Annual report pursuant to Section 13 and 15(d)

Condensed Financial Information of Registrant

v3.19.3.a.u2
Condensed Financial Information of Registrant
12 Months Ended
Dec. 31, 2019
Condensed Financial Information Disclosure [Abstract]  
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)
 
December 31,
 
2019
 
2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
6,257

 
$
6

Short-term investments
3

 
2

Other current assets
50

 
61

Total current assets
6,310

 
69

Long-term investments
130

 
14

Investment in subsidiaries
19,561

 
17,409

Other long-term assets
337

 
278

Total assets
$
26,338

 
$
17,770

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities
$
198

 
$
109

Long-term debt
13,411

 
6,521

Other long-term liabilities
37

 
117

Total liabilities
13,646

 
6,747

 
 
 
 
Redeemable noncontrolling interest
33

 
10

 
 
 
 
Stockholders' equity:
 
 
 
Preferred stock, $.001 par value; authorized 10,000 shares; no shares issued or outstanding at December 31, 2019 and December 31, 2018

 

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

 

Additional paid-in capital
7,647

 
7,449

Accumulated other comprehensive loss
134

 
(56
)
Retained earnings
4,984

 
3,663

Treasury stock, at cost (6,460 and 5,217 shares, respectively)
(214
)
 
(139
)
Total Centene stockholders' equity
12,551

 
10,917

Noncontrolling interest
108

 
96

Total stockholders' equity
12,659

 
11,013

Total liabilities, redeemable noncontrolling interests and stockholders' equity
$
26,338

 
$
17,770



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)
 
 
Year Ended December 31,
 
2019
 
2018
 
2017
Expenses:
 
 
 
 
 
Selling, general and administrative expenses
$
11

 
$
28

 
$
7

Contingent consideration
(24
)
 
(4
)
 
(1
)
Other income (expense):
 
 
 
 
 
Investment and other income
11

 
3

 
2

Debt extinguishment costs
(30
)
 

 

Interest expense
(394
)
 
(334
)
 
(247
)
Loss before income taxes
(400
)
 
(355
)
 
(251
)
Income tax benefit
(172
)
 
(64
)
 
(114
)
Net (loss) before equity in subsidiaries
(228
)
 
(291
)
 
(137
)
Equity in earnings from subsidiaries
1,537

 
1,185

 
945

Net earnings
1,309

 
894

 
808

Loss attributable to noncontrolling interests
12

 
6

 
20

Net earnings attributable to Centene
$
1,321

 
$
900

 
$
828

 
 
 
 
 
 
Net earnings per share:
 
 
 
 
 
Basic earnings per common share
$
3.19

 
$
2.31

 
$
2.40

Diluted earnings per common share
$
3.14

 
$
2.26

 
$
2.34


 
See notes to condensed financial information of registrant.

Centene Corporation (Parent Company Only)
Condensed Statements of Cash Flows
(In millions)

 
Year Ended December 31,
 
2019
 
2018
 
2017
Cash flows from operating activities:
 
 
 
 
 
Dividends from subsidiaries, return on investment
$
429

 
$
464

 
$
292

Other operating activities, net
(231
)
 
(317
)
 
(132
)
Net cash provided by operating activities
198

 
147

 
160

Cash flows from investing activities:
 
 
 
 
 
Capital contributions to subsidiaries
(731
)
 
(681
)
 
(339
)
Purchases of investments
(124
)
 
(23
)
 
(38
)
Sales and maturities of investments

 
7

 
4

Dividends from subsidiaries, return of investment
291

 
11

 
28

Investments in acquisitions
(302
)
 
(4,226
)
 
(59
)
Intercompany activities
140

 
215

 
322

Other investing activities, net

 

 
(1
)
Net cash used in investing activities
(726
)
 
(4,697
)
 
(83
)
Cash flows from financing activities:
 
 
 
 
 
Proceeds from the issuance of common stock

 
2,778

 

Proceeds from long-term debt
24,647

 
6,014

 
1,400

Payments of long-term debt
(17,778
)
 
(4,080
)
 
(1,350
)
Common stock repurchases
(75
)
 
(71
)
 
(65
)
Contribution from noncontrolling interest
21

 

 

Payments for debt extinguishment
(23
)
 

 

Debt issuance costs
(25
)
 
(25
)
 

Purchase of noncontrolling interest

 
(76
)
 
(66
)
Other financing activities, net
12

 
10

 
5

Net cash provided by (used in) financing activities
6,779

 
4,550

 
(76
)
Net increase in cash and cash equivalents
6,251

 

 
1

Cash and cash equivalents, beginning of period
6

 
6

 
5

Cash and cash equivalents, end of period
$
6,257

 
$
6

 
$
6



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.