Document


 
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): October 31, 2018 (October 31, 2018)
______________
MOLINA HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
Delaware
1-31719
13-4204626
(State of incorporation)
(Commission File Number)
(I.R.S. Employer Identification Number)
______________
200 Oceangate, Suite 100, Long Beach, California 90802
(Address of principal executive offices)
Registrant’s telephone number, including area code: (562) 435-3666

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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicated by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act.
 
¨
 





Item 2.02.    Results of Operations and Financial Condition.
On October 31, 2018, Molina Healthcare, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2018, and increases to the Company’s fiscal year 2018 guidance. 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 part of this report.

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

Item 9.01.    Financial Statements and Exhibits.
(d)     Exhibits:
Exhibit No.
Description
99.1
Press release of Molina Healthcare, Inc., issued October 31, 2018, as to financial results for the third quarter ended September 30, 2018, and increases to the Company’s fiscal year 2018 guidance.







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.
 
 
MOLINA HEALTHCARE, INC.
 
 
 
Date:
October 31, 2018
By:
/s/ Jeff D. Barlow
 
 
 
Jeff D. Barlow
 
 
 
Chief Legal Officer and Secretary







EXHIBIT INDEX
Exhibit No.
Description
99.1




Exhibit

MOH Reports Third Quarter 2018 Results
Page 1
October 31, 2018

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12522259&doc=3


News Release

Contact:
Ryan Kubota
Investor Relations
562-435-3666, ext. 119057

MOLINA HEALTHCARE ANNOUNCES THIRD QUARTER 2018 RESULTS AND
INCREASES FULL YEAR 2018 GUIDANCE
Net income of $2.90 per diluted share on a GAAP basis for the third quarter of 2018, and $7.60 for the nine months ended September 30, 2018
Third quarter 2018 results include a net charge of $0.35 per diluted share, and year-to-date results include a net benefit of $0.59 per diluted share, for non-run rate items
The overall medical care ratio improved to 86.4% from 87.0%, sequentially, when excluding non-run rate items
Net profit margin of 4.2% in the quarter, and 3.6% year to date
2018 guidance increases by $1.65 per diluted share at the midpoint, to a range of $8.80 - $9.00 net income per diluted share on a GAAP basis
Long Beach, California (October 31, 2018) - Molina Healthcare, Inc. (NYSE: MOH) today reported its financial results for the third quarter of 2018.
“We are very pleased with the continued improvement in the performance of our business,” said Joe Zubretsky, President and Chief Executive Officer. “Our financial results reflect the significant progress we are making in executing our margin recovery and sustainability plan.”
We believe that the sequential comparison of our 2018 third quarter performance with our 2018 second quarter performance is the most useful indicator of our business progress. Significant items impacting the quarter are presented in a table later in this press release.
Third Quarter of 2018 Compared With Second Quarter of 2018
Net income decreased slightly to $197 million, from $202 million in the second quarter of 2018. Net income per diluted share decreased to $2.90, from $3.02 in the second quarter of 2018.
Premium revenue decreased $177 million, or 4%, in the third quarter of 2018 compared with the second quarter of 2018. The sequential decline is mainly attributed to non-run rate items including the 2017 Marketplace risk adjustment premium that we recognized in the second quarter of 2018, and a $57 million reduction in revenues for a retroactive California Medicaid Expansion risk corridor for the state’s 2017 fiscal year that we recognized in the third quarter of 2018.
Overall, the medical care ratio (MCR) increased to 87.4%, from 85.3% in the second quarter of 2018. Excluding the retroactive California Medicaid Expansion risk corridor adjustment and a small benefit from the 2017 Marketplace cost sharing reduction (CSR), the MCR would have been 86.4% in the third quarter of 2018. Excluding the combined benefit of the 2017 Marketplace risk adjustment and CSR reimbursement,

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MOH Reports Third Quarter 2018 Results
Page 2
October 31, 2018

the MCR would have been 87.0% in the second quarter of 2018. The sequential improvement in the overall underlying MCR was due to a decrease in the Medicaid and Marketplace MCRs, partially offset by an increase in the Medicare MCR as follows:
The Medicaid MCR increased to 90.5%, from 89.8% in the second quarter of 2018. Excluding the recognition of the $57 million retroactive California Medicaid Expansion risk corridor adjustment, the Medicaid MCR would have been 89.0% in the third quarter of 2018. The sequential decrease was mainly due to improved performance in the Aged, Blind or Disabled (ABD) and Expansion programs, partially offset by a decline in performance in the Temporary Assistance for Needy Families program (TANF).
The Marketplace MCR increased to 64.1%, from 57.4% in the second quarter of 2018. Excluding the benefit of the 2017 CSR, the MCR would have been 65.3% in the third quarter of 2018. Excluding the combined benefit of the 2017 risk adjustment and CSR, the Marketplace MCR would have been 68.4% in the second quarter of 2018. The sequential improvement was mainly due to lower medical costs and higher revenue.
The Medicare MCR increased to 87.3%, from 85.0% in the second quarter of 2018, mainly due to certain premium adjustments and higher inpatient costs in our Medicare-Medicaid Integrated plans.
The general and administrative (G&A) expense ratio decreased to 6.6%, from 6.9% in the second quarter of 2018, due to continuing G&A cost containment.
Capital Plan Progress
In the third quarter of 2018, we repaid $140 million aggregate principal amount of our 1.125% Notes and entered into privately negotiated termination agreements to partially terminate the related 1.125% Call Option and 1.125% Warrants. In addition, we converted the remaining $64 million aggregate principal amount of our 1.625% Notes for cash and 0.6 million shares of our common stock. Year to date, we have reduced the principal amount of outstanding debt by $697 million. In addition, we terminated our bridge credit agreement in the third quarter of 2018.
Sale of Molina Medicaid Solutions (MMS) Segment
We closed on our sale of MMS to DXC Technology Company on September 30, 2018. The net cash selling price for the equity interests of MMS was $233 million, which we received on October 1, 2018. As a result of this transaction, we recorded a pretax gain, net of transactions costs, of $37 million, or $0.42 per diluted share.
Third Quarter of 2018 Compared With Third Quarter of 2017
Net income for the third quarter of 2018 was $197 million, compared with a net loss of $97 million for the third quarter of 2017. Net income per diluted share was $2.90 for the third quarter of 2018 compared with a net loss per diluted share of $1.70 reported for the third quarter of 2017. In the third quarter of 2017, we recorded impairment and restructuring charges of $247 million, or $3.16 per diluted share.

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MOH Reports Third Quarter 2018 Results
Page 3
October 31, 2018

2018 Revised Guidance
The following table summarizes 2018 Revised Guidance (1):
Premium revenue
 
~ $17.5B

Service revenue
 
~ $390M

Premium tax revenue
 
~ $420M

Health insurer fees reimbursed
 
~ $325M

Investment income and other revenue
 
~ $125M

Total revenue
 
~ $18.8B

Medical care costs
 
~ $15.1B

Medical care ratio (2)
 
~ 86%

Cost of service revenue
 
~ $350M

General and administrative expenses
 
~ $1.4B

G&A ratio (3)
 
~ 7.3%

Premium tax expenses
 
~ $420M

Health insurer fees
 
~ $350M

Depreciation and amortization
 
~ $100M

Restructuring and separation costs
 
~ $40M - $45M

Losses on sale of subsidiaries, net
 
~ $15M

Interest expense and other expenses, net
 
~ $145M

Income before income taxes
 
$870M - $890M

Net income
 
$585M - $600M

EBITDA (4)
 
$1,105M - $1,125M

Effective tax rate
 
32% - 33%

Net profit margin (3)
 
3.1% - 3.2%

Diluted weighted average shares
 
~ 66.7M

Net income per share
 
$8.80 - $9.00

Adjusted net income per share (4)
 
$9.05 - $9.25

End-of-year Marketplace membership
 
340,000

End-of-year Medicaid and Medicare membership
 
3,510,000

__________________
(1)
All amounts are estimates; actual results may differ materially. See the Company’s risk factors as discussed in its 2017 Form 10-K and other filings and the statements below in this press release after the heading “Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.”
(2)
Medical care ratio represents medical care costs as a percentage of premium revenue.
(3)
G&A ratio represents general and administrative expenses as a percentage of total revenue. Net profit margin represents net income as a percentage of total revenue.
(4)
See reconciliation of non-GAAP financial measures at the end of this release.

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MOH Reports Third Quarter 2018 Results
Page 4
October 31, 2018

Conference Call
Management will host a conference call and webcast to discuss Molina Healthcare’s third quarter 2018 results at 7:30 a.m. Eastern time on Thursday, November 1, 2018. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 5420566. A telephonic replay of the conference call will be available through Friday, November 2, 2018, by dialing (877) 344-7529 and entering confirmation number 10124788. 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 health care services under the Medicaid and Medicare programs and through the state insurance marketplaces. Through its locally operated health plans, Molina Healthcare served approximately 4.0 million members as of September 30, 2018. 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 2018 revised 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 known risks and uncertainties include, but are not limited to, the following:
the success of the Company’s profit improvement and maintenance initiatives, including the timing and amounts of the benefits realized, and administrative and medical cost savings achieved;
the numerous political and market-based uncertainties associated with the Affordable Care Act (the “ACA”) or “Obamacare;”
the market dynamics surrounding the ACA Marketplaces, including but not limited to uncertainties associated with risk adjustment requirements, the potential for disproportionate enrollment of higher acuity members, the discontinuation of premium tax credits, and the adequacy of agreed rates;
subsequent adjustments to reported premium revenue based upon subsequent developments or new information, including changes to estimated amounts payable or receivable related to Marketplace risk adjustment;
effective management of the Company’s medical costs;
the Company’s ability to predict with a reasonable degree of accuracy utilization rates, including utilization rates associated with seasonal flu patterns or other newly emergent diseases;
significant budget pressures on state governments and their potential inability to maintain current rates, to implement expected rate increases, or to maintain existing benefit packages or membership eligibility thresholds or criteria;
the full reimbursement of the ACA health insurer fee, or HIF;
the success of the Company’s efforts to retain existing or awarded government contracts, including the success of any protest filings or defenses;
the Company’s ability to manage its operations, including maintaining and creating adequate internal systems and controls relating to authorizations, approvals, provider payments, and the overall success of its care management initiatives;
the Company’s ability to consummate and realize benefits from divestitures and acquisitions, including the recently consummated MMS and Pathways divestitures;
the Company’s receipt of adequate premium rates to support increasing pharmacy costs, including costs associated with specialty drugs and costs resulting from formulary changes that allow the option of higher-priced non-generic drugs;
the Company’s ability to operate profitably in an environment where the trend in premium rate increases lags behind the trend in increasing medical costs;
the interpretation and implementation of federal or state medical cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit sharing arrangements, and risk adjustment provisions and requirements;

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MOH Reports Third Quarter 2018 Results
Page 5
October 31, 2018

the Company’s estimates of amounts owed for such cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions;
the Medicaid expansion medical cost corridors in California, New Mexico, and Washington, and any other retroactive adjustment to revenue where methodologies and procedures are subject to interpretation or dependent upon information about the health status of participants other than Molina members;
the interpretation and implementation of at-risk premium rules and state contract performance requirements regarding the achievement of certain quality measures, and the Company’s ability to recognize revenue amounts associated therewith;
cyber-attacks or other privacy or data security incidents resulting in an inadvertent unauthorized disclosure of protected health information;
the success of the Company’s health plan in Puerto Rico, including the resolution of the debt crisis and the effect of the PROMESA law, and the impact of any future significant weather events;
the success and renewal of the Company’s duals demonstration programs in California, Illinois, Michigan, Ohio, South Carolina, and Texas;
the accurate estimation of incurred but not reported or paid medical costs across the Company’s health plans;
efforts by states to recoup previously paid and recognized premium amounts;
complications, member confusion, or enrollment backlogs related to the annual renewal of Medicaid coverage;
government audits and reviews, or potential investigations, and any fine, sanction, enrollment freeze, monitoring program, or premium recovery that may result therefrom;
changes with respect to the Company’s provider contracts and the loss of providers;
approval by state regulators of dividends and distributions by the Company’s health plan subsidiaries;
changes in funding under the Company’s contracts as a result of regulatory changes, programmatic adjustments, or other reforms;
high dollar claims related to catastrophic illness;
the favorable resolution of litigation, arbitration, or administrative proceedings, including litigation involving the ACA to which we ourselves are not a direct party;
the relatively small number of states in which we operate health plans, including the greater scale and revenues of the Company’s California, Ohio, Texas, and Washington health plans;
the availability of adequate financing on acceptable terms to fund and capitalize the Company’s expansion and growth, repay the Company’s outstanding indebtedness at maturity and meet its liquidity needs, including the interest expense and other costs associated with such financing;
the Company’s failure to comply with the financial or other covenants in its credit agreement or the indentures governing its outstanding notes;
the sufficiency of the Company’s funds on hand to pay the amounts due upon conversion or maturity of its outstanding notes;
the failure of a state in which we operate to renew its federal Medicaid waiver;
changes generally affecting the managed care or Medicaid management information systems industries;
increases in government surcharges, taxes, and assessments, including but not limited to the deductibility of certain compensation costs;
newly emergent viruses or widespread epidemics, public catastrophes or terrorist attacks, and associated public alarm;
the unexpected loss of the leadership of one or more of our senior executives;
increasing competition and consolidation in the Medicaid industry;

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MOH Reports Third Quarter 2018 Results
Page 6
October 31, 2018

and numerous other risk factors, including those discussed in the Company’s periodic reports and filings with the Securities and Exchange Commission. 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 October 31, 2018, and the Company disclaims any obligation to update any forward-looking statements to conform the statement to actual results or changes in its expectations.

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MOH Reports Third Quarter 2018 Results
Page 7
October 31, 2018

MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
 
(Dollar amounts in millions, except per-share amounts)
Revenue:
 
 
 
 
 
 
 
Premium revenue
$
4,337

 
$
4,777

 
$
13,174

 
$
14,165

Service revenue
130

 
130

 
391

 
390

Premium tax revenue
110

 
106

 
320

 
331

Health insurer fees reimbursed
83

 

 
248

 

Investment income and other revenue
37

 
18

 
93

 
48

Total revenue
4,697

 
5,031

 
14,226

 
14,934

Operating expenses:
 
 
 
 
 
 
 
Medical care costs
3,790

 
4,220

 
11,362

 
12,822

Cost of service revenue
111

 
123

 
349

 
369

General and administrative expenses
311

 
383

 
998

 
1,227

Premium tax expenses
110

 
106

 
320

 
331

Health insurer fees
87

 

 
261

 

Depreciation and amortization
25

 
33

 
76

 
109

Restructuring and separation costs
5

 
118

 
38

 
161

Impairment losses

 
129

 

 
201

Total operating expenses
4,439

 
5,112

 
13,404

 
15,220

Gain on sale of subsidiary
37

 

 
37

 

Operating income (loss)
295

 
(81
)
 
859

 
(286
)
Other expenses, net:
 
 
 
 
 
 
 
Interest expense
26

 
32

 
91

 
85

Other expense (income), net
10

 

 
25

 
(75
)
Total other expenses, net
36

 
32

 
116

 
10

Income (loss) before income tax expense (benefit)
259

 
(113
)
 
743

 
(296
)
Income tax expense (benefit)
62

 
(16
)
 
237

 
(46
)
Net income (loss)
$
197

 
$
(97
)
 
$
506

 
$
(250
)
 
 
 
 
 
 
 
 
Net income (loss) per diluted share
$
2.90

 
$
(1.70
)
 
$
7.60

 
$
(4.44
)
 
 
 
 
 
 
 
 
Diluted weighted average shares outstanding
67.9

 
56.5

 
66.6

 
56.2

 
 
 
 
 
 
 
 
Operating Statistics:
 
 
 
 
 
 
 
Medical care ratio
87.4
%
 
88.3
 %
 
86.2
%
 
90.5
 %
G&A ratio
6.6
%
 
7.6
 %
 
7.0
%
 
8.2
 %
Premium tax ratio
2.5
%
 
2.2
 %
 
2.4
%
 
2.3
 %
Effective income tax rate
24.0
%
 
14.6
 %
 
31.9
%
 
15.5
 %
Net profit (loss) margin
4.2
%
 
(1.9
)%
 
3.6
%
 
(1.7
)%



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MOH Reports Third Quarter 2018 Results
Page 8
October 31, 2018

MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
 
September 30,
 
December 31,
 
2018
 
2017
 
(In millions,
except per-share data)
ASSETS
Current assets:
 
 
 
Cash and cash equivalents
$
2,814

 
$
3,186

Investments
1,812

 
2,524

Restricted investments

 
169

Receivables
1,346

 
871

Prepaid expenses and other current assets
486

 
239

Derivative asset
843

 
522

Total current assets
7,301

 
7,511

Property, equipment, and capitalized software, net
264

 
342

Goodwill and intangible assets, net
195

 
255

Restricted investments
118

 
119

Deferred income taxes
143

 
103

Other assets
30

 
141

 
$
8,051

 
$
8,471

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
Medical claims and benefits payable
$
2,042

 
$
2,192

Amounts due government agencies
1,030

 
1,542

Accounts payable and accrued liabilities
824

 
366

Deferred revenue
178

 
282

Current portion of long-term debt
296

 
653

Derivative liability
843

 
522

Total current liabilities
5,213

 
5,557

Long-term debt
1,019

 
1,318

Lease financing obligations
198

 
198

Other long-term liabilities
60

 
61

Total liabilities
6,490

 
7,134

Stockholders’ equity:
 
 
 
Common stock, $0.001 par value, 150 shares authorized; outstanding: 62 shares at September 30, 2018 and 60 shares at December 31, 2017

 

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

 

Additional paid-in capital
760

 
1,044

Accumulated other comprehensive loss
(10
)
 
(5
)
Retained earnings
811

 
298

Total stockholders’ equity
1,561

 
1,337

 
$
8,051

 
$
8,471


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MOH Reports Third Quarter 2018 Results
Page 9
October 31, 2018

MOLINA HEALTHCARE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2018
 
2017
 
2018
 
2017
 
(In millions)
Operating activities:
 
 
 
 
 
 
 
Net income (loss)
$
197

 
$
(97
)
 
$
506

 
$
(250
)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
31

 
43

 
104

 
139

Deferred income taxes
(26
)
 
(27
)
 
(32
)
 
(68
)
Share-based compensation
7

 
3

 
20

 
38

Non-cash restructuring costs

 
49

 
17

 
49

Amortization of convertible senior notes and lease financing obligations
5

 
8

 
18

 
24

Gain on sale of subsidiary
(37
)
 

 
(37
)
 

Loss on debt extinguishment
10

 

 
25

 

Impairment losses

 
129

 

 
201

Other, net
2

 
6

 
6

 
13

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Receivables
(192
)
 
4

 
(507
)
 
(28
)
Prepaid expenses and other current assets
64

 
(15
)
 
(117
)
 
(53
)
Medical claims and benefits payable
123

 
401

 
(144
)
 
549

Amounts due government agencies
(716
)
 
(520
)
 
(511
)
 
122

Accounts payable and accrued liabilities
49

 
108

 
398

 
90

Deferred revenue
(13
)
 
185

 
(55
)
 
153

Income taxes
(9
)
 
8

 
118

 
(22
)
Net cash (used in) provided by operating activities
(505
)
 
285

 
(191
)
 
957

Investing activities:
 
 
 
 
 
 
 
Purchases of investments
(288
)
 
(258
)
 
(1,202
)
 
(1,894
)
Proceeds from sales and maturities of investments
735

 
662

 
2,070

 
1,536

Purchases of property, equipment, and capitalized software
(10
)
 
(25
)
 
(24
)
 
(85
)
Other, net
(14
)
 
(9
)
 
(23
)
 
(33
)
Net cash provided by (used in) investing activities
423

 
370

 
821

 
(476
)
Financing activities:
 
 
 
 
 
 
 
Repayment of credit facility

 

 
(300
)
 

Repayment of principal amount of 1.125% Notes
(140
)
 

 
(236
)
 

Cash paid for partial settlement of 1.125% Conversion Option
(343
)
 

 
(477
)
 

Cash received for partial termination of 1.125% Call Option
343

 

 
477

 

Cash paid for partial termination of 1.125% Warrants
(306
)
 

 
(419
)
 

Repayment of principal amount of 1.625% Notes
(64
)
 

 
(64
)
 

Proceeds from senior notes offerings, net of issuance costs

 

 

 
325

Proceeds from borrowings under credit facility

 
300

 

 
300

Other, net
1

 
(1
)
 
7

 
7

Net cash (used in) provided by financing activities
(509
)
 
299

 
(1,012
)
 
632

Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents
(591
)
 
954

 
(382
)
 
1,113

Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period
3,499

 
3,071

 
3,290

 
2,912

Cash, cash equivalents, and restricted cash and cash equivalents at end of period
$
2,908

 
$
4,025

 
$
2,908

 
$
4,025


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MOH Reports Third Quarter 2018 Results
Page 10
October 31, 2018

MOLINA HEALTHCARE, INC.
UNAUDITED HEALTH PLANS SEGMENT MEMBERSHIP
 
September 30,
 
December 31,
 
September 30,
 
2018
 
2017
 
2017
Ending Membership by Program:
 
 
 
 
 
Temporary Assistance for Needy Families (TANF) and Children’s Health Insurance Program (CHIP)
2,436,000

 
2,457,000

 
2,451,000

Medicaid Expansion
664,000

 
668,000

 
662,000

Aged, Blind or Disabled (ABD)
415,000

 
412,000

 
411,000

Total Medicaid
3,515,000

 
3,537,000

 
3,524,000

Medicare-Medicaid Plan (MMP) - Integrated
55,000

 
57,000

 
58,000

Medicare Special Needs Plans
45,000

 
44,000

 
44,000

Total Medicare
100,000

 
101,000

 
102,000

Total Medicaid and Medicare
3,615,000

 
3,638,000

 
3,626,000

Marketplace
384,000

 
815,000

 
877,000

 
3,999,000

 
4,453,000

 
4,503,000

 
 
 
 
 
 
Ending Membership by Health Plan:
 
 
 
 
 
California
623,000

 
746,000

 
751,000

Florida
395,000

 
625,000

 
641,000

Illinois
223,000

 
165,000

 
163,000

Michigan
394,000

 
398,000

 
399,000

New Mexico
234,000

 
253,000

 
256,000

Ohio
315,000

 
327,000

 
343,000

Puerto Rico
320,000

 
314,000

 
306,000

South Carolina
117,000

 
116,000

 
113,000

Texas
436,000

 
430,000

 
444,000

Washington
770,000

 
777,000

 
770,000

Other (1)
172,000

 
302,000

 
317,000

 
3,999,000

 
4,453,000

 
4,503,000

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






-MORE-


MOH Reports Third Quarter 2018 Results
Page 11
October 31, 2018

MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA
(In millions, except percentages and per-member per-month amounts)
 
Three Months Ended September 30, 2018
 
Member
Months (1)
 
Premium Revenue
 
Medical Care Costs
 
MCR (2)
 
Medical Margin
 
 
Total
 
PMPM
 
Total
 
PMPM
 
 
TANF and CHIP
7.4

 
$
1,379

 
$
187.03

 
$
1,228

 
$
166.41

 
89.0
%
 
$
151

Medicaid Expansion
2.0

 
671

 
333.11

 
640

 
317.62

 
95.3

 
31

ABD
1.2

 
1,322

 
1,054.92

 
1,186

 
946.38

 
89.7

 
136

Total Medicaid
10.6

 
3,372

 
316.86

 
3,054

 
286.86

 
90.5

 
318

MMP
0.2

 
353

 
2,159.72

 
323

 
1,981.45

 
91.7

 
30

Medicare
0.1

 
156

 
1,157.71

 
121

 
895.25

 
77.3

 
35

Total Medicare
0.3

 
509

 
1,706.95

 
444

 
1,490.63

 
87.3

 
65

Total Medicaid and Medicare
10.9

 
3,881

 
354.70

 
3,498

 
319.63

 
90.1

 
383

Marketplace
1.2

 
456

 
394.02

 
292

 
252.61

 
64.1

 
164

 
12.1

 
$
4,337

 
$
358.46

 
$
3,790

 
$
313.23

 
87.4
%
 
$
547


 
Three Months Ended September 30, 2017
 
Member
Months (1)
 
Premium Revenue
 
Medical Care Costs
 
MCR (2)
 
Medical Margin
 
 
Total
 
PMPM
 
Total
 
PMPM
 
 
TANF and CHIP
7.5

 
$
1,392

 
$
185.95

 
$
1,242

 
$
165.76

 
89.1
%
 
$
150

Medicaid Expansion
2.0

 
773

 
385.58

 
667

 
332.99

 
86.4

 
106

ABD
1.2

 
1,288

 
1,038.85

 
1,259

 
1,016.06

 
97.8

 
29

Total Medicaid
10.7

 
3,453

 
321.77

 
3,168

 
295.23

 
91.8

 
285

MMP
0.2

 
378

 
2,263.07

 
336

 
2,013.67

 
89.0

 
42

Medicare
0.1

 
163

 
1,231.61

 
126

 
951.01

 
77.2

 
37

Total Medicare
0.3

 
541

 
1,806.26

 
462

 
1,543.05

 
85.4

 
79

Total Medicaid and Medicare
11.0

 
3,994

 
362.04

 
3,630

 
329.08

 
90.9

 
364

Marketplace
2.7

 
783

 
301.72

 
590

 
227.22

 
75.3

 
193

 
13.7

 
$
4,777

 
$
350.55

 
$
4,220

 
$
309.68

 
88.3
%
 
$
557

__________________
(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.


-MORE-


MOH Reports Third Quarter 2018 Results
Page 12
October 31, 2018

MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA
(In millions, except percentages and per-member per-month amounts)
 
Nine Months Ended September 30, 2018
 
Member
Months
 
Premium Revenue
 
Medical Care Costs
 
MCR
 
Medical Margin
 
 
Total
 
PMPM
 
Total
 
PMPM
 
 
TANF and CHIP
22.3

 
$
4,145

 
$
186.12

 
$
3,705

 
$
166.35

 
89.4
%
 
$
440

Medicaid Expansion
6.1

 
2,184

 
359.37

 
1,957

 
322.01

 
89.6

 
227

ABD
3.7

 
3,864

 
1,034.25

 
3,550

 
950.11

 
91.9

 
314

Total Medicaid
32.1

 
10,193

 
317.70

 
9,212

 
287.10

 
90.4

 
981

MMP
0.5

 
1,077

 
2,173.90

 
941

 
1,899.26

 
87.4

 
136

Medicare
0.4

 
470

 
1,171.59

 
385

 
959.54

 
81.9

 
85

Total Medicare
0.9

 
1,547

 
1,725.71

 
1,326

 
1,479.06

 
85.7

 
221

Total Medicaid and Medicare
33.0

 
11,740

 
355.96

 
10,538

 
319.50

 
89.8

 
1,202

Marketplace
3.8

 
1,434

 
379.91

 
824

 
218.44

 
57.5

 
610

 
36.8

 
$
13,174

 
$
358.42

 
$
11,362

 
$
309.12

 
86.2
%
 
$
1,812


 
Nine Months Ended September 30, 2017
 
Member
Months
 
Premium Revenue
 
Medical Care Costs
 
MCR
 
Medical Margin
 
 
Total
 
PMPM
 
Total
 
PMPM
 
 
TANF and CHIP
22.8

 
$
4,185

 
$
183.69

 
$
3,861

 
$
169.44

 
92.2
%
 
$
324

Medicaid Expansion
6.1

 
2,376

 
389.14

 
2,045

 
334.93

 
86.1

 
331

ABD
3.6

 
3,769

 
1,033.45

 
3,634

 
996.58

 
96.4

 
135

Total Medicaid
32.5

 
10,330

 
317.49

 
9,540

 
293.21

 
92.4

 
790

MMP
0.5

 
1,083

 
2,189.96

 
976

 
1,974.22

 
90.1

 
107

Medicare
0.4

 
449

 
1,142.68

 
369

 
939.21

 
82.2

 
80

Total Medicare
0.9

 
1,532

 
1,726.39

 
1,345

 
1,516.09

 
87.8

 
187

Total Medicaid and Medicare
33.4

 
11,862

 
354.88

 
10,885

 
325.66

 
91.8

 
977

Marketplace
8.4

 
2,303

 
276.27

 
1,937

 
232.31

 
84.1

 
366

 
41.8

 
$
14,165

 
$
339.19

 
$
12,822

 
$
307.03

 
90.5
%
 
$
1,343




-MORE-


MOH Reports Third Quarter 2018 Results
Page 13
October 31, 2018

MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
MEDICAID AND MEDICARE
(In millions, except percentages and per-member per-month amounts)
 
Three Months Ended September 30, 2018
 
Member
Months
 
Premium Revenue
 
Medical Care Costs
 
MCR
 
Medical Margin
 
 
Total
 
PMPM
 
Total
 
PMPM
 
 
California
1.7

 
$
435

 
$
249.00

 
$
446

 
$
255.22

 
102.5
%
 
$
(11
)
Florida
1.0

 
388

 
363.16

 
362

 
339.33

 
93.4

 
26

Illinois
0.7

 
207

 
312.72

 
182

 
274.98

 
87.9

 
25

Michigan
1.1

 
397

 
350.05

 
321

 
282.49

 
80.7

 
76

New Mexico
0.6

 
304

 
471.66

 
275

 
426.69

 
90.5

 
29

Ohio
0.9

 
584

 
624.84

 
532

 
568.93

 
91.1

 
52

Puerto Rico
1.0

 
179

 
189.65

 
162

 
171.96

 
90.7

 
17

South Carolina
0.4

 
124

 
354.53

 
112

 
318.56

 
89.9

 
12

Texas
0.7

 
577

 
848.47

 
525

 
772.14

 
91.0

 
52

Washington
2.3

 
511

 
226.77

 
444

 
197.04

 
86.9

 
67

Other (1)
0.5

 
175

 
334.29

 
137

 
261.49

 
78.2

 
38

 
10.9

 
$
3,881

 
$
354.70

 
$
3,498

 
$
319.63

 
90.1
%
 
$
383

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2017
 
Member
Months
 
Premium Revenue
 
Medical Care Costs
 
MCR
 
Medical Margin
 
Total
 
PMPM
 
Total
 
PMPM
 
 
California
1.9

 
$
601

 
$
322.97

 
$
563

 
$
302.67

 
93.7
%
 
$
38

Florida
1.0

 
388

 
355.59

 
390

 
356.83

 
100.3

 
(2
)
Illinois
0.5

 
137

 
287.69

 
138

 
289.36

 
100.6

 
(1
)
Michigan
1.2

 
390

 
337.17

 
345

 
298.83

 
88.6

 
45

New Mexico
0.7

 
304

 
429.07

 
277

 
390.91

 
91.1

 
27

Ohio
0.9

 
549

 
560.06

 
483

 
492.61

 
88.0

 
66

Puerto Rico
1.0

 
191

 
202.59

 
159

 
168.25

 
83.1

 
32

South Carolina
0.3

 
113

 
332.48

 
101

 
297.74

 
89.6

 
12

Texas
0.7

 
541

 
778.50

 
506

 
728.19

 
93.5

 
35

Washington
2.3

 
612

 
276.73

 
522

 
236.11

 
85.3

 
90

Other (1)
0.5

 
168

 
294.99

 
146

 
256.99

 
87.1

 
22

 
11.0

 
$
3,994

 
$
362.04

 
$
3,630

 
$
329.08

 
90.9
%
 
$
364

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

-MORE-


MOH Reports Third Quarter 2018 Results
Page 14
October 31, 2018

MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
MEDICAID AND MEDICARE
(In millions, except percentages and per-member per-month amounts)
 
Nine Months Ended September 30, 2018
 
Member
Months
 
Premium Revenue
 
Medical Care Costs
 
MCR
 
Medical Margin
 
 
Total
 
PMPM
 
Total
 
PMPM
 
 
California
5.3

 
$
1,446

 
$
270.63

 
$
1,299

 
$
243.14

 
89.8
%
 
$
147

Florida
3.2

 
1,147

 
356.15

 
1,069

 
331.93

 
93.2

 
78

Illinois
1.8

 
551

 
308.45

 
474

 
265.47

 
86.1

 
77

Michigan
3.4

 
1,161

 
343.08

 
983

 
290.26

 
84.6

 
178

New Mexico
2.0

 
936

 
469.19

 
875

 
438.70

 
93.5

 
61

Ohio
2.8

 
1,670

 
590.71

 
1,474

 
521.26

 
88.2

 
196

Puerto Rico
2.9

 
549

 
190.34

 
501

 
173.83

 
91.3

 
48

South Carolina
1.1

 
369

 
350.94

 
323

 
306.76

 
87.4

 
46

Texas
2.1

 
1,715

 
831.21

 
1,554

 
753.31

 
90.6

 
161

Washington
6.8

 
1,666

 
245.40

 
1,544

 
227.41

 
92.7

 
122

Other
1.6

 
530

 
323.84

 
442

 
269.98

 
83.4

 
88

 
33.0

 
$
11,740

 
$
355.96

 
$
10,538

 
$
319.50

 
89.8
%
 
$
1,202

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2017
 
Member
Months
 
Premium Revenue
 
Medical Care Costs
 
MCR
 
Medical Margin
 
Total
 
PMPM
 
Total
 
PMPM
 
 
California
5.6

 
$
1,771

 
$
316.83

 
$
1,586

 
$
283.82

 
89.6
%
 
$
185

Florida
3.2

 
1,132

 
347.41

 
1,112

 
341.15

 
98.2

 
20

Illinois
1.6

 
447

 
284.18

 
492

 
312.54

 
110.0

 
(45
)
Michigan
3.5

 
1,162

 
332.60

 
1,035

 
296.28

 
89.1

 
127

New Mexico
2.2

 
933

 
431.70

 
887

 
410.24

 
95.0

 
46

Ohio
2.9

 
1,598

 
541.56

 
1,434

 
486.02

 
89.7

 
164

Puerto Rico
2.9

 
553

 
190.99

 
513

 
177.01

 
92.7

 
40

South Carolina
1.0

 
329

 
325.43

 
301

 
298.43

 
91.7

 
28

Texas
2.1

 
1,592

 
760.76

 
1,468

 
701.32

 
92.2

 
124

Washington
6.7

 
1,835

 
275.60

 
1,603

 
240.83

 
87.4

 
232

Other
1.7

 
510

 
292.93

 
454

 
261.01

 
89.1

 
56

 
33.4

 
$
11,862

 
$
354.88

 
$
10,885

 
$
325.66

 
91.8
%
 
$
977



-MORE-


MOH Reports Third Quarter 2018 Results
Page 15
October 31, 2018


MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—MARKETPLACE
(In millions, except percentages and per-member per-month amounts)
 
Three Months Ended September 30, 2018
 
Member
Months
 
Premium Revenue
 
Medical Care Costs
 
MCR
 
Medical Margin
 
 
Total
 
PMPM
 
Total
 
PMPM
 
 
California
0.2

 
$
49

 
$
309.04

 
$
37

 
$
235.63

 
76.2
%
 
$
12

Florida
0.2

 
66

 
548.60

 
45

 
362.39

 
66.1

 
21

Michigan

 
12

 
233.51

 
7

 
145.13

 
62.1

 
5

New Mexico
0.1

 
28

 
419.20

 
18

 
249.33

 
59.5

 
10

Ohio
0.1

 
27

 
485.08

 
18

 
336.86

 
69.4

 
9

Texas
0.6

 
228

 
357.54

 
134

 
209.80

 
58.7

 
94

Washington

 
44

 
656.70

 
34

 
518.75

 
79.0

 
10

Other (1)

 
2

 
NM

 
(1
)
 
NM

 
NM

 
3

 
1.2

 
$
456

 
$
394.02

 
$
292

 
$
252.61

 
64.1
%
 
$
164

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2017
 
Member
Months
 
Premium Revenue
 
Medical Care Costs
 
MCR
 
Medical Margin
 
Total
 
PMPM
 
Total
 
PMPM
 
 
California
0.3

 
$
88

 
$
208.19

 
$
63

 
$
147.87

 
71.0
%
 
$
25

Florida
0.9

 
260

 
313.36

 
235

 
283.13

 
90.4

 
25

Michigan

 
14

 
212.08

 
10

 
150.24

 
70.8

 
4

New Mexico
0.1

 
29

 
383.58

 
20

 
269.28

 
70.2

 
9

Ohio
0.1

 
23

 
386.09

 
20

 
364.31