News Release

<< Back

Molina Healthcare Reports Fourth Quarter and Year-End 2019 Financial Results

Feb 10, 2020

Introduces Full Year 2020 Earnings Guidance

LONG BEACH, Calif.--(BUSINESS WIRE)--Feb. 10, 2020-- Molina Healthcare, Inc. (NYSE: MOH) today reported net income for the fourth quarter of 2019 of $168 million, or $2.67 per diluted share, compared to net income of $201 million, or $3.01 per diluted share, for the fourth quarter of 2018. The Company also reported net income for the year ended December 31, 2019, of $737 million, or $11.47 per diluted share, compared to net income of $707 million, or $10.61 per diluted share, for the year ended December 31, 2018. Financial results for the fourth quarter and full year 2019 are summarized below:

 

 

Three Months Ended

Year Ended

 

December 31,

December 31,

 

2019

2018

2019

2018

 

(In millions, except per share results)

Premium Revenue

$

4,123

 

$

4,438

 

$

16,208

 

$

17,612

 

Total Revenue

$

4,274

 

$

4,664

 

$

16,829

 

$

18,890

 

Pre-Tax Income

$

222

 

$

256

 

$

972

 

$

999

 

Net Income

$

168

 

$

201

 

$

737

 

$

707

 

EPS – Diluted

$

2.67

 

$

3.01

 

$

11.47

 

$

10.61

 

 

MCR

 

86.0

%

 

85.1

%

 

85.8

%

 

85.9

%

G&A Ratio

 

8.0

%

 

7.2

%

 

7.7

%

 

7.1

%

Pre-Tax Margin

 

5.2

%

 

5.5

%

 

5.8

%

 

5.3

%

Effective Tax Rate

 

24.3

%

 

21.4

%

 

24.2

%

 

29.2

%

After-Tax Margin

 

3.9

%

 

4.3

%

 

4.4

%

 

3.7

%

 

Highlights include:

  • Premium revenue was $4.1 billion for the fourth quarter of 2019, a 7.1% decrease compared to the fourth quarter of 2018.
  • Medical care ratio (MCR) was 86.0% for the fourth quarter of 2019, compared to 85.1% for the fourth quarter of 2018.
  • General and administrative (G&A) expense ratio increased to 8.0% for the fourth quarter of 2019, compared to 7.2% for the fourth quarter of 2018.
  • After-tax margin was 3.9% for the fourth quarter of 2019, compared to 4.3% for the fourth quarter of 2018.
  • Net income for the year ended December 31, 2019, increased to $737 million, compared to $707 million for 2018, and after-tax margin increased to 4.4% for 2019, compared to 3.7% for 2018.
  • In December 2019, the Company’s Board of Directors authorized a share repurchase program of up to $500 million, and through February 7th, the Company repurchased an aggregate of approximately 1.9 million shares for $257 million, at an average cost of $133.23 per share.
  • Operating cash flows for the year ended December 31, 2019, were $427 million.
  • Introduced full year 2020 earnings guidance, including GAAP earnings per diluted share of $11.20 - $11.70.
  • In October 2019, the Company announced that it entered into a definitive agreement to acquire certain assets of YourCare HealthPlan for approximately $40 million. Molina will assume the rights to serve approximately 46,000 Medicaid members in Western New York. The acquisition is expected to close in the first half of 2020.
  • In January 2020, the Company announced that it entered into a definitive agreement to acquire all of the capital stock of NextLevel Health Partners for approximately $50 million. Molina will assume the rights to serve approximately 50,000 Medicaid and Managed Long-Term Services and Supports members in Illinois’ Cook County. The acquisition is expected to close in the first half of 2020.

Joe Zubretsky, president and CEO, said, “We are pleased with our fourth quarter and full year results. We improved our Medicaid and Medicare margins and achieved exceptional Marketplace margins. Overall, we delivered 4.4 percent after-tax margins and earnings per share growth of 8 percent.” Mr. Zubretsky continued, “Going forward, 2020 represents an important year in our pivot to growth strategy with a return to top-line growth. Each of our three business lines are well positioned to grow in 2020 and beyond.”

Premium Revenue

Premium revenue for the fourth quarter of 2019 decreased 7.1% to $4.1 billion compared to $4.4 billion for the fourth quarter of 2018, which was in line with the Company’s expectations.

For the year ended December 31, 2019, premium revenue decreased 8.0% to $16.2 billion, from $17.6 billion for the comparable period in 2018. For both periods, the lower premium revenue is primarily a result of previously announced losses of Medicaid membership in New Mexico and Florida.

Medical Care Ratio

The consolidated MCR for the fourth quarter of 2019 increased to 86.0%, compared to 85.1% for the fourth quarter of 2018, primarily due to the increased Marketplace MCR. Prior period reserve development in the quarter was not material.

The MCR for the year ended December 31, 2019, improved to 85.8%, compared to 85.9% for the comparable period in 2018, due to a combination of the following:

  • The Medicaid MCR improved to 88.0%, compared to 90.0% for the year ended December 31, 2018, due to improvement in all programs.
  • The Medicare MCR increased to 85.3%, compared to 84.5% for the year ended December 31, 2018, due to fluctuation of medical care costs in certain markets.
  • The Marketplace MCR was 68.2%, compared to 58.9% for the year ended December 31, 2018. The MCR in 2018 was favorably impacted by reduced medical care costs due to Cost Sharing Reduction (CSR) subsidies related to 2017 dates of service, while the current year was impacted by a relatively smaller benefit from prior-year Marketplace risk adjustment compared to 2018.

General and Administrative Expense Ratio

General and administrative expenses were 8.0% of total revenues for the fourth quarter of 2019, compared to 7.2% for the fourth quarter of 2018.

For the year ended December 31, 2019, the G&A ratio was 7.7%, compared to 7.1% for the comparable prior-year period. In both periods, the year-over-year increases are due mainly to the year-over-year decline in total revenues.

Interest Expense

Interest expense was $20 million for the fourth quarter of 2019, compared to $24 million for the fourth quarter of 2018. The decline was due to the repayment of convertible notes in 2019.

Balance Sheet

Cash and investments at the parent company amounted to $997 million as of December 31, 2019, compared to $796 million as of September 30, 2019.

For the fourth quarter of 2019, the parent company received $305 million of dividends from the regulated health plan subsidiaries.

The Company repaid $240 million of principal on the convertible notes in 2019. The impact of capital deployment actions in 2019 resulted in lower interest expense, a net gain on repayment of the convertible notes and a lower share count.

In early December 2019, the Company's board of directors authorized the purchase of up to $500 million in aggregate of the Company's common stock. Pursuant to a 10b5-1 trading plan, under this authorization the Company purchased approximately 400,000 shares for $54 million through December 31, 2019, and through February 7th, the Company has purchased in total approximately 1.9 million shares for $257 million.

Cash Flow

Operating cash flows for the year ended December 31, 2019, amounted to $427 million and were higher compared to the year ended December 31, 2018, primarily due to the normal fluctuations in timing of premium receipts.

Outlook

The Company issued its full year 2020 earnings guidance, including GAAP earnings per diluted share of $11.20 - $11.70 and premium revenue growth of 7.4%.

Full year guidance highlights:

  • Medicaid after-tax margins are expected to perform well benefiting from stable rate and cost trend environments.
  • Medicare after-tax margins are expected to be strong despite the impact of the Health Insurer Fee.
  • Marketplace after-tax margins are expected to be lower reflecting pricing actions taken for the year.

Full year guidance reflects the following:

  • The reintroduction of the Health Insurer Fee in 2020 with an impact of approximately $0.30 per diluted share.
  • Steady state in Texas for the full year 2020. The Company is currently exercising its protest rights on the recently announced STAR+PLUS RFP award. The Company believes that the effective date of the new contract would be no earlier than January 1, 2021.
  • The YourCare Health Plan and NextLevel Health Partners acquisitions are not included in guidance as the transactions have not closed. Together they have over $500 million in annualized premium revenue.
 

Full Year 2020 Guidance (1)

Premium Revenue

 

~$17.4B

Medicaid

 

~$13.3B

Medicare

 

~$2.5B

Marketplace

 

~$1.6B

Premium Tax Revenue

 

~$565M

Health Insurer Fees Reimbursed

 

~$280M

Total Revenue

 

~$18.3B

Interest Expense

 

~$85M

Net Income

 

$674M - $704M

EPS - Diluted

 

$11.20 - $11.70

Diluted Shares

 

~60.2M

 

 

 

Total Membership

 

~3.4M

Medicaid and Medicare

 

~3.1M

Marketplace

 

~310K

 

 

 

Ratios:

 

 

MCR

 

86.2% - 86.4%

G&A Ratio

 

~7.2%

Effective Tax Rate

 

30.8% - 31.1%

After-Tax Margin

 

3.7% - 3.8%

Medicaid

 

3.2% - 3.4%

Medicare

 

5.6% - 5.7%

Marketplace

 

4.7% - 4.9%

___________________________

(1) All amounts are rounded and approximations.

Press Release Format

In an effort to streamline its earnings release, beginning in the first quarter of 2020, the Company will report its financial data by government program as seen on page 9, and schedules on pages 14 - 20 will no longer be published.

Conference Call

Management will host a conference call and webcast to discuss Molina Healthcare’s fourth quarter and year-end 2019 results at 8:00 a.m. Eastern time on Tuesday, February 11, 2020. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 6197632. A telephonic replay of the conference call will be available through Tuesday, February 18, 2020, by dialing (877) 344-7529 and entering confirmation number 10137536. A live audio broadcast of this conference call will be available on Molina Healthcare’s website, molinahealthcare.com. A 30-day online replay will be available approximately an hour following the conclusion of the live broadcast.

About Molina Healthcare

Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. Through its locally operated health plans, Molina Healthcare served approximately 3.3 million members as of December 31, 2019. For more information about Molina Healthcare, please visit molinahealthcare.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This earnings release contains forward-looking statements regarding the Company’s 2020 guidance, as well as its plans, expectations, and anticipated future events. Actual results could differ materially due to numerous known and unknown risks and uncertainties. Those risks and uncertainties are discussed in the section entitled “Risk Factors,” and the section entitled “Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2018, and our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, which are on file with the SEC. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2019.

These reports can be accessed under the investor relations tab of the Company’s website or on the SEC’s website at sec.gov. Given these risks and uncertainties, the Company can give no assurances that its forward-looking statements will prove to be accurate, or that any other results or events projected or contemplated by its forward-looking statements will in fact occur, and the Company cautions investors not to place undue reliance on these statements. All forward-looking statements in this release represent the Company’s judgment as of February 10, 2020, and, except as otherwise required by law, the Company disclaims any obligation to update any forward-looking statements to conform the statement to actual results or changes in its expectations.

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

(In millions, except per-share amounts)

Revenue:

 

 

 

 

 

 

 

Premium revenue

$

4,123

 

 

$

4,438

 

 

$

16,208

 

 

$

17,612

 

Premium tax revenue

122

 

 

97

 

 

489

 

 

417

 

Health insurer fees reimbursed

 

 

81

 

 

 

 

329

 

Service revenue

 

 

16

 

 

 

 

407

 

Investment income and other revenue

29

 

 

32

 

 

132

 

 

125

 

Total revenue

4,274

 

 

4,664

 

 

16,829

 

 

18,890

 

Operating expenses:

 

 

 

 

 

 

 

Medical care costs

3,545

 

 

3,775

 

 

13,905

 

 

15,137

 

General and administrative expenses

343

 

 

335

 

 

1,296

 

 

1,333

 

Premium tax expenses

122

 

 

97

 

 

489

 

 

417

 

Health insurer fees

 

 

87

 

 

 

 

348

 

Depreciation and amortization

21

 

 

23

 

 

89

 

 

99

 

Restructuring costs

1

 

 

8

 

 

6

 

 

46

 

Cost of service revenue

 

 

15

 

 

 

 

364

 

Total operating expenses

4,032

 

 

4,340

 

 

15,785

 

 

17,744

 

Loss on sales of subsidiaries, net of gain

 

 

(52

)

 

 

 

(15

)

Operating income

242

 

 

272

 

 

1,044

 

 

1,131

 

Other expenses, net:

 

 

 

 

 

 

 

Interest expense

20

 

 

24

 

 

87

 

 

115

 

Other (income) expenses, net

 

 

(8

)

 

(15

)

 

17

 

Total other expenses, net

20

 

 

16

 

 

72

 

 

132

 

Income before income tax expense

222

 

 

256

 

 

972

 

 

999

 

Income tax expense

54

 

 

55

 

 

235

 

 

292

 

Net income

$

168

 

 

$

201

 

 

$

737

 

 

$

707

 

 

 

 

 

 

 

 

 

Net income per share, diluted

$

2.67

 

 

$

3.01

 

 

$

11.47

 

 

$

10.61

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

63.0

 

 

66.6

 

 

64.2

 

 

66.6

 

 

 

 

 

 

 

 

 

Operating Statistics:

 

 

 

 

 

 

 

Medical care ratio

86.0

%

 

85.1

%

 

85.8

%

 

85.9

%

G&A ratio

8.0

%

 

7.2

%

 

7.7

%

 

7.1

%

Premium tax ratio

2.9

%

 

2.2

%

 

2.9

%

 

2.3

%

Effective income tax rate

24.3

%

 

21.4

%

 

24.2

%

 

29.2

%

After-tax margin

3.9

%

 

4.3

%

 

4.4

%

 

3.7

%

Medicaid

3.6

%

 

3.6

%

 

3.2

%

 

2.4

%

Medicare

5.5

%

 

8.0

%

 

6.7

%

 

4.8

%

Marketplace

4.5

%

 

15.4

%

 

10.3

%

 

16.4

%

 

CONSOLIDATED BALANCE SHEETS

 

December 31,

 

2019

 

2018

 

Unaudited

 

 

 

(Dollars in millions,
except per-share
amounts)

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

2,452

 

 

$

2,826

 

Investments

1,946

 

 

1,681

 

Receivables

1,406

 

 

1,330

 

Prepaid expenses and other current assets

134

 

 

149

 

Derivative asset

29

 

 

476

 

Total current assets

5,967

 

 

6,462

 

Property, equipment, and capitalized software, net

385

 

 

241

 

Goodwill and intangible assets, net

172

 

 

190

 

Restricted investments

79

 

 

120

 

Deferred income taxes

79

 

 

117

 

Other assets

105

 

 

24

 

Total assets

$

6,787

 

 

$

7,154

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

Medical claims and benefits payable

$

1,854

 

 

$

1,961

 

Amounts due government agencies

664

 

 

967

 

Accounts payable and accrued liabilities

455

 

 

390

 

Deferred revenue

249

 

 

211

 

Current portion of long-term debt

18

 

 

241

 

Derivative liability

29

 

 

476

 

Total current liabilities

3,269

 

 

4,246

 

Long-term debt

1,237

 

 

1,020

 

Finance lease liabilities

231

 

 

197

 

Other long-term liabilities

90

 

 

44

 

Total liabilities

4,827

 

 

5,507

 

Stockholders’ equity:

 

 

 

Common stock, $0.001 par value, 150 million shares authorized; outstanding: 62 million shares at each of December 31, 2019, and December 31, 2018

 

 

 

Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding

 

 

 

Additional paid-in capital

175

 

 

643

 

Accumulated other comprehensive income (loss)

4

 

 

(8

)

Retained earnings

1,781

 

 

1,012

 

Total stockholders’ equity

1,960

 

 

1,647

 

Total liabilities and stockholders' equity

$

6,787

 

 

$

7,154

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Year Ended

 

December 31,

 

2019

 

2018

 

(In millions)

Operating activities:

 

 

 

Net income

$

737

 

 

$

707

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

89

 

 

127

 

Deferred income taxes

10

 

 

(6

)

Share-based compensation

39

 

 

27

 

Amortization of convertible senior notes and finance lease liabilities

5

 

 

22

 

(Gain) loss on debt repayment

(15

)

 

22

 

Loss on sales of subsidiaries, net of gain

 

 

15

 

Non-cash restructuring costs

 

 

17

 

Other, net

(5

)

 

4

 

Changes in operating assets and liabilities:

 

 

 

Receivables

(76

)

 

(530

)

Prepaid expenses and other current assets

28

 

 

6

 

Medical claims and benefits payable

(107

)

 

(226

)

Amounts due government agencies

(303

)

 

(574

)

Accounts payable and accrued liabilities

2

 

 

45

 

Deferred revenue

38

 

 

(21

)

Income taxes

(15

)

 

51

 

Net cash provided by (used in) operating activities

427

 

 

(314

)

Investing activities:

 

 

 

Purchases of investments

(2,536

)

 

(1,444

)

Proceeds from sales and maturities of investments

2,302

 

 

2,445

 

Purchases of property, equipment, and capitalized software

(57

)

 

(30

)

Net cash received from sales of subsidiaries

 

 

190

 

Other, net

(2

)

 

(18

)

Net cash (used in) provided by investing activities

(293

)

 

1,143

 

Financing activities:

 

 

 

Repayment of principal amount of convertible senior notes

(240

)

 

(362

)

Cash paid for partial settlement of conversion option

(578

)

 

(623

)

Cash received for partial settlement of call option

578

 

 

623

 

Cash paid for partial termination of warrants

(514

)

 

(549

)

Proceeds from borrowings under term loan facility

220

 

 

 

Common stock purchases

(47

)

 

 

Repayment of credit facility

 

 

(300

)

Other, net

29

 

 

18

 

Net cash used in financing activities

(552

)

 

(1,193

)

Net decrease in cash, cash equivalents, and restricted cash and cash equivalents

(418

)

 

(364

)

Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period

2,926

 

 

3,290

 

Cash, cash equivalents, and restricted cash and cash equivalents at end of period

$

2,508

$

2,926

 

 

HEALTH PLANS SEGMENT MEMBERSHIP

 

 

As of December 31,

 

2019

 

2018

Ending Membership by Government Program:

 

 

 

Medicaid

2,956,000

 

 

3,361,000

 

Medicare

101,000

 

 

98,000

 

Marketplace

274,000

 

 

362,000

 

 

3,331,000

 

 

3,821,000

 

 

 

 

 

Ending Membership by Health Plan:

 

 

 

California

565,000

 

 

608,000

 

Florida (1)

132,000

 

 

313,000

 

Illinois

224,000

 

 

224,000

 

Michigan

362,000

 

 

383,000

 

New Mexico (1)

23,000

 

 

222,000

 

Ohio

288,000

 

 

302,000

 

Puerto Rico

176,000

 

 

252,000

 

South Carolina

131,000

 

 

120,000

 

Texas

341,000

 

 

423,000

 

Washington

832,000

 

 

781,000

 

Other (2)

257,000

 

 

193,000

 

 

3,331,000

 

 

3,821,000

 

__________________

(1) The Company’s Medicaid contracts in New Mexico and in all but two regions in Florida terminated in late 2018 and early 2019. The Company continues to serve Medicare and Marketplace members in both Florida and New Mexico, as well as Medicaid members in two regions in Florida.

(2) “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to the Company’s consolidated operating results.

 

HEALTH PLANS SEGMENT FINANCIAL DATA — BY GOVERNMENT PROGRAM

(In millions, except percentages)

 

 

Three Months Ended December 31,

 

2019

 

2018

 

Premium
Revenue

 

Medical
Care Costs

 

MCR (1)

 

Premium
Revenue

 

Medical
Care Costs

 

MCR (1)

 

 

 

 

 

 

Medicaid

$

3,227

 

 

$

2,818

 

 

87.3

%

 

$

3,430

 

 

$

3,046

 

 

88.8

%

Medicare

561

 

 

480

 

 

85.5

 

 

527

 

 

426

 

 

80.8

 

Marketplace

335

 

 

247

 

 

73.5

 

 

481

 

 

303

 

 

62.9

 

 

$

4,123

 

 

$

3,545

 

 

86.0

%

 

$

4,438

 

 

$

3,775

 

 

85.1

%

 
 

 

Year Ended December 31,

 

2019

 

2018

 

Premium
Revenue

 

Medical
Care Costs

 

MCR

 

Premium
Revenue

 

Medical
Care Costs

 

MCR

 

 

 

 

 

 

Medicaid

$

12,466

 

 

$

10,969

 

 

88.0

%

 

$

13,623

 

 

$

12,258

 

 

90.0

%

Medicare

2,243

 

 

1,913

 

 

85.3

 

 

2,074

 

 

1,752

 

 

84.5

 

Marketplace

1,499

 

 

1,023

 

 

68.2

 

 

1,915

 

 

1,127

 

 

58.9

 

 

$

16,208

 

 

$

13,905

 

 

85.8

%

 

$

17,612

 

 

$

15,137

 

 

85.9

%

__________________

(1) The MCR represents medical costs as a percentage of premium revenue.

CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE
(Dollars in millions)

The Company’s claims liability includes a provision for adverse claims deviation based on historical experience and other factors including, but not limited to, variations in claims payment patterns, changes in utilization and cost trends, known outbreaks of disease, and large claims. The Company’s reserving methodology is consistently applied across all periods presented. The amounts displayed for “Components of medical care costs related to: Prior period” represent the amount by which the original estimate of claims and benefits payable at the beginning of the period was more than the actual amount of the liability based on information (principally the payment of claims) developed since that liability was first reported. The following table presents the components of the change in medical claims and benefits payable for the periods indicated:

 

 

Year Ended December 31,

 

2019

 

2018

Medical claims and benefits payable, beginning balance

$

1,961

 

 

$

2,192

 

Components of medical care costs related to:

 

 

 

Current period

14,176

 

 

15,478

 

Prior period (1)

(271

)

 

(341

)

Total medical care costs

13,905

 

 

15,137

 

Change in non-risk and other provider payables

24

 

 

13

 

Payments for medical care costs related to:

 

 

 

Current period

12,554

 

 

13,671

 

Prior period

1,482

 

 

1,710

 

Total paid

14,036

 

 

15,381

 

Medical claims and benefits payable, ending balance

$

1,854

 

 

$

1,961

 

 

 

 

 

Days in claims payable, fee for service (2)

50

 

 

53

 

______________________

(1) The December 31, 2018, amounts include the 2018 benefit of the 2017 Marketplace CSR reimbursement of $81 million.

(2) Claims payable includes primarily IBNP. It also includes certain fee-for-service payables reported in “Other” medical claims and benefits payable amounting to $50 million and $43 million, as of December 31, 2019 and 2018, respectively.

UNAUDITED NON-GAAP FINANCIAL MEASURES

The Company uses non-generally accepted accounting principles, or non-GAAP, financial measures as supplemental metrics in evaluating the Company’s financial performance, making financing and business decisions, and forecasting and planning for future periods. For these reasons, management believes such measures are useful supplemental measures to investors in comparing the Company’s performance to the performance of other public companies in the health care industry. These non-GAAP financial measures should be considered as supplements to, and not as substitutes for or superior to, GAAP measures. See further information regarding non-GAAP measures below the tables.

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 

(In millions)

Net income

$

168

 

 

$

201

 

 

$

737

 

 

$

707

 

Adjustments:

 

 

 

 

 

 

 

Depreciation, and amortization of intangible assets and capitalized software

21

 

 

23

 

 

89

 

 

118

 

Interest expense

20

 

 

24

 

 

87

 

 

115

 

Income tax expense

54

 

 

55

 

 

235

 

 

292

 

EBITDA

$

263

 

 

$

303

 

 

$

1,148

 

 

$

1,232

 

 

Adjustments made to GAAP measures used to calculate the non-GAAP measures used in this news release follow:

Earnings before interest, taxes, depreciation and amortization (“EBITDA”): Net income on a GAAP basis less depreciation, and amortization of intangible assets and capitalized software, interest expense and income tax expense. The Company believes that EBITDA is helpful in assessing the Company’s ability to meet the cash demands of its operating units.

 

UNAUDITED NON-GAAP FINANCIAL MEASURES CONTINUED

 

 

Three Months Ended December 31,

 

Year Ended December 31,

2019

 

2018

 

2019

 

2018

 

 

 

Amount

 

Per
Diluted
Share

 

Amount

 

Per
Diluted
Share

 

Amount

 

Per
Diluted
Share

 

Amount

 

Per
Diluted
Share

 

(In millions, except per diluted share amounts)

Net income

$

168

 

 

$

2.67

 

 

$

201

 

 

$

3.01

 

 

$

737

 

 

$

11.47

 

 

$

707

 

 

$

10.61

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

4

 

 

0.06

 

 

6

 

 

0.08

 

 

17

 

 

0.27

 

 

22

 

 

0.32

 

(Gain) loss on debt repayment

 

 

 

 

(3

)

 

(0.05

)

 

(15

)

 

(0.24

)

 

22

 

 

0.33

 

Restructuring costs

1

 

 

0.02

 

 

8

 

 

0.12

 

 

6

 

 

0.10

 

 

46

 

 

0.68

 

Loss on sales of subsidiaries, net of gain

 

 

 

 

52

 

 

0.78

 

 

 

 

 

 

15

 

 

0.23

 

Subtotal, adjustments

5

 

 

0.08

 

 

63

 

 

0.93

 

 

8

 

 

0.13

 

 

105

 

 

1.56

 

Income tax effect (1)

(1

)

 

(0.02

)

 

(23

)

 

(0.34

)

 

(2

)

 

(0.03

)

 

(30

)

 

(0.43

)

Adjustments, net of tax effect

4

 

 

0.06

 

 

40

 

 

0.59

 

 

6

 

 

0.10

 

 

75

 

 

1.13

 

Adjusted net income

$

172

 

 

$

2.73

 

 

$

241

 

 

$

3.60

 

 

$

743

 

 

$

11.57

 

 

$

782

 

 

$

11.74

 

________________________

(1) Income tax effect of adjustments calculated at the blended federal and state statutory tax rate of 22.6% and 22% for 2019 and 2018, respectively.

Adjustments made to GAAP measures used to calculate the non-GAAP measures used in this news release follow:

Adjusted net income: Net income on a GAAP basis less amortization of intangible assets, gain or loss on debt repayment, restructuring costs, loss on sales of subsidiaries, and the aggregate income tax effect calculated at the statutory tax rate. The Company believes that adjusted net income is helpful in assessing the Company’s financial performance exclusive of the non-cash impact of the amortization of purchased intangibles and the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations.

Adjusted net income per diluted share: Adjusted net income divided by weighted average common shares outstanding on a fully diluted basis.

Beginning in the first quarter of 2020, the Company will no longer publish the tables that follow in its earnings announcements, through the last page of this news release.

 

HEALTH PLANS SEGMENT MEMBERSHIP

 

 

As of December 31,

 

2019

 

2018

Ending Membership by Government Program:

 

 

 

TANF and CHIP

1,987,000

 

 

2,295,000

 

Medicaid Expansion

605,000

 

 

660,000

 

ABD

364,000

 

 

406,000

 

Total Medicaid

2,956,000

 

 

3,361,000

 

MMP - Integrated

58,000

 

 

54,000

 

Medicare Special Needs Plans

43,000

 

 

44,000

 

Total Medicare

101,000

 

 

98,000

 

Total Medicaid and Medicare

3,057,000

 

 

3,459,000

 

Marketplace

274,000

 

 

362,000

 

 

3,331,000

 

 

3,821,000

 

 
 

UNAUDITED SELECTED FINANCIAL DATA

(In millions, except percentages and per-member per-month amounts)

HEALTH PLANS SEGMENT FINANCIAL DATA — BY GOVERNMENT PROGRAM

 

 

Member
Months (1)

 

Premium Revenue

 

Medical Care Costs

 

MCR (2)

 

Medical
Margin

 

 

Total

 

PMPM

 

Total

 

PMPM

 

 

 

Three Months Ended December 31, 2019

TANF and CHIP

6.1

 

 

$

1,244

 

 

$

206.74

 

 

$

1,117

 

 

$

185.79

 

 

89.9

%

 

$

127

 

Medicaid Expansion

1.8

 

 

720

 

 

395.37

 

 

608

 

 

333.59

 

 

84.4

 

 

112

 

ABD

1.1

 

 

1,263

 

 

1,150.24

 

 

1,093

 

 

995.29

 

 

86.5

 

 

170

 

Total Medicaid

9.0

 

 

3,227

 

 

361.16

 

 

2,818

 

 

315.41

 

 

87.3

 

 

409

 

MMP

0.2

 

 

396

 

 

2,284.37

 

 

343

 

 

1,981.07

 

 

86.7

 

 

53

 

Medicare

0.1

 

 

165

 

 

1,264.10

 

 

137

 

 

1,044.28

 

 

82.6

 

 

28

 

Total Medicare

0.3

 

 

561

 

 

1,846.15

 

 

480

 

 

1,578.71

 

 

85.5

 

 

81

 

Total Medicaid and Medicare

9.3

 

 

3,788

 

 

409.99

 

 

3,298

 

 

356.95

 

 

87.1

 

 

490

 

Marketplace

0.8

 

 

335

 

 

404.18

 

 

247

 

 

297.17

 

 

73.5

 

 

88

 

 

10.1

 

 

$

4,123

 

 

$

409.51

 

 

$

3,545

 

 

$

352.03

 

 

86.0

%

 

$

578

 

 

 

Three Months Ended December 31, 2018

TANF and CHIP

7.1

 

 

$

1,363

 

 

$

189.86

 

 

$

1,203

 

 

$

167.61

 

 

88.3

%

 

$

160

 

Medicaid Expansion

2.0

 

 

700

 

 

349.05

 

 

630

 

 

314.34

 

 

90.1

 

 

70

 

ABD

1.3

 

 

1,367

 

 

1,094.14

 

 

1,213

 

 

970.49

 

 

88.7

 

 

154

 

Total Medicaid

10.4

 

 

3,430

 

 

328.79

 

 

3,046

 

 

292.00

 

 

88.8

 

 

384

 

MMP

0.2

 

 

366

 

 

2,263.41

 

 

300

 

 

1,855.34

 

 

82.0

 

 

66

 

Medicare

0.1

 

 

161

 

 

1,206.96

 

 

126

 

 

944.65

 

 

78.3

 

 

35

 

Total Medicare

0.3

 

 

527

 

 

1,784.58

 

 

426

 

 

1,442.57

 

 

80.8

 

 

101

 

Total Medicaid and Medicare

10.7

 

 

3,957

 

 

368.93

 

 

3,472

 

 

323.72

 

 

87.7

 

 

485

 

Marketplace

1.1

 

 

481

 

 

437.79

 

 

303

 

 

275.56

 

 

62.9

 

 

178

 

 

11.8

 

 

$

4,438

 

 

$

375.33

 

 

$

3,775

 

 

$

319.24

 

 

85.1

%

 

$

663

 

 

 

Year Ended December 31, 2019

TANF and CHIP

24.4

 

 

$

4,838

 

 

$

198.66

 

 

$

4,258

 

 

$

174.88

 

 

88.0

%

 

$

580

 

Medicaid Expansion

7.2

 

 

2,775

 

 

383.93

 

 

2,418

 

 

334.53

 

 

87.1

 

 

357

 

ABD

4.4

 

 

4,853

 

 

1,111.09

 

 

4,293

 

 

982.83

 

 

88.5

 

 

560

 

Total Medicaid

36.0

 

 

12,466

 

 

346.79

 

 

10,969

 

 

305.16

 

 

88.0

 

 

1,497

 

MMP

0.7

 

 

1,589

 

 

2,346.87

 

 

1,377

 

 

2,033.77

 

 

86.7

 

 

212

 

Medicare

0.5

 

 

654

 

 

1,268.74

 

 

536

 

 

1,039.02

 

 

81.9

 

 

118

 

Total Medicare

1.2

 

 

2,243

 

 

1,880.79

 

 

1,913

 

 

1,603.73

 

 

85.3

 

 

330

 

Total Medicaid and Medicare

37.2

 

 

14,709

 

 

396.05

 

 

12,882

 

 

346.87

 

 

87.6

 

 

1,827

 

Marketplace

3.6

 

 

1,499

 

 

411.89

 

 

1,023

 

 

281.04

 

 

68.2

 

 

476

 

 

40.8

 

 

$

16,208

 

 

$

397.47

 

 

$

13,905

 

 

$

340.99

 

 

85.8

%

 

$

2,303

 

 

 

Year Ended December 31, 2018

TANF and CHIP

29.4

 

 

$

5,508

 

 

$

187.04

 

 

$

4,908

 

 

$

166.66

 

 

89.1

%

 

$

600

 

Medicaid Expansion

8.1

 

 

2,884

 

 

356.81

 

 

2,587

 

 

320.11

 

 

89.7

 

 

297

 

ABD

5.0

 

 

5,231

 

 

1,049.26

 

 

4,763

 

 

955.22

 

 

91.0

 

 

468

 

Total Medicaid

42.5

 

 

13,623

 

 

320.43

 

 

12,258

 

 

288.31

 

 

90.0

 

 

1,365

 

MMP

0.7

 

 

1,443

 

 

2,192.58

 

 

1,241

 

 

1,885.59

 

 

86.0

 

 

202

 

Medicare

0.5

 

 

631

 

 

1,180.46

 

 

511

 

 

955.81

 

 

81.0

 

 

120

 

Total Medicare

1.2

 

 

2,074

 

 

1,738.85

 

 

1,752

 

 

1,468.77

 

 

84.5

 

 

322

 

Total Medicaid and Medicare

43.7

 

 

15,697

 

 

359.14

 

 

14,010

 

 

320.53

 

 

89.2

 

 

1,687

 

Marketplace

4.9

 

 

1,915

 

 

392.97

 

 

1,127

 

 

231.33

 

 

58.9

 

 

788

 

 

48.6

 

 

$

17,612

 

 

$

362.54

 

 

$

15,137

 

 

$

311.59

 

 

85.9

%

 

$

2,475

 

__________________

(1) A member month is defined as the aggregate of each month’s ending membership for the period presented.

(2) The MCR represents medical costs as a percentage of premium revenue.

 

HEALTH PLANS SEGMENT FINANCIAL DATA — MEDICAID AND MEDICARE

 

 

Member
Months

 

Premium Revenue

 

Medical Care Costs

 

MCR

 

Medical
Margin

 

 

Total

 

PMPM

 

Total

 

PMPM

 

 

 

Three Months Ended December 31, 2019

California

1.5

 

 

$

531

 

 

$

334.81

 

 

$

414

 

 

$

261.66

 

 

78.2

%

 

$

117

 

Florida

0.3

 

 

125

 

 

426.72

 

 

109

 

 

371.79

 

 

87.1

 

 

16

 

Illinois

0.7

 

 

276

 

 

412.06

 

 

240

 

 

357.32

 

 

86.7

 

 

36

 

Michigan

1.0

 

 

390

 

 

362.57

 

 

321

 

 

298.90

 

 

82.4

 

 

69

 

Ohio

0.9

 

 

615

 

 

691.25

 

 

562

 

 

631.53

 

 

91.4

 

 

53

 

Puerto Rico

0.5

 

 

133

 

 

254.48

 

 

119

 

 

229.44

 

 

90.2

 

 

14

 

South Carolina

0.4

 

 

156

 

 

394.94

 

 

133

 

 

334.33

 

 

84.7

 

 

23

 

Texas

0.6

 

 

613

 

 

952.36

 

 

561

 

 

870.16

 

 

91.4

 

 

52

 

Washington

2.5

 

 

645

 

 

266.70

 

 

569

 

 

235.58

 

 

88.3

 

 

76

 

Other (1) (2)

0.9

 

 

304

 

 

406.59

 

 

270

 

 

360.51

 

 

88.7

 

 

34

 

 

9.3

 

 

$

3,788

 

 

$

409.99

 

 

$

3,298

 

 

$

356.95

 

 

87.1

%

 

$

490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2018

California

1.8

 

 

$

485

 

 

$

282.83

 

 

$

425

 

 

$

247.56

 

 

87.5

%

 

$

60

 

Florida

1.0

 

 

370

 

 

376.80

 

 

345

 

 

351.20

 

 

93.2

 

 

25

 

Illinois

0.7

 

 

242

 

 

361.29

 

 

196

 

 

291.63

 

 

80.7

 

 

46

 

Michigan

1.1

 

 

389

 

 

348.47

 

 

320

 

 

287.33

 

 

82.5

 

 

69

 

New Mexico (2)

0.6

 

 

305

 

 

489.86

 

 

265

 

 

425.85

 

 

86.9

 

 

40

 

Ohio

0.9

 

 

607

 

 

662.51

 

 

527

 

 

575.69

 

 

86.9

 

 

80

 

Puerto Rico

0.8

 

 

147

 

 

173.81

 

 

135

 

 

158.97

 

 

91.5

 

 

12

 

South Carolina

0.3

 

 

126

 

 

352.67

 

 

106

 

 

299.17

 

 

84.8

 

 

20

 

Texas

0.6

 

 

581

 

 

865.75

 

 

538

 

 

801.34

 

 

92.6

 

 

43

 

Washington

2.3

 

 

512

 

 

225.52

 

 

455

 

 

200.72

 

 

89.0

 

 

57

 

Other (1)

0.6

 

 

193

 

 

344.31

 

 

160

 

 

283.96

 

 

82.5

 

 

33

 

 

10.7

 

 

$

3,957

 

 

$

368.93

 

 

$

3,472

 

 

$

323.72

 

 

87.7

%

 

$

485

 

 

 

Year Ended December 31, 2019

California

6.4

 

 

$

2,039

 

 

$

313.75

 

 

$

1,700

 

 

$

261.74

 

 

83.4

%

 

$

339

 

Florida

1.3

 

 

543

 

 

414.29

 

 

483

 

 

368.81

 

 

89.0

 

 

60

 

Illinois

2.7

 

 

1,002

 

 

377.13

 

 

872

 

 

328.11

 

 

87.0

 

 

130

 

Michigan

4.3

 

 

1,589

 

 

368.73

 

 

1,311

 

 

304.22

 

 

82.5

 

 

278

 

Ohio

3.6

 

 

2,450

 

 

684.74

 

 

2,215

 

 

619.03

 

 

90.4

 

 

235

 

Puerto Rico

2.3

 

 

474

 

 

204.88

 

 

420

 

 

181.85

 

 

88.8

 

 

54

 

South Carolina

1.6

 

 

583

 

 

375.13

 

 

511

 

 

328.58

 

 

87.6

 

 

72

 

Texas

2.6

 

 

2,402

 

 

920.94

 

 

2,184

 

 

837.05

 

 

90.9

 

 

218

 

Washington

9.6

 

 

2,513

 

 

263.13

 

 

2,260

 

 

236.63

 

 

89.9

 

 

253

 

Other (1) (2)

2.8

 

 

1,114

 

 

403.47

 

 

926

 

 

335.31

 

 

83.1

 

 

188

 

 

37.2

 

 

$

14,709

 

 

$

396.05

 

 

$

12,882

 

 

$

346.87

 

 

87.6

%

 

$

1,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2018

California

7.1

 

 

$

1,931

 

 

$

273.59

 

 

$

1,724

 

 

$

244.21

 

 

89.3

%

 

$

207

 

Florida

4.2

 

 

1,517

 

 

360.98

 

 

1,414

 

 

336.43

 

 

93.2

 

 

103

 

Illinois

2.5

 

 

793

 

 

322.87

 

 

670

 

 

272.61

 

 

84.4

 

 

123

 

Michigan

4.5

 

 

1,550

 

 

344.42

 

 

1,303

 

 

289.53

 

 

84.1

 

 

247

 

New Mexico (2)

2.6

 

 

1,241

 

 

474.10

 

 

1,140

 

 

435.65

 

 

91.9

 

 

101

 

Ohio

3.7

 

 

2,277

 

 

608.29

 

 

2,001

 

 

534.59

 

 

87.9

 

 

276

 

Puerto Rico

3.7

 

 

696

 

 

186.59

 

 

636

 

 

170.45

 

 

91.4

 

 

60

 

South Carolina

1.4

 

 

495

 

 

351.38

 

 

429

 

 

304.85

 

 

86.8

 

 

66

 

Texas

2.7

 

 

2,296

 

 

839.70

 

 

2,092

 

 

765.12

 

 

91.1

 

 

204

 

Washington

9.1

 

 

2,178

 

 

240.42

 

 

1,999

 

 

220.72

 

 

91.8

 

 

179

 

Other (1)

2.2

 

 

723

 

 

329.06

 

 

602

 

 

273.55

 

 

83.1

 

 

121

 

 

43.7

 

 

$

15,697

 

 

$

359.14

 

 

$

14,010

 

 

$

320.53

 

 

89.2

%

 

$

1,687

 

_______________

(1) “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to the Company’s consolidated operating results.

(2) In 2019, “Other” includes the New Mexico health plan. The New Mexico health plan’s Medicaid contract terminated on December 31, 2018, and therefore its 2019 results are not individually significant to the Company’s consolidated operating results.

 

HEALTH PLANS SEGMENT FINANCIAL DATA — MARKETPLACE

 

 

Member
Months

 

Premium Revenue

 

Medical Care Costs

 

MCR

 

Medical
Margin

 

 

Total

 

PMPM

 

Total

 

PMPM

 

 

 

Three Months Ended December 31, 2019

California

0.2

 

 

$

53

 

 

$

365.16

 

 

$

36

 

 

$

241.93

 

 

66.3

%

 

$

17

 

Florida

0.1

 

 

39

 

 

357.79

 

 

26

 

 

239.09

 

 

66.8

 

 

13

 

Michigan

0.1

 

 

8

 

 

497.43

 

 

5

 

 

302.84

 

 

60.9

 

 

3

 

Ohio

 

 

24

 

 

803.58

 

 

18

 

 

599.84

 

 

74.6

 

 

6

 

Texas

0.4

 

 

132

 

 

337.02

 

 

99

 

 

253.66

 

 

75.3

 

 

33

 

Washington

 

 

39

 

 

684.31

 

 

33

 

 

563.25

 

 

82.3

 

 

6

 

Other (1)

 

 

40

 

 

492.23

 

 

30

 

 

379.25

 

 

77.0

 

 

10

 

 

0.8

 

 

$

335

 

 

$

404.18

 

 

$

247

 

 

$

297.17

 

 

73.5

%

 

$

88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2018

California

 

 

$

48

 

 

$

322.39

 

 

$

36

 

 

$

248.84

 

 

77.2

%

 

$

12

 

Florida

0.1

 

 

62

 

 

526.44

 

 

32

 

 

278.60

 

 

52.9

 

 

30

 

Michigan

0.1

 

 

11

 

 

259.20

 

 

8

 

 

166.54

 

 

64.3

 

 

3

 

New Mexico

0.1

 

 

22

 

 

328.32

 

 

19

 

 

302.79

 

 

92.2

 

 

3

 

Ohio

0.1

 

 

27

 

 

512.33

 

 

20

 

 

366.62

 

 

71.6

 

 

7

 

Texas

0.7

 

 

269

 

 

440.81

 

 

153

 

 

250.66

 

 

56.9

 

 

116

 

Washington

 

 

44

 

 

697.31

 

 

35

 

 

536.80

 

 

77.0

 

 

9

 

Other (2)

 

 

(2

)

 

NM

 

 

 

NM

 

NM

 

(2

)

 

1.1

 

 

$

481

 

 

$

437.79

 

 

$

303

 

 

$

275.56

 

 

62.9

%

 

$

178

 

 

 

Year Ended December 31, 2019

California

0.7

 

 

$

227

 

 

$

364.82

 

 

$

137

 

 

$

218.06

 

 

59.8

%

 

$

90

 

Florida

0.5

 

 

191

 

 

382.52

 

 

107

 

 

214.19

 

 

56.0

 

 

84

 

Michigan

0.1

 

 

35

 

 

479.12

 

 

20

 

 

273.87

 

 

57.2

 

 

15

 

Ohio

0.1

 

 

103

 

 

802.29

 

 

71

 

 

556.15

 

 

69.3

 

 

32

 

Texas

1.7

 

 

589

 

 

342.57

 

 

430

 

 

250.40

 

 

73.1

 

 

159

 

Washington

0.2

 

 

182

 

 

730.31

 

 

130

 

 

522.15

 

 

71.5

 

 

52

 

Other (1)

0.3

 

 

172

 

 

494.05

 

 

128

 

 

368.08

 

 

74.5

 

 

44

 

 

3.6

 

 

$

1,499

 

 

$

411.89

 

 

$

1,023

 

 

$

281.04

 

 

68.2

%

 

$

476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2018

California

0.6

 

 

$

219

 

 

$

325.84

 

 

$

125

 

 

$

187.37

 

 

57.5

%

 

$

94

 

Florida

0.6

 

 

273

 

 

498.66

 

 

99

 

 

181.52

 

 

36.4

 

 

174

 

Michigan

0.2

 

 

51

 

 

250.69

 

 

31

 

 

150.11

 

 

59.9

 

 

20

 

New Mexico

0.3

 

 

115

 

 

403.55

 

 

74

 

 

260.29

 

 

64.5

 

 

41

 

Ohio

0.3

 

 

111

 

 

477.03

 

 

78

 

 

334.32

 

 

70.1

 

 

33

 

Texas

2.7

 

 

948

 

 

356.06

 

 

593

 

 

222.89

 

 

62.6

 

 

355

 

Washington

0.2

 

 

183

 

 

664.48

 

 

140

 

 

506.07

 

 

76.2

 

 

43

 

Other (2)

 

 

15

 

 

NM

 

(13

)

 

NM

 

NM

 

28

 

 

4.9

 

 

$

1,915

 

 

$

392.97

 

 

$

1,127

 

 

$

231.33

 

 

58.9

%

 

$

788

 

__________________

(1) “Other” includes the New Mexico, Utah and Wisconsin health plans, which are not individually significant to the Company’s consolidated operating results in 2019.

(2) “Other” includes the Utah and Wisconsin health plans, where the Company did not participate in the Marketplace in 2018. Therefore, the ratios for 2018 periods are not meaningful (NM).

 

HEALTH PLANS SEGMENT FINANCIAL DATA — TOTAL

 

 

Member
Months

 

Premium Revenue

 

Medical Care Costs

 

MCR

 

Medical
Margin

 

 

Total

 

PMPM

 

Total

 

PMPM

 

 

 

Three Months Ended December 31, 2019

California

1.7

 

 

$

584

 

 

$

337.37

 

 

$

450

 

 

$

259.99

 

 

77.1

%

 

$

134

 

Florida

0.4

 

 

164

 

 

407.98

 

 

135

 

 

335.71

 

 

82.3

 

 

29

 

Illinois

0.7

 

 

276

 

 

412.06

 

 

240

 

 

357.32

 

 

86.7

 

 

36

 

Michigan

1.1

 

 

398

 

 

364.51

 

 

326

 

 

298.95

 

 

82.0

 

 

72

 

Ohio

0.9

 

 

639

 

 

694.87

 

 

580

 

 

630.51

 

 

90.7

 

 

59

 

Puerto Rico

0.5

 

 

133

 

 

254.48

 

 

119

 

 

229.44

 

 

90.2

 

 

14

 

South Carolina

0.4

 

 

156

 

 

394.94

 

 

133

 

 

334.33

 

 

84.7

 

 

23

 

Texas

1.0

 

 

745

 

 

720.66

 

 

660

 

 

638.02

 

 

88.5

 

 

85

 

Washington

2.5

 

 

684

 

 

276.64

 

 

602

 

 

243.37

 

 

88.0

 

 

82

 

Other (1) (2)

0.9

 

 

344

 

 

414.93

 

 

300

 

 

362.34

 

 

87.3

 

 

44

 

 

10.1

 

 

$

4,123

 

 

$

409.51

 

 

$

3,545

 

 

$

352.03

 

 

86.0

%

 

$

578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2018

California

1.8

 

 

$

533

 

 

$

285.98

 

 

$

461

 

 

$

247.66

 

 

86.6

%

 

$

72

 

Florida

1.1

 

 

432

 

 

392.68

 

 

377

 

 

343.49

 

 

87.5

 

 

55

 

Illinois

0.7

 

 

242

 

 

361.29

 

 

196

 

 

291.63

 

 

80.7

 

 

46

 

Michigan

1.2

 

 

400

 

 

344.96

 

 

328

 

 

282.58

 

 

81.9

 

 

72

 

New Mexico (2)

0.7

 

 

327

 

 

474.44

 

 

284

 

 

414.10

 

 

87.3

 

 

43

 

Ohio

1.0

 

 

634

 

 

654.39

 

 

547

 

 

564.37

 

 

86.2

 

 

87

 

Puerto Rico

0.8

 

 

147

 

 

173.81

 

 

135

 

 

158.97

 

 

91.5

 

 

12

 

South Carolina

0.3

 

 

126

 

 

352.67

 

 

106

 

 

299.17

 

 

84.8

 

 

20

 

Texas

1.3

 

 

850

 

 

663.84

 

 

691

 

 

539.68

 

 

81.3

 

 

159

 

Washington

2.3

 

 

556

 

 

238.21

 

 

490

 

 

209.76

 

 

88.1

 

 

66

 

Other (1)

0.6

 

 

191

 

 

344.44

 

 

160

 

 

285.37

 

 

82.9

 

 

31

 

 

11.8

 

 

$

4,438

 

 

$

375.33

 

 

$

3,775

 

 

$

319.24

 

 

85.1

%

 

$

663

 

 

 

Year Ended December 31, 2019

California

7.1

 

 

$

2,266

 

 

$

318.22

 

 

$

1,837

 

 

$

257.91

 

 

81.0

%

 

$

429

 

Florida

1.8

 

 

734

 

 

405.52

 

 

590

 

 

326.11

 

 

80.4

 

 

144

 

Illinois

2.7

 

 

1,002

 

 

377.13

 

 

872

 

 

328.11

 

 

87.0

 

 

130

 

Michigan

4.4

 

 

1,624

 

 

370.57

 

 

1,331

 

 

303.71

 

 

82.0

 

 

293

 

Ohio

3.7

 

 

2,553

 

 

688.80

 

 

2,286

 

 

616.86

 

 

89.6

 

 

267

 

Puerto Rico

2.3

 

 

474

 

 

204.88

 

 

420

 

 

181.85

 

 

88.8

 

 

54

 

South Carolina

1.6

 

 

583

 

 

375.13

 

 

511

 

 

328.58

 

 

87.6

 

 

72

 

Texas

4.3

 

 

2,991

 

 

691.31

 

 

2,614

 

 

604.14

 

 

87.4

 

 

377

 

Washington

9.8

 

 

2,695

 

 

275.05

 

 

2,390

 

 

243.91

 

 

88.7

 

 

305

 

Other (1) (2)

3.1

 

 

1,286

 

 

413.61

 

 

1,054

 

 

338.98

 

 

82.0

 

 

232

 

 

40.8

 

 

$

16,208

 

 

$

397.47

 

 

$

13,905

 

 

$

340.99

 

 

85.8

%

 

$

2,303

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2018

California

7.7

 

 

$

2,150

 

 

$

278.13

 

 

$

1,849

 

 

$

239.28

 

 

86.0

%

 

$

301

 

Florida

4.8

 

 

1,790

 

 

376.84

 

 

1,513

 

 

318.58

 

 

84.5

 

 

277

 

Illinois

2.5

 

 

793

 

 

322.87

 

 

670

 

 

272.61

 

 

84.4

 

 

123

 

Michigan

4.7

 

 

1,601

 

 

340.35

 

 

1,334

 

 

283.47

 

 

83.3

 

 

267

 

New Mexico (2)

2.9

 

 

1,356

 

 

467.17

 

 

1,214

 

 

418.44

 

 

89.6

 

 

142

 

Ohio

4.0

 

 

2,388

 

 

600.62

 

 

2,079

 

 

522.89

 

 

87.1

 

 

309

 

Puerto Rico

3.7

 

 

696

 

 

186.59

 

 

636

 

 

170.45

 

 

91.4

 

 

60

 

South Carolina

1.4

 

 

495

 

 

351.38

 

 

429

 

 

304.85

 

 

86.8

 

 

66

 

Texas

5.4

 

 

3,244

 

 

601.23

 

 

2,685

 

 

497.75

 

 

82.8

 

 

559

 

Washington

9.3

 

 

2,361

 

 

252.92

 

 

2,139

 

 

229.13

 

 

90.6

 

 

222

 

Other (1)

2.2

 

 

738

 

 

336.86

 

 

589

 

 

268.17

 

 

79.6

 

 

149

 

 

48.6

 

 

$

17,612

 

 

$

362.54

 

 

$

15,137

 

 

$

311.59

 

 

85.9

%

 

$

2,475

 

__________________

(1) “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to the Company’s consolidated operating results.

(2) In 2019, “Other” includes the New Mexico health plan. The New Mexico health plan’s Medicaid contract terminated on December 31, 2018, and therefore its 2019 results are not individually significant to the Company’s consolidated operating results.

 

SELECTED FINANCIAL DATA

The following table provides details of the Company’s medical care costs for the periods indicated:

 

Three Months Ended December 31,

 

2019

 

2018

 

Amount

 

PMPM

 

% of
Total

 

Amount

 

PMPM

 

% of
Total

Fee for service

$

2,660

 

 

$

264.20

 

 

75.0

%

 

$

2,807

 

 

$

237.39

 

 

74.4

%

Pharmacy

427

 

 

42.43

 

 

12.0

 

 

493

 

 

41.68

 

 

13.1

 

Capitation

293

 

 

29.06

 

 

8.3

 

 

293

 

 

24.83

 

 

7.7

 

Other

165

 

 

16.34

 

 

4.7

 

 

182

 

 

15.34

 

 

4.8

 

 

$

3,545

 

 

$

352.03

 

 

100.0

%

 

$

3,775

 

 

$

319.24

 

 

100.0

%

 

 

Year Ended December 31,

 

2019

 

2018

 

Amount

 

PMPM

 

% of
Total

 

Amount

 

PMPM

 

% of
Total

Fee for service

$

10,453

 

 

$

256.34

 

 

75.1

%

 

$

11,278

 

 

$

232.15

 

 

74.5

%

Pharmacy

1,681

 

 

41.23

 

 

12.1

 

 

2,138

 

 

44.01

 

 

14.1

 

Capitation

1,149

 

 

28.17

 

 

8.3

 

 

1,184

 

 

24.38

 

 

7.8

 

Other

622

 

 

15.25

 

 

4.5

 

 

537

 

 

11.05

 

 

3.6

 

 

$

13,905

 

 

$

340.99

 

 

100.0

%

 

$

15,137

 

 

$

311.59

 

 

100.0

%

 
 

The following table provides details of the Company’s medical claims and benefits payable as of the dates indicated:

 

December 31,

 

2019

 

2018

Fee-for-service claims incurred but not paid (IBNP)

$

1,406

 

 

$

1,562

 

Pharmacy payable

126

 

 

115

 

Capitation payable

55

 

 

52

 

Other (1)

267

 

 

232

 

 

$

1,854

 

 

$

1,961

 

______________________

(1) “Other” medical claims and benefits payable include amounts payable to certain providers for which the Company acts as an intermediary on behalf of various state agencies without assuming financial risk. Such receipts and payments do not impact the Company’s consolidated statements of income. As of December 31, 2019 and 2018, the Company had recorded non-risk provider payables of approximately $132 million and $107 million, respectively.

 

SUMMARY OF NON-RUN RATE ITEMS AFFECTING CURRENT QUARTER AND YEAR-TO-DATE FINANCIAL RESULTS

(In millions, except per diluted share amounts)

 

The table below summarizes the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations. The individual items presented below increase (decrease) income before income tax expense.

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2019

 

2018

 

2019

 

2018

 

Amount

 

Per
Diluted
Share (1)

 

Amount

 

Per
Diluted
Share (1)

 

Amount

 

Per
Diluted
Share (1)

 

Amount

 

Per
Diluted
Share (1)

Gain (loss) on debt repayment

$

 

 

$

 

 

$

3

 

 

$

0.04

 

 

$

15

 

 

$

0.18

 

 

$

(22

)

 

$

(0.29

)

Restructuring costs

(1

)

 

(0.01

)

 

(8

)

 

(0.09

)

 

(6

)

 

(0.07

)

 

(46

)

 

(0.54

)

Loss on sales of subsidiaries, net of gain

 

 

 

 

(52

)

 

(0.48

)

 

 

 

 

 

(15

)

 

(0.05

)

 

$

(1

)

 

$

(0.01

)

 

$

(57

)

 

$

(0.53

)

 

$

9

 

 

$

0.11

 

 

$

(83

)

 

$

(0.88

)

______________________

(1) Except for permanent differences between GAAP and tax (such as certain expenses that are not deductible for tax purposes), per diluted share amounts are generally calculated at the statutory income tax rate of 22.6% and 22% for 2019 and 2018, respectively.

 

NON-GAAP FINANCIAL MEASURES

 

 

Three Months Ended December 31,

 

Year Ended December 31,

2019

 

2018

 

2019

 

2018

 

 

 

Amount

 

Per
Diluted
Share

 

Amount

 

Per
Diluted
Share

 

Amount

 

Per
Diluted
Share

 

Amount

 

Per
Diluted
Share

Net income

$

168

 

 

$

2.67

 

 

$

201

 

 

$

3.01

 

 

$

737

 

 

$

11.47

 

 

$

707

 

 

$

10.61

 

Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

4

 

 

0.06

 

 

6

 

 

0.08

 

 

17

 

 

0.27

 

 

22

 

 

0.32

 

Income tax effect (1)

(1

)

 

(0.01

)

 

(1

)

 

(0.02

)

 

(4

)

 

(0.06

)

 

(5

)

 

(0.07

)

Adjustment, net of tax effect

3

 

 

0.05

 

 

5

 

 

0.06

 

 

13

 

 

0.21

 

 

17

 

 

0.25

 

Adjusted net income

$

171

 

 

$

2.72

 

 

$

206

 

 

$

3.07

 

 

$

750

 

 

$

11.68

 

 

$

724

 

 

$

10.86

 

________________________

(1) Income tax effect of adjustments calculated at the blended federal and state statutory tax rate of 22.6% and 22% for 2019 and 2018, respectively.

Adjustments made to GAAP measures used to calculate the non-GAAP measures used in this news release follow:

Adjusted net income: Net income on a GAAP basis less amortization of intangible assets, net of income tax effect calculated at the statutory tax rate. The Company believes that adjusted net income is helpful in assessing the Company’s financial performance exclusive of the non-cash impact of the amortization of purchased intangibles.

Adjusted net income per diluted share: Adjusted net income divided by weighted average common shares outstanding on a fully diluted basis.

Source: Molina Healthcare, Inc.

Investor Contact: Julie Trudell, Julie.Trudell@molinahealthcare.com, 562-912-6720
Media Contact: Caroline Zubieta, Caroline.Zubieta@molinahealthcare.com, 562-951-1588