v3.8.0.1
Condensed Financial Information of Registrant
 12 Months Ended
Dec. 31, 2017
Condensed Financial Information of Parent Company Only 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,
 
2017
 
2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
6

 
$
5

Short-term investments, at fair value (amortized cost $2 and $1, respectively)
2

 
1

Other current assets
331

 
29

Total current assets
339

 
35

Long-term investments, at fair value (amortized cost $17 and $19, respectively)
17

 
19

Investment in subsidiaries
11,018

 
10,674

Other long-term assets
302

 
52

Total assets
$
11,676

 
$
10,780

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities
$
100

 
$
78

Long-term debt
4,624

 
4,573

Other long-term liabilities
76

 
75

Total liabilities
4,800

 
4,726

 
 
 
 
Redeemable noncontrolling interest
12

 
145

 
 
 
 
Stockholders' equity:
 
 
 
Preferred stock, $.001 par value; authorized 10,000 shares; no shares issued or outstanding at December 31, 2017 and December 31, 2016
—

 
—

Common stock, $.001 par value; authorized 400,000 shares; 180,379 issued and 173,437 outstanding at December 31, 2017, and 178,134 issued and 171,919 outstanding at December 31, 2016
—

 
—

Additional paid-in capital
4,349

 
4,190

Accumulated other comprehensive loss
(3
)
 
(36
)
Retained earnings
2,748

 
1,920

Treasury stock, at cost (6,942 and 6,215 shares, respectively)
(244
)
 
(179
)
Total Centene stockholders' equity
6,850

 
5,895

Noncontrolling interest
14

 
14

Total stockholders' equity
6,864

 
5,909

Total liabilities, redeemable noncontrolling interests and stockholders' equity
$
11,676

 
$
10,780



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,
 
2017
 
2016
 
2015
Expenses:
 
 
 
 
 
Selling, general and administrative expenses
$
7

 
$
10

 
$
9

Gain on contingent consideration
(1
)
 
(5
)
 
(44
)
Other income (expense):
 
 
 
 
 
Investment and other income
2

 
2

 
(5
)
Interest expense
(247
)
 
(201
)
 
(39
)
Earnings (loss) before income taxes
(251
)
 
(204
)
 
(9
)
Income tax benefit
(114
)
 
(76
)
 
(26
)
Net earnings (loss) before equity in subsidiaries
(137
)
 
(128
)
 
17

Equity in earnings from subsidiaries
945

 
686

 
341

Net earnings
808

 
558

 
358

(Earnings) loss attributable to noncontrolling interests
20

 
1

 
(2
)
Net earnings attributable to Centene
$
828

 
$
559

 
$
356

 
 
 
 
 
 
Net earnings per share from continuing operations:
 
 
 
 
 
Basic earnings per common share
$
4.80

 
$
3.50

 
$
2.99

Diluted earnings per common share
$
4.69

 
$
3.41

 
$
2.89


 
See notes to condensed financial information of registrant.

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

 
Year Ended December 31,
 
2017
 
2016
 
2015
Cash flows from operating activities:
 
 
 
 
 
Dividends from subsidiaries, return on investment
$
292

 
$
25

 
$
11

Other operating activities, net
(132
)
 
(71
)
 
(29
)
Net cash provided by (used in) operating activities
160

 
(46
)
 
(18
)
Cash flows from investing activities:
 
 
 
 
 
Capital contributions to subsidiaries
(339
)
 
(691
)
 
(646
)
Purchases of investments
(38
)
 
(112
)
 
(17
)
Sales and maturities of investments
4

 
169

 
9

Dividends from subsidiaries, return of investment
28

 
100

 
3

Investments in acquisitions
(59
)
 
(2,248
)
 
(113
)
Intercompany activities
322

 
(575
)
 
463

Other investing activities, net
(1
)
 
—

 
7

Net cash used in investing activities
(83
)
 
(3,357
)
 
(294
)
Cash flows from financing activities:
 
 
 
 
 
Proceeds from borrowings
1,400

 
8,934

 
1,925

Payment of long-term debt
(1,350
)
 
(5,377
)
 
(1,575
)
Common stock repurchases
(65
)
 
(63
)
 
(53
)
Debt issuance costs
—

 
(76
)
 
(4
)
Purchase of noncontrolling interest
(66
)
 
(14
)
 
—

Other financing activities, net
5

 
—

 
20

Net cash (used in) provided by financing activities
(76
)
 
3,404

 
313

Net increase in cash and cash equivalents
1

 
1

 
1

Cash and cash equivalents, beginning of period
5

 
4

 
3

Cash and cash equivalents, end of period
$
6

 
$
5

 
$
4



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 our restricted subsidiaries. The management and service fees received by our 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, medical 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 our centralized cash management function, cash flows generated by our unrestricted subsidiaries are utilized by the parent company to the extent required, primarily to repay borrowings on the parent company's revolving credit facility, make acquisitions, fund capital contributions to subsidiaries and fund its operations.

In August 2016, the FASB issued an ASU which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The Company early adopted the new guidance in the fourth quarter of 2017. Certain amounts in the parent company only financial statements have been reclassified to conform to the 2017 presentation, reflecting this adoption and a reclassification of intercompany activities from operating to investing cash flows. These reclassifications have no effect on net earnings or stockholders' equity as previously reported.

Certain amounts presented in the parent company only financial statements are eliminated in the consolidated financial statements of Centene Corporation.