| Condensed Financial Information of Registrant |
Condensed Financial Information of Registrant
Centene Corporation (Parent Company Only)
Condensed Balance Sheets
(In millions, except shares in thousands and per share data in dollars)
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December 31, |
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2019 |
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2018 |
ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ |
6,257 |
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$ |
6 |
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Short-term investments |
3 |
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2 |
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Other current assets |
50 |
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61 |
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Total current assets |
6,310 |
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|
69 |
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Long-term investments |
130 |
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|
14 |
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Investment in subsidiaries |
19,561 |
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17,409 |
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Other long-term assets |
337 |
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|
278 |
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Total assets |
$ |
26,338 |
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$ |
17,770 |
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LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY |
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Current liabilities |
$ |
198 |
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$ |
109 |
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Long-term debt |
13,411 |
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6,521 |
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Other long-term liabilities |
37 |
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117 |
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Total liabilities |
13,646 |
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6,747 |
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Redeemable noncontrolling interest |
33 |
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10 |
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Stockholders' equity: |
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Preferred stock, $.001 par value; authorized 10,000 shares; no shares issued or outstanding at December 31, 2019 and December 31, 2018 |
— |
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— |
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Common stock, $.001 par value; authorized 800,000 shares; 421,508 issued and 415,048 outstanding at December 31, 2019, and 417,695 issued and 412,478 outstanding at December 31, 2018 |
— |
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— |
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Additional paid-in capital |
7,647 |
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7,449 |
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Accumulated other comprehensive loss |
134 |
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(56 |
) |
Retained earnings |
4,984 |
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3,663 |
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Treasury stock, at cost (6,460 and 5,217 shares, respectively) |
(214 |
) |
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(139 |
) |
Total Centene stockholders' equity |
12,551 |
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10,917 |
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Noncontrolling interest |
108 |
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|
96 |
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Total stockholders' equity |
12,659 |
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|
11,013 |
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Total liabilities, redeemable noncontrolling interests and stockholders' equity |
$ |
26,338 |
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$ |
17,770 |
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See notes to condensed financial information of registrant.
Centene Corporation (Parent Company Only)
Condensed Statements of Operations
(In millions, except per share data in dollars)
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Year Ended December 31, |
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2019 |
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2018 |
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2017 |
Expenses: |
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Selling, general and administrative expenses |
$ |
11 |
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$ |
28 |
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$ |
7 |
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Contingent consideration |
(24 |
) |
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(4 |
) |
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(1 |
) |
Other income (expense): |
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Investment and other income |
11 |
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3 |
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2 |
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Debt extinguishment costs |
(30 |
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— |
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— |
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Interest expense |
(394 |
) |
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(334 |
) |
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(247 |
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Loss before income taxes |
(400 |
) |
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(355 |
) |
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(251 |
) |
Income tax benefit |
(172 |
) |
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(64 |
) |
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(114 |
) |
Net (loss) before equity in subsidiaries |
(228 |
) |
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(291 |
) |
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(137 |
) |
Equity in earnings from subsidiaries |
1,537 |
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1,185 |
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|
945 |
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Net earnings |
1,309 |
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|
894 |
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|
808 |
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Loss attributable to noncontrolling interests |
12 |
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6 |
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20 |
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Net earnings attributable to Centene |
$ |
1,321 |
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$ |
900 |
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$ |
828 |
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Net earnings per share: |
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Basic earnings per common share |
$ |
3.19 |
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$ |
2.31 |
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$ |
2.40 |
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Diluted earnings per common share |
$ |
3.14 |
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$ |
2.26 |
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$ |
2.34 |
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See notes to condensed financial information of registrant.
Centene Corporation (Parent Company Only)
Condensed Statements of Cash Flows
(In millions)
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Year Ended December 31, |
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2019 |
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2018 |
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2017 |
Cash flows from operating activities: |
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Dividends from subsidiaries, return on investment |
$ |
429 |
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$ |
464 |
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$ |
292 |
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Other operating activities, net |
(231 |
) |
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(317 |
) |
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(132 |
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Net cash provided by operating activities |
198 |
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147 |
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160 |
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Cash flows from investing activities: |
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Capital contributions to subsidiaries |
(731 |
) |
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(681 |
) |
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(339 |
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Purchases of investments |
(124 |
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(23 |
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(38 |
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Sales and maturities of investments |
— |
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7 |
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4 |
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Dividends from subsidiaries, return of investment |
291 |
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11 |
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28 |
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Investments in acquisitions |
(302 |
) |
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(4,226 |
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(59 |
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Intercompany activities |
140 |
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215 |
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322 |
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Other investing activities, net |
— |
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— |
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(1 |
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Net cash used in investing activities |
(726 |
) |
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(4,697 |
) |
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(83 |
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Cash flows from financing activities: |
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Proceeds from the issuance of common stock |
— |
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2,778 |
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— |
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Proceeds from long-term debt |
24,647 |
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6,014 |
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1,400 |
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Payments of long-term debt |
(17,778 |
) |
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(4,080 |
) |
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(1,350 |
) |
Common stock repurchases |
(75 |
) |
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(71 |
) |
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(65 |
) |
Contribution from noncontrolling interest |
21 |
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— |
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— |
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Payments for debt extinguishment |
(23 |
) |
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— |
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— |
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Debt issuance costs |
(25 |
) |
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(25 |
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— |
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Purchase of noncontrolling interest |
— |
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(76 |
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(66 |
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Other financing activities, net |
12 |
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10 |
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5 |
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Net cash provided by (used in) financing activities |
6,779 |
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4,550 |
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(76 |
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Net increase in cash and cash equivalents |
6,251 |
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— |
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1 |
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Cash and cash equivalents, beginning of period
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6 |
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6 |
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5 |
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Cash and cash equivalents, end of period
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$ |
6,257 |
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$ |
6 |
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$ |
6 |
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See notes to condensed financial information of registrant.
Notes to Condensed Financial Information of Registrant
Note A - Basis of Presentation and Significant Accounting Policies
The parent company only financial statements should be read in conjunction with Centene Corporation's audited consolidated financial statements and the notes to consolidated financial statements included in this Form 10-K.
The parent company's investment in subsidiaries is stated at cost plus equity in undistributed earnings of the subsidiaries. The parent company's share of net income of its unconsolidated subsidiaries is included in income using the equity method of accounting. Certain unrestricted subsidiaries receive monthly management fees from the Company's restricted subsidiaries. The management and service fees received by its unrestricted subsidiaries are associated with all of the functions required to manage the restricted subsidiaries including but not limited to salaries and wages for all personnel, rent, utilities, population health management, provider contracting, compliance, member services, claims processing, information technology, cash management, finance and accounting, and other services. The management fees are based on a percentage of the restricted subsidiaries' revenue.
Due to the Company's centralized cash management function, cash flows generated by its unrestricted subsidiaries are utilized by the parent company to the extent required, primarily to repay borrowings on the parent company's credit facilities, make acquisitions, fund capital contributions to subsidiaries and fund its operations.
Certain amounts presented in the parent company only financial statements are eliminated in the consolidated financial statements of Centene Corporation.
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