2021 Annual Review
CENTENE CORPORATION
1
CENTENE CORPORATION
Centene Corporation, a Fortune 25
company, is a leading multi-national
healthcare enterprise that is committed to
helping people live healthier lives.
The Company takes a local approach —
with local brands and local teams —
to provide fully integrated, high-quality,
and cost-effective services to government-
sponsored and commercial healthcare
programs, focusing on under-insured and
uninsured individuals. Centene offers
affordable and high-quality products to
nearly 1 in 15 individuals across the nation,
including Medicaid and Medicare members
(including Medicare Prescription Drug
Plans) as well as individuals and families
served by the Health Insurance
Marketplace, the TRICARE program, and
individuals in correctional facilities.
The Company also serves several
international markets, and contracts
with other healthcare and commercial
organizations to provide a variety of
specialty services focused on treating
the whole person. Centene focuses on
long-term growth and value creation as
well as the development of its people,
systems, and capabilities so that it can
better serve its members, providers, local
communities, and government partners.
TABLE OF CONTENTS
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17
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2021 at a Glance
Letter from the Chief Executive Officer
Message from the Acting Chairman of the Board
Company and Financial Summary
Noteworthy Recognitions and Awards
Message from the Vice Chairman
Improving Health Outcomes
Message from the President and Chief Operating Officer
Products and Presence
Board of Directors
Supplemental Information
Corporate Information
With more
than 35 years
of experience in
managing the health
needs of many of our most
vulnerable populations,
Centene continues to pioneer
innovative approaches to care.
As we work to shape a better
world of healthcare, we do so
with a strong sense of
responsibility for the value we
provide to our communities.
2021 AT A GLANCE
26.6M
Members
$126B
In total revenues
$4.2B
Total operating cash flow
$2.
28
Diluted earnings per s
hare
$5.15
Adjusted diluted earnings per share
CENTENE CORPORATION
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Letter from the
Chief Executive Officer
In 2021, Centene continued demonstrating the unique value we provide to the
individuals and communities we serve — while navigating the challenges of the
ongoing pandemic. We added capabilities in critical areas, such as mental health and
telemedicine, to address the evolving needs of our members and providers. And we
spurred COVID-19 vaccinations to protect the health of our members and their families,
increasing access to these lifesaving inoculations in communities across the country.
Moreover, Centene initiated its Value Creation Plan in 2021, which will enhance quality
for our members and state partners and unlock the tremendous earnings potential of this
company.
The strength of our foundational principles is evident in our performance. We saw
membership grow to 26.6 million, a 4% increase from 2020. Total revenues reached
$126 billion, or 13% year-over-year growth.
Our accomplishments last year were the result of Centene’s leadership, partnerships
with state governments and community organizations, and, of course, the dedication
of our nearly 72,500-person workforce.
CONTINUED LEADERSHIP IN GOVERNMENT-SPONSORED HEALTHCARE
Centene’s success is sustained by the platform we have built across government-
sponsored healthcare, including Medicaid, Medicare, and Marketplace offerings.
Our scale and experience uniquely position us with the knowledge, skills, technology,
and resources to best serve more than 26.6 million people — nearly 1 in 15 individuals
across the U.S.
Medicaid continues to represent Centene’s largest membership group. In 2021, we saw
newly awarded contracts and reprocurements in markets including Arizona, Hawaii,
Nevada, North Carolina, and Ohio. In each, our commitment to our local approach will
ensure that we are responsive to members’ needs and to state governments seeking to
improve health outcomes and healthcare affordability.
We remain optimistic regarding future Medicare growth in 2022 after seeing strong
performance in our Medicare Advantage product in 2021. Our geographic expansion for
2022 means our Medicare products, most of which are now offered under a newly
relaunched Wellcare brand, are now available to an additional base of 5.3 million
potential customers.
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Letter from the Chief Executive Officer
For Marketplace, despite headwinds caused by the pandemic, we continue to see
significant opportunity underscored by our innovative and diverse product offering.
In 2021, we entered 274 new counties across 13 markets, including five new states:
Kentucky, Louisiana, Nebraska, New Jersey, and Oklahoma. In 2022, our Ambetter
product will be available in 49% of all U.S. counties.
In addition, we closed our acquisition of Magellan Health in early 2022, which is a
key example of our commitment to meet our members’ needs. Through the addition
of Magellan, we are investing in our specialty care capabilities while also focusing on
improved integration of behavioral and physical health. As a result, we see a growth
opportunity ahead as we further enhance our ability to provide comprehensive care to
the most complex and vulnerable populations.
OUR VALUE CREATION PLAN
As we look to 2022 and beyond, we have strong momentum. We are well-positioned
for operational excellence, high-quality health outcomes, and member and provider
satisfaction.
At 2021 investor meetings, our executive team unveiled an enterprise-wide Value
Creation Plan that fully leverages our size and scale to unlock opportunities for enhanced
profitability and margin expansion. This initiative will allow us to remain agile, foster a
culture of continuous improvement, and drive excellence and innovation — ultimately
creating greater value for all stakeholders. As a purpose-driven organization, our Value
Creation Plan is fully aligned with enterprise-wide goals for improving quality of care and
member experiences. I believe the overwhelmingly positive reception we have received
from the investment community underscores the strength of our management team, as
well as our strategic vision for long-term success.
We have already begun executing our Value Creation Plan, which extends our leadership
position in core markets while accelerating earnings. There are numerous levers to drive
margin expansion that will yield significant results, particularly in 2023 and 2024.
Ultimately, our Value Creation Plan will touch every part of our business and represents
an ongoing evolution of how we operate.
CONTINUED COMMITMENT TO IMPROVING SOCIAL OUTCOMES
We continue to make social outcomes and health equity enterprise-wide goals. In 2021,
we prioritized COVID-19 vaccination education and access for our members through a
series of initiatives and partnerships, including an extensive outreach campaign and a
partnership with the Pro Football Hall of Fame that created public service announcements
targeting diverse communities.
Our commitment to addressing social determinants of health was seen in numerous
initiatives across the country. Such initiatives included a pilot program in Arizona that
targets social isolation by connecting high-risk members with an app that uses a chatbot
to decrease loneliness and to connect users who may need help with housing or
transportation, for example, with community-based resources.
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CENTENE CORPORATION Our ability to effect positive change in our communities comes from within and from our
deeply held belief in diversity, equity, and inclusion. We are pleased to be among the top
scorers in the Human Rights Campaign Corporate Equality Index, as well as the Disability
Equality Index, sponsored by the joint initiative of the American Association of People with
Disabilities and Disability:IN. Centene was also recognized by U.S. Veterans Magazine as a
“Best of the Best” top veteran-friendly company for the second year in a row, and was
named a “Best Place to Work for LGBTQ Equality” by the Human Rights Campaign
Foundation for the fourth consecutive year.
ENHANCED CORPORATE GOVERNANCE AND LEADERSHIP PLANNING
In 2021, we announced enhancements to Centene’s governance as part of our ongoing
review and Board of Directors refreshment processes. Recent appointments of directors
include Kenneth “Ken” Burdick, Christopher Coughlin, Wayne DeVeydt, Sarah London,
Leslie Norwalk, and Theodore “Ted” Samuels. In February of 2022, James Dallas was
appointed Acting Chairman of the Board, and will assume the role of Independent
Chairman this year.
As we welcome these new members, the entire board is working to ensure Centene is
best positioned to sustain our strong momentum in the years ahead. Throughout 2021, we
continued to prioritize succession planning to ensure that Centene has the right leadership
in place for continued success. With my imminent retirement, which I announced in
December would take place in 2022, the Board of Directors is currently undergoing a
thorough selection process for a new CEO and expects to appoint a new leader in Q2 2022.
As part of that process, in February 2022, we announced the expansion of the Office of the
Chairman, which is made up of Vice Chairman Sarah London, President and Chief Operating
Officer Brent Layton, Chief Financial Officer Drew Asher, and Chief Administrative Officer
Shannon Bagley.
I am highly confident that the company is in great hands with a capable management team
focused on executing Centene’s strategy for profitable growth and serving our members
with the highest quality of care.
MOVING CENTENE FORWARD
It has been one of the greatest privileges of my life to serve as CEO of Centene for more
than 25 years. Nothing has been more important to me than providing the highest quality
of care to the most vulnerable populations.
In 1996, when I started as CEO, Centene served just three counties across two states, with
$40 million in revenue. Today, Centene is a market leader with 2021 revenues of $126
billion — ranking 24th nationally on the Fortune 500® list and 57 on the Fortune Global
500® list.
I want to thank all of our Centene employees, both past and present, for what we have
achieved together. Our employees have worked tirelessly for our members, and their
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Letter from the Chief Executive Officer
dedication has not wavered even throughout recent global upheavals. I am immensely
proud of each employee's role in building Centene into the company it is today. I also want
to thank our shareholders for believing in our company and our ability to deliver value.
Centene is a unique organization that has been guided by our purpose, culture, and values
to become the leader in government-sponsored healthcare — and I have never been more
confident in the future success of this company.
MICHAEL NEIDORFF
MICHAEL NEIDORFF
MICHAEL NEIDORFF
MICHAEL NEIDORFF
Chief Executive Officer
Message from the Acting Chairman of the Board
As the Acting Chairman of the Board of Centene, I want to express my deep gratitude,
on behalf of the entire organization, for Michael's exceptional leadership over the
past 25 years.
Michael has played an instrumental role in growing the company to what it is today —
one of the largest managed healthcare companies in the country with a presence in all
50 states and over 72,500 employees. Michael has also instilled in our entire organization
a purpose to provide high-quality, low-cost health care to the most vulnerable
populations — a mission that serves as Centene's North Star.
Under Michael's stewardship, he has established a strong foundation across Medicaid,
Medicare and Marketplace. He has also successfully implemented a strategy to leverage
Centene's size and scale and unlock significant value for all of our stakeholders.
As we look forward, through 2022 and beyond, I am confident in the breadth and depth of
our strong senior leadership team to further execute on this strategy and ensure Centene
continues to play a leading role in transforming healthcare and the communities we serve.
JAMES DALLAS
Acting Chairman of the Board
CENTENE CORPORATION
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Company and Financial Summary
(in millions)
Total Revenues
Net Earnings(1)
2021
2020
2019
2018
2017
$125,982
$111,115
$74,639
$60,116
$48,382
$1,347
$1,808
$1,321
$900
$828
$889
Adjusted Net Earnings(1)
$3,040
$2,896
$1,857
$1,411
Total Assets
$78,375
$68,719
$40,994
$30,901
$21,855
TOTAL
REVENUES
(in millions)
NET
EARNINGS(1)
(in millions)
MANAGED
CARE
MEMBERSHIP
(in thousands)
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
2021
2020
2019
2018
2017
$125,982
$111,115
$74,639
$60,116
$48,382
$1,347
$1,321
$1,808
26,611
25,523
$900
$828
15,242
14,171
12,207
(1) Attributable to Centene Corporation
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Company and Financial Summary
Noteworthy Recognitions and Awards
Centene continues to gain global recognition for our
leadership in a number of key areas, including our
commitment to diversity, equity, and inclusion.
Great Place to Work:
In 2021, Centene was certifi ed a Great Place to
Work® based on our employee experience and our
.
people-first workplace culture
DiversityInc Top 50 Companies
for Diversity:
For the second consecutive year, Centene was
named a Top 50 Company for Diversity by
DiversityInc, placing #36 in 2021. This represents a
climb of 13 spots from 2020.
Human Rights Campaign Corporate
Equality Index — Best Places to Work
for LGBTQ Equality:
Centene earned a score of 100 on the benchmarking
report that measures corporate policies and practices
related to LGBTQ workplace equality.
NO.
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NO.
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Ranked #24 on Fortune 500 List (2021):
Centene ranked #24 on the 2021 FORTUNE 500® list of
largest U.S. corporations by revenue, up from #42 in 2020.
Centene has continued to rapidly climb the list since its
first appearance, in 2010.
Ranked #57 on Fortune Global 500 List
(2021):
Centene ranked #57 on the FORTUNE Global 500 list, up
from #127 in 2020. This year marked Centene’s sixth year
on the list, which ranks the top 500 companies worldwide
based on revenue.
Gender-Equality Index:
Centene is listed on the Bloomberg 2021
Gender-Equality Index for our strong dedication to
gender equality and the advancement of women in
the workplace.
Veterans Inclusion:
For the second year, U.S. Veterans Magazine
named Centene one of its Top Veteran-Friendly
Companies, while Military Times ranked Centene
#40 on its Best for Vets: Employers list.
FORTUNE® World’s Most Admired Companies
(2022):
For the fourth consecutive year, Centene was selected as
one of Fortune's World's Most Admired CompaniesTM,
a recognition bestowed by industry executives, directors,
and analysts asked to rate enterprises in their own industry
on nine criteria, from investment value and quality of
management and products to social responsibility and
ability to attract talent.
Disability Equality:
For the fourth consecutive year, Centene as a
recognized with a 100% score on the Disability
Equality Index (DEI), as one of the Best Places to
Work for People with Disabilities, and named a
Leading Disability Employer by the National
Organization on Disability (NOD).
Modern Healthcare Top Organization for Diversity:
Modern Healthcare magazine recognized Centene for our commitment
to expanding and improving access to care, regardless of the race,
ethnicity, gender, or sexual orientation of those we serve. Centene was
also spotlighted for our efforts to increase diversity within our
workforce, including leadership and governance.
From FORTUNE, ©2021 FORTUNE Media IP Limited. FORTUNE and The World's Most Admired Companies are
registered trademarks of Fortune Media IP Limited and are used under license. FORTUNE and Fortune
Media IP Limited are not affi liated with, and do not endorse the products or services of, Centene Corporation.
CENTENE CORPORATION
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Message from the Vice Chairman
SARAH LONDON
Vice Chairman
As Vice Chairman of Centene, I have the opportunity to work across our enterprise to set
the overall strategy for the company. Our successful performance in 2021 amid a highly
dynamic COVID-19 environment highlighted the strength of Centene’s core platform of
capabilities combined with our ability to quickly address community health challenges.
This past year certainly proved to be an important inflection point in our history.
And while the entire world adjusts to a new normal, I believe Centene is more than
prepared to continue leading.
Entering 2022, we are hard at work executing a detailed road map to unlock significant
value for the next chapter of Centene. Strategic initiatives to grow our core businesses —
Medicaid, Medicare, and Marketplace — are at the heart of our forward-looking plan. As
we diligently manage this strategic process, we know that the keys to our plan for
sustainable, profitable growth center on making the wisest use of our scale, position,
and differentiated capabilities.
It is through this lens that we revealed our Value Creation Plan, and our strategy for
execution is clear, with targeted initiatives in motion across Centene today. Our plan is
supported by a multiyear financial framework to help drive improved performance and
results: SG&A expense savings, gross margin expansion, and strategic capital allocation.
:: On SG&A, initiatives are aimed at improving productivity, driving efficiencies, and
reducing costs across the organization. This includes opportunities to regionalize or
centralize certain functions — better supporting our health plans while continuing our
strong commitment to our unique, local approach.
::
::
The second area is gross margin expansion, which we expect to yield from both
medical expense improvement and broader gross margin performance improvements.
Our third and final area of value creation is the strategic use of capital, which
includes investing in our business, managing debt, and using free cash flow and
proceeds from divestitures toward share repurchases.
Furthermore, a critical component of Centene’s Value Creation Plan is a comprehensive
review of our non-core assets as part of our ongoing portfolio optimization process. This
review involves a thorough examination of financial potential, value to our core products,
and relevance to our long-term strategy.
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Message from the Vice Chairman
Of course, an extremely important component of our vision for the future is Centene’s
pioneering use of technology and a modern, digital infrastructure designed around closing
the gap between health and care. Our strategic plan involves putting our machine learning,
artifi cial intelligence, human-centered design, and advanced technology platforms to work
— reimagining how we empower members to make better decisions along their care
journey.
Across every corner of our enterprise, we are committed to delivering increased value to
all of our stakeholders. As we build on Centene’s strong foundation and strategic
investments in technology and innovation, we’re seizing opportunities to enhance our
operations by creating a more seamless and efficient organization that delivers unrivaled
member and provider experiences. Even as we transform, we remain absolutely steadfast
in our determination to deliver high-quality, affordable care with dignity to the most
vulnerable members of our community.
Looking ahead, I couldn’t be more energized by the opportunities that I see ahead for
Centene. And I know I’m not alone. Our entire leadership team is motivated and unified by
our vision for the future of this company and our ambition to shape a better world of
healthcare. We are grateful for your support as we continue working to transform our
communities and the healthcare experience for each and every one of our valued members.
SARAH LONDON
Vice Chairman
Centene's pioneering digital
transformation is focused
on closing the gap
between health and care.
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Improving Health Outcomes
Through strategic, meaningful investments in data and
technology, as well as the strong local focus of our community-
based teams, Centene is helping more members than ever
receive the care they need, when and how they need it.
NEST: Using more than 200 geodemographic characteristics
as inputs, Centene created a predictive model known as NEST
(Neighborhood, Environment, and Social Traits), which, supported
by artificial intelligence, enables us to more proactively address
risks and barriers to health that impact our members and the
community as a whole, such as access to the COVID-19 vaccine
and other necessary care.
OpiEnd: Centene’s substance use disorder model provides a
98% accuracy rate in identifying potentially dangerous disorders
and allows our teams to quickly connect individuals to the
appropriate interventions.
Start Smart for Your Baby: Utilizing machine learning
to identify pregnant members who are at high risk for a poor
pregnancy outcome, our Start Smart for Your Baby predictive
model has led to a 70% increase in the prediction of
low-birth-weight babies. Our program reduces pregnancy
complications, preterm and lower-birth-weight deliveries, and
infant disease for our members, and can allow moms and babies
to get home earlier. The program’s success leads to shorter
hospital stays and outcome improvement and healthcare cost
savings opportunity of more than $55 million.
Diabetes Care Management: Our diabetes predictive
model has a 93% accuracy rate in identifying members likely to
have uncontrolled diabetes, enabling our local care managers to
outreach to members in need and develop a care plan for
controlling diabetes.
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Improving Health Outcomes
TECHNOLOGY EMPOWERING
ENHANCED CARE
As the model for delivering,
receiving, and accessing timely and
appropriate care continues to
radically change, Centene remains
at the forefront of the digital
transformation, building and
utilizing the latest technology and
partnering with leaders inside the
tech industry to shape the future
of healthcare.
One example of our initiatives is our
partnership with AT&T, Connected
Nation, Dell Technologies, and Intel
to create the K-12 Digital Divide
Program, enabling greater internet
access for youth in foster care.
Centene and the other groups
donated more than 1,000 laptops
and 2,200 hotspots to foster care
agencies in Florida and Missouri.
Additionally, Centene is creating new
ways to streamline tasks for our
team members — allowing them to
focus more on supporting our
members and providers. The
Centene Authorization Digital
Assistant uses machine learning to
enable us to review millions of data
records in little time, accelerating
approval of authorization requests
that can help members get the care
they need quicker. In three pilot
markets in 2021, CADA helped
reduce clinical work by 67%,
boosting efficiencies while cutting
administrative costs.
COVID-19: The scale and durability of Centene’s
response to the COVID-19 pandemic is vast, varied, and
ongoing. Initiatives delivering immediate resources to local
communities, combined with long-lasting investments, will
assist our workforce, provider network, community
partners, and members for years to come.
::
::
::
Centene health plans launched a nationwide Member
Access Campaign, hosting or working with partners to
hold more than 300 vaccination and COVID-19 testing
events, providing nearly 272,000 vaccinations.
Our health plans encouraged members to update their
current vaccination status and provided assistance in
accessing and scheduling vaccines for members.
Our partnership with the Pro Football Hall of Fame aimed
to increase education and awareness around vaccination
through a series of public service announcements. The
PSAs aired on national television networks and digital
platforms, focusing particularly on communities of color.
::
Centene joined the Lyft Vaccine Alliance, which provided
60 million rides to and from vaccination sites for people
in low-income, uninsured, and at-risk communities.
Centene continues to be at
the forefront of helping our
communities through the
COVID-19 pandemic.
STEADFASTLY COMMITTED TO ENVIRONMENTAL,
SOCIAL, AND CORPORATE RESPONSIBILITY
Transforming the health of our communities requires
protecting and nurturing our environment, adhering to strict
corporate governance, and addressing and removing social
barriers that may prevent individuals and families from
accessing the care they need. Learn more in our
Environmental, Social, Health, and Governance
Report to the Community available at www.centene.com/
who-we-are/corporate-facts-reports.html
DEI IS IN OUR DNA
Since our founding in 1984, diversity, equity, and inclusion
have been part of the foundation of our company. Learn more
about how we’re working with our communities to address
societal challenges and provide targeted, culturally
competent care to our members in our 2021 C-Index report
at http://www.centene.com/who-we-are/corporate-facts-
reports.html
CENTENE CORPORATION
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Message from the President and
Chief Operating Officer
BRENT LAYTON
President and Chief Operating Officer
I'm pleased to report that Centene's core businesses continue producing strong results
— thanks to the underlying, principled ways we serve individuals and communities that
are far too often left behind.
By building upon our distinctive, local approach, we've grown to support members
across the country. In the past five years alone, we've more than doubled our Medicaid
membership from nearly 6.9 million to more than 15 million, which includes managed
care services for Temporary Assistance for Needy Families (TANF), Medicaid Expansion,
Children's Health Insurance Program (CHIP), Foster Care, Behavioral Health, Aged, Blind
and Disabled (ABD), Intellectual and Developmental Disabilities (IDD), Long Term Services
& Supports (LTSS), and Medicare-Medicaid Plan (MMP) Duals members.
Our partnership with federal and local governments to provide individuals and families
with access to quality healthcare coverage expanded through our Health Insurance
Marketplace products. Centene has consistently led the way since these insurance
exchanges were introduced in 2014. Today, despite increasing competition, we continue to
be the No. 1 provider of Marketplace health insurance. Entering 2022, we have expanded
our geographic footprint and introduced new Marketplace products, designed to optimize
flexibility, access, and affordability, that will continue to drive growth and meet our
members' needs.
The acquisition of WellCare in 2020 continues to strengthen our position in Medicare. Our
second year as a combined organization continued to build upon WellCare's product
expertise and Centene's geographic footprint and provider relationships. This past year we
unified our Medicare products under a refreshed national brand to build stronger brand
awareness and better align with the company's strategy to transform and modernize how
we engage with our members about their health. As we move into 2022, with an additional
327 new counties, including counties in three new states, we feel confident about
Centene's future in Medicare.
Centene's leadership position in government-sponsored healthcare is a responsibility we
take very seriously. More than 26.6 million people and countless communities across the
country depend on the high-quality healthcare solutions we deliver each day. That's why
everything we do at Centene is built around serving the needs — and exceeding the
expectations — of our members, providers, and state partners.
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Message from the President and Chief Operating Officer
15
We take our leadership
responsibility seriously — to
increase access, improve
quality, and reduce costs in
healthcare.
The foundations of our business platform grow stronger as we enhance and streamline our
operations to create additional value within our products. Above all else, we are driven by
the dedication of our employees across the company to increase access, improve quality,
and reduce costs in healthcare. The outlook for Centene is strong as we keep our eyes fixed
on shaping the future of healthcare.
BRENT LAYTON
President and Chief Operating Officer
CENTENE CORPORATION
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Products and Presence
15.0 million members
29 states
67% of revenue
MEDICAID
As the largest Medicaid managed care organization in the United States,
Centene serves millions of low-income adults, children, pregnant women, and
those with disabilities through our local health insurance companies across the
country. Our Medicaid programs also provide tailored care options for specific
populations, such as those who are blind or have a disability, children within
and outside the foster care system, and adults and children who suffer from
long-term or chronic illnesses or conditions.
In 2021, Centene expanded Medicaid offerings through newly awarded
contracts and reprocurements in markets including Arizona, Hawaii,
Nevada, North Carolina and Ohio.
2.1 million members
27 states
1,480 counties
13% of revenue*
HEALTH INSURANCE MARKETPLACE
Centene remains the leading insurer on the Health Insurance Marketplace,
providing affordable healthcare solutions to individuals and families in more
than 25 states and growing. Many of our Marketplace plans are offered through
our Ambetter brand, a name that will gain in recognition in 2022, as we plan
to expand into five new states and more than 250 new counties, making
Ambetter available to individuals in 49% of U.S. counties.
1.3 million members
36 states
1,575 counties
14% of revenue**
MEDICARE ADVANTAGE
Centene’s Medicare product offerings continue to grow, due in large part to
our acquisition of WellCare in 2020. Following the acquisition, Centene made
major strides to consolidate its Medicare products under a unified national
brand. In 2022, Centene will expand its Medicare footprint by three new states
and more than 325 new counties.
Geographic footprint depicted on these pages represents anticipated expansion
throughout 2022. Marketplace expansion in 2022 includes LA, NE, NJ, OK, and
KY. Medicare Advantage expansion in 2022 includes MA, NE, and OK.
* Revenue is total Commercial, which includes Health Insurance Marketplace.
** Medicare revenue includes Prescription Drug Plans (PDPs). Centene offers PDPs
in all 50 states and has 4.1 million members.
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Products and Presence
ALASKA HAWAII
ALASKA HAWAII
ALASKA HAWAII
CENTENE CORPORATION
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Products and Presence (continued)
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Products and Presence
CORRECTIONAL
Centene offers healthcare and staffing services to
correctional systems and government agencies in nearly
20 states through our national provider, Centurion Health.
ALASKA HAWAII
TRICARE
Managed by the Pentagon, TRICARE is the U.S. militaryʼs
healthcare program, supporting active-duty families,
National Guardsmen, and reservists and their families, as
well as military retirees and their families. Partnering with
the U.S. government, Centene offers TRICARE coverage
in more than 20 states.
ALASKA HAWAII
INTERNATIONAL
Centene offers innovative and personalized solutions that
close care gaps and improve health outcomes for
international populations. In the United Kingdom, Circle
Health Group is the largest independent hospital operator
with 54 facilities and over 1.8 million patient visits per year.
Operose Health is the leading provider of primary care
services in the UK with customer-centric technological
platforms, data analytics, and population management
capabilities. Ribera Salud operates in both private
healthcare and the fully integrated Accountable Care
System sector, including research hospitals, primary care
and outpatient clinics, and diagnostic centers in Spain and
Central Europe.
Board of Directors
Centene’s Board of Directors provides exceptional business and
healthcare insight that has helped shape our corporate culture of
accountability, ethics, and integrity. In 2021, Centene announced a
number of enhancements as part of its ongoing board refreshment
and governance review process.
Frederick H. Eppinger
President and Chief Executive Officer of
Stewart Title Guaranty Company
Richard A. Gephardt
Chief Executive Officer and President of
Gephardt Group, LLC; Former Majority Leader
of the U.S. House of Representatives
Leslie V. Norwalk
Strategic Counsel to Epstein Becker & Green,
P.C., EBG Advisors, Inc., and National
Health Advisors
Lori J. Robinson
Retired United States Air Force General
Theodore Samuels
Retired President of Capital Guardian
Trust Company
William L. Trubeck
Retired Chief Financial Officer, Director, and
Executive Vice President of YRC Worldwide;
Retired Executive Vice President and Chief
Financial Officer of H&R Block
Michael Neidorff
Chief Executive Officer of
Centene Corporation
Sarah M. London
Vice Chairman, Centene Board of Directors
Orlando Ayala
Retired Chairman and Corporate
Vice President of Emerging Businesses for
Microsoft Corporation
Jessica L. Blume
Retired Vice Chairman of Deloitte LLP
Kenneth Burdick
Retired Executive Vice President of Products
and Markets of Centene Corporation;
Former Chief Executive Officer of WellCare
Health Plans, Inc.
Christopher Coughlin
Former Executive Vice President and
Chief Financial Officer of Tyco
International, Ltd.
H. James Dallas
Acting Chairman of Centene Corporation;
Retired Senior Vice President and
Chief Information Officer of Medtronic
Wayne S. DeVeydt
Executive Chairman of Surgery Partners, Inc.;
Former Executive Vice President and Chief
Financial Officer of Anthem, Inc.
CENTENE CORPORATION
17
Supplemental Information
MEMBERSHIP
The following table sets forth our membership
by line of business:
December 31
Traditional Medicaid(1)
High Acuity Medicaid(2)
Total Medicaid
Commercial
Medicare(3)
Medicare PDP
International
Correctional
Total at-risk membership
TRICARE eligibles
Non-risk membership
Total
The following table sets forth additional
membership statistics, which are included
in the membership information above:
Dual-eligible(4)
Health Insurance Marketplace
Medicaid Expansion
2021
13,328,400
1,686,100
15,014,500
2,602,600
1,252,200
4,070,500
597,600
194,500
23,731,900
2,874,700
4,000
26,610,600
1,178,000
2,140,500
2,468,100
(1) Membership includes TANF, Medicaid Expansion, CHIP, Foster Care, and Behavioral Health.
(2) Membership includes ABD, IDD, LTSS, and MMP Duals.
(3) Membership includes Medicare Advantage and Medicare Supplement.
(4) Membership that is eligible for both Medicaid and Medicare benefits.
2020
12,055,400
1,554,700
13,610,100
2,633,600
955,400
4,469,400
597,700
147,200
22,413,400
2,877,900
231,600
25,522,900
1,066,800
2,131,600
2,181,400
18
Supplemental Information
OPERATING RATIOS
HBR
SG&A expense ratio
Adjusted SG&A expense ratio
HBR BY PRODUCT
2021
Medicaid
Commercial
Medicare(1)
Year Ended December 31
2021
87.8%
8.6%
8.4%
Full Year
88.1%
86.6%
87.1%
Q4
89.0%
84.4%
86.3%
Q3
88.4%
88.7%
85.4%
Q2
88.1%
90.0%
87.6%
(1) Medicare includes Medicare Advantage, Medicare Supplement, and Medicare PDP.
2020
86.2%
9.5%
8.9%
Q1
87.1%
83.4%
88.9%
19
CENTENE CORPORATION
Corporate Information
COMMON STOCK INFORMATION
Centene common stock is traded and quoted
on the New York Stock Exchange under the
symbol “CNC.”
Stock
Price
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2022*
2021
High
Low
High
Low
$86.81 $74.47
$70.26 $57.16
75.25 59.33
75.59 59.67
85.44 60.81
NON-GAAP FINANCIAL RECONCILIATIONS
Year Ended December 31
(in millions, except per share data in dollars)
GAAP net earnings attributable to Centene
$1,347
$1,808
$1,321
$900
Amortization of acquired intangible assets
Acquisition-related expenses
Other adjustments(1)
770
185
1,275
719
602
29
258
104
301
211
425
30
2021
2020
2019
2018
2017
$828
156
20
(7)
Income tax effects of adjustments(2)
(537)
(262)
(127)
(155)
(108)
Adjusted net earnings
$3,040
$2,896
$1,857
$1,411
889
GAAP diluted earnings per share (EPS)
attributable to Centene
*Stock price through February 18, 2022
Amortization of acquired intangible assets(3)
Acquisition-related expenses(4)
Other adjustments(5)
Adjusted diluted EPS
ADJUSTED SG&A EXPENSE RATIO RECONCILIATION
GAAP SG&A expenses
Less:
Acquisition-related expenses
Restructuring Costs
Legal fees related to legal settlement
Adjusted SG&A expenses
(1) Other adjustments include the following items:
$2.28
1.00
0.24
1.63
$5.15
$10,166
$9,867
157
54
14
580
—
—
$9,941
$9,287
xpense and related legal fees of $1,264 million; debt extinguishment costs of $125 million; severance costs due to a
2021 — legal settlement e
restructuring of $54 million; 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; non-cash gain related to the acquisition of the remaining 60% interest
of Circle Health of $309 million; non-cash impairment of our equity method investment in RxAdvance of $229 million; and gain related to the
divestiture of U.S. Medical Management (USMM) of $150 million
2020 — gain related to the divestiture of certain products of our Illinois health plan of $104 million; non-cash impairment of our third-party
care management software business of $72 million; and debt extinguishment costs of $61 million
2019 — non-cash goodwill and intangible asset impairment of $271 million and debt extinguishment costs of $30 million
2018 — the impact of retroactive changes to the California minimum medical loss ratio (MLR) of $30 million of expense
2017 — the Penn Treaty assessment expense of $56 million; the cost sharing reduction (CSR) expense of $22 million; (c) the charitable
contribution commitment of $40 million; and the benefit associated with income tax reform of $125 million
(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 $0.31 for the twelve
months ended December 31, 2021.
(4) The acquisition-related expenses per diluted share presented above are net of an income tax benefit of $0.07 for the twelve months ended
December 31, 2021.
(5) Other adjustments for the year ended December 3
1, 2021, include the following items: legal settlement expense and related legal fees of $1.76
per diluted share, net of an income tax benefit of $0.38; debt extinguishment costs of $0.16 per diluted share, net of an income tax benefit of
$0.05; severance costs due to a restructuring of $0.06 per diluted share, net of an income tax benefit of $0.03; 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 $0.08 per diluted share, net of an income tax benefit of $0.02; non-cash gain related to the acquisition of the remaining 60% interest of
Circle Health of $0.52 per diluted share, net of income tax expense of $0.00; non-cash impairment of our equity method investment in RxAd-
vance of $0.32 per diluted share, net of an income tax benefit of $0.07; and gain related to the divestiture of USMM of $0.23 per diluted share,
net of an income tax expense of $0.02.
20
Corporate Information
GAAP net earnings attributable to Centene
$1,347
$1,808
$1,321
$900
2021
2020
2019
2018
770
185
1,275
719
602
29
258
104
301
211
425
30
2017
$828
156
20
(7)
Income tax effects of adjustments(2)
(537)
(262)
(127)
(155)
(108)
Adjusted net earnings
$3,040
$2,896
$1,857
$1,411
889
NON-GAAP FINANCIAL RECONCILIATIONS
Amortization of acquired intangible assets
Acquisition-related expenses
Other adjustments(1)
GAAP diluted earnings per share (EPS)
attributable to Centene
Amortization of acquired intangible assets(3)
Acquisition-related expenses(4)
Other adjustments(5)
Adjusted diluted EPS
GAAP SG&A expenses
Less:
Acquisition-related expenses
Restructuring Costs
Legal fees related to legal settlement
Adjusted SG&A expenses
$2.28
1.00
0.24
1.63
$5.15
$10,166
$9,867
157
54
14
580
—
—
$9,941
$9,287
CORPORATE
INFORMATION
Included in this 2021 Annual Review are financial
and operating highlights and summary financial
statements. For complete financial statements,
including notes, please refer to Centene’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2021, filed with the Securities and
Exchange Commission (the “2021 Form 10-K”),
which also includes Management’s Discussion and
Analysis of Financial Condition and Results of
Operations. This 2021 Annual Review together with
our 2021 Form 10-K constitute our annual report to
security holders for purposes of Rule 14a-3(b) of
the Securities Exchange Act of 1934, as amended.
Our 2021 Form 10-K may be obtained by accessing
the investor section of our company’s website at
www.centene.com or by going to the SEC’s website
at www.sec.gov.
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, acquisition-related expenses, and other
items allows investors to develop a more
meaningful understanding of the Company’s
performance over time.
FORM 10-K
Centene has filed an Annual Report on Form 10-K
for the year ended December 31, 2021, with the
Securities and Exchange Commission. Stockholders
may obtain a copy of this report, without charge,
by writing:
Investor Relations
Centene Corporation
7700 Forsyth Boulevard
St. Louis, MO 63105
www.centene.com
TRANSFER AGENT
Broadridge Corporate Issuer Solutions, Inc.
51 Mercedes Way
Edgewood, NY 11717
855-627-5087
https://shareholder.broadridge.com/bcis/
ANNUAL MEETING
The Annual Meeting of Stockholders will be held
on Tuesday, April 26, 2022, at 10 a.m. Central Time
at Centene Plaza, 7700 Forsyth Boulevard,
St. Louis, Missouri 63105.
ADJUSTED SG&A EXPENSE RATIO RECONCILIATION
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS OF CENTENE
All statements, other than statements of current or historical fact, contained in this communication 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 (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, value creation strategy,
competition, expected activities in completed and future acquisitions, including statements about the impact of our recently completed acquisition of Magellan Health (the Magellan
Acquisition), other recent and future acquisitions and dispositions, investments and the adequacy of our available cash resources.
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 communication are based on information available to us on the date
hereof. Except as may be otherwise required by law, we undertake no obligation to update or revise the forward-looking statements included in this communication, whether as a result of
new information, future events or otherwise, after the date hereof. 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: 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 the election of
new directors, changes in senior management and inability to retain key personnel may create uncertainty or negatively impact our ability to execute quickly and effectively; uncertainty as to
the expected financial performance of the combined company following the recent 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 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; disruption from the 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; competition;
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, including the possibility that these initiatives will not be successful, or will not be realized within the expected time periods; 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; 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; foreign currency fluctuations and risks
and uncertainties discussed in the reports that Centene has filed with the Securities and Exchange Commission. 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. 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.
7700 Forsyth Blvd.
St. Louis, MO 63105 U.S.A.
1-314-725-4477
www.centene.com