The following discussion of our financial condition and results of operations
should be read in conjunction with our consolidated financial statements and the
related notes included elsewhere in this filing. The discussion contains
forward-looking statements that involve known and unknown risks and
uncertainties.

                               EXECUTIVE OVERVIEW

General

We are a leading healthcare enterprise that is committed to helping people live
healthier lives. We take 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.

Results of operations depend on our ability to manage expenses associated with
health benefits (including estimated costs incurred) and selling, general and
administrative (SG&A) costs. We measure operating performance based upon two key
ratios. The health benefits ratio (HBR) represents medical costs as a percentage
of premium revenues, excluding premium tax revenues that are separately billed,
and reflects the direct relationship between the premiums received and the
medical services provided. The SG&A expense ratio represents SG&A costs as a
percentage of premium and service revenues, excluding premium taxes separately
billed.

Value Creation Plan

As introduced in June 2021, our Value Creation Plan is designed to drive margin
expansion by leveraging our scale and generating sustainable profitable growth.
In addition to creating shareholder value, this plan is an ongoing effort to
modernize and improve how we work in order to propel our organization to new
levels of success and elevate the member and provider experiences. The three
major pillars of the Value Creation Plan are: SG&A expense savings, gross margin
expansion, and strategic capital management. The first pillar, SG&A expense
savings, includes initiatives targeting improving productivity, driving
efficiencies, and reducing costs throughout the organization, including real
estate optimization. The second pillar, gross margin expansion, relates to
initiatives including bid discipline, clinical initiatives, quality improvement,
and pharmacy cost management. The third pillar, strategic capital management,
focuses on value-creating capital deployment activities such as stock
repurchases, portfolio optimization, and debt and investment management.

From an operational perspective, we continue to move forward with our value
creation plan, including the streamlining of certain operations, such as key
call centers and utilization management, evaluating our real estate footprint
and seeking opportunities for platform consolidation. We are assessing our
portfolio and are focused on making strategic decisions and investments to
create additional value in the short term and to seek opportunities that
position the organization for long-term strength, profitability, growth, and
innovation.

In the second quarter of 2022, following a strategic review of our real estate
portfolio and the adoption of a more modern, flexible work environment, we
initiated a reduction of our real estate footprint and incurred a charge of
$1.45 billion related to the impairment of leased and owned real estate and
related fixed assets. We incurred impairments of $706 million related to owned
real estate, $521 million related to leased real estate, and $223 million
related to associated fixed assets. We anticipate additional future charges of
approximately $200 million related to real estate optimization. This represents
an approximate 70% decrease in domestic leased space and is expected to result
in annualized lease expense savings of approximately $200 million.

Additionally, during the second quarter of 2022, our Board of Directors
authorized a $3.0 billion increase to our stock repurchase program and a new
$1.0 billion debt repurchase program. During 2022, we have repurchased $450
million of our common stock through our stock repurchase program, entered into
definitive agreements to sell Magellan Rx as well as our ownership stakes in our
Spanish and Central European businesses as part of our ongoing portfolio review,
and completed the divestiture of PANTHERx Rare (PANTHERx). We intend to utilize
the majority of the proceeds from these divestitures to repurchase additional
shares and the balance to reduce debt.

Trends and uncertainties related to COVID-19

The impact of COVID-19 on our business in both the short-term and long-term is
uncertain and difficult to predict. The outlook for the remainder of 2022
depends on future developments, including but not limited to: the length and
severity of the outbreak
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(including new variants, which may be more contagious, more severe or less
responsive to treatment or vaccines), the effectiveness of containment actions,
the timing and effectiveness of vaccinations and achievement of herd immunity,
and the timing and rate at which members return to accessing healthcare. The
pandemic and these future developments have impacted and will continue to affect
our membership and medical utilization. From the onset of the pandemic in March
2020, our Medicaid membership has increased by 2.9 million members (excluding
the new North Carolina membership). The public health emergency (PHE) extension
for COVID-19 has been extended to October 2022 with redeterminations eligible to
begin in November 2022. However, the PHE may be extended beyond October 2022.
Our Ambetter product covers the majority of our Medicaid states, and we believe
we are among the best positioned in the healthcare market to capture those
transitioning coverage through redeterminations. Our execution plan is
well-thought out and we remain agile in working with our state partners and are
prepared to support our members and promote continuity of coverage when
redeterminations resume.

We continue to watch external trends closely, as COVID-19 costs could increase
based upon macro trends. New variants and additional waves of the pandemic could
create new dynamics and uncertainties around our expectations.

We are confident that we have the team, the systems, the expertise and the financial strength to
continue to navigate this difficult pandemic landscape effectively.

Trends and regulatory uncertainties

The United States government, policymakers, and healthcare experts continue to
discuss and debate various elements of the United States healthcare model. We
remain focused on the promise of delivering access to high-quality, affordable
healthcare to all of our members and believe we are well positioned to meet the
needs of the changing healthcare landscape.

In contrast to previous executive and legislative efforts to restrict or limit
certain provisions of the Affordable Care Act (ACA), the American Rescue Act,
enacted on March 11, 2021, contained provisions aimed at leveraging Medicaid and
the Health Insurance Marketplace to expand health insurance coverage and
affordability to consumers. The American Rescue Act authorized an additional
$1.9 trillion in federal spending to address the COVID-19 PHE, and contained
several provisions designed to increase coverage of certain healthcare services,
expand eligibility and benefits, incentivize state Medicaid expansion, and
adjust federal financing for state Medicaid programs, the ultimate impact of
which remain uncertain. The American Rescue Act enhanced eligibility for the
advance premium tax credit for certain enrollees in the Health Insurance
Marketplace currently expires on December 31, 2022, and if it is not extended,
our Health Insurance Marketplace membership would likely be reduced.

Recently, the Biden Administration has made efforts to address the family glitch
in the ACA, which relates to determining who is eligible for premium subsidies.
We see this as a significant step in making Marketplace more affordable for
working families.

We have more than three decades of experience, spanning seven presidents from
both sides of the aisle, in delivering high-quality healthcare services on
behalf of states and the federal government to under-insured and uninsured
families, commercial organizations and military families. This expertise has
allowed us to deliver cost effective services to our government sponsors and our
members. While healthcare experts maintain focus on personalized healthcare
technology, we continue to make strategic decisions to accelerate development of
new software platforms and analytical capabilities. We continue to believe we
have both the capacity and capability to successfully navigate industry changes
to the benefit of our members, customers and shareholders.

Second Quarter 2022 Highlights

Our financial performance for the second quarter of 2022 is summarized as follows
follows:

• 26.4 million managed care members, an increase of 1.8 million members, or
7% year over year.

• Total turnover of $35.9 billionrepresenting a 16% year-on-year growth.

• Income from premiums and services of $34.0 billionrepresenting growth of 18%
Year after year.

•HBR of 86.7%, compared to 88.3% for the second quarter of 2021.

•SG&A expense ratio of 8.2%, compared to 7.4% for the second quarter of 2021.

• Adjusted SG&A expense ratio of 8.2%, compared to 7.3% for the second quarter of
2021.

• Operating cash flow of $3.4 billion for the second quarter of 2022.

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•Diluted loss per share of $(0.29), compared to $(0.92) for the second quarter
of 2021. The second quarter loss was driven by a pre-tax real estate impairment
charge of $1.45 billion ($1.80 per share after-tax), related to the reduction in
our real estate footprint. The diluted loss per share in 2021 was driven by the
recording of a legal settlement reserve estimate of $1.25 billion ($1.78 per
share after-tax).

• Diluted earnings per share (EPS) adjusted by $1.77compared to $1.25 for the
second quarter of 2021.

A reconciliation of GAAP diluted earnings (loss) per share to adjusted diluted earnings
EPS is highlighted below, and additional details are provided above under the
“Non-GAAP Financial Presentation” section:

                                                                  Three 

Months ended June 30th,

                                                                   2022                   2021

GAAP diluted earnings (loss) per share attributable to
centene

                                                      $        (0.29)         $     (0.92)
Amortization of acquired intangible assets                             0.34                 0.33
Acquisition and divestiture related expenses                           0.04                 0.07
Other adjustments (1)                                                  2.45                 2.23
Income tax effects of adjustments (2)                                 (0.77)               (0.46)
Adjusted diluted EPS                                         $         1.77          $      1.25

(1) Other adjustments include the following pre-tax items:

(a) for the three months ended June 30, 2022: real estate impairments of $1,454
million, or $2.46 per share ($1.80 after-tax), gain on debt extinguishment of
$13 million, or $0.02 per share, and costs related to the pharmacy benefits
management (PBM) legal settlement of $4 million, or $0.01 per share;

(b) for the three months ended June 30, 2021: PBM legal settlement expense of
$1,250 million, or $2.12 per share ($1.78 after-tax), a reduction to the
previously reported gain on divestiture of certain products of our Illinois
health plan of $62 million, or $0.10 per share, severance costs of $2 million,
or $0.00 per share, and the $0.01 impact of 8 million diluted shares in the
calculation of adjusted diluted EPS.

(2) The income tax effects of adjustments are based on the effective income tax
rates applicable to each adjustment. The three and six months ended June 30,
2022 also include a $0.03 per share increase to the tax benefit on the
previously reported non-cash impairment of our equity method investment in
RxAdvance.

The following items contributed to our operating results during the year
year:

• Circle Health. In July 2021we acquired the remaining stake in our equity
method of investing in Health Circlea die from the United Kingdom the biggest independent
hospital operators.

•Commercial. In 2022, we introduced Ambetter into five new states, as well as
expanded coverage to 274 new counties across 13 existing states. We now serve
members in 27 states across the country in 1,480 counties. Additionally, we
introduced three new Ambetter product offerings to address growing needs of our
members: Ambetter Value, Ambetter Select, and Ambetter Virtual Access.

•Eligibility Redeterminations. Revenue growth was driven by organic Medicaid
growth due to the ongoing suspension of eligibility redeterminations as well as
Medicare membership growth during the annual enrollment period.

•Hawaii. In July 2021, we began operating under two new statewide contracts in
Hawaii to continue administering covered services to eligible Medicaid and
Children's Health Insurance Program (CHIP) members for medically necessary
medical, behavioral health, and long-term services and support and to continue
administering services through the Community Care Services program in
partnership with the Hawaii Department of Human Services' Med-QUEST Division.

•Magellan Health, Inc. (Magellan). In January 2022we acquired all
issued and outstanding shares of Magellan for approximately $2.6 billion.

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•Medicare Advantage. We experienced strong Medicare membership growth during the
2022 annual enrollment period. In 2022, we introduced WellCare into three new
states, as well as expanded coverage to 327 new counties across existing states.
We now serve members in 36 states across the country in 1,575 counties.

•North Carolina. In July 2021, WellCare of North Carolina commenced operations
under a new statewide contract in North Carolina providing Medicaid managed care
services. In addition, we also began operating under a new contract to provide
Medicaid managed care services in three regions in North Carolina through our
provider-led North Carolina joint venture, Carolina Complete Health.

In addition, we have been negatively impacted by the previously disclosed carve
out of California pharmacy services effective January 2022, which occurred in
connection with the state's transition of pharmacy services from managed care to
fee for service, and the decrease in the number of our Medicare members in a 4.0
star or above plan for the 2022 bonus year.

We expect the following to affect our future operating results:

•In July 2022, as part of our previously announced review of strategic
alternatives for our international portfolio, we signed a definitive agreement
to sell our ownership stakes in our Spanish and Central European businesses,
including Ribera Salud, Torrejón Salud, and Pro Diagnostics Group. The
transaction is expected to close by the end of 2022.

•In July 2022, we have completed the previously announced sale of PANTHERx. The
the disposal illustrates our continued progress on the value creation plan.

•In July 2022, we announced our subsidiary, Delaware First Health, was awarded
contracts for the statewide Medicaid Managed Care programs. The new contracts
are anticipated to begin January 1, 2023.

•In July 2022, our subsidiary, Home State Health, commenced the MO HealthNet
Managed Care General Plan and Specialty Plan contracts. Under the General Plan,
Home State will continue serving multiple MO HealthNet programs including
Children's Health Insurance (CHIP) members and the state's newly implemented
Medicaid expansion population, across all regions of Missouri. Additionally, as
the sole provider of the newly awarded Specialty Plan, Home State now serves
approximately 50,000 foster children and children receiving adoption subsidy
assistance.

•In May 2022, we signed a definitive agreement to sell Magellan Rx as part of
our ongoing portfolio review. The transaction is expected to close by the end of
2022.

•In March 2022, we announced our subsidiary, Managed Health Services, was
selected by the Indiana Department of Administration to continue serving Hoosier
Healthwise and Health Indiana Plan members with Medicaid and Medicaid
alternative managed care and care coordination services. The new contract is
anticipated to begin January 1, 2023.

•In February 2022, our Louisiana subsidiary, Louisiana Healthcare Connections,
was awarded a Medicaid contract by the Louisiana Department of Health to
continue administering quality, integrated healthcare services to members across
the state. The contract is expected to commence in January 2023.

•In January 2022, our Nevada subsidiary, SilverSummit Healthplan, Inc.,
commenced the contract awarded from the Nevada Department of Health and Human
Services - Health Care Financing and Policy to continue providing managed care
services for its Medicaid Managed Care program in both Clark and Washoe
Counties.

•In October 2021, Centers for Medicare and Medicaid Services (CMS) published
updated Medicare Star quality ratings for the 2022 rating year. Over 50% of our
Medicare members are in a 4.0 star or above plan for the 2023 bonus year,
compared to approximately 30% for the 2022 bonus year. This increase in Star
quality ratings is primarily due to certain disaster relief provisions, which we
do not expect to be applicable in future years. As a result, we expect to
experience a meaningful decrease to our Star ratings for the 2023 Star rating
year, which impacts the 2024 bonus year, followed by a subsequent increase to
our Star ratings for the 2024 Star rating year, which impacts the 2025 bonus
year.

•In August 2021, we announced that our North Carolina subsidiaries, Carolina
Complete Health and WellCare of North Carolina, will coordinate physical and/or
other health services with Local Management Entities/Managed Care Organizations
under the state's new Tailored Plans. The Tailored Plans, which are expected to
launch in December 2022, are integrated health plans designed for individuals
with significant behavioral health needs and intellectual/developmental
disabilities.
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•In August 2021our Ohio subsidiary, Buckeye Health Plan, obtained a
Medicaid contract by the Ohio Department of Medicaid to continue the interview
members with quality health care, coordinated services and benefits. The
the contract should start in December 2022.

• We expect re-determinations of Medicaid eligibility to begin in November 2022,
although it could be extended until early 2023.

•We will be negatively impacted by the anticipated carve out of Ohio pharmacy
services in the second half of 2022 in connection with the state's transition of
pharmacy services from managed care to a single PBM.

• We may be negatively impacted by Medicaid actions and potential state rate risks
corridor mechanisms following the COVID-19 pandemic.

• We may be adversely affected by the expiration of the Advanced Enhanced
Premium Tax Credits (eAPTC) which, if not extended by the end of September,
expire in December 2022.

                                   MEMBERSHIP

From June 30, 2021 to June 30, 2022, we increased our managed care membership by
1.8 million, or 7%. The following table sets forth our membership by line of
business:

                                                     June 30,                     December 31,                    June 30,
                                                       2022                           2021                          2021
Traditional Medicaid (1)                              13,758,000                    13,328,400                     12,492,600
High Acuity Medicaid (2)                               1,688,000                     1,686,100                      1,531,000
Total Medicaid                                        15,446,000                    15,014,500                     14,023,600
Commercial Marketplace                                 2,033,300                     2,140,500                      2,040,900
Commercial Group                                         448,700                       462,100                        479,500
Total Commercial                                       2,482,000                     2,602,600                      2,520,400
Medicare (3)                                           1,483,900                     1,252,200                      1,182,900
Medicare PDP                                           4,165,500                     4,070,500                      4,064,500
Total at-risk membership (4)                          23,577,400                    22,939,800                     21,791,400
TRICARE eligibles                                      2,862,400                     2,874,700                      2,881,400
Total                                                 26,439,800                    25,814,500                     24,672,800

(1) Membership includes TANF, Medicaid Expansion, CHIP, Host family and Behavioral health.
(2) Membership includes ABD, IDD, LTSS and MMP Duals.
(3) Membership includes Medicare Advantage and Medicare Supplement.
(4) Membership includes 1,252,600, 1,178,000 and 1,131,900 dual-qualifying beneficiaries for periods ending June 30, 2022,
December 31, 2021and June 30, 2021respectively.

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                             RESULTS OF OPERATIONS

The following discussion and analysis is based on our Consolidated Statements of
Operations, which reflect our results of operations for the three and six months
ended June 30, 2022 and 2021, prepared in accordance with generally accepted
accounting principles in the United States.

Summarized comparative financial data for the three and six months ended June
30, 2022 and 2021 is as follows ($ in millions, except per share data in
dollars):

                                                          Three Months Ended June 30,                                     Six Months Ended June 30,
                                                 2022                 2021              % Change                 2022                2021              % Change
Premium                                    $       31,510          $ 27,627                    14  %       $      63,399          $ 54,560                    16  %
Service                                             2,458             1,235                    99  %               4,801             2,416                    99  %
 Premium and service revenues                      33,968            28,862                    18  %              68,200            56,976                    20  %
Premium tax                                         1,968             2,163                    (9) %               4,921             4,032                    22  %
Total revenues                                     35,936            31,025                    16  %              73,121            61,008                    20  %
Medical costs                                      27,312            24,389                    12  %              55,150            47,780                    15  %
Cost of services                                    2,099             1,107                    90  %               4,087             2,155                    90  %
Selling, general and administrative
expenses                                            2,800             2,139                    31  %               5,545             4,373                    27  %
Depreciation expense                                  164               134                    22  %                 320               267                    20  %
Amortization of acquired intangible assets            199               188                     6  %                 398               383                     4  %
Premium tax expense                                 2,041             2,236                    (9) %               5,047             4,164                    21  %

Impairment                                          1,450                 -                     n.m.               1,450                 -                     n.m.
Legal settlement                                        -             1,250                     n.m.                   -             1,250                     n.m.
Earnings (loss) from operations                      (129)             (418)                   69  %               1,124               636                    77  %
Investment and other income                            42                39                     8  %                  94               142                   (34) %
Debt extinguishment                                    13                 -                     n.m.                  16               (46)                  135  %
Interest expense                                     (162)             (163)                    1  %                (322)             (333)                    3  %

Earnings (loss) before income tax                    (236)             (542)                   56  %                 912               399                   129  %
Income tax expense (benefit)                          (65)               (7)                    n.m.                 231               237                    (3) %
Net earnings (loss)                                  (171)             (535)                   68  %                 681               162                   320  %
(Earnings) loss attributable to
noncontrolling interests                               (1)                -                     n.m.                  (4)                2                  (300) %
Net earnings (loss) attributable to
Centene Corporation                        $         (172)         $   (535)                   68  %       $         677          $    164                   313  %
Diluted earnings (loss) per common share
attributable to Centene Corporation        $        (0.29)         $  (0.92)                   68  %       $        1.15          $   0.28                   311  %
n.m.: not meaningful




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Three months completed June 30, 2022 Compared to the three months ended June 30, 2021

Total revenue

The following table presents additional information on the revenues of the three
months ended June 30th(in millions of dollars):

                                           2022                       2021                       % Change
Medicaid                           $           22,458          $         20,797                               8  %
Commercial                                      4,556                     4,110                              11  %
Medicare (1)                                    5,639                     4,464                              26  %
Other                                           3,283                     1,654                              98  %
Total Revenues                     $           35,936          $         31,025                              16  %

(1) Medicare includes Medicare Advantage, Medicare Supplement and Medicare PDP.


Total revenues increased 16% in the three months ended June 30, 2022 over the
corresponding period in 2021, driven by organic Medicaid growth, primarily due
to the ongoing suspension of eligibility redeterminations, 25% membership growth
in the Medicare business (19% growth since December 31, 2021), our recent
acquisitions of Magellan and Circle Health, and the commencement of our
contracts in North Carolina.

Operating Expenses

Medical Costs

The HBR for the three months ended June 30, 2022, was 86.7%, compared to 88.3%
in the same period in 2021. The HBR for the second quarter of 2022 was
positively impacted by favorable performance in Marketplace driven by pricing
actions and a return to more normalized utilization compared to the second
quarter of 2021. Additionally, the second quarter of 2021 was negatively
impacted by unfavorable 2020 risk adjustment, while the second quarter of 2022
was favorably impacted by 2021 risk adjustment.

Cost of services

Cost of services increased by $992 million in the three months ended June 30,
2022, compared to the corresponding period in 2021, primarily attributable to
newly acquired businesses, including Magellan and Circle Health. The cost of
service ratio for the three months ended June 30, 2022, was 85.4%, compared to
89.6% in the same period in 2021. The decrease in the cost of service ratio was
driven by the acquisition of the Circle Health business, which operates at a
lower cost of service ratio.

Selling, general and administrative expenses

The SG&A expense ratio was 8.2% for the second quarter of 2022, compared to 7.4%
in the second quarter of 2021. The adjusted SG&A expense ratio was 8.2% for the
second quarter of 2022, compared to 7.3% in the second quarter of 2021. The
increases were due to the additions of the Magellan and Circle Health
businesses, which operate at higher SG&A expense ratios due to the nature of
their respective businesses along with increased costs associated with risk
adjustment improvement efforts, Medicare broker commissions and variable
compensation. These impacts were partially offset by the leveraging of expenses
over higher revenues as a result of increased membership.

impairment

During the second quarter of 2022, we recorded an impairment loss of $1.45
billion
related to the reduction of our real estate footprint consisting of
leased and owned real estate and related fixed assets.

Legal settlement

During the second quarter of 2021, we recorded a legal settlement reserve
estimate of $1.25 billion (inclusive of the Ohio and Mississippi settlements)
related to services provided by Envolve Pharmacy Solutions, Inc. (Envolve), our
PBM subsidiary, essentially during 2017 and 2018.

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Other Income (Expense)

The following table summarizes the components of other income (expenses) for
three months completed June 30th(in millions of dollars):

                                                    2022        2021
                    Investment and other income   $   42      $   39
                    Debt extinguishment               13           -
                    Interest expense                (162)       (163)
                    Other income (expense), net   $ (107)     $ (124)



Investment and other income. Investment and other income increased by $3 million
in the three months ended June 30, 2022 compared to the corresponding period in
2021.

Debt extinguishment. In May 2022, we recognized a $13 million pre-tax gain on
the extinguishment of debt related to the refinancing of debt for our of Circle
Health subsidiary.

Interest charges. Interest expense decreased by $1 million within three months
ended June 30, 2022 compared to the corresponding period in 2021.

income tax expense

For the three months ended June 30, 2022, we recorded income tax benefit of $65
million on pre-tax loss of $236 million, or an effective tax rate of 27.7%. For
the second quarter of 2022, our effective tax rate on adjusted earnings was
27.1%. For the three months ended June 30, 2021, we recorded an income tax
benefit of $7 million on a pre-tax loss of $542 million, or an effective tax
rate of 1.3%. The effective tax rate for the second quarter of 2021 reflects the
partial non-deductibility of the legal settlement reserve. For the second
quarter of 2021, our effective tax rate on adjusted earnings was 26.3%.

Sector results

The following table summarizes our consolidated operating results by segment for
the three months have ended June 30th(in millions of dollars):

                              2022          2021        % Change
Total Revenues
Managed Care               $ 33,189      $ 29,590           12  %
Specialty Services            5,975         4,559           31  %
Eliminations                 (3,228)       (3,124)          (3) %
Consolidated Total         $ 35,936      $ 31,025           16  %
Earnings from Operations
Managed Care               $   (130)     $   (415)          69  %
Specialty Services                1            (3)         133  %

Consolidated Total         $   (129)     $   (418)          69  %



Managed Care

Total revenues increased 12% in the three months ended June 30, 2022, compared
to the corresponding period in 2021. The increase was due to organic Medicaid
growth, partially due to the ongoing suspension of eligibility redeterminations,
membership growth in the Medicare business, our recent acquisition of Circle
Health, and the commencement of our contracts in North Carolina. Earnings from
operations increased $285 million between years primarily as a result of
Medicaid and Medicare membership growth, 2021 risk adjustment in 2022, lower
traditional utilization in the Marketplace business, profitability growth in the
PDP business, offset by the $1.45 billion pre-tax real estate impairment. 2021
was negatively impacted by a legal settlement reserve estimate of $1.25 billion
related to services provided by Envolve.

Specialized services

Total revenues increased 31% in the three months ended June 30, 2022, compared
to the corresponding period in 2021, resulting primarily from our recent
acquisition of Magellan as well as from our specialty pharmacy businesses.
Earnings from operations increased $4 million in the three months ended June 30,
2022, compared to the corresponding period in 2021.
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Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

Total revenue

The following table provides additional revenue information for the six
months ended June 30th(in millions of dollars):

                                           2022                       2021                       % Change
Medicaid                           $           46,534          $         40,988                              14  %
Commercial                                      8,688                     8,008                               8  %
Medicare (1)                                   11,396                     8,803                              29  %

Other                                           6,503                     3,209                             103  %
Total Revenues                     $           73,121          $         61,008                              20  %

(1) Medicare includes Medicare Advantage, Medicare Supplement and Medicare PDP.


Total revenues increased 20% in the six months ended June 30, 2022 over the
corresponding period in 2021 primarily due to Medicaid membership growth
resulting from the ongoing suspension of eligibility redeterminations,
membership growth in the Medicare business, our recent acquisitions of Magellan
and Circle Health, and the commencement of our contracts in North Carolina, and
additional premium tax revenue and retroactive state directed payments.

Functionnary costs

Medical fees

The HBR for the six months ended June 30, 2022 was 87.0%, compared to 87.6% in
the same period in 2021. The HBR for 2022 was positively impacted by favorable
performance in Marketplace driven by pricing actions and a return to more
normalized utilization compared to the second quarter of 2021. Additionally, the
second quarter of 2021 was negatively impacted by unfavorable 2020 risk
adjustment, while the second quarter of 2022 was favorably impacted by 2021 risk
adjustment.

Cost of Services

Cost of services increased by $1.9 billion in the six months ended June 30,
2022, compared to the corresponding period in 2021, primarily attributable to
newly acquired businesses, including Magellan and Circle Health. The cost of
service ratio for the six months ended June 30, 2022, was 85.1%, compared to
89.2% in the same period in 2021. The decrease in the cost of service ratio was
driven by the acquisition of the Circle Health business, which operates at a
lower cost of service ratio.

Selling, general and administrative expenses

The SG&A expense ratio for the six months ended June 30, 2022 was 8.1%, compared
to 7.7% for the corresponding period in 2021. The adjusted SG&A expense ratio
for the six months ended June 30, 2022 was 7.9%, compared to 7.4% for the six
months ended June 30, 2021. The increases were due to the additions of the
Magellan and Circle Health businesses, which operate at higher SG&A ratios due
to the nature of their respective businesses along with increased risk
adjustment costs, Medicare broker commissions and variable compensation. These
impacts were partially offset by the leveraging of expenses over high revenues
as a result of increased membership as well as reduced restructuring charges
compared to 2021.

Impairment

During the second quarter of 2022, we recorded an impairment loss of $1.45
billion
related to the reduction of our real estate footprint consisting of
leased and owned real estate and related fixed assets.

Legal settlement

During the second quarter of 2021, we recorded a legal settlement reserve
estimate of $1.25 billion (inclusive of the Ohio and Mississippi settlements)
related to services provided by Envolve, our PBM subsidiary, essentially during
2017 and 2018.
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Other income (expenses)

The following table summarizes the components of other income (expenses) for
six months completed June 30th(in millions of dollars):

                                                    2022        2021
                    Investment and other income   $   94      $  142
                    Debt extinguishment               16         (46)
                    Interest expense                (322)       (333)
                    Other income (expense), net   $ (212)     $ (237)



Investment and other income. Investment and other income decreased by $48
million in the six months ended June 30, 2022 compared to the corresponding
period in 2021, driven by decreases in the performance of our deferred
compensation investment fund portfolio, which fluctuate with their underlying
investments. The losses from our deferred compensation portfolio were
substantially offset by decreases in deferred compensation expense, recorded in
SG&A expense. These decreases were partially offset by higher interest rates.

Debt extinguishment. In May 2022, we recognized a $13 million pre-tax gain on
the extinguishment of debt related to the refinancing of debt for our of Circle
Health subsidiary. The 2022 debt extinguishment also includes an immaterial gain
related to the redemption of Magellan's outstanding senior notes in January
2022. In February 2021, we tendered or redeemed all of our outstanding $2.2
billion 4.75% Senior Notes, due 2025 and recognized a pre-tax loss on
extinguishment of approximately $46 million. The loss includes the call premium
and the write-off of unamortized premium and debt issuance costs.

Interest expense. Interest expense decreased by $11 million in the six months
ended June 30, 2022, compared to the corresponding period in 2021, driven by our
2022 and 2021 refinancing actions.

income tax expense

For the six months ended June 30, 2022, we recorded income tax expense of $231
million on pre-tax earnings of $912 million, or an effective tax rate of 25.3%.
For the six months ended June 30, 2022, our effective tax rate on adjusted
earnings was 26.1%. For the six months ended June 30, 2021, we recorded income
tax expense of $237 million on pre-tax earnings of $399 million, or an effective
tax rate of 59.4%, which reflects the partial non-deductibility of the legal
settlement reserve.

Segment Results

The following table summarizes our consolidated operating results by segment for
the six months have ended June 30th(in millions of dollars):

                              2022          2021        % Change
Total Revenues
Managed Care               $ 67,710      $ 58,193           16  %
Specialty Services           12,090         8,826           37  %
Eliminations                 (6,679)       (6,011)         (11) %
Consolidated Total         $ 73,121      $ 61,008           20  %
Earnings from Operations
Managed Care               $  1,107      $    541          105  %
Specialty Services               17            95          (82) %
Consolidated Total         $  1,124      $    636           77  %



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Managed Care

Total revenues increased 16% in the six months ended June 30, 2022, compared to
the corresponding period in 2021, driven by organic Medicaid growth, partially
due to the ongoing suspension of eligibility redeterminations, membership growth
in the Medicare business, our recent acquisition of Circle Health, the
commencement of our contracts in North Carolina, along with premium tax revenue
and retroactive state directed payments. Earnings from operations increased $566
million between years primarily as a result of Medicaid and Medicare membership
growth, 2021 risk adjustment in 2022, lower traditional utilization in the
Marketplace business, profitability growth in the PDP business, and the
acquisition of Circle Health, partially offset by the $1.45 billion pre-tax real
estate impairment. 2021 was negatively impacted by the legal settlement reserve
estimate of $1.25 billion related to services provided by Envolve and higher
utilization in the Marketplace business in 2021.

Specialized services

Total revenues increased 37% in the six months ended June 30, 2022, compared to
the corresponding period in 2021, resulting primarily from our recent
acquisition of Magellan as well as from our specialty pharmacy businesses,
increased services associated with membership growth in the Managed Care
segment, and new contracts in our correctional business. Earnings from
operations decreased $78 million in the six months ended June 30, 2022, compared
to the corresponding period in 2021, primarily due to declining operations in
our PBM business, the shift of margin to our managed care segment for our
internal dental and vision businesses, as well as a non-recurring item in our
federal services business. Decreases in operations were partially offset by the
Magellan Acquisition.

                        LIQUIDITY AND CAPITAL RESOURCES

Below is a condensed cash flow table used in the discussion of
cash and capital resources (in millions of dollars).

                                                                        Six 

Months ended June 30th,

                                                                        2022                  2021
Net cash provided by operating activities                         $       4,505          $     1,728
Net cash used in investing activities                                    (3,145)              (1,420)
Net cash used in financing activities                                      (984)                 (46)
Effect of exchange rate changes on cash and cash equivalents                 (9)                 (24)
Net increase in cash, cash equivalents, and restricted cash and
cash equivalents                                                  $         367          $       238


Cash flow generated by operating activities

Normal operations are funded primarily through operating cash flows and
borrowings under our revolving credit facility. Operating activities provided
cash of $4.5 billion in the six months ended June 30, 2022 compared to providing
cash of $1.7 billion in the comparable period in 2021. Cash flows provided by
operations in 2022 was driven by net earnings before the non-cash real estate
impairment charge and an increase in medical claims liabilities partially due to
timing of state directed payments.

Cash flows provided by operations in 2021 were due to net earnings before the
legal settlement reserve, an increase in state risk adjustments and risk sharing
mechanism payables, partially offset by the timing of payments from our state
customers.

Cash flows used in investing activities

Investing activities used cash of $3.1 billion in the six months ended June 30,
2022, and $1.4 billion in the comparable period in 2021. Cash flows used in
investing activities in 2022 primarily consisted of our acquisition of Magellan
and net additions to the investment portfolio of our regulated subsidiaries
(including transfers from cash and cash equivalents to long-term investments).

Cash flows used in investing activities in 2021 primarily consisted of the net
additions to the investment portfolio of our regulated subsidiaries (including
transfers from cash and cash equivalents to long-term investments) and capital
expenditures.

we spent $524 million and $437 million within six months June 30, 2022 and
2021, respectively, on capital expenditure for system improvements, the market
growth, and our corporate and regional buildings.

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As of June 30, 2022, our investment portfolio consisted primarily of
fixed-income securities with an average duration of 3.6 years. We had
unregulated cash and cash equivalents of $782 million at June 30, 2022,
including $299 million in our international subsidiaries (a material portion of
which is expected to be used to satisfy contractual obligations), compared to
$2.7 billion at December 31, 2021, including $430 million in our international
subsidiaries. Unregulated cash was substantially reduced in January 2022 upon
the closing of the Magellan Acquisition for the purchase price payment and
corresponding closing costs. Unregulated cash and investments include private
equity investments and company owned life insurance contracts.

Cash flows used in financing activities

Financing activities used cash of $984 million in the six months ended June 30,
2022, compared to using cash of $46 million in the comparable period in 2021.
Financing activities in 2022 were driven by the redemption of Magellan's
outstanding debt of $535 million acquired in the transaction using Magellan's
cash on hand and stock repurchases of $344 million. In 2021, net financing
activities were driven by to costs associated with our debt refinancing, offset
by increased borrowings.

Liquidity Metrics

In June 2022, our Board of Directors approved an increase to the existing stock
repurchase program for Centene's common stock by $3.0 billion. We have
approximately $3.5 billion remaining under the program for repurchases as of
June 30, 2022.

From time to time, we raise capital through the issuance of debt in the form of
senior notes or make decisions to repurchase shares or reduce debt as part of
our capital allocation strategy. As of June 30, 2022, we had an aggregate
principal amount of $16.0 billion of senior notes issued and outstanding. The
indentures governing our various maturities of senior notes contain restrictive
covenants. As of June 30, 2022, we were in compliance with all covenants. Refer
to Note 8. Debt for further information regarding the issuance and redemption of
senior notes and Note 10. Stockholders' Equity for information on stock
repurchases.

The credit agreement underlying our Revolving Credit Facility and Term Loan
Facility contains customary covenants as well as financial covenants including a
minimum fixed charge coverage ratio and a maximum debt-to-EBITDA ratio. Our
maximum debt-to-EBITDA ratio under the credit agreement may not exceed 4.0 to
1.0. As of June 30, 2022, we had $129 million of borrowings outstanding under
our Revolving Credit Facility, $2.2 billion of borrowings under our Term Loan
Facility, and we were in compliance with all covenants. As of June 30, 2022,
there were no limitations on the availability of our Revolving Credit Facility
as a result of the debt-to-EBITDA ratio.

We had outstanding letters of credit of $172 million as of June 30, 2022, which
were not part of our revolving credit facility. The letters of credit bore
weighted interest of 0.6% as of June 30, 2022. In addition, we had outstanding
surety bonds of $1.4 billion as of June 30, 2022.

At June 30, 2022, we had working capital, defined as current assets less current
liabilities, of $3.3 billion, compared to $2.7 billion at December 31, 2021. The
increase as of June 30, 2022 was driven by the reclassification of PANTHERx
assets and liabilities held for sale. We manage our short-term and long-term
investments with the goal of ensuring that a sufficient portion is held in
investments that are highly liquid and can be sold to fund short-term
requirements as needed.

At June 30, 2022, our debt to capital ratio, defined as total debt divided by
the sum of total debt and total equity, was 41.5%, compared to 41.2% at
December 31, 2021. Excluding $181 million of non-recourse debt, our debt to
capital ratio was 41.3% as of June 30, 2022, compared to $184 million and 40.9%
at December 31, 2021. We utilize the debt to capital ratio as a measure, among
others, of our leverage and financial flexibility.

Expectations 2022

During the remainder of 2022, we expect to receive net dividends from our
insurance subsidiaries of approximately $610 million and spend approximately
$550 million in additional capital expenditures primarily associated with system
enhancements and the completion of our office in Charlotte, North Carolina. In
July 2022, we made $106 million in additional purchases through our stock
repurchase program and intend to utilize the majority of the proceeds from the
recently completed PANTHERx sale to repurchase additional shares and the balance
to reduce debt.

If the previously announced divestments of Magellan Rx or our Spanish companies and
Operations in Central Europe will close in 2022, we would have additional product for
use for additional share buybacks and debt reduction.

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Based on our operating plan, we expect that our available cash, cash equivalents
and investments, cash from our operations and cash available under our Revolving
Credit Facility will be sufficient to finance our general operations and capital
expenditures for at least 12 months from the date of this filing. While we are
currently in a strong liquidity position and believe we have adequate access to
capital, we may elect to increase borrowings on our Revolving Credit Facility.
From time to time we may elect to raise additional funds for these and other
purposes, either through issuance of debt or equity, the sale of investment
securities or otherwise, as appropriate. In addition, we may strategically
pursue refinancing or redemption opportunities to extend maturities and/or
improve terms of our indebtedness if we believe such opportunities are favorable
to us.

We intend to continue to evaluate strategic actions in connection with our Value
Creation Plan, targeting initiatives to improve productivity, efficiencies and
reduced organizational costs, as well as capital deployment activities,
including stock repurchases, portfolio optimization and the evaluation of
refinancing opportunities. In addition to creating shareholder value, this plan
encompasses a larger organizational mission to enhance our member and provider
experience, improve outcomes for our members, and to initiate new ways of doing
business that make Centene a great partner in all aspects of our operations.
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                  REGULATORY CAPITAL AND DIVIDEND RESTRICTIONS

Our operations are conducted through our subsidiaries. As managed care
organizations, most of our subsidiaries are subject to state regulations and
other requirements that, among other things, require the maintenance of minimum
levels of statutory capital, as defined by each state, and restrict the timing,
payment and amount of dividends and other distributions that may be paid to us.
Generally, the amount of dividend distributions that may be paid by a regulated
subsidiary without prior approval by state regulatory authorities is limited
based on the entity's level of statutory net income and statutory capital and
surplus.

Our regulated subsidiaries are required to maintain minimum capital requirements
prescribed by various regulatory authorities in each of the states in which we
operate. During the six months ended June 30, 2022, we received dividends of
$500 million from and made $428 million of capital contributions to our
regulated subsidiaries. For our subsidiaries that file with the National
Association of Insurance Commissioners (NAIC), the aggregate risk-based capital
(RBC) level as of December 31, 2021, which was the most recent date for which
reporting was required, was in excess of 350% of the Authorized Control Level.
We intend to continue to maintain an aggregate RBC level in excess of 350% of
the Authorized Control Level during 2022.

Under the California Knox-Keene Health Care Service Plan Act of 1975, as amended
(Knox-Keene), certain of our California subsidiaries must comply with tangible
net equity (TNE) requirements. Under these Knox-Keene TNE requirements, actual
net worth less certain unsecured receivables and intangible assets must be more
than the greater of (i) a fixed minimum amount, (ii) a minimum amount based on
premiums or (iii) a minimum amount based on healthcare expenditures, excluding
capitated amounts.

Under the New York State Department of Health Codes, Rules and Regulations Title
10, Part 98, our New York subsidiary must comply with contingent reserve
requirements. Under these requirements, net worth based upon admitted assets
must equal or exceed a minimum amount based on annual net premium income.

The NAIC has adopted rules that set out RBC’s minimum requirements for insurance
businesses, managed care organizations and other entities bearing risk for
health coverage. From June 30, 2022each of our health plans was in
compliance with RBC requirements enacted in those states.

As a result of the above requirements and other regulatory requirements, certain
of our subsidiaries are subject to restrictions on their ability to make
dividend payments, loans or other transfers of cash to their parent companies.
Such restrictions, unless amended or waived or unless regulatory approval is
granted, limit the use of any cash generated by these subsidiaries to pay our
obligations. The maximum amount of dividends that can be paid by our insurance
company subsidiaries without prior approval of the applicable state insurance
departments is subject to restrictions relating to statutory surplus, statutory
income and unassigned surplus.
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