8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 28, 2009

CENTENE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation) 001-31826 (Commission file number) 42-1406317 (IRS Employer Identification No.)

7711 Carondelet Avenue, St. Louis, Missouri 63105

(Address of principal executive office and zip code)

Registrant’s telephone number, including area code: (314) 725-4477

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

(a) On July 28, 2009, we issued a press release announcing our financial results for the second quarter ended June 30, 2009. The full text of the press release is included as Exhibit 99.1 to this report. The information contained in the website cited in the press release is not a part of this report.

The information contained in this Form 8-K and exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Nor shall such information or exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished and not filed:

99.1 Press release of Centene Corporation issued July 28, 2009, as to financial results for the second quarter ended June 30, 2009.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 28, 2009	CENTENE CORPORATION
	By:	/s/ WILLIAM N. SCHEFFEL
		William N. Scheffel
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press release* of Centene Corporation issued July 28, 2009, as to financial results for the second quarter ended June 30, 2009.

* The press release is being furnished pursuant to Item 2.02, and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange of 1934, as amended.

EX-99.1

Exhibit 99.1

N E W S  R E L E A S E

Contact:	Investor Relations Inquiries Edmund E. Kroll
	Senior Vice President, Finance & Investor Relations
	(212) 759-0382
	Media Inquiries
	Deanne Lane
	Senior Director, Media Affairs
	(314) 725-4477

FOR IMMEDIATE RELEASE

CENTENE CORPORATION REPORTS 2009 SECOND QUARTER EARNINGS

--Company Increases Full Year 2009 EPS Guidance to $1.88-$1.96 --

ST. LOUIS, MISSOURI (July 28, 2009) -- Centene Corporation (NYSE: CNC) today announced its net earnings from continuing operations for the quarter ended June 30, 2009 were $20.7 million, or $0.47 per diluted share, compared to $17.9 million, or $0.40 per diluted share in the 2008 second quarter.  The results of operations for our New Jersey health plan, University Health Plans, are classified as discontinued operations.  The discussions below, with the exception of cash flow information, are in the context of continuing operations and all financial ratios are calculated using revenues excluding premium taxes and investment income.

Second Quarter Highlights

·   Quarter-end managed care at-risk membership of 1,289,000, an increase of 140,200 lives year over year.

·   Premium and Service revenues of $931.3 million, representing 16.1% year over year growth.

·   Health Benefits Ratio (HBR) of 83.1%.

·   General and administrative (G&A) expense ratio of 13.9%.

·   Cash flow from operations of $38.7 million, which is 2.0x net earnings.

·   Days in claims payable of 47.5, an increase from 45.3 days at March 31, 2009.

·   Diluted earnings per share from continuing operations of $0.47, representing 17.5% year over year growth.

·   Increased 2009 EPS guidance range to $1.88-$1.96.

Other Events

·   On July 1, 2009, CeltiCare Health Plan of Massachusetts began serving the Central, Northern, Boston and Southern regions under the Commonwealth Care program. CeltiCare was also recently granted a seal of approval by the Commonwealth Connector Authority for the Commonwealth Choice program.  Commonwealth Choice is part of Massachusetts’ health care program, serving the individual and small group market and is not a subsidized program. CeltiCare now participates in two of the three health coverage programs in Massachusetts.

·   In July 2009, the Company was awarded a tentative contract from the Texas Health and Human Services Commission (HHSC) for the Children’s Health Insurance Program (CHIP) Rural Services Area Managed Care Organization Procurement. The award is contingent upon the successful negotiation and execution of a contract with HHSC.  Our Texas health plan will begin serving members under the new contract on September 1, 2010, continuing through August 31, 2013. The award covers up to 174 primarily rural counties in Texas.

Centene Corporation Reports 2009 Second Quarter Results July 28, 2009 / Page 2

Michael F. Neidorff, Centene’s Chairman and Chief Executive Officer, stated, “We are pleased that our strategic and operational focus on fundamentals continues to drive this positive operating momentum.”

The following table depicts membership in Centene’s managed care organizations, by state, at June 30, 2009 and 2008:

	June 30,
	2009			2008
Arizona		16,200			—
Florida		22,300			—
Georgia		292,800			278,800
Indiana		196,100			161,700
Ohio		141,200			137,300
South Carolina		46,000			22,500
Texas		443,200			423,700
Wisconsin		131,200			124,800
Total at-risk membership		1,289,000			1,148,800
Non-risk membership		114,000	*		3,500
Total		1,403,000			1,152,300
______________________________
* Increase mainly due to consolidation of our Access Health Solutions LLC investment, effective January 1, 2009.

The following table depicts membership in Centene’s managed care organizations, by member category, at June 30, 2009 and 2008:

	June 30,
	2009		2008
Medicaid		958,600		828,700
CHIP & Foster Care		261,400		256,900
ABD & Medicare		69,000		63,200
Total at-risk membership		1,289,000		1,148,800
Non-risk membership		114,000		3,500
Total		1,403,000		1,152,300

Statement of Operations

·   For the 2009 second quarter, Premium and Service Revenues increased 16.1% to $931.3 million from $802.5 million in the 2008 second quarter.  The increase was primarily driven by membership growth, especially related to the commencement of our Arizona acute care contract in October 2008, the consolidation of Access and conversion of members to our at-risk plan, premium rate increases and the recent acquisition of Celtic in July 2008.

·   The consolidated HBR, which reflects medical costs as a percent of premium revenues, was 83.1%, relatively flat compared to 83.0% in the 2008 second quarter. Sequentially, our consolidated HBR decreased from 83.5% in the 2009 first quarter to 83.1% as a result of normal seasonality.  During the second quarter, an increase in outpatient expense attributable to swine flu concerns was offset by lower inpatient and pharmacy costs.

·   Consolidated G&A expense as a percent of premium and service revenues was 13.9% in the second quarter of 2009, an increase from 13.6% in the second quarter of 2008.  G&A expense increased in the quarter ended June 30, 2009 compared to 2008 as a result of new business initiatives including the acquisition of Celtic, the consolidation of Access Health Solutions LLC and the start up of CeltiCare health plan in Massachusetts.

·   Earnings per diluted share from continuing operations were $0.47, compared to $0.40 in the 2008 second quarter.

Centene Corporation Reports 2009 Second Quarter Results July 28, 2009 / Page 3

Balance Sheet and Cash Flow

At June 30, 2009, the Company had cash and investments of $852.8 million, including $825.8 million held by its regulated entities and $27.0 million held by its unregulated entities.  Medical claims liabilities totaled $394.8 million, representing 47.5 days in claims payable, an increase of 2.2 days from March 31, 2009.  Total debt was $288.8 million and debt to capitalization was 33.0%.  Year to date cash flow from operations was $62.1 million.

A reconciliation of the Company’s change in days in claims payable from the immediately preceding quarter-end is presented below:

Days in claims payable, March 31, 2009	45.3
Timing of claims payments	1.5
Increase in claims processing inventory	1.1
Payment of annual provider bonuses	(0.4	)
Days in claims payable, June 30, 2009	47.5

Outlook

The table below depicts the Company’s annual guidance for 2009:

	Full Year 2009
	Low	High
Premium and Service revenues (in millions)	$    3,750	$  3,850
Earnings per diluted share	$      1.88	$    1.96

Conference Call

As previously announced, the Company will host a conference call Tuesday, July 28, 2009, at 8:30 A.M. (Eastern Time) to review the financial results for the second quarter ended June 30, 2009, and to discuss its business outlook.  Michael F. Neidorff and William N. Scheffel will host the conference call.  Investors and other interested parties are invited to listen to the conference call by dialing 800-273-1254 in the U.S. and Canada, 973-638-3440 from abroad, or via a live Internet broadcast on the Company's website at www.centene.com, under the Investor Relations section.  A replay will be available for on-demand listening shortly after the completion of the call until 11:59 PM (Eastern Time) on Tuesday, August 11, 2009, at the aforementioned URL, or by dialing 800-642-1687 in the U.S. and Canada, or 706-645-9291 from abroad, and entering access code 15407585.

About Centene Corporation

Centene Corporation is a leading multi-line healthcare enterprise that provides programs and related services to individuals receiving benefits under Medicaid, including the Children’s Health Insurance Program (CHIP), as well as Aged, Blind, or Disabled (ABD), Foster Care, Long-Term Care and Medicare (Special Needs Plans). The Company operates local health plans and offers a wide range of health insurance solutions to individuals and the rising number of uninsured Americans. It also contracts with other healthcare and commercial organizations to provide specialty services including behavioral health, life and healthmanagement, managed vision, telehealth services, pharmacy benefits management and medication adherence. Information regarding Centene is available via the Internet at www.centene.com.

The information provided in this press release contains forward-looking statements that relate to future events and future financial performance of Centene.  Subsequent events and developments may cause the Company’s estimates to change.  The Company disclaims any obligation to update this forward-looking financial information in the future.  Readers are cautioned that matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, regulatory, competitive and other factors that may cause Centene’s or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.  Actual results may differ from projections or estimates due to a variety of important factors, including Centene’s ability to accurately predict and effectively manage health benefits and other operating expenses, competition, changes in healthcare practices, changes in federal or state laws or regulations, inflation, provider contract changes, new technologies, reduction in provider payments by governmental payors, major epidemics, disasters and numerous other factors affecting the delivery and cost of healthcare.  The expiration, cancellation or suspension of Centene’s Medicaid Managed Care contracts by state governments would also negatively affect Centene.

 [Tables Follow]

Centene Corporation Reports 2009 Second Quarter Results July 28, 2009 / Page 4

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	June 30, 2009			December 31, 2008
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents of continuing operations	$	382,700		$	370,999
Cash and cash equivalents of discontinued operations		1,799			8,100
Total cash and cash equivalents		384,499			379,099
Premium and related receivables, net of allowance for uncollectible accounts of $48 and $595, respectively		157,863			92,531
Short-term investments, at fair value (amortized cost $60,749 and $108,469, respectively)		61,217			109,393
Other current assets		73,686			75,333
Current assets of discontinued operations other than cash		8,499			9,987
Total current assets		685,764			666,343
Long-term investments, at fair value (amortized cost $387,166 and $329,330, respectively)		394,395			332,411
Restricted deposits, at fair value (amortized cost $14,436 and $9,124, respectively)		14,526			9,254
Property, software and equipment, net of accumulated depreciation of $88,469 and $74,194, respectively		194,277			175,858
Goodwill		218,121			163,380
Intangible assets, net		22,714			17,575
Other long-term assets		28,957			59,083
Long-term assets of discontinued operations		27,455			27,248
Total assets	$	1,586,209		$	1,451,152
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims liability	$	394,787		$	373,037
Accounts payable and accrued expenses		181,605			219,566
Unearned revenue		62,958			17,107
Current portion of long-term debt		243			255
Current liabilities of discontinued operations		23,851			31,013
Total current liabilities		663,444			640,978
Long-term debt		288,513			264,637
Other long-term liabilities		48,678			43,539
Long-term liabilities of discontinued operations		557			726
Total liabilities		1,001,192			949,880
Commitments and contingencies
Stockholders’ equity:
Common stock, $.001 par value; authorized 100,000,000 shares; issued and outstanding 45,344,717 and 45,071,179 shares, respectively		45			45
Additional paid-in capital		273,029			263,835
Accumulated other comprehensive income:
Unrealized gain on investments, net of tax		5,081			3,152
Retained earnings		313,924			275,236
Treasury stock at cost (2,369,133 and 2,083,415 shares, respectively)		(46,405	)		(40,996	)
Total Centene stockholders’ equity		545,674			501,272
Noncontrolling interest		39,343			—
Total stockholders’ equity		585,017			501,272
Total liabilities and stockholders’ equity	$	1,586,209		$	1,451,152

Centene Corporation Reports 2009 Second Quarter Results July 28, 2009 / Page 5

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Revenues:
Premium	$	909,698		$	783,996		$	1,794,704		$	1,520,810
Service		21,591			18,466			45,440			38,996
Premium and service revenues		931,289			802,462			1,840,144			1,559,806
Premium tax		108,180			21,468			131,760			43,352
Total revenues		1,039,469			823,930			1,971,904			1,603,158
Expenses:
Medical costs		755,706			650,878			1,495,046			1,260,252
Cost of services		14,559			14,437			30,521			30,613
General and administrative expenses		129,221			109,270			251,500			204,763
Premium tax		108,548			21,468			132,490			43,352
Total operating expenses		1,008,034			796,053			1,909,557			1,538,980
Earnings from operations		31,435			27,877			62,347			64,178
Other income (expense):
Investment and other income		4,418			5,434			8,031			13,016
Interest expense		(4,160	)		(4,065	)		(8,146	)		(8,059	)
Earnings from continuing operations, before income tax expense		31,693			29,246			62,232			69,135
Income tax expense		11,789			11,363			22,634			26,319
Earnings from continuing operations, net of income tax expense		19,904			17,883			39,598			42,816
Discontinued operations, net of income tax (benefit) expense of $(196), $(116), $(356) and $148, respectively		(485	)		320			(934	)		1,010
Net earnings		19,419			18,203			38,664			43,826
Noncontrolling interest (loss)		(811	)		―			(24	)		―
Net earnings attributable to Centene Corporation	$	20,230		$	18,203		$	38,688		$	43,826
Amounts attributable to Centene Corporation common shareholders:
Earnings from continuing operations, net of income tax expense	$	20,715		$	17,883		$	39,622		$	42,816
Discontinued operations, net of income tax (benefit) expense		(485	)		320			(934	)		1,010
Net earnings	$	20,230		$	18,203		$	38,688		$	43,826
Net earnings (loss) per share attributable to Centene Corporation:
Basic:
Continuing operations	$	0.48		$	0.41		$	0.92		$	0.99
Discontinued operations		(0.01	)		0.01			(0.02	)		0.02
Earnings per common share	$	0.47		$	0.42		$	0.90		$	1.01
Diluted:
Continuing operations	$	0.47		$	0.40		$	0.90		$	0.96
Discontinued operations		(0.01	)		0.01			(0.02	)		0.02
Earnings per common share	$	0.46		$	0.41		$	0.88		$	0.98
Weighted average number of shares outstanding:
Basic		43,001,157			43,375,944			43,034,390			43,457,076
Diluted		44,242,339			44,275,601			44,240,071			44,516,890

Centene Corporation Reports 2009 Second Quarter Results July 28, 2009 / Page 6

CENTENE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended June 30,
	2009			2008
	(Unaudited)
Cash flows from operating activities:
Net earnings	$	38,664		$	43,826
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation and amortization		20,892			16,229
Stock compensation expense		7,611			7,839
Loss (gain) on sale of investments, net		450			(201	)
Deferred income taxes		1,512			11,879
Changes in assets and liabilities —
Premium and related receivables		(23,327	)		(23,144	)
Other current assets		1,357			(4,294	)
Other assets		(608	)		(1,671	)
Medical claims liabilities		16,369			27,316
Unearned revenue		44,129			(38,753	)
Accounts payable and accrued expenses		(48,653	)		45,907
Other operating activities		3,723			1,743
Net cash provided by operating activities		62,119			86,676
Cash flows from investing activities:
Capital expenditures		(29,833	)		(34,581	)
Purchases of investments		(415,052	)		(172,873	)
Sales and maturities of investments		377,320			210,277
Investments in acquisitions, net of cash acquired, and investment in equity method investee		(7,621	)		(7,818	)
Net cash used in investing activities		(75,186	)		(4,995	)
Cash flows from financing activities:
Proceeds from exercise of stock options		1,109			3,029
Proceeds from borrowings		288,000			56,005
Payment of long-term debt		(264,135	)		(41,287	)
Dividend to noncontrolling interest		(1,749	)		―
Contribution from noncontrolling interest		1,042			―
Excess tax benefits from stock compensation		15			2,792
Common stock repurchases		(5,447	)		(13,316	)
Debt issue costs		(368	)		―
Net cash provided by financing activities		18,467			7,223
Net increase in cash and cash equivalents		5,400			88,904
Cash and cash equivalents, beginning of period		379,099			268,584
Cash and cash equivalents, end of period	$	384,499		$	357,488
Supplemental disclosures of cash flow information:
Interest paid	$	7,658		$	7,590
Income taxes paid	$	31,512		$	15,966
Supplemental disclosure of non-cash investing and financing activities:
Contribution from noncontrolling interest	$	5,107		$	―

Centene Corporation Reports 2009 Second Quarter Results July 28, 2009 / Page 7

CENTENE CORPORATION

CONTINUING OPERATIONS SUPPLEMENTAL FINANCIAL DATA

	Q2		Q1		Q4		Q3		Q2
	2009		2009		2008		2008		2008
MEMBERSHIP
Managed Care:
Arizona	16,200		15,500		14,900		—		—
Florida	22,300		29,100		—		—		—
Georgia	292,800		289,300		288,300		283,900		278,800
Indiana	196,100		179,100		175,300		172,400		161,700
Ohio	141,200		137,000		133,400		132,500		137,300
South Carolina	46,000		48,500		31,300		26,600		22,500
Texas	443,200		421,100		428,000		433,200		423,700
Wisconsin	131,200		127,700		124,800		122,500		124,800
Total at-risk membership	1,289,000		1,247,300		1,196,000		1,171,100		1,148,800
Non-risk membership	114,000		96,000		3,700		3,700		3,500
TOTAL	1,403,000		1,343,300		1,199,700		1,174,800		1,152,300
Medicaid	958,600		921,100		877,400		850,500		828,700
CHIP & Foster Care	261,400		256,900		257,300		261,800		256,900
ABD & Medicare	69,000		69,300		61,300		58,800		63,200
Total at-risk membership	1,289,000		1,247,300		1,196,000		1,171,100		1,148,800
Non-risk membership	114,000		96,000		3,700		3,700		3,500
TOTAL	1,403,000		1,343,300		1,199,700		1,174,800		1,152,300
Specialty Services(a):
Cenpatico Behavioral Health
Arizona	110,500		104,700		105,000		102,400		99,400
Kansas	41,100		40,600		41,100		40,100		40,000
Bridgeway Health Solutions
Long-term Care	2,400		2,300		2,100		1,900		1,800
TOTAL	154,000		147,600		148,200		144,400		141,200
(a) Includes external membership only.
REVENUE PER MEMBER(b)	$	219.75	$	220.29	$	218.52	$	213.28	$	214.76
CLAIMS(b)
Period-end inventory	362,200		325,000		269,300		323,200		389,100
Average inventory	234,500		267,600		288,600		298,400		235,300
Period-end inventory per member	0.28		0.26		0.23		0.28		0.34
(b) Revenue per member and claims information are presented for the Managed Care at-risk members.

Centene Corporation Reports 2009 Second Quarter Results July 28, 2009 / Page 8

	Q2		Q1		Q4		Q3		Q2
	2009		2009		2008		2008		2008
DAYS IN CLAIMS PAYABLE (c)	47.5		45.3		48.5		47.9		47.8
(c) Days in Claims Payable is a calculation of Medical Claims Liabilities at the end of the period divided by average claims expense per calendar day for such period.
CASH AND INVESTMENTS (in millions)
Regulated	$	825.8	$	816.8	$	798.0	$	692.6	$	653.1
Unregulated		27.0		28.9		24.1		26.8		29.0
TOTAL	$	852.8	$	845.7	$	822.1	$	719.4	$	682.1
DEBT TO CAPITALIZATION(d)	33.0%		34.6%		34.6%		34.4%		32.6%
(d) Debt to Capitalization is calculated as follows: total debt divided by (total debt + total equity).

OPERATING RATIOS:

	Three Months Ended June 30,				Six Months Ended June 30,
	2009		2008		2009		2008
Health Benefits Ratios
Medicaid and CHIP	83.7	%	81.6	%	84.2	%	80.4	%
ABD and Medicare	82.6		88.5		82.0		93.0
Specialty Services	79.8		86.2		79.0		85.2
Total	83.1		83.0		83.3		82.9
Total General & Administrative Expense Ratio	13.9	%	13.6	%	13.7	%	13.1	%

MEDICAL CLAIMS LIABILITIES (In thousands)

Four rolling quarters of the changes in medical claims liabilities are summarized as follows:

Balance, June 30, 2008	$	340,456
Acquisitions		15,398
Incurred related to:
Current period		2,924,510
Prior period		(49,381	)
Total incurred		2,875,129
Paid related to:
Current period		2,558,425
Prior period		277,771
Total paid		2,836,196
Balance, June 30, 2009	$	394,787

Centene’s claims reserving process utilizes a consistent actuarial methodology to estimate Centene’s ultimate liability.  Any reduction in the “Incurred related to:  Prior period” claims may be offset as Centene actuarially determines “Incurred related to: Current period.”  As such, only in the absence of a consistent reserving methodology would favorable development of prior period claims liability estimates reduce medical costs.  Centene believes it has consistently applied its claims reserving methodology in each of the periods presented.

The amount of the “Incurred related to: Prior period” above includes the effects of reserving under moderately adverse conditions, new markets where we use a conservative approach in setting reserves during the initial periods of operations, increased receipts from other third party payors related to coordination of benefits and lower medical utilization and cost trends for dates of service prior to June 30, 2008.