, which could have a material adverse effect on our results of operations, financial condition, cash flows and ability to bid for, and continue to participate in, certain programs;
If any of our government contracts are terminated or are not renewed on favorable terms or at all, or if we receive an adverse finding or review resulting from an audit or investigation, our business may be adversely affected;
Ineffectiveness of state-operated systems and subcontractors could adversely affect our business;
Execution of our growth strategy may increase costs or liabilities, or create disruptions in our business;
If competing managed care programs are unwilling to purchase specialty services from us, we may not be able to successfully implement our strategy of diversifying our business lines;
If state regulators do not approve payments of dividends and distributions by our subsidiaries to us, we may not have sufficient funds to implement our business strategy;
We derive a significant portion of our premium revenues from operations in a limited number of states, and our results of operations, financial position or cash flows could be materially affected by a decrease in premium revenues or profitability in any one of those states;
Competition may limit our ability to increase penetration of the markets that we serve;
If we are unable to maintain relationships with our provider networks, our profitability may be harmed;
If we are unable to integrate and manage our information systems effectively, our operations could be disrupted;
An impairment charge with respect to our recorded goodwill and intangible assets could have a material impact on our results of operations;
A failure in or breach of our operational or security systems or infrastructure, or those of third parties with which we do business, including as a result of cyber-attacks, could have an adverse effect on our business;
Reductions in funding, changes to eligibility requirements for government sponsored healthcare programs in which we participate and any inability on our part to effectively adapt to changes to these programs could substantially affect our results of operations, financial position and cash flows;
The implementation of the ACA, as well as potential repeal of, significant changes to, or judicial challenges to the ACA, could materially and adversely affect our results of operations, financial position and cash flows;
Our business activities are highly regulated and new laws or regulations or changes in existing laws or regulations or their enforcement or application could force us to change how we operate and could harm our business;
Our businesses providing pharmacy benefits management and specialty pharmacy services face regulatory and other risks and uncertainties which could materially and adversely affect our results of operations, financial position and cash flows;
We have been and may from time to time become involved in costly and time-consuming litigation and other regulatory proceedings, which require significant attention from our management and adversely affect our business;
If we fail to comply with applicable privacy, security, and data laws, regulations and standards, including with respect to third-party service providers that utilize sensitive personal information on our behalf, our business, reputation, results of operations, financial position and cash flows could be materially and adversely affected;
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If we fail to comply with the extensive federal and state fraud, waste and abuse laws, our business, reputation, results of operations, financial position and cash flows could be materially and adversely affected;
Our investment portfolio may suffer losses which could materially and adversely affect our results of operations or liquidity;
Adverse credit market conditions may have a material adverse effect on our liquidity or our ability to obtain credit on acceptable terms;
We have substantial indebtedness outstanding and may incur additional indebtedness in the future. Such indebtedness could reduce our agility and may adversely affect our financial condition;
Changes in the method pursuant to which the LIBOR rates are determined and expected phasing out of LIBOR after 2021 may affect the value of the financial obligations to be held or issued by us that are linked to LIBOR or our results of operations or financial condition;
Mergers and acquisitions may not be accretive and may cause dilution to our earnings per share, which may cause the market price of our common stock to decline;
We may be unable to successfully integrate our existing business with acquired businesses and realize the anticipated benefits of such acquisitions;
The merger with Magellan Health is subject to conditions, some or all of which may not be satisfied, or completed on a timely basis, if at all. Failure to complete the merger with Magellan Health could have adverse effects on our business;
Centene and Magellan Health have been and may be targets of securities class action and derivative lawsuits that could result in substantial costs and may delay or prevent the Magellan Acquisition from being completed;
Completion of the Magellan Acquisition may trigger change in control or other provisions in certain agreements to which Magellan Health or its subsidiaries are a party, which may have an adverse impact on the combined company’s business and results of operations;
We may be unable to attract, retain or effectively manage the succession of key personnel; and
Future issuances and sales of additional shares of preferred or common stock could reduce the market price of our shares of common stock.
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Non-GAAP Financial Presentation

The Company is providing certain non-GAAP financial measures in this report, as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company’s operations and measure the Company’s performance more consistently across periods. The Company uses the presented non-GAAP financial measures internally to allow management to focus on period-to-period changes in the Company’s core business operations. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Specifically, the Company believes the presentation of non-GAAP financial information that excludes amortization of acquired intangible assets and acquisition related expenses, as well as other items, allows investors to develop a more meaningful understanding of the Company’s performance over time. The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data):
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
GAAP net earnings$584 $568 $748 $1,820 
Amortization of acquired intangible assets198 164 581 527 
Acquisition related expenses54 62 141 446 
Other adjustments (1)
11 — 1,427 12 
Income tax effects of adjustments (2)
(102)(53)(455)(178)
Adjusted net earnings $745 $741 $2,442 $2,627 
GAAP diluted earnings per share (EPS)$0.99 $0.97 $1.27 $3.16 
Amortization of acquired intangible assets (3)
0.26 0.21 0.75 0.70 
Acquisition related expenses (4)
0.07 0.08 0.19 0.65 
Other adjustments (1)
(0.06)— 1.93 0.05 
Adjusted Diluted EPS$1.26 $1.26 $4.14 $4.56 
(1) Other adjustments include the following items:
2021:
(a) legal settlement expense and related legal fees of $11 million, or $0.01 per diluted share, net of an income tax benefit of $0.01, and $1.26 billion, or $1.79 per diluted share, net of an income tax benefit of $0.34, for the three and nine months ended September 30, 2021, respectively;
(b) debt extinguishment costs of $79 million, or $0.10 per diluted share, net of an income tax benefit of $0.03, and $125 million, or $0.16 per diluted share, net of an income tax benefit of $0.05, for the three and nine months ended September 30, 2021, respectively;
(c) severance costs due to a restructuring of $1 million, or $0.00 per diluted share, net of an income tax benefit of $0.00, and $59 million, or $0.07 per diluted share, net of an income tax benefit of $0.03, for the three and nine months ended September 30, 2021, respectively;
(d) a reduction to the previously reported gain due to the finalization of the working capital adjustment related to the divestiture of certain products of our Illinois health plan of $62 million, or $0.08 per diluted share, net of an income tax benefit of $0.03, for the nine months ended September 30, 2021;
(e) non-cash gain related to the acquisition of the remaining 60% interest of Circle Health of $309 million, or $0.52 per diluted share, net of income tax expense of $0.00, for the three and nine months ended September 30, 2021; and
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(f) non-cash impairment of our equity method investment in RxAdvance of $229 million, or $0.35 per diluted share, net of an income tax benefit of $0.03, and $0.35 per diluted share, net of an income tax benefit of $0.04 for the three and nine months ended September 30, 2021, respectively.
2020:
(a) debt extinguishment costs of $44 million, or $0.05 per diluted share, net of an income tax benefit of $0.02, for the nine months ended September 30 2020;
(b) gain related to the divestiture of certain products of our Illinois health plan of $104 million, or $0.10 per diluted share, net of income tax expense of $0.08, for the nine months ended September 30, 2020; and
(c) non-cash impairment of $72 million, or $0.10 per diluted share, net of an income tax benefit of $0.03, for the nine months ended September 30, 2020.
(2)     The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment.
(3)    The amortization of acquired intangible assets per diluted share presented above is net of an income tax benefit of $0.08 and $0.07 for the three months ended September 30, 2021 and 2020, respectively, and $0.23 and $0.22 for the nine months ended September 30, 2021 and 2020, respectively.
(4)    Acquisition related expenses per diluted share presented above are net of an income tax benefit of $0.02 and $0.02 for the three months ended September 30, 2021 and 2020, respectively, and $0.05 and $0.12 for the nine months ended September 30, 2021 and 2020, respectively.

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
GAAP selling, general and administrative expenses$2,684 $2,507 $7,324 $7,146 
Acquisition related expenses41 61 126 426 
Restructuring costs— 59 — 
Legal fees related to legal settlement11 — 11 — 
Adjusted selling, general and administrative expenses$2,631 $2,446 $7,128 $6,720 
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PART I
FINANCIAL INFORMATION

Item 1. Financial Statements.
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except shares in thousands and per share data in dollars)
 September 30, 2021December 31, 2020
(Unaudited)
ASSETS  
Current assets:
  
Cash and cash equivalents
$13,423 $10,800 
Premium and trade receivables
11,516 9,696 
Short-term investments
1,517 1,580 
Other current assets
1,600 1,317 
Total current assets28,056 23,393 
Long-term investments
13,561 12,853 
Restricted deposits
1,114 1,060 
Property, software and equipment, net
3,302 2,774 
Goodwill
19,699 18,652 
Intangible assets, net
8,143 8,388 
Other long-term assets
3,868 1,599 
Total assets$77,743 $68,719 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
  
Medical claims liability
$14,099 $12,438 
Accounts payable and accrued expenses
8,089 7,069 
Return of premium payable
2,238 1,458 
Unearned revenue
371 523 
Current portion of long-term debt
245 97 
Total current liabilities25,042 21,585 
Long-term debt
18,594 16,682 
Deferred tax liability1,440 1,534 
Other long-term liabilities
5,993 2,956 
Total liabilities51,069 42,757 
Commitments and contingencies
Redeemable noncontrolling interests
84 77 
Stockholders’ equity:
  
Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or outstanding at September 30, 2021 and December 31, 2020
  
Common stock, $0.001 par value; authorized 800,000 shares; 600,708 issued and 583,500 outstanding at September 30, 2021, and 598,249 issued and 581,479 outstanding at December 31, 2020
1 1 
Additional paid-in capital
19,594 19,459 
Accumulated other comprehensive earnings
176 337 
Retained earnings
7,540 6,792 
Treasury stock, at cost (17,208 and 16,770 shares, respectively)
(845)(816)
Total Centene stockholders’ equity26,466 25,773 
Nonredeemable noncontrolling interest124 112 
Total stockholders’ equity
26,590 25,885 
Total liabilities, redeemable noncontrolling interests and stockholders’ equity
$77,743 $68,719 
The accompanying notes to the consolidated financial statements are an integral part of these statements. 
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CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except shares in thousands and per share data in dollars)
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Revenues:
Premium$28,876 $26,537 $83,436 $74,496 
Service1,638 922 4,054 2,859 
Premium and service revenues
30,514 27,459 87,490 77,355 
Premium tax and health insurer fee
1,892 1,631 5,924 5,472 
Total revenues
32,406 29,090 93,414 82,827 
Expenses:  
Medical costs
25,430 22,932 73,210 63,659 
Cost of services
1,355 861 3,510 2,519 
Selling, general and administrative expenses
2,684 2,507 7,324 7,146 
Amortization of acquired intangible assets
198 164 581 527 
Premium tax expense
1,965 1,389 6,129 4,737 
Health insurer fee expense
 376  1,100 
Impairment
229  229 72 
Legal settlement  1,250  
Total operating expenses
31,861 28,229 92,233 79,760 
Earnings from operations545 861 1,181 3,067 
Other income (expense):  
Investment and other income
424 95 566 375 
Debt extinguishment costs
(79) (125)(44)
Interest expense
(170)(184)(503)(551)
Earnings before income tax expense720 772 1,119 2,847 
Income tax expense139 207 376 1,034 
Net earnings581 565 743 1,813 
Loss attributable to noncontrolling interests3 3 5 7 
Net earnings attributable to Centene Corporation$584 $568 $748 $1,820 

Net earnings per common share attributable to Centene Corporation:
Basic earnings per common share$1.00 $0.98 $1.28 $3.21 
Diluted earnings per common share$0.99 $0.97 $1.27 $3.16 

Weighted average number of common shares outstanding:
Basic
583,244 579,510 582,636 567,586 
Diluted
590,702 587,971 590,154 575,732 

The accompanying notes to the consolidated financial statements are an integral part of these statements.
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CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In millions)
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net earnings$581 $565 $743 $1,813 
Reclassification adjustment, net of tax1  (16)1 
Change in unrealized gain (loss) on investments, net of tax(47)38 (125)152 
Defined benefit pension plan net gain, net of tax   2 
Foreign currency translation adjustments(17)10 (20)4 
Other comprehensive earnings (loss)(63)48 (161)159 
Comprehensive earnings518 613 582 1,972 
Comprehensive loss attributable to noncontrolling interests3 3 5 7 
Comprehensive earnings attributable to Centene Corporation$521 $616 $587 $1,979 

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

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CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except shares in thousands and per share data in dollars)
(Unaudited)
Three and Nine Months Ended September 30, 2021
 Centene Stockholders’ Equity  
 Common Stock   Treasury Stock  
 
$0.001 Par
Value
Shares
AmtAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive Earnings
(Loss)
Retained
Earnings
$0.001 Par
Value
Shares
AmtNon-redeemable
Non-
controlling
Interest
Total
Balance, December 31, 2020598,249 $1 $19,459 $337 $6,792 16,770 $(816)$112 $25,885 
Comprehensive Earnings:         
Net earnings (loss)— — — — 699 — — (5)694 
Other comprehensive loss, net of $(49) tax
— — — (161)— — — — (161)
Common stock issued for employee benefit plans1,675 — 9 — — — — — 9 
Common stock repurchases(316)— (19)— — 156 (10)— (29)
Stock compensation expense— — 51 — — — — — 51 
Contribution from noncontrolling interest— — — — — — — 9 9 
Balance, March 31, 2021599,608 $1 $19,500 $176 $7,491 16,926 $(826)$116 $26,458 
Comprehensive Earnings:         
Net earnings (loss)— — — — (535)— — (3)(538)
Other comprehensive earnings, net of $19 tax
— — — 63 — — — — 63 
Common stock issued for employee benefit plans390 — 9 — — — — — 9 
Common stock repurchases(10)— — — — 60 (4)— (4)
Stock compensation expense— — 36 — — — — — 36 
Contribution from noncontrolling interest— — — — — — — 21 21 
Balance, June 30, 2021599,988 $1 $19,545 $239 $6,956 16,986 $(830)$134 $26,045 
Comprehensive Earnings:
Net earnings (loss)— — — — 584 — — (8)576 
Other comprehensive loss, net of $(15) tax
— — — (63)— — — — (63)
Common stock issued for employee benefit plans
720 — 9 — — — — — 9 
Common stock repurchases
 —  — — 222 (15)— (15)
Stock compensation expense
— — 40 — — — — — 40 
Contribution from noncontrolling interest
— — — — — — — 5 5 
Divestiture of noncontrolling interest— — — — — — — (10)(10)
Acquisition resulting in noncontrolling interest
— — — — — — — 3 3 
Balance, September 30, 2021600,708 $1 $19,594 $176 $7,540 17,208 $(845)$124 $26,590 

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Three and Nine Months Ended September 30, 2020
 Centene Stockholders’ Equity  
 Common Stock   Treasury Stock  
 
$0.001 Par
Value
Shares
AmtAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive Earnings
(Loss)
Retained
Earnings
$0.001 Par
Value
Shares
AmtNon-redeemable
 Non-
controlling
Interest
Total
Balance, December 31, 2019421,508 $ $7,647 $134 $4,984 6,460 $(214)$108 $12,659 
Comprehensive Earnings:         
Net earnings (loss)— — — — 46 — — (3)43 
Other comprehensive loss, net of $(40) tax
— — — (139)— — — — (139)
Common stock issued for acquisitions
171,225 — 11,526 — — — — — 11,526 
Common stock issued for employee benefit plans
2,448 — 5 — — — — — 5 
Common stock repurchases(291)— (17)— — 9,308 (541)— (558)
Stock compensation expense
— — 117 — — — — — 117 
Contribution from noncontrolling interest
— — — — — — — 2 2 
Other
— — 1 — — — — — 1 
Balance, March 31, 2020594,890 $ $19,279 $(5)$5,030 15,768 $(755)$107 $23,656 
Comprehensive Earnings:         
Net earnings (loss)— — — — 1,206 — — (6)1,200 
Other comprehensive earnings, net of $76 tax
— — — 250 — — — — 250 
Common stock issued for employee benefit plans
269 — 7 — — — — — 7 
Common stock repurchases
1 — — — — 47 (3)— (3)
Stock compensation expense
— — 47 — — — — — 47 
Contribution from noncontrolling interest
— — — — — — — 15 15 
Balance, June 30, 2020595,160 $ $19,333 $245 $6,236 15,815 $(758)$116 $25,172 
Comprehensive Earnings:
Net earnings (loss)— — — — 568 — — (6)562 
Other comprehensive earnings, net of $13 tax
— — — 48 — — — — 48 
Common stock issued for employee benefit plans
531 — 8 — — — — — 8 
Common stock repurchases
(69)— (5)— — 81 (4)— (9)
Stock compensation expense
— — 54 — — — — — 54 
Contribution from noncontrolling interest— — — — — — — 8 8 
Balance, September 30, 2020595,622 $ $19,390 $293 $6,804 15,896 $(762)$118 $25,843 

The accompanying notes to the consolidated financial statements are an integral part of these statements.
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CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions, unaudited)
 Nine Months Ended September 30,
 20212020
Cash flows from operating activities:
  
Net earnings
$743 $1,813 
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation and amortization1,098 916 
Stock compensation expense127 218 
Impairment229 72 
Loss on debt extinguishment125 44 
Gain on acquisition(309) 
Deferred income taxes(143)(154)
Gain on divestiture62 (104)
Other adjustments, net(6) 
Changes in assets and liabilities  
Premium and trade receivables(1,723)(1,640)
Other assets(124)185 
Medical claims liabilities1,661 1,563 
Unearned revenue(169)(212)
Accounts payable and accrued expenses993 (861)
Other long-term liabilities964 663 
Other operating activities, net2 19 
Net cash provided by operating activities3,530 2,522 
Cash flows from investing activities:
  
Capital expenditures(662)(663)
Purchases of investments(5,253)(2,911)
Sales and maturities of investments4,069 3,408 
Acquisitions, net of cash acquired(534)(3,000)
Divestiture proceeds, net of divested cash(62)466 
Net cash used in investing activities(2,442)