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Centene: N E W S R E L E A S E Contact: Investor Relations Inquiries Edmund E. Kroll, Jr.

The following excerpt is from the company's SEC filing.

Senior Vice President, Finance & Investor Relations

(212) 759-0382

Media Inquiries

Marcela Manjarrez-Hawn

Senior Vice President and Chief Communications Officer

(314) 445-0790

FOR IMMEDIATE RELEASE

CENTENE CORPORATION REPORTS

QUARTER RESULTS & UPDATES 2016 GUIDANCE

ST. LOUIS, MISSOURI (

April 26, 2016

) -- Centene Corporation (NYSE: CNC) today announced its financial results for the first quarter ended

March 31, 2016

. On

, Centene acquired all of the issued and outstanding shares of Healt h Net, Inc. (Health Net). Our consolidated financial statements as of and for the

three months ended March 31, 2016

reflect

days of Health Net operations. The following discussions, with the exception of cash flow information, are in the context of continuing operations.

For the first quarter of 2016, we reported a diluted net loss per share of

$(0.13)

and adjusted diluted earnings per share (Adjusted Diluted EPS) of

when excluding Health Net acquisition related expenses and intangible amortization. A reconciliation of GAAP diluted net loss per share to Adjusted Diluted EPS is highlighted below:

GAAP diluted net earnings (loss) per share

Amortization of acquired intangible assets

In summary, the 2016 first quarter results were as follows:

Total Revenues (in millions)

Health Benefits Ratio

General & Administrative expense ratio

General & Administrative expense ratio excluding Health Net acquisition related expenses

Total cash flow from operations (in millions)

Michael F. Neidorff, Centene's Chairman and Chief Executive Officer, stated, "We are pleased to have closed the Health Net transaction, as expected, in the first quarter. This acquisition is transformational -- building on our critical mass and new products and capabilities that will enhance the sustainability of our long-term growth. The integration process is proceeding as planned and we look forward to continued success in 2016 and beyond."

Quarter Highlights

, we acquired all of the issued and outstanding shares of Health Net for approximately

$6.0 billion

, including the assumption of debt. This strategic acquisition broadens our current service offerings, providing expansion in Medicaid and Medicare programs. This acquisition provides further diversification across our markets and products through the addition of government-sponsored care under federal contracts with the Department of Defense and the U.S. Department of Veteran's Affairs, as well as Medicare Advantage. Our consolidated financial statements as of and for the

managed care membership of

11.5 million

, an increase of

7.1 million

members, or

compared to the

Total revenues for the

$7.0 billion

, representing

growth compared to the

Health Benefits Ratio of

, compared to

General and Administrative expense ratio of

excluding Health Net acquisition related expenses for the

Operating cash flow of

$195 million

Diluted loss per share for the

of Adjusted Diluted EPS when excluding Health Net acquisition related expenses and intangible amortization

. In comparison, diluted EPS for the first quarter of 2015 was

Adjusted Diluted EPS when excluding intangible amortization.

Other Events

In April 2016, our Nebraska subsidiary, Nebraska Total Care, executed a contract with the Nebraska Department of Health and Human Services' Division of Medicaid and Long-Term Care as one of three managed care organizations to administer its new Heritage Health Program for Medicaid, ABD and CHIP enrollees. The contract is expected to commence in the first quarter of 2017, pending regulatory approval.

In April 2016, Centurion of Mississippi, LLC was selected to provide correctional healthcare services for the Mississippi Department of Corrections (MDOC). Centurion began providing healthcare services to the MDOC in July 2015 under a one-year emergency contract. The new three year contract will begin in July 2016.

In April 2016, Centurion of Florida, LLC began providing correctional healthcare services for the Florida Department of Corrections in Regions 1, 2 and 3.

In April 2016, Coordinated Care of Washington began operating as the sole contractor with the Washington State Health Care Authority to provide foster care services through the Apple Health Foster Care contract.

In April 2016, we announced the appointment of Mark Brooks to Senior Vice President and Chief Information Officer.

In April 2016, the Health Net Federal Services call center operations earned the ranking of first place for large call centers (those with more than 250 full-time representatives) in BenchmarkPortal’s Top 100 Call Center Contest.

In April 2016, Centene was awarded the Hispanic Health Leadership Award by the National Hispanic Medical Association.

In March 2016, Centene was added to the S&P 500 Index.

Membership

The following table sets forth the Company's membership by state for its managed care organizations:

Arizona

607,000

202,200

Arkansas

50,700

43,200

California

3,125,400

171,200

660,800

463,100

Georgia

495,500

405,600

Illinois

239,100

184,800

Indiana

290,300

227,700

Kansas

141,100

143,700

Louisiana

381,200

359,500

Massachusetts

52,400

64,500

Michigan

Minnesota

328,300

141,900

Missouri

100,000

75,600

New Hampshire

81,500

67,500

314,000

296,000

Oregon

209,000

South Carolina

107,700

106,000

Tennessee

20,100

20,800

1,036,700

974,900

Vermont

226,500

207,100

Wisconsin

78,400

82,100

Total at-risk membership

8,559,300

4,248,500

TRICARE eligibles

2,819,700

Non-risk membership

161,400

153,200

11,540,400

4,401,700

The following table sets forth our membership by line of business:

Medicaid:

TANF, CHIP & Foster Care

5,464,200

3,372,200

ABD & LTC

757,600

457,500

Behavioral Health

456,500

195,100

Commercial

1,518,900

161,700

Medicare & Duals

303,100

19,400

Correctional

59,000

42,600

, the Company served

984,900

members in Medicaid expansion programs in

states and

362,300

dual-eligible members, compared to

331,800

members in Medicaid expansion programs in seven states and

184,000

dual-eligible members at

March 31, 2015

. At

683,000

members in Health Insurance Marketplaces, compared to

Statement of Operations: Three Months Ended

, Total Revenues increased

$5.1 billion

. The increase was primarily

a result of the impact from expansions, acquisitions or new programs in many of our states in 2015 and the acquisition of Health Net.

HBR of

represents a

decrease

in the comparable period in

and an

from 88.0% in the

fourth

quarter of 2015. The year over year HBR

is primarily

attributable to improvement in medical expense in the higher acuity populations and membership growth in Medicaid expansion and Health Insurance Marketplace, which operate at a lower HBR.

HBR increased from 88.0% in the fourth quarter of 2015 to

, primarily attributable to an increase in flu related costs over the fourth quarter.

The following table compares the results for new business and existing business for the quarters ended

Premium and Service Revenue

New business

Existing business

G&A expense ratio of

Balance Sheet and Cash Flow

, the Company had cash, investments and restricted deposits of

$7.8 billion

$139 million

held by its unregulated entities. Medical claims liabilities totaled

$3.9 billion

. The Company's days in claims payable was

on a pro-forma basis to include a full quarter of Health Net medical costs. Total debt was

$4.3 billion

, which includes

$515 million

of borrowings on the $1.0 billion revolving credit facility at quarter end. Debt to capitalization was

, excluding the

$66 million

non-recourse mortgage note. Cash flow from operations for the three months ended

, was

days of Health Net operations. A reconciliation of the Company's change in days in claims payable from the immediately preceding quarter-end is presented below:

Days in claims payable, December 31, 2015

Impact of Health Net acquisition

Days in claims payable, March 31, 2016

A pro-forma adjustment has been made to medical costs to include a full quarter of Health Net medical costs. Using actual medical costs, days in claims payable was 66.

Outlook

The table below depicts the Company's updated annual guidance for 2016.

Full Year 2016

Total Revenues (in billions)

GAAP diluted EPS

Adjusted diluted EPS

G&A expense ratio, excluding acquisition related costs

Effective tax rate

Diluted shares outstanding (in millions)

Adjusted diluted earnings per share excludes approximately $1.00 to $1.05 per diluted share of Health Net acquisition related expenses and total intangible amortization associated with acquisitions of $0.50 to $0.55 per diluted share.

Conference Call

As previously announced, the Company will host a conference call Tuesday,

, at 8:30 AM (Eastern Time) to review the financial results for the

, and to discuss its business outlook. Michael Neidorff

and Jeffrey Schwaneke will host the conference call.

Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 in the U.S. and Canada; +1-412-902-6506 from abroad, including the following Elite Entry Number: 2633125 to expedite caller registration; or via a live, audio webcast on the Company's website at

www.centene.com

, under the Investors section.

A webcast replay will be available for on-demand listening shortly after the completion of the call for the next twelve months or until 11:59 PM (Eastern Time) on Tuesday, April 25, 2017, at the aforementioned URL. In addition, a digital audio playback will be available until 9:00 AM Eastern Time on Tuesday, May 3, 2016, by dialing 1-877-344-7529 in the U.S. and Canada, or +1-412-317-0088 from abroad, and entering access code 10083202.

Other Information

The discussion in the third bullet under the heading "Statement of Operations: Three Months Ended

" contains financial information for new and existing businesses. Existing businesses are primarily state markets or significant geographic expansion in an existing state or product that we have managed for four complete quarters. New businesses are primarily new state markets or significant geographic expansion in an existing state or product that conversely, we have not managed for four complete quarters.

Non-GAAP Financial Presentation

The Company is providing certain non-GAAP financial measures in this release

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 which excludes Health Net acquisition related expenses and intangible amortization allows investors to understand the Company's performance more consistently. The table below provides a reconciliation of non-GAAP items ($ in millions, except share data):

Three Months Ended March 31,

GAAP general and administrative expenses

General and administrative expenses, excluding Health Net acquisition related expenses

About Centene Corporation

Centene Corporation, a Fortune 500 company, is a diversified, multi-national healthcare enterprise that provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals. Many receive benefits provided under Medicaid, including the State Children's Health Insurance Program (CHIP), as well as Aged, Blind or Disabled (ABD), Foster Care and Long Term Care (LTC), in addition to other state-sponsored programs, Medicare (including the Medicare prescription drug benefit commonly known as "Part D"), as well as programs with the U.S. Department of Defense and U.S. Department of Veterans Affairs. Centene operates local health plans and offers a range of health insurance solutions. It also contracts with other healthcare and commercial organizations to provide specialty services including behavioral health management, care management software, correctional healthcare services, dental benefits management, in-home health services, life and health management, managed vision, pharmacy benefits management, specialty pharmacy and telehealth services.

Centene uses its investor relations website to publish important information about the Company, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene's investor relations website, http://www.centene.com/investors.

Forward-Looking Statements

The information provided in this press release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Centene and certain plans and objectives of Centene with respect thereto, including the expected benefits of the acquisition of Health Net. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “hope”, “aim”, “continue”, “will”, “may”, “would”, “could” or “should” or other words of similar meaning or the negative thereof. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to, the possibility that the expected synergies and value creation from the acquisition will not be realized, or will not be realized within the expected time period, including, but not limited to, as a result of conditions, terms, obligations or restrictions imposed by regulators in connection with their approval of, or consent to, the acquisition; the exertion of management’s time and Centene’s resources, and other out-of-pocket expenses incurred in connection with complying with the undertakings in connection with certain regulatory approvals; the risk that the businesses will not be integrated successfully; disruption from the acquisition making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred; changes in economic conditions or political conditions; changes in federal or state laws or regulations, including the Patient Protection and Affordable Care Act and the Health Care Education Affordability Reconciliation Act and any regulations enacted thereunder; provider and state contract changes; the outcome of pending legal or regulatory proceedings; reduction in provider payments by governmental payors; the expiration or termination of Centene’s Medicare or Medicaid managed care contracts with federal or state governments; tax matters; increased health care costs; and risks and uncertainties discussed in the reports that Centene has filed with the Securities and Exchange Commission (the “SEC”). These forward-looking statements reflect Centene’s current views with respect to future events and are based on numerous assumptions and assessments made by Centene in light of its experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors it believes appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this announcement could cause Centene’s plans with respect to the acquisition, actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this announcement are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this announcement. Centene does not assume any obligation to update the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law. This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain risk factors that may affect our business operations, financial condition and results of operations, in our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

[Tables Follow]

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

December 31, 2015

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

Premium and related receivables

Short term investments

Other current assets

Total current assets

Long term investments

Restricted deposits

Property, software and equipment, net

Goodwill

Intangible assets, net

Other long term assets

Total assets

18,652

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Medical claims liability

Accounts payable and accrued expenses

Return of premium payable

Unearned revenue

Current portion of long term debt

Total current liabilities

Long term debt

Other long term liabilities

Total liabilities

13,199

Commitments and contingencies

Redeemable noncontrolling interests

Stockholders’ equity:

Preferred stock, $0.001 par value; authorized 10,000,000 shares; no shares issued or outstanding at March 31, 2016 and December 31, 2015

Common stock, $0.001 par value; authorized 400,000,000 shares; 175,952,159 issued and 170,449,444 outstanding at March 31, 2016, and 126,855,477 issued and 120,342,981 outstanding at December 31, 2015

Additional paid-in capital

Accumulated other comprehensive earnings (loss)

Retained earnings

Treasury stock, at cost (5,502,715 and 6,512,496 shares, respectively)

Total Centene stockholders’ equity

Noncontrolling interest

Total stockholders’ equity

Total liabilities and stockholders’ equity

CONSOLIDATED STATEMENTS OF OPERATIONS

Revenues:

Premium and service revenues

Premium tax and health insurer fee

Expenses:

Medical costs

Cost of services

Premium tax expense

Health insurer fee expense

Total operating expenses

Earnings from operations

Other income (expense):

Investment and other income

Interest expense

Earnings from continuing operations, before income tax expense

Income tax expense

Earnings (loss) from continuing operations, net of income tax expense

Discontinued operations, net of income tax

Net earnings (loss)

(Earnings) loss attributable to noncontrolling interests

Net earnings (loss) attributable to Centene Corporation

Amounts attributable to Centene Corporation common shareholders:

Net earnings (loss) per common share attributable to Centene Corporation:

Basic:

Continuing operations

Basic earnings (loss) per common share

Diluted:

Diluted earnings (loss) per common share

Weighted average number of common shares outstanding:

125,543,076

118,783,755

122,572,366

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Cash flows from operating activities:

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities

Depreciation and amortization

Stock compensation expense

Deferred income taxes

Gain on contingent consideration

Changes in assets and liabilities

Other operating activities, net

Net cash provided by operating activities

Cash flows from investing activities:

Capital expenditures

Purchases of investments

Sales and maturities of investments

Investments in acquisitions, net of cash acquired

Other investing activities, net

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from borrowings

Payment of long term debt

(1,388

Common stock repurchases

Purchase of noncontrolling interest

Debt issue costs

Other financing activities, net

Net cash provided by financing activities

Net increase in cash and cash equivalents

, beginning of period

, end of period

Supplemental disclosures of cash flow information:

Interest paid

Income taxes paid

Equity issued in connection with acquisitions

SUPPLEMENTAL FINANCIAL DATA FROM CONTINUING OPERATIONS

MANAGED CARE MEMBERSHIP BY STATE

440,900

223,600

210,900

45,400

186,000

183,900

178,700

510,400

486,500

470,300

408,600

406,700

405,000

207,500

211,300

209,100

282,100

276,700

250,400

141,000

137,500

143,000

381,900

358,800

358,900

61,500

63,700

302,200

301,000

250,600

88,400

82,600

71,400

71,900

70,800

302,700

308,100

287,100

98,700

99,800

104,000

104,800

112,600

20,000

20,200

21,400

983,100

976,500

969,700

209,400

208,600

214,100

77,100

78,100

78,600

4,941,600

4,664,500

4,437,100

166,300

169,900

176,600

5,107,900

4,834,400

4,613,700

MANAGED CARE MEMBERSHIP BY LINE OF BUSINESS

3,763,400

3,719,900

3,536,000

478,600

473,700

454,000

456,800

216,700

203,900

146,100

155,600

167,400

37,400

39,300

28,200

47,600

NUMBER OF EMPLOYEES

28,000

18,200

17,100

15,800

14,800

DAYS IN CLAIMS PAYABLE

Days in Claims Payable is a calculation of Medical Claims Liabilities at the end of the period divided by average claims expense per calendar day for such period. On a pro-forma basis, DCP for Q1 2016 is 42, reflecting adjusted medical costs to include a full quarter of Health Net operations.

CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions)

Regulated

Unregulated

DEBT TO CAPITALIZATION

DEBT TO CAPITALIZATION EXCLUDING NON-RECOURSE DEBT

The non-recourse debt represents the Company's mortgage note payable ($66 million at March 31, 2016).

Debt to Capitalization is calculated as follows: total debt divided by (total debt + total equity).

OPERATING RATIOS

MEDICAL CLAIMS LIABILITY

The changes in medical claims liability are summarized as follows (in millions):

Balance, March 31, 2015

Acquisitions

Incurred related to:

Current period

Prior period

Total incurred

18,692

Paid related to:

16,520

Total paid

18,229

Balance, March 31, 2016

Centene's claims reserving process utilizes a consistent actuarial methodology to estimate Centene's ultimate liability. Any reduction in the “Incurred related to: Prior period” amount may be offset as Centene actuarially determines “Incurred related to: Current period.” As such, only in the absence of a consistent reserving methodology would favorable development of prior period claims liability estimates reduce medical costs. Centene believes it has consistently applied its claims reserving methodology in each of the periods presented. Additionally, as a result of minimum HBR and other return of premium programs, approximately $13 million of the “Incurred related to: Prior period” was recorded as a reduction to premium revenues.

The amount of the “Incurred related to: Prior period” above represents favorable development and includes the effects of reserving under moderately adverse conditions, new markets where we use a conservative approach in setting reserves during the initial periods of operations, receipts from other third party payors related to coordination of benefits and lower medical utilization and cost trends for dates of service

and prior.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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