CENTENE CORP

Previous wording

The American Rescue Plan Act (ARPA), enacted in March 2021, initially enhanced eligibility for the premium tax credit for enrollees in the Health Insurance Marketplace. The enhanced eligibility extended by the Inflation Reduction Act (IRA), enacted in August 2022, expires at the end of 2025. We continue to advocate for legislation and regulations aimed at leveraging Medicaid and the Health Insurance Marketplace to maintain health insurance coverage and affordability for consumers.

Current wording

The American Rescue Plan Act (ARPA), enacted in March 2021, initially enhanced eligibility for APTCs for enrollees in the Health Insurance Marketplace. The enhanced eligibility extended by the Inflation Reduction Act (IRA), enacted in August 2022, expires at the end of 2025.

Previous wording

The IRA significantly changes Medicare Prescription Drug Plans (PDPs) in 2025, most notably by eliminating the coverage gap and capping members' annual out-of-pocket costs at $2,000 in order to provide more predictable and affordable prescription drug coverage for Medicare beneficiaries. The IRA changes effective for 2025 result in a meaningful shift in cost-sharing responsibilities between members, drug companies, Centers for Medicare and Medicaid Services (CMS), and PDPs and have resulted in a significant increase in our premiums in consideration for our PDPs' responsibility for a larger portion of total Part D benefit costs. To help mitigate significant premium impacts and address these changes, CMS introduced the Medicare Part D Premium Stabilization Demonstration program. This program began in calendar year 2025 and was intended by CMS to exist for three years. The parameters of the program are expected to be different each year. CMS believes the demonstration will provide plans greater flexibility to manage costs and assist in stabilizing beneficiary premiums. We continue to advocate for policies that promote cost-effective, high-quality care for our PDP enrolled members.

Current wording

The IRA significantly changed Medicare Prescription Drug Plans (PDPs) in 2025, most notably by eliminating the coverage gap and capping members' annual out-of-pocket costs at $2,000 in order to provide more predictable and affordable prescription drug coverage for Medicare beneficiaries. The IRA changes effective for 2025 result in a meaningful shift in cost-sharing responsibilities between members, drug companies, Centers for Medicare and Medicaid Services (CMS), and PDPs and have resulted in a significant increase in our premiums in consideration for our PDPs' responsibility for a larger portion of total Part D benefit costs. To help mitigate significant premium impacts and address these changes, CMS introduced the Medicare Part D Premium Stabilization Demonstration program. This program began in calendar year 2025 and was intended by CMS to exist for three years. The parameters of the program are expected to be different each year. CMS believes the demonstration will provide plans greater flexibility to manage costs and assist in stabilizing beneficiary premiums. We continue to advocate for policies that promote cost-effective, high-quality care for our PDP enrolled members. We have receivables due to us from CMS for Part D risk-sharing programs attributable to the 2024 and 2025 plan years that we expect to be paid by CMS approximately 12 to 13 months after the plan year closes. If the payments from CMS are delayed, our cash flows may be materially adversely affected.

Previous wording

In addition, the CMS calendar year 2025 Medicare and Part D policy rule and finalized regulations will require beneficiaries dually enrolled in Medicare and a Medicaid Managed Care Plan to receive integrated care through the Medicaid company's Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs) beginning in 2030, with certain restrictions beginning in 2027. However, some states have already moved or are planning to exclusively align dual-eligible enrollment under an aligned D-SNP before this timeframe. We believe we are well positioned given our overlapping Medicaid and Medicare Advantage footprints and are committed to navigating evolving regulations.

Current wording

In addition, the CMS calendar year 2025 Medicare and Part D policy rule and finalized regulations will require beneficiaries dually enrolled in Medicare and a Medicaid Managed Care Plan to receive integrated care through the Medicaid company's Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs) beginning in 2030, with certain provisions beginning in 2027. However, some states have already moved or are planning to exclusively align dual-eligible enrollment under an aligned D-SNP before this timeframe. We believe we are well positioned given our overlapping Medicaid and Medicare Advantage footprints and are committed to navigating evolving regulations.

Previous wording

We have four 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 and commercial organizations. This expertise has allowed us to deliver cost-effective services to our government partners and our members. With trends in the personalization of healthcare technology, we continue the use of data and analytics to improve the provider and member experience. We continue to believe we have both the capacity and capability to successfully navigate industry changes to the benefit of our members, customers, providers and shareholders.

Current wording

We remain focused on the promise of delivering high-quality healthcare services on behalf of states and the federal government to under-insured and uninsured families and commercial organizations. Our decades of experience and deep industry knowledge has allowed us to deliver cost-effective services to our government partners and our members. With a focus on the personalization of healthcare technology, we continue the use of data and analytics to improve the provider and member experience. We continue to believe we have both the capacity and capability to successfully navigate industry changes to the benefit of our members, customers, providers, and shareholders.

Previous wording

Our financial performance for the first quarter of 2025 is summarized as follows:

Current wording

Our financial performance for the second quarter of 2025 is summarized as follows:

Previous wording

•Managed care membership of 27.9 million, a decrease of 479 thousand members, or (2)% year-over-year.

Current wording

•Managed care membership of 28.0 million, a decrease of 473 thousand members, or (2)% year-over-year.

Previous wording

•Total revenues of $46.6 billion, representing 15% growth year-over-year.

Current wording

•Total revenues of $48.7 billion, representing 22% growth year-over-year.

Previous wording

•Premium and service revenues of $42.5 billion, representing 17% growth year-over-year.

Current wording

•Premium and service revenues of $42.5 billion, representing 18% growth year-over-year.

Previous wording

•Operating cash flows provided cash of $1.5 billion in the first quarter of 2025.

Current wording

•Operating cash flows provided cash of $1.8 billion in the second quarter of 2025.

Previous wording

A reconciliation from GAAP diluted EPS to adjusted diluted EPS is highlighted below, and additional detail is provided above under the heading "Non-GAAP Financial Presentation":

Current wording

A reconciliation from GAAP diluted earnings (loss) per share to adjusted diluted earnings (loss) per share is highlighted below, and additional detail is provided above under the heading "Non-GAAP Financial Presentation":

Previous wording

(a) A reduction to the previously reported gain on the sale of Magellan Rx of $10 million or $0.02 per share ($0.02 after-tax) and net gain on real estate transactions of $7 million, or $0.01 per share ($0.01 after-tax).

Current wording

(a) intangible asset impairment related to the wind-down of certain contracts in the Other segment of $55 million, or $0.11 per share ($0.08 after-tax), and a reduction to the previously reported gain on real estate transactions of $3 million, or $0.01 per share ($0.01 after-tax).

Previous wording

(a) Net gain on the previously reported divestiture of Magellan Specialty Health due to the achievement of contingent consideration and finalization of working capital adjustments of $81 million, or $0.15 per share ($0.11 after-tax), net gain on the sale of property of $24 million, or $0.04 per share ($0.03 after-tax), Health Net Federal Services asset impairment due to the 2024 final ruling on the TRICARE Managed Care Support Contract of $14 million, or $0.03 per share ($0.02 after-tax), gain on the previously reported divestiture of Circle Health Group (Circle Health) of $10 million, or $0.02 per share ($0.10 after-tax), severance costs due to a restructuring of $9 million, or $0.01 per share ($0.01 after-tax) and gain on the previously reported divestiture of HealthSmart due to the finalization of working capital adjustments of $7 million, or $0.01 per share ($0.01 after-tax).

Current wording

(a) gain on the previously reported divestiture of Circle Health Group (Circle Health) of $10 million, or $0.02 per share ($0.02 after-tax), an additional loss on the divestiture of our Spanish and Central European businesses of $7 million, or $0.01 per share ($0.01 after-tax), severance costs due to a restructuring of $4 million, or $0.01 per share ($0.01 after-tax), reduction to the net gain on the sale of property due to closing costs of $3 million, or $0.00 per share ($0.00 after-tax), and net gain on the finalization of working capital adjustments for the previously reported divestiture of Magellan Specialty Health of $2 million, or $0.00 per share ($0.00 after-tax).

Previous wording

•In February 2025, our subsidiary, Sunshine Health, commenced the expanded Statewide Medicaid Managed Care program, including integrated Managed Medical Assistance, Long-Term Care services, Serious Mental Illness, Child Welfare and HIV specialty products. The contract has a six-year term.

Current wording

•In February 2025, our subsidiary, Sunshine Health, commenced the expanded Statewide Medicaid Managed Care (SMMC) program, including integrated Managed Medical Assistance, Long-Term Care services, Serious Mental Illness, Child Welfare and HIV specialty products. The expanded SMMC program now includes coverage for Behavior Analysis services. The contract has a six-year term. Additionally, coverage for Behavior Analysis services was also added to the existing Children's Medical Services contract beginning February 2025.

Previous wording

•Given our strong bid positioning, PDP membership increased 22% year-over-year. Additionally, the IRA changes effective for 2025 result in a meaningful shift in cost-sharing responsibilities between members, drug companies, CMS, and PDPs and have led to a significant increase in our premiums in consideration for our PDPs responsibility for a larger portion of total Part D benefit costs. These changes also result in a change to the quarterly progression of the Medicare segment HBR.

Current wording

•Given our strong bid positioning, PDP membership increased 19% year-over-year. Additionally, the IRA changes effective for 2025 result in a meaningful shift in cost-sharing responsibilities between members, drug companies, CMS, and PDPs and have led to a significant increase in our premiums in consideration for our PDPs responsibility for a larger portion of total Part D benefit costs. These changes also result in a change to the quarterly progression of the Medicare segment HBR.

Previous wording

•In 2025, Wellcare is offering Medicare Advantage plans in 32 states, including its newest state, Iowa. Wellcare discontinued offering Medicare Advantage products in Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island and Vermont in 2025. Consistent with our strategic positioning and bid strategy, Medicare Advantage membership declined 9% year-over-year.

Current wording

•In 2025, Wellcare is offering Medicare Advantage plans in 32 states, including its newest state, Iowa. Wellcare discontinued offering Medicare Advantage products in Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island and Vermont in 2025. Consistent with our strategic positioning and bid strategy, Medicare Advantage membership declined 10% year-over-year.

Previous wording

•In 2025, our Health Insurance Marketplace product, Ambetter Health, expanded its geographic footprint, adding 60 new counties across 10 states, which includes expansion into Iowa. Additionally, Marketplace membership increased 29% year-over-year due to the expanded footprint, strong product positioning and open enrollment results, as well as overall market growth.

Current wording

•In 2025, our Health Insurance Marketplace product, Ambetter Health, expanded its geographic footprint, adding 60 new counties across 10 states, which includes expansion into Iowa. Additionally, Marketplace membership increased 33% year-over-year due to the expanded footprint, strong open enrollment results, as well as overall market growth.

Previous wording

•In September 2024, our subsidiary, Iowa Total Care, was selected by the Iowa Department of Health and Human Services to continue providing Medicaid managed care services under the Iowa Health Link program. The contract is expected to begin in July 2025 and has a four-year term, with an optional two-year extension, for a total of six possible contract years.

Current wording

•In July 2025, our subsidiary, Iowa Total Care, commenced the contract to continue providing Medicaid managed care services under the Iowa Health Link program. The contract has a four-year term, with an optional two-year extension, for a total of six possible contract years.

Previous wording

•In August 2022, our subsidiary, Magnolia Health Plan (Magnolia), was awarded the Mississippi Division of Medicaid contract. Under the new contract, Magnolia will continue serving the state's Coordinated Care Organization Program, which will consist of the Mississippi Coordinated Access Network and the Mississippi CHIP. The contract is expected to begin in July 2025 and has a four-year term, with two optional one-year extensions, for a total of six possible contract years.

Current wording

•In July 2025, our subsidiary, Magnolia Health Plan (Magnolia), commenced the Mississippi Division of Medicaid contract to continue serving the state's Coordinated Care Organization Program consisting of the Mississippi Coordinated Access Network and the Mississippi CHIP. The contract has a four-year term, with two optional one-year extensions, for a total of six possible contract years.

Previous wording

•In April 2025, our subsidiary, SilverSummit Healthplan, Inc., was selected by the Nevada Department of Health and Human Services to continue to provide services for its Medicaid managed care program. For the first time the program will include expansion of Medicaid Managed Care into rural and frontier service areas, communities that were previously fee-for-service. Subject to state approval, the contract is expected to begin in January 2026 and has a five-year term, with the option of a two-year extension, for a total of seven possible contract years.

Current wording

•In April 2025, our subsidiary, SilverSummit Healthplan, Inc., was selected by the Nevada Department of Health and Human Services to continue to provide services for its Medicaid managed care program. For the first time the program will include expansion of Medicaid Managed Care into rural and frontier service areas, communities that were previously fee-for-service. The contract is expected to begin in January 2026 and has a five-year term, with the option of a two-year extension, for a total of seven possible contract years.

Previous wording

•In September 2024, our subsidiary, Health Net Community Solutions, was selected by the California Department of Health Care Services to provide managed dental health care services to beneficiaries of Medi-Cal, the State's Medicaid program, in Los Angeles and Sacramento counties. The new 54-month contract is expected to commence in July 2025.

Current wording

•In September 2024, our subsidiary, Health Net Community Solutions, was selected by the California Department of Health Care Services to provide managed dental health care services to beneficiaries of Medi-Cal, the State's Medicaid program, in Los Angeles and Sacramento counties. The new 54-month contract is expected to begin in January 2026.

Previous wording

•In December 2023, our subsidiary, Arizona Complete Health, was selected by the Arizona Health Care Cost Containment System – Arizona's single state Medicaid agency – to provide managed care for the Arizona Long Term Care System (ALTCS). The program supports Arizonans who are elderly and/or have a physical disability (E/PD) with physical and behavioral healthcare, as well as provides pharmacy benefits and home and community-based services. The new ALTCS-E/PD contract is expected to begin in October 2025 and has a three-year term, with four optional one-year extensions, for a total of seven possible contract years.

Current wording

•In December 2023, our subsidiary, Arizona Complete Health, was selected by the Arizona Health Care Cost Containment System – Arizona's single state Medicaid agency – to provide managed care for the Arizona Long Term Care System (ALTCS). The program supports Arizonans who are elderly and/or have a physical disability (E/PD) with physical and behavioral healthcare, as well as provides pharmacy benefits and home and community-based services. A prolonged bid protest continues to be litigated and, at this time, it is unclear when the contract could be implemented.

Previous wording

•In November 2024, our subsidiary, Buckeye Health Plan, was selected by the Ohio Department of Medicaid to continue providing Medicare and Medicaid services for dually eligible individuals through a FIDE SNP. The three-year contract is expected to commence in January 2026.

Current wording

•In November 2024, our subsidiary, Buckeye Health Plan, was selected by the Ohio Department of Medicaid to continue providing Medicare and Medicaid services for dually eligible individuals through a FIDE SNP. The three-year contract is expected to begin in January 2026.

Previous wording

•In October 2024, our subsidiary, Meridian Health Plan of Michigan, Inc., was selected by the MDHHS to provide highly integrated Medicare and Medicaid services for dually eligible Michiganders through a Highly Integrated Dual Eligible Special Needs Plan. The plan is expected to launch on January 1, 2026 and has a seven-year term, with three optional one-year extensions, for a total of 10 possible contract years.

Current wording

•In October 2024, our subsidiary, Meridian Health Plan of Michigan, Inc., was selected by the MDHHS to provide highly integrated Medicare and Medicaid services for dually eligible Michiganders through a Highly Integrated Dual Eligible Special Needs Plan (HIDE SNP). The plan is expected to begin in January 2026 and has a seven-year term, with three optional one-year extensions, for a total of 10 possible contract years.

Previous wording

From March 31, 2024 to March 31, 2025, our managed care membership decreased by 479 thousand, or (2)%. The following table sets forth our membership by line of business:

Current wording

From June 30, 2024 to June 30, 2025, our managed care membership decreased by 473 thousand, or (2)%. The following table sets forth our membership by line of business:

Previous wording

The following discussion and analysis is based on our Consolidated Statements of Operations, which reflect our results of operations for the three months ended March 31, 2025 and 2024, prepared in accordance with generally accepted accounting principles in the United States (GAAP).

Current wording

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, 2025 and 2024, prepared in accordance with generally accepted accounting principles in the United States (GAAP).

Previous wording

Summarized comparative financial data for the three months ended March 31, 2025 and 2024 is as follows ($ in millions, except per share data in dollars):

Current wording

Summarized comparative financial data for the three and six months ended June 30, 2025 and 2024 is as follows ($ in millions, except per share data in dollars):

Previous wording

Total revenues increased 15% in the three months ended March 31, 2025, over the corresponding period in 2024, primarily driven by premium and membership growth in the PDP business along with strong product positioning and overall market growth in the Marketplace business.

Current wording

Total revenues increased 22% in the three months ended June 30, 2025, over the corresponding period in 2024, primarily driven by premium and membership growth in the PDP business along with overall market growth in the Marketplace business, rate increases in the Medicaid business and increased premium tax revenue, partially offset by lower Medicaid membership as a result of redeterminations and lower Marketplace net risk adjustment revenue. The three months ended June 30, 2024, benefited from outperformance in Marketplace risk adjustment for the 2023 benefit year.

Previous wording

Cost of services increased by $29 million in the three months ended March 31, 2025, compared to the corresponding period in 2024. The cost of service ratio for the three months ended March 31, 2025, was 89.8%, compared to 82.8% in the same period in 2024.

Current wording

Cost of services decreased by $39 million in the three months ended June 30, 2025, compared to the corresponding period in 2024. The cost of service ratio for the three months ended June 30, 2025, was 88.2%, compared to 81.6% in the same period in 2024.

Previous wording

The SG&A expense ratio was 7.9% for the first quarter of 2025, compared to 8.9% in the first quarter of 2024. The adjusted SG&A expense ratio was 7.9% for the first quarter of 2025, compared to 8.7% in the first quarter of 2024. The decreases were primarily driven by continued leveraging of expenses over higher revenues and growth in the PDP business. The decreases were partially offset by growth in the Marketplace business, which operates at a meaningfully higher SG&A expense ratio as compared to the overall company. The SG&A expense ratio in the first quarter of 2024 was also impacted by acquisition and divestitures related expenses and severance costs due to a restructuring.

Current wording

The SG&A expense ratio was 7.1% for the second quarter of 2025, compared to 8.0% in the second quarter of 2024. The adjusted SG&A expense ratio was 7.1% for the second quarter of 2025, compared to 8.0% in the second quarter of 2024. The decreases were primarily driven by continued leveraging of expenses over higher revenues and growth in the PDP business. The decreases were partially offset by growth in the Marketplace business, which operates at a meaningfully higher SG&A expense ratio as compared to the overall company.

Previous wording

Interest expense. Interest expense decreased by $8 million in the three months ended March 31, 2025, compared to the corresponding period in 2024.

Current wording

Interest expense. Interest expense decreased by $6 million in the three months ended June 30, 2025, compared to the corresponding period in 2024.

Previous wording

For the three months ended March 31, 2024, we recorded an income tax expense of $315 million on pre-tax earnings of $1.5 billion, or an effective tax rate of 21.4%. The effective tax rate for the first quarter of 2024 reflects the tax effects of the Circle Health divestiture. For the first quarter of 2024, our effective tax rate on adjusted earnings was 24.6%.

Current wording

For the three months ended June 30, 2024, we recorded income tax expense of $370 million on pre-tax earnings of $1.5 billion, or an effective tax rate of 24.4%. The effective tax rate for the second quarter of 2024 reflects the tax effects of settlements with taxing authorities. For the second quarter of 2024, our effective tax rate on adjusted earnings was 24.4%.

Previous wording

Total revenues increased 4% in the three months ended March 31, 2025, compared to the corresponding period in 2024. Gross margin decreased $512 million in the three months ended March 31, 2025, compared to the corresponding period in 2024. The increase in total revenues was primarily driven by rate increases, partially offset by lower membership primarily due to redeterminations. Gross margin decreased due to higher costs associated with influenza-and-like illnesses coupled with higher acuity post-redeterminations as we continue to work with our state partners to fully match rates to the changes in acuity. Gross margin in the first quarter of 2024 was not meaningfully impacted by the redetermination-related acuity pressure, which escalated in the second quarter of 2024.

Current wording

Total revenues increased 16% in the three months ended June 30, 2025, compared to the corresponding period in 2024. The increase in total revenues was primarily driven by rate increases, partially offset by lower membership, primarily due to redeterminations. Gross margin decreased $344 million in the three months ended June 30, 2025, compared to the corresponding period in 2024. Gross margin decreased due to higher medical costs driven primarily by behavioral health, home health and high-cost drugs.

Previous wording

Total revenues increased 48% in the three months ended March 31, 2025, compared to the corresponding period in 2024 primarily driven by increased PDP premium and membership, partially offset by lower Medicare Advantage membership. Gross margin increased $658 million in the three months ended March 31, 2025, compared to the corresponding period in 2024, primarily driven by premium and membership growth in the PDP business, including changes from the IRA impacting the quarterly progression of medical costs.

Current wording

Total revenues increased 58% in the three months ended June 30, 2025, compared to the corresponding period in 2024 primarily driven by increased PDP premium and membership, partially offset by lower Medicare Advantage membership. Gross margin increased $218 million in the three months ended June 30, 2025, compared to the corresponding period in 2024, primarily driven by premium and membership growth in the PDP business, including changes from the IRA impacting the quarterly progression of medical costs, partially offset by an increase to the 2025 premium deficiency reserve based on the progression of earnings during the year (with higher earnings at the beginning of the year and lower at the end of the year, given cost sharing progression).

Previous wording

The HBR for the three months ended March 31, 2025, was 87.5%, compared to 87.1% in the same period in 2024. The increase was primarily driven by a higher Medicaid HBR due to influenza-and-like illnesses. Further, the Medicaid HBR in the first quarter of 2024 was not meaningfully impacted by the redetermination-related acuity pressure, which escalated in the second quarter of 2024. The increase in HBR was partially offset by a decrease in Medicare due to program changes in the Part D business as a result of the IRA compared to the first quarter of 2024 and the resulting change in the quarterly progression of the Medicare segment HBR.

Current wording

The HBR for the six months ended June 30, 2025, was 90.2%, compared to 87.3% in the same period in 2024. The increase was primarily driven by a reduction in our net 2025 Marketplace risk adjustment revenue transfer estimate, increased Marketplace medical costs late in the second quarter of 2025, higher medical costs in Medicaid driven primarily by behavioral health, home health and high-cost drugs, and an increase to the 2025 Medicare Advantage premium deficiency reserve based on the progression of earnings during the year (with higher earnings at the beginning of the year and lower at the end of the year, given cost sharing progression). The increase in HBR was partially offset by a decrease in Medicare due to program changes in the Part D business as a result of the IRA compared to the second quarter of 2024 and the resulting change in the quarterly progression of the Medicare segment HBR.

Previous wording

Investment and other income. Investment and other income decreased by $163 million in the three months ended March 31, 2025, compared to the corresponding period in 2024. The three months ended March 31, 2024 included net gains on divestitures. The decrease was also driven by lower interest rates and lower average investment balances during the quarter.

Current wording

Investment and other income. Investment and other income decreased by $255 million in the six months ended June 30, 2025, compared to the corresponding period in 2024. The six months ended June 30, 2024, included net gains on divestitures. The decrease was also driven by lower interest rates and lower average investment balances during 2025.

Previous wording

Total revenues increased 8% in the three months ended March 31, 2025, compared to the corresponding period in 2024, primarily driven by the behavioral health business. Gross margin decreased $65 million in the three months ended March 31, 2025, compared to the corresponding period in 2024 driven by the Circle Health divestiture in the first quarter of 2024 along with the expiration of the TRICARE Managed Care Support Contract in December 2024.

Current wording

Total revenues increased 4% in the six months ended June 30, 2025, compared to the corresponding period in 2024. Gross margin decreased $128 million in the six months ended June 30, 2025, compared to the corresponding period in 2024 driven by the Circle Health divestiture in the first quarter of 2024 along with the expiration of the TRICARE Managed Care Support Contract in December 2024.

Previous wording

Normal operations are funded primarily through operating cash flows and borrowings under our Revolving Credit Facility. Operating activities provided cash of $1.5 billion in the three months ended March 31, 2025, compared to using cash of $456 million in the comparable period in 2024.

Current wording

Normal operations are funded primarily through operating cash flows and borrowings under our Revolving Credit Facility. Operating activities provided cash of $3.3 billion in the six months ended June 30, 2025, compared to providing cash of $1.7 billion in the comparable period in 2024.

Previous wording

Cash flows provided by operations in 2025 were primarily driven by net earnings and an increase in medical claims liabilities, partially offset by a delay in premium payments from one of our state partners subsequently received in April 2025. Cash flows used in operations in 2024 were driven by net earnings, more than offset by timing of experience rebate payments, a delay in premium payments from one of our state partners subsequently received in April 2024 and pharmacy remittance timing as we transitioned to the new third-party PBM, which commenced in January 2024.

Current wording

Cash flows provided by operations in 2025 were primarily driven by net earnings and improved pharmacy rebate remittance timing. Cash flows provided in operations in 2024 were driven by net earnings, partially offset by pharmacy remittance timing as we transitioned to the new third-party PBM, which commenced in January 2024.

Previous wording

Investing activities used cash of $529 million in the three months ended March 31, 2025, compared to providing cash of $852 million in the comparable period in 2024. Cash flows used in investing activities in the first quarter of 2025 were driven primarily by net additions to the investment portfolio of our regulated subsidiaries (including transfers from cash and cash equivalents to long-term investments) and capital expenditures. Cash flows provided by investing activities in the first quarter of 2024 primarily consisted of divestiture proceeds.

Current wording

Investing activities used cash of $1.4 billion in the six months ended June 30, 2025, compared to using cash of $315 million in the comparable period in 2024. Cash flows used in investing activities in the second quarter of 2025 were driven primarily by net additions to the investment portfolio of our regulated subsidiaries (including transfers from cash and cash equivalents to long-term investments) and capital expenditures. Cash flows used in investing activities in the second quarter of 2024 were primarily driven by net additions to the investment portfolio of our regulated subsidiaries (including transfers from cash and cash equivalents to long-term investments) and capital expenditures, partially offset by divestiture proceeds.

Previous wording

We spent $135 million and $151 million in the three months ended March 31, 2025 and 2024, respectively, on capital expenditures, the majority of which was driven by system enhancements and computer hardware.

Current wording

We spent $343 million and $337 million in the six months ended June 30, 2025 and 2024, respectively, on capital expenditures, the majority of which was driven by system enhancements and computer hardware.