Centene Corporation (CNC, NYSE)
Industry: Healthcare Plans
Annual report, fiscal year 2017






## CENTENE CORPORATION

Centene Corporation, a Fortune 100 company, is a diversified, multi-national healthcare enterprise that provides a portfolio of services to government sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Centene operates local health plans and offers a range of health insurance solutions and specialty services.

1 2017 At a Glance
2 Letter from the Chairman
6 Company and Financial Summary
8 2017 Highlights
12 Expanding Access to Quality Healthcare
14 Addressing Healthcare Challenges
16 Going Beyond Traditional Methods of Care
18 Quarterly Financial Information
19 Selected Financial Information
20 Corporate Information

From the very beginning, Centene has been a transformative company founded on the belief that everyone deserves access to affordable, quality healthcare with dignity.

Today, and every day, we are making a real difference in people's lives.



2017 AT A GLANCE

$48.4 BILLION IN TOTAL REVENUES

33,700 EMPLOYEES

$1.5 BILLION TOTAL OPERATING CASH FLOW

12.2 MILLION MEMBERS (includes 2.8 million TRICARE eligibles)

$4.69 GAAP DILUTED EARNINGS PER SHARE

$5.03 ADJUSTED DILUTED EARNINGS PER SHARE




MICHAEL F. NEIDORFF
Chairman & Chief Executive Officer

For Centene, 2017 was a year of strategic and financial growth in which we built momentum and delivered strong results by leveraging our diverse portfolio and M&A expertise. While our industry continues to evolve and become more complex, we understand the opportunities for healthcare and are excited about the future for Centene. We have a clear line of sight into our growth drivers and long-term expectations of double-digit top and bottom line growth.

Strong Performance in 2017 was driven by our leadership across several products and markets combined with our ability to execute on key merger and acquisition opportunities.

Growth in Total Revenues
19%

Total Shareholder Return
79%
Growth in Adjusted Diluted Earnings Per Share
14%

Industry-Leading 5-Year Compounded Total Shareholder Return Annual Growth Rate
38%

Because of our operational and financial performance, in 2017 we advanced on a number of the FORTUNE lists, including to #66 on the annual ranking of America’s largest companies by revenue, and to #244 on the Global 500 list. Increased 2017 revenue gained Centene a #27 ranking on the FORTUNE Fastest Growing Companies list, and we are most proud of our #19 ranking on FORTUNE’s Change the World list, which recognizes companies making positive social impact part of their core businesses.

We enter 2018 as the largest Medicaid managed care organization in the U.S., with more than 12 million members domestically. In 2018, pending the close of the Fidelis Care transaction, Centene will be a $60 billion enterprise, bringing approximately 300 integrated solutions across the country. We will have a leadership position in the country’s four largest Medicaid states — California, Florida, New York and Texas.

## DRIVING GROWTH IN AN EVER-CHANGING INDUSTRY

Centene continues to drive organic growth in our core products of Medicaid, Medicare and the Health Insurance Marketplace:

We expanded into multiple new Medicaid markets, including Nebraska, Nevada and Pennsylvania.

● Within existing Medicaid markets we expanded or reprocured contracts in Georgia, Illinois, Indiana, Mississippi and Missouri.

We expanded our Medicare offerings, entering Arkansas, Indiana, Kansas, Louisiana, Missouri, Pennsylvania, South Carolina and Washington, and expanded our footprint in Ohio.

We are the number one insurer in the nation on the Health Insurance Marketplace. In January 2017 we added over 500,000 new members. In 2018 we expanded our offerings in six existing markets and entered Kansas, Missouri and Nevada. We continue to prove that we remain one of the few companies that can successfully navigate the Health Insurance Marketplace.

We continue to be the largest provider of managed Long-Term Services and Supports, one of the fastest-growing segments in the managed care market. In addition, through our TRICARE and Veterans Choice programs, we continue to be one of the nation’s largest providers of managed care services for military families and veterans. We also continued to grow internationally in Spain and the U.K., where we believe our investments in these countries provide an opportunity for further global entry and partnership.



A key tenet of our strategy continues to be expanding our growth platform through strategic mergers and acquisitions. In September 2017, we signed a definitive agreement to acquire Fidelis Care, which will make Centene the leader in providing government-sponsored healthcare in New York. We expect this acquisition to create significant strategic and financial value for Centene. As a blueprint for the Fidelis Care integration plan, we are applying the skills and models developed during the successful integration of Health Net, which we acquired in 2016.

## WELL POSITIONED FOR SUCCESS

Centene has a proven history of top and bottom line growth, and we are confident that our competitive advantages position us for growth and shareholder value creation:

We have more than 30 years of experience applying our local approach to government-sponsored healthcare programs. We have gone beyond traditional healthcare, partnering with states and other key stakeholders to offer programs and services that address the health and social needs of our country’s most vulnerable populations. This year, we will launch our inaugural community investment report to illustrate the depth of our local commitment as a core part of Centene’s business strategy.

We are continuing to invest in key technology. Driven by critical mass attained through organic and external growth, we have the resources and capabilities to innovate and develop better systems, products, tools and techniques that help us collect and analyze data to understand and better prioritize our members’ needs. We firmly believe that our differentiated technology and analytics are a fundamental strength that will help us achieve long-term success.

Preparing for the future by developing talent. During the fourth quarter, we announced a number of senior appointments to align our leadership structure with the company’s strategic objectives and capitalize on Centene’s management depth and culture of excellence. To ensure we maximize our collective strengths to create stakeholder value, we also established an office of the president — a core team of executives to help guide strategy and execution.
In short, we believe Centene’s competitive advantages provide the discipline, capacity and capabilities to adapt and thrive in the changing healthcare industry and political landscape.

## LOOKING AHEAD

We are confident that, by focusing on fundamentals as we execute our strategies, we will continue to be a high-growth, industry-leading company with the ability to successfully navigate our changing industry. In the long term, we expect to continue to achieve double-digit growth in revenues and earnings per share as we capitalize on opportunities in the $1.9 trillion addressable healthcare market.

Our success as a company is a testament to the commitment and tireless efforts of the more than 37,000 talented individuals at Centene. I want to take this opportunity to thank them for enabling Centene to deliver on our mission to provide better health outcomes at lower costs. We also value the support of our eight independent Board of Directors, including Jessica L. Blume who was appointed in early 2018.

We look forward to building on Centene’s growth, innovation and global presence while achieving consistently high levels of performance in driving value for members, partners and shareholders.

## Mind Well

MICHAEL F. NEIDORFF
Chairman & Chief Executive Officer

Leading Position in the Country's 4 LARGEST MEDICAID STATES









*The Fidelis Care transaction is expected to close in the second quarter of 2018, subject to various closing conditions and receipt of New York regulatory approvals, including approvals under the New York Not-for-Profit Corporation Law.



## FINANCIAL HIGHLIGHTS
FROM CONTINUING OPERATIONS
(in millions)





(1) Attributable to Centene Corporation



GROUP & PRODUCT SOLUTIONS

● MEDICAID/CHIP
Arizona, Arkansas (Private Option), California, Florida, Georgia, Illinois, Indiana, Kansas, Louisiana, Maryland*, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico*, New York*, Ohio, Oregon, South Carolina, Texas, Washington, Wisconsin

● ABD (NON-DUAL)
Arizona, California, Florida, Illinois, Indiana, Kansas, Louisiana, Maryland*, Mississippi, Nebraska, New Hampshire, New Mexico*, New York*, Ohio, Oregon, South Carolina, Texas, Washington, Wisconsin

● ABD (MEDICAID ONLY DUAL-ELIGIBLE)
Arizona, California, Florida, Kansas, Nebraska, New Hampshire, New Mexico*, New York*, Ohio, Oregon, Pennsylvania, Texas, Wisconsin

● LONG-TERM SERVICES & SUPPORTS
Arizona, California, Florida, Illinois, Kansas, New Mexico*, New York*, Ohio, Pennsylvania, Texas

● FOSTER CARE
California, Florida, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Hampshire, New Mexico*, New York*, Oregon, Texas, Washington

● MEDICARE
Arizona, Arkansas, California, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, New York*, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Washington, Wisconsin

● MEDICAID-MEDICARE PLANS (INCLUDES LTSS)
California, Illinois, Michigan, New York*, Ohio, South Carolina, Texas

● CORRECTIONAL HEALTHCARE
California, Florida, Massachusetts, Minnesota, Mississippi, New Mexico, Tennessee, Vermont

● HEALTH INSURANCE MARKETPLACE
Arizona, Arkansas, California, Florida, Georgia, Illinois, Indiana, Kansas, Mississippi, Missouri, Nevada, New Hampshire, New York*, Ohio, Texas, Washington

● COMMERCIAL INSURANCE
Arizona, California, Oregon, Washington

● TRICARE
Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa (except the Rock Island Arsenal area), Kansas, Minnesota, Missouri (except the St. Louis area), Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Texas (areas of Western Texas only), Utah, Washington, Wyoming

● VA PROGRAMS
Alabama, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, U.S. Virgin Islands, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming

GROUP & PRODUCT SOLUTIONS



## ● INTERNATIONAL

We currently have an international presence in two markets, Spain and the United Kingdom. Our joint venture in Spain, Ribera Salud, is a health management group mainly operating in the fully integrated Accountable Care System sector. Ribera Salud also has other controlling and noncontrolling interests in Spain, Latin America and Slovakia. In the United Kingdom, Centene UK leverages our local strategic assets to support UK accountable care initiatives based on the blueprint outlined by the National Health Service (NHS), which is the publicly funded, national healthcare system for England. We partner with local health and social commissioners on opportunities to support coordination and integration of care.



## q1

## JANUARY

Nebraska Total Care, a Centene subsidiary, begins operating under 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, CHIP, Foster Care and LTSS enrollees.

Centene's Indiana subsidiary, MHS, begins operating under a contract with the Indiana Family & Social Services Administration to continue providing risk-based managed care services for enrollees in the Healthy Indiana Plan and Hoosier Healthwise programs.

Centene signs a joint venture agreement with the North Carolina Medical Society, working in conjunction with the North Carolina Community Health Center, to collaborate on a patient-focused approach to Medicaid under the reform plan enacted in the State of North Carolina.

## FEBRUARY

Centene announces the appointment of former Missouri Attorney General Chris Koster to senior vice president, Corporate Services.

## q2

## MAY

Centene's Missouri subsidiary, Home State Health, begins providing managed care services to MO HealthNet Managed Care beneficiaries under an expanded statewide contract.

Coordinated Care, a Centene subsidiary, is selected by the Washington State Health Care Authority to provide managed care services to Apple Health's Fully Integrated Managed Care (FIMC) beneficiaries in the North Central Region, commencing January 2018.

## JUNE

Centurion begins operating under an expanded contract to provide correctional healthcare services for the Florida Department of Corrections in South Florida.

Centene announces an expansion of offerings in the 2018 Health Insurance Marketplace, including plans to enter Kansas, Missouri and Nevada, and expanding its footprint in six existing markets: Florida, Georgia, Indiana, Ohio, Texas and Washington.

Centene's subsidiary, Magnolia Health, is selected by the Mississippi Division of Medicaid to continue serving Medicaid recipients enrolled in the Mississippi Coordinated Access Network (MississippiCAN). Pending regulatory approval, the new three-year agreement, which also includes the option of two one-year extensions, is expected to commence midyear 2018.

## q3

## JULY

Centene's specialty solutions subsidiary, Envolve, Inc., begins providing health plan management services for Medicaid operations in Maryland.

SilverSummit Healthplan, a Centene subsidiary, begins serving Medicaid recipients enrolled in Nevada's Medicaid managed care program.

Centene's Georgia subsidiary, Peach State Health Plan, begins operating under a statewide managed care contract to continue serving members enrolled in the Georgia Families managed care program.

## AUGUST

Centurion is recommended for a contract award by the Tennessee Department of Correction to continue providing inmate health services.

IlliniCare Health, Centene's Illinois subsidiary, is awarded the statewide contract for the Medicaid Managed Care Program, which includes children who are in need through the Department of Children and Family Services (DCFS)/Youth in Care by the Illinois Department of Healthcare and Family Services (HFS).

## SEPTEMBER

Centene signs a definitive agreement under which Fidelis Care will become Centene's health plan in New York State. Under the terms of the agreement, the Company will acquire substantially all of the assets of Fidelis Care for $3.75 billion, subject to certain adjustments, closing conditions and receipt of New York regulatory approvals.

## q4

## OCTOBER

Mercy Health of Arkansas and Centene subsidiaries LifeShare and Arkansas Health & Wellness announce that their joint venture, Arkansas Total Care, has received a license from the Arkansas Insurance Department to become a risk-based provider organization and manage a Medicaid special needs population composed of people with high behavioral health needs and individuals with developmental/intellectual disabilities.

## NOVEMBER

Centene announces an enhanced organizational structure and the appointments of several key executives, including the appointment of Cynthia J. Brinkley as president and chief operating officer,

Jesse N. Hunter as executive vice president of Mergers & Acquisitions and chief strategy officer, Mark J. Brooks as executive vice president and chief information officer, and Kevin J. Counihan as senior vice president of Products.

Centene, Schnuck Markets Inc., and Betty Jean Kerr People's Health Centers open a full-service health center located within the Schnucks supermarket in Ferguson, Missouri. The facility is expected to provide services to over 8,000 people annually.

## 2017 NOTEWORTHY ACCREDITATIONS AND AWARDS

Centene's integrated healthcare solutions company, Envolve, Inc., received an AVA Digital Award and Honorable Mention for its animated series of health tips, "Did You Know?" The series provides easy-to-understand clinical health information for consumers.
The 2017 Hermes Creative Awards honored several books in Centene's series of Health Education publications focusing on topics such as asthma management and life lessons for teens. Centene videos and publications earned both Platinum and Gold awards.
For its quality management framework and processes, Health Net Federal Services, LLC, was awarded the International Organization for Standardization (ISO) 9001:2015 certification in May of 2017. The internationally recognized standard for quality management systems is effective through 2020.
Centene and three subsidiaries — Home State Health, Centurion and Envolve, Inc. — were honored for innovative member programs at the May 2017 Decision Health's Eighth Centinavian Annual Conference in May of 2017. The internationally recognized standard for quality management systems is effective through 2020.
Several Centene subsidiaries earned clinical accreditations in 2017: Health Net Federal Services, LLC, earned the Disease Management Accreditation from URAC, and Envolve Dental, Inc., earned URAC accreditations for Dental Plan and Health Management.
In addition, Buckeye Health Plan, Coordinated Care of Washington, Louisiana Healthcare Connections, CelticCare Health and New Hampshire Healthy Families all earned NCQA Commendable Health Plan Accreditations.

Health Net Federal Services, LLC, (HNFS), announced that it has earned the Health Utilization Management and Case Management Accreditations from URAC in 2017. URAC is an independent organization that promotes health care quality through accreditation, certification and measurement.












## FORTUNE 500 \( ^{®} \)  Ranking:

Centene ranked No. 66 on the 2017 FORTUNE 500 list of largest U.S. corporations by revenue, up from No. 124 in 2016. Since first entering the list in 2010, Centene has climbed 420 spots.

## FORTUNE \( ^{®} \)  Global 500 Ranking:

Centene ranked No. 244 on the 2017 FORTUNE Global 500 list of the world's largest corporations by revenue. Centene first appeared on the list in 2016 at No. 470.

## FORTUNE 100
Fastest
Growing

## Companies List:
For the second year,

Centene has been placed on the list of FORTUNE 100 Fastest Growing Companies, ranked No. 27. The list is based on revenue growth, EPS growth rate and three-year annualized total return ending June 30, 2017.

## FORTUNE \( ^{®} $  2017 Change

## the World List:

Centene ranked No. 19 on the FORTUNE 2017 Change the World List. Companies are recognized for, and competitively ranked on, innovative strategies that positively impact the world.





CEO [ACTION] FOR
DIVERSITY & INCLUSION

In 2017, Centene was among the top scorers in the Human Rights Campaign Corporate Equality Index for policies and practices regarding LGBTQ employees and was recognized by the Disability Equality Index, sponsored by United States Business Leadership Network (USBLN) and the American Association of People with Disabilities (AAPD). Additionally, Centene Chairman and CEO Michael F. Neidorff was one of the nation's first CEOs to sign on to the CEO Action for Diversity & Inclusion Pledge.

## Forbes Global 2000 Growth Champion List:

Centene is positioned in the No. 36 spot on the 2017 Forbes Global 2000 Growth Champion list. The list ranks 250 companies around the globe by highest compound annual growth rate in revenues from 2013 through 2016. Centene is the highest ranked among healthcare companies.



## NO.
36

## As transformational leaders, we never lose sight of what's important.

By working together and remaining focused on our members and the communities they call home, we are able to continue to expand access to quality healthcare, reach beyond traditional methods of care and address the challenges of today and tomorrow.



Centene was founded on the belief that everyone deserves access to quality healthcare with dignity. Today, one way we help more people live healthier lives is through our Health Insurance Marketplace product, Ambetter.

## EXPANDING ACCESS TO
QUALITY HEALTHCARE

It was announced in the summer of 2017 that Centene’s SilverSummit Healthplan in Nevada would provide Health Insurance Marketplace options to all 17 counties in the state, including counties where 8,000 people were at risk of having no health exchange options in 2018, after other insurance carriers left the market. Centene is providing health insurance coverage in Missouri under similar circumstances for 25 counties that would otherwise have no marketplace options.

Centene’s ability to provide coverage for communities in need demonstrates the company’s continued success in navigating the healthcare landscape. Where uncertainty about national healthcare policy has caused most health insurance providers to trim back their exchange programs, Centene has experienced steady growth. With 1.2 million members in 2017, Centene was the number one insurer in the nation on the Health Insurance Marketplace.

New products such as Ambetter are a valuable extension of the way Centene has helped transform the health of communities for more than three decades. And, as the world of healthcare continues to evolve, Centene stands ready to continue taking the lead.

COVERING
COMMUNITIES IN 2017
Ambetter expands Centene’s
ability to help more people in
more communities across the
United States.



365
Counties
9,158
Zip Codes



Launched in 2014, Ambetter has transformed into the No. 1 carrier in the Health Insurance Marketplace today.



 \( ^{1} $ 2014-2015 exclude Health Net

Centene’s Marketplace footprint continues to develop in 2018 with expansion in six existing Ambetter exchange markets, as well as entrance into three new states: Kansas, Missouri and Nevada. Expansion into New York’s Marketplace is also expected pending the close of the Fidelis Care acquisition.

To help achieve better health outcomes, Ambetter invites members to participate in the MyHealthPay \( ^{™} \)  Rewards Program, which rewards members for participation in a number of healthy activities. Rewards can be earned for completion of annual well visits and receiving an annual flu vaccination.






Our geographic footprint and leadership position in managed care allow us to develop and apply evidence-based clinical best practices to address some of the country’s most pervasive healthcare challenges.

## FIGHTING THE FLU THROUGH VACCINATION

For nearly 10 years, Centene’s Medical Affairs division has worked to decrease the spread of the flu by increasing the number of its managed care members that receive an annual flu vaccination.

Centene’s multilayered campaign is designed to promote vaccinations as the key to flu prevention. Health plan members, particularly those in high-risk groups such as the elderly, young children and pregnant women, receive personal outreach calls, visits, mailers, text messages, media and social media communications that stress the importance of getting vaccinated against the flu virus.

Texas, home to Centene’s subsidiary Superior HealthPlan, has been one of the states hardest hit during the 2017-2018 flu season. Partnerships with school districts and community health organizations played a key role in helping Superior HealthPlan communicate with members. “In October and November, we called more than 190,000 members,” said Susan Mills, vice president of Quality and Improvement at Superior HealthPlan. “We also focused on educating school-aged members by distributing thousands of stickers with a message about hand washing and getting a flu shot. Hundreds of schools, youth clubs and health organizations helped us get the word out to kids and their families.”



INCREASE IN VACCINATION RATES FOR VULNERABLE POPULATIONS, 2016/2017 FLU SEASON

3.4%: pregnant women

3.27%: adults over 65

4.2%: young children (6 months to 4 years old)

DECREASE IN ANNUAL COST OF FLU

4.8-10 Million in cost savings



## ADDRESSING THE NATIONAL
OPIOID EPIDEMIC

In November 2017, a task force composed of over a dozen health insurance companies, including Centene, announced its commitment to saving lives and improving outcomes through quality enhancements and access to addiction treatment. The initiative, which was launched in response to the nation’s growing opioid crisis, aligned with Centene’s strategy to combat the opioid epidemic.

The opioid epidemic spans every community where Centene operates health plans, including both urban and rural areas. Realizing this epidemic’s impact on our membership, our clinical leadership developed the comprehensive OpiEnd™ clinical program. OpiEnd utilizes Centene’s proprietary business intelligence tools to identify at-risk members for opioid misuse before formal diagnosis. This proactive approach employs early intervention to prevent opioid misuse and ultimately save lives, one member at a time.

The OpiEnd Pharmacy Advisory Group established a pharmacy opioid policy designed to prevent opioid misuse by restricting the daily dosage and maximum days of use prescribed for members. OpiEnd has trended toward positive results, specifically among our Medicaid members. In 2017, OpiEnd observed a trend toward a decrease in the percent of opioid prescriptions, opioid utilizers and opioid utilizers greater than 30 days.
Centene encourages local innovation, and state health plans are hosting opioid summits to provide a forum for healthcare and community leaders to engage and identify grassroots solutions to the crisis. For example, Centene’s Sunshine Health plan developed an online provider toolkit and presented free online courses to help providers share best practices and identify ways to support the prevention of opioid misuse and addiction.

Centene’s comprehensive strategy to address the national opioid epidemic demonstrates how the company has long used technology, innovation and key collaborative partnerships to improve the quality of life for its members.

TRENDS IN OPIOID UTILIZATION AMONG CENTENE'S MEDICADI MEMBERS, 2015-2017






At Centene, we know we have a responsibility to address more than just the physical health of our members. Our specialty health solutions, including behavioral health, allow us to provide a more integrated whole health approach to care.

## GOING BEYOND TRADITIONAL METHODS OF CARE

The Tucson Police Department in Arizona reports that one out of eight service calls they receive involves a member of the public who is potentially dealing with a mental health issue. A subsidiary of Centene in Arizona, Censtic Integrated Care, began a collaboration with local law enforcement agencies to develop programs that can help officers resolve crisis situations in a peaceful manner.

As the Regional Behavioral Health Authority for Pima County, Censtic Integrated Care has developed a mental health first-aid training program for the Tucson Police Department. The specialized program instructs officers on tools they can use to de-escalate a crisis situation. So far, 300 officers have completed the training, and there are plans to complete training for an additional 900 law enforcement officers.

Improving police response and police interactions with persons affected by mental illness is the goal, according to Censtic Integrated Care President James D. Stover. “Censtic Integrated Care believes in working closely with law enforcement. The Mental Health First Aid Training program is a good example of how we can partner together to help the communities we serve.”

Additionally, the Pinal County Sheriff’s Department and Tucson PD have implemented a co-responder program that pairs a police officer with a Censtic Integrated Care crisis clinician. The co-responder team answers service calls where behavioral health skills can be beneficial. The teams provide a number of on-the-ground services, including crisis assessments, coordination of care, safety planning, de-escalation and placement facilitation.

## CRISIS INTERVENTION PROGRAM 2017
AT A GLANCE

Number of crisis calls handled by the Crisis Response Center:

125,000

Number of Crisis Response Teams dispatched to crisis scenes:

25,000

Censtic Integrated Care operates the state-of-the-art crisis phone line at the Tucson, Arizona, Crisis Response Center.

At no cost to callers, members of the community can call the crisis line, 24 hours a day, seven days a week. Behavioral health clinicians are available over the phone, and a Crisis Response Team can be dispatched to any location in the Tucson area.






<table><tr><td rowspan="2"></td><td colspan="5">For the Quarter Ended, 2017 (in millions) (unaudited)</td></tr><tr><td>March 31</td><td>June 30</td><td>September 30</td><td>December 31</td><td></td></tr><tr><td>Total revenues</td><td>$11,731</td><td>$11,954</td><td>$11,898</td><td>$12,806</td><td></td></tr><tr><td>Amounts Attributable to Centene Corporation Common Shareholders</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Earnings from continuing operations, net of income tax expense</td><td>139</td><td>254</td><td>205</td><td>230</td></tr><tr><td></td><td>Discontinued operations, net of income tax expense</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td></td><td>Net earnings</td><td>$139</td><td>$254</td><td>$205</td><td>$230</td></tr><tr><td>Net Earnings Per Common Share Attributable to Centene Corporation</td><td>Basic:</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Continuing operations</td><td>$0.81</td><td>$1.47</td><td>$1.19</td><td>$1.33</td></tr><tr><td></td><td>Discontinued operations</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td></td><td>Basic earnings per common share</td><td>$0.81</td><td>$1.47</td><td>$1.19</td><td>$1.33</td></tr><tr><td></td><td>Diluted:</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Continuing operations</td><td>$0.79</td><td>$1.44</td><td>$1.16</td><td>$1.30</td></tr><tr><td></td><td>Discontinued operations</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td></td><td>Diluted earnings per common share</td><td>$0.79</td><td>$1.44</td><td>$1.16</td><td>$1.30</td></tr></table>

<table><tr><td rowspan="2"></td><td colspan="5">For the Quarter Ended, 2016 (in millions) (unaudited)</td></tr><tr><td>March 31</td><td>June 30</td><td>September 30</td><td>December 31</td><td></td></tr><tr><td>Amounts Attributable to Centene Corporation Common Shareholders</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Earnings (loss) from continuing operations, net of income tax expense</td><td>(15)</td><td>171</td><td>148</td><td>255</td></tr><tr><td></td><td>Discontinued operations, net of income tax expense (benefit)</td><td>(1)</td><td>(1)</td><td>(1)</td><td>6</td></tr><tr><td></td><td>Net earnings (loss)</td><td>$(16)</td><td>$170</td><td>$147</td><td>$261</td></tr><tr><td>Net Earnings (Loss) Per Common Share Attributable to Centene Corporation</td><td>Basic:</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Continuing operations</td><td>$0.12</td><td>$1.00</td><td>$0.87</td><td>$1.49</td></tr><tr><td></td><td>Discontinued operations</td><td>(0.01)</td><td>—</td><td>(0.01)</td><td>0.04</td></tr><tr><td></td><td>Basic earnings (loss) per common share</td><td>$0.13</td><td>$1.00</td><td>$0.86</td><td>$1.53</td></tr><tr><td></td><td>Diluted:</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Continuing operations</td><td>$0.12</td><td>$0.98</td><td>$0.84</td><td>$1.45</td></tr><tr><td></td><td>Discontinued operations</td><td>(0.01)</td><td>(0.01)</td><td>—</td><td>0.04</td></tr><tr><td></td><td>Diluted earnings (loss) per common share</td><td>$0.13</td><td>$0.97</td><td>$0.84</td><td>$1.49</td></tr></table>

<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31</td></tr><tr><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Revenues</td><td>$43,353</td><td>$35,399</td><td>$19,389</td></tr><tr><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>



## CORPORATE INFORMATION

The graph to the right compares the cumulative total stockholder return on our common stock for December 31, 2012, to December 31, 2017, with the cumulative total return of the New York Stock Exchange Composite Index and the Standard & Poor's SuperComposite Managed Healthcare Index over the same period. The graph assumes an investment of $100 on December 31, 2012, in our common stock (at the last reported sale price on such day), the New York Stock Exchange Composite Index and the Standard & Poor's SuperComposite Managed Healthcare Index and assumes the reinvestment of any dividends.

## BOARD OF DIRECTORS

MICHAEL F. NEIDORFF
Chairman & CEO; Centene Corporation
ORLANDO AYALA
Retired Vice President, Chairman, Emerging Markets & Chief Advisor to COO; Microsoft Corporation
JESSICA L. BLUME
Retired Vice Chairman; Deloitte LLP
ROBERT K. DITMORE
Retired President & COO; United Healthcare Corporation
FREDERICK H. EPPINGER
Retired President & CEO; The Hanover Insurance Group, Inc.
RICHARD A. GEHPARDT
CEO of Gephardt & Associates; Former Majority Leader of the U.S. House of Representatives
JOHN R. ROBERTS
Retired Regional Managing Partner; Arthur Andersen LLP
DAVID L. STEWARD
Chairman of the Board; World Wide Technology, Inc.
TOMMY G. THOMPSON
Former Health and Human Services Secretary; Former Governor of Wisconsin



<table><tr><td colspan="7">Non-GAAP FINANCIAL RECONCILIATIONS*</td></tr><tr><td></td><td></td><td colspan="5">Year ended December 31</td></tr><tr><td></td><td></td><td>2017</td><td>2016</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>GAAP net earnings from continuing operations</td><td></td><td>$828</td><td>$559</td><td>$356</td><td>$268</td><td>$161</td></tr><tr><td>Amortization of acquired intangible assets</td><td></td><td>156</td><td>147</td><td>24</td><td>16</td><td>6</td></tr><tr><td>Acquisition related expenses</td><td></td><td>20</td><td>234</td><td>27</td><td>—</td><td>—</td></tr><tr><td>Penn Treaty assessment expense</td><td></td><td>56</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Cost sharing reductions</td><td></td><td>22</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Income Tax Reform</td><td></td><td>(125)</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Charitable contribution(1)</td><td></td><td>40</td><td>50</td><td>—</td><td>—</td><td>—</td></tr><tr><td>California minimum medical loss ratio change</td><td></td><td>—</td><td>(195)</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Debt extinguishment</td><td></td><td>—</td><td>11</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Income tax effects of adjustments(2)</td><td></td><td>(108)</td><td>(79)</td><td>(20)</td><td>(6)</td><td>(2)</td></tr><tr><td>Adjusted net earnings from continuing operations</td><td></td><td>$889</td><td>$727</td><td>$387</td><td>$278</td><td>$165</td></tr><tr><td>GAAP diluted earnings per share (EPS)</td><td></td><td>$4.69</td><td>$3.41</td><td>$2.89</td><td></td><td></td></tr><tr><td>Amortization of acquired intangible assets(3)</td><td></td><td>0.56</td><td>0.57</td><td>0.11</td><td></td><td></td></tr><tr><td>Acquisition related expenses(4)</td><td></td><td>0.07</td><td>0.98</td><td>0.14</td><td></td><td></td></tr><tr><td>Penn Treaty assessment expense(5)</td><td></td><td>0.20</td><td>—</td><td>—</td><td></td><td></td></tr><tr><td>Cost sharing reductions(6)</td><td></td><td>0.08</td><td>—</td><td>—</td><td></td><td></td></tr><tr><td>Income Tax Reform</td><td></td><td>(0.71)</td><td>—</td><td>—</td><td></td><td></td></tr><tr><td>Charitable contribution(7)</td><td></td><td>0.14</td><td>0.19</td><td>—</td><td></td><td></td></tr><tr><td>California minimum medical loss ratio change(8)</td><td></td><td>—</td><td>(0.76)</td><td>—</td><td></td><td></td></tr><tr><td>Debt extinguishment(9)</td><td></td><td>—</td><td>0.04</td><td>—</td><td></td><td></td></tr><tr><td>Adjusted Diluted EPS from continuing operations</td><td></td><td>$5.03</td><td>$4.43</td><td>$3.14</td><td></td><td></td></tr></table>

(1) In connection with the favorable impact of the Tax Cuts and Jobs Act (Income Tax Reform) passed in late 2017 and the additional revenue associated with the California minimum medical loss ratio (MLR) change in 2016, the Company made charitable commitments to its foundation in 2017 and 2016, respectively.

(2) The income tax effects of adjustments are based on the effective income tax rates applicable to adjusted (non-GAAP) results. There is no additional income tax effect from Income Tax Reform.

(3) Amortization of acquired intangible assets per diluted share is net of an income tax benefit of $0.32, $0.33, and $0.08 for the years ended December 31, 2017, 2016 and 2015, respectively.

(4) Acquisition related expenses per diluted share are net of an income tax benefit of $0.04, $0.45 and $0.08 for the years ended December 31, 2017, 2016 and 2015, respectively.

(5) The Penn Treaty assessment expense per diluted share is net of an income tax benefit of $0.12 for the year ended December 31, 2017.

(6) The cost sharing reduction (CSR) expense per diluted share is net of an income tax benefit of $0.04 for the year ended December 31, 2017.

(7) The charitable contributions per diluted share are net of an income tax benefit of $0.09 and $0.11 for the years ended December 31, 2017 and 2016, respectively.

(8) The impact associated with the retroactive contract amendment received in the fourth quarter of 2016 that changed the minimum MLR calculation per diluted share is net of the income tax expense of $(0.43) for the year ended December 31, 2016.

(9) The debt extinguishment cost per diluted share is net of the income tax benefit of $0.03 for the year ended December 31, 2016.






Included in this 2017 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, 2017, filed with the Securities and Exchange Commission (the "2017 Form 10-K"), which also includes Management's Discussion and Analysis of Financial Condition and Results of Operations. This 2017 Annual Review, together with our 2017 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 2017 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, as well as 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, 2017, 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

**CURRENT STOCK INFORMATION**

Centene common stock is traded and quoted on the New York Stock Exchange under the symbol "CNC."

**Stock Price**

| 2018* | 2017 | 2016 |
|---|---|---|
| High | Low | High | Low | High | Low |
| First Quarter | $112.42 | $97.61 | $73.23 | $56.00 | $68.42 | $47.36 |
| Second Quarter | $85.80 | $69.20 | $71.53 | $55.60 |
| Third Quarter | $98.72 | $79.06 | $75.57 | $63.37 |
| Fourth Quarter | $104.65 | $83.56 | $67.41 | $50.00 |

* Stock price through February 16, 2018