moh-20230208
0001179929false00011799292023-02-082023-02-08

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): February 8, 2023 (February 8, 2023)
______________
MOLINA HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
Delaware1-3171913-4204626
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
______________
200 Oceangate, Suite 100,Long Beach,California90802
(Address of principal executive offices)(Zip Code)
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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 Par Value MOHNew York Stock Exchange
Indicate 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 February 8, 2023, Molina Healthcare, Inc. (the “Company”) issued a press release reporting its financial results for the fourth quarter and year ended December 31, 2022, and the Company’s full-year 2023 revenue and earnings 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.
Note: The information in this Form 8-K and the exhibits 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, 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
104
Cover Page information from Molina Healthcare, Inc.’s Current Report on Form 8-K filed on February 8, 2023 formatted in iXBRL (Inline Extensible Business Reporting Language).



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:
February 8, 2023
By:
/s/ Jeff D. Barlow
Jeff D. Barlow
Chief Legal Officer and Secretary


Document
https://cdn.kscope.io/2222c54ecb97fd5a3647d3f5f248f41a-molinaa03a01a01a17.jpg
News Release
Investor Contact: Joseph Krocheski, Joseph.Krocheski@molinahealthcare.com, 562-951-8382
Media Contact: Caroline Zubieta, Caroline.Zubieta@molinahealthcare.com, 562-951-1588
Molina Healthcare Reports Fourth Quarter and Year-End 2022 Financial Results
Introduces Full-Year 2023 Revenue and Earnings Guidance

Long Beach, Calif, February 8, 2023 – Molina Healthcare, Inc. (NYSE: MOH) (the “Company”) today reported fourth quarter 2022 GAAP earnings per diluted share of $0.96 and adjusted earnings per diluted share of $4.10. The Company also reported full year 2022 GAAP earnings per diluted share of $13.55 and adjusted earnings per diluted share of $17.92. Financial results are summarized below.
Quarter endedYear ended
December 31,
 December 31,
 2022202120222021
(In millions, except per-share results)
Premium Revenue$7,917$7,166$30,883$26,855
Total Revenue$8,223$7,409$31,974$27,771
GAAP:
Net Income$56$103$792$659
EPS – Diluted$0.96$1.74$13.55$11.25
Medical Care Ratio (MCR)88.3 %88.8 %88.0 %88.3 %
G&A Ratio7.6 %7.8 %7.2 %7.4 %
After-tax Margin0.7 %1.4 %2.5 %2.4 %
Adjusted:
Net Income$240$170$1,048$793
EPS – Diluted$4.10$2.88$17.92$13.54
G&A Ratio7.5 %7.4 %7.1 %7.2 %
After-tax Margin2.9 %2.3 %3.3 %2.9 %
See the Reconciliation of Unaudited Non-GAAP Financial Measures at the end of this release.

Full Year Highlights
As of December 31, 2022, the Company served approximately 5.3 million members.
Premium revenue was $30.9 billion for the full year 2022, an increase of 15% year over year.
GAAP earnings were $13.55 per diluted share, an increase of 20% year over year. GAAP earnings include a fourth quarter non-cash, after tax impairment charge of $159 million, or $2.72 per diluted share, attributable to the Company’s plan to reduce its leased real estate footprint.
Adjusted earnings were $17.92 per diluted share, an increase of 32% year over year.
The Company issued its full year 2023 earnings guidance with expected premium revenue of $32 billion and adjusted earnings of at least $19.75 per diluted share. Earnings guidance includes $0.65 per diluted share of one-time, non-recurring, implementation costs for new Medicaid contract wins.
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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 2
February 8, 2023

“The fourth quarter completes another strong year of operating and financial performance,” said Joseph Zubretsky, President and Chief Executive Officer. “We are very pleased with our business performance during the year, as well as the progress we made in 2022 on our growth strategy, which has created a solid and growing financial profile as we head into 2023.”

Premium Revenue
Premium revenue was $30.9 billion for the full year, an increase of 15% compared to the full year 2021. The higher premium revenue reflects the impact of acquisitions and increased organic membership in the Medicaid and Medicare lines of business.

Net Income
GAAP net income for the full year was $13.55 per diluted share, compared to $11.25 per diluted share for the full year 2021. GAAP net income includes a fourth quarter non-cash, after tax impairment charge of $159 million, or $2.72 per diluted share, attributable to the Company’s plan to reduce its leased real estate footprint.
Adjusted net income for the full year was $17.92 per diluted share, compared to $13.54 per diluted share for the full year 2021, an increase of 32%. The net effect of COVID decreased full year 2022 GAAP and adjusted EPS by $2.50 per diluted share, compared to $3.50 per diluted share a year earlier.

Medical Care Ratio
The consolidated MCR for the full year was 88.0%, compared to 88.3% for the full year 2021. The full year consolidated MCR included a 60 basis point impact for the net effect of COVID, compared to 90 basis points for the full year 2021 MCR. The impact varied by segment.
The Medicaid MCR for the full year was 88.0%, at the low end of the Company’s long-term target range and consistent with pre-pandemic levels. Included in the full year MCR was a 10 basis point impact for the net effect of COVID.
The Medicare MCR for the full year was 88.5%, modestly above the Company’s long-term target range and included 300 basis points for the impact of the net effect of COVID.
The Marketplace MCR for the full year 2022 was 87.2%, above the Company’s long-term target range and included 120 basis points for the impact of the net effect of COVID.

General and Administrative Expense Ratio
The G&A ratio for the full year was 7.2%, compared to 7.4% for the full year 2021. The adjusted G&A ratio was 7.1% for the full year, compared to 7.2% for the full year 2021. The year over year improvement reflects disciplined cost management and the benefits of fixed cost leverage produced by the Company’s increase in revenue.

Balance Sheet
Cash and investments at the parent company were $375 million as of December 31, 2022, compared to $348 million as of December 31, 2021. The Company purchased approximately 590,000 shares for $200 million in the fourth quarter of 2022.
Days in claims payable at December 31, 2022 was 47, approximately three days lower sequentially. The decline was driven by an increased mix of long-term services and support claims which settle more quickly, resulting from the closing of the AgeWell acquisition, as well as an additional payment cycle in the quarter.
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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 3
February 8, 2023

Cash Flow
Operating cash flow for the full year was $773 million, lower compared to the full year 2021. The decline compared to prior year was primarily due to the cash settlement in 2022 of large prior year Marketplace risk adjustment and Medicaid risk corridor payments.

2023 Guidance
Premium revenue for the full year is expected to be approximately $32 billion, an increase of approximately 4% from the full year 2022.
The Company expects its full year adjusted earnings per share in 2023 to be at least $19.75 per share, representing 10% growth over the full year 2022, with key metrics expected to be in line with the Company’s long-term targets. Excluding one-time non-recurring implementation costs for new Medicaid contract wins, adjusted earnings per share growth for the full year 2023 is expected to be 14%.
Guidance reflects expected:
Continued realization of embedded earnings;
Underlying organic growth and operational catalysts; and
$0.65 per diluted share of one-time non-recurring implementation costs for new Medicaid contract wins.
See the Reconciliation of Unaudited Non-GAAP Financial Measures at the end of this release.
Full Year 2023 Guidance (1)
Premium Revenue$32.0B
Total Revenue$33.0B
GAAP Net Income$1,077M
Adjusted Net Income (2)
$1,148M
GAAP EPS – Diluted>$18.53
Adjusted EPS – Diluted (2)
>$19.75
Diluted weighted average shares58.1M
Year End Total Membership5.1M
Medicaid4.7M
Medicare 175K
Marketplace230K
MCR88.0%
GAAP G&A Ratio7.0%
Adjusted G&A Ratio7.0%
Effective Tax Rate25.3%
GAAP After-tax Margin 3.3%
Adjusted After-tax Margin3.5%
______________
(1)All amounts are rounded and approximations.
(2) Reconciliations of non-GAAP financial measures at the end of this release.

Conference Call
Management will host a conference call and webcast to discuss Molina Healthcare’s fourth quarter and full year 2022 results at 8:00 a.m. Eastern Time on Thursday, February 9, 2023. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 3561497. A telephonic replay of the conference call will be available through Thursday, February 16, 2023, by dialing (877) 344-7529 and entering confirmation number 8594444. A live audio broadcast of this conference call will be available on Molina Healthcare’s website,
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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 4
February 8, 2023
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 (currently ranked 125), provides managed healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. Molina Healthcare served approximately 5.3 million members as of December 31, 2022, located across 19 states. 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 and the Company’s accompanying oral remarks contain forward-looking statements regarding its 2023 guidance, including the Company’s plans and expectations regarding future developments. Actual results could differ materially due to numerous known and unknown risks and uncertainties. These risks and uncertainties are discussed under the headings “Forward-Looking Statements,” and “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which is on file with the U.S. Securities and Exchange Commission (the “SEC”), and also in its Quarterly Reports on Form 10-Q for the periods ended March 31, 2022, June 30, 2022, and September 30, 2022, which are on file with the SEC. Additional information regarding the Company’s risk factors during 2023 and future periods will also be set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which the Company expects to file on or about February 13, 2023.
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 developments 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 8, 2023, and, except as otherwise required by law, the Company disclaims any obligation to update any forward-looking statement to conform the statement to actual results or changes in its expectations.
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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 5
February 8, 2023
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
Year Ended
 December 31,December 31,
 2022202120222021
 (In millions, except per-share amounts)
Revenue:
Premium revenue$7,917 $7,166 $30,883 $26,855 
Premium tax revenue 227 211 873 787 
Investment income 61 13 143 52 
Other revenue18 19 75 77 
Total revenue8,223 7,409 31,974 27,771 
Operating expenses:
Medical care costs6,992 6,362 27,175 23,704 
General and administrative expenses629 579 2,311 2,068 
Premium tax expenses227 211 873 787 
Depreciation and amortization47 35 176 131 
Impairment208 — 208 — 
Other15 31 58 61 
Total operating expenses8,118 7,218 30,801 26,751 
Operating income105 191 1,173 1,020 
Other expenses, net:
Interest expense27 30 110 120 
Other expense, net— 25 — 25 
Total other expenses, net27 55 110 145 
Income before income tax expense
78 136 1,063 875 
Income tax expense22 33 271 216 
Net income$56 $103 $792 $659 
Net income per share – Diluted$0.96 $1.74 $13.55 $11.25 
Diluted weighted average shares outstanding
58.4 58.7 58.5 58.6 
Operating Statistics:
Medical care ratio88.3 %88.8 %88.0 %88.3 %
G&A ratio7.6 %7.8 %7.2 %7.4 %
Premium tax ratio2.8 %2.9 %2.7 %2.8 %
Effective income tax rate28.5 %24.2 %25.5 %24.7 %
After-tax margin0.7 %1.4 %2.5 %2.4 %

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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 6
February 8, 2023
MOLINA HEALTHCARE, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
20222021
Unaudited
(Dollars in millions,
except per-share amounts)
ASSETS
Current assets:
Cash and cash equivalents$4,006 $4,438 
Investments3,499 3,202 
Receivables2,302 2,177 
Prepaid expenses and other current assets277 247 
Total current assets10,084 10,064 
Property, equipment, and capitalized software, net259 396 
Goodwill and intangible assets, net1,390 1,252 
Restricted investments238 212 
Deferred income taxes 220 106 
Other assets123 179 
Total assets$12,314 $12,209 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable$3,528 $3,363 
Amounts due government agencies 2,079 2,472 
Accounts payable, accrued liabilities and other889 842 
Deferred revenue359 370 
Total current liabilities6,855 7,047 
Long-term debt2,176 2,173 
Finance lease liabilities215 219 
Other long-term liabilities104 140 
Total liabilities9,350 9,579 
Stockholders’ equity:
Common stock, $0.001 par value, 150 million shares authorized; outstanding: 58 million shares at each of December 31, 2022 and December 31, 2021
— — 
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding
— — 
Additional paid-in capital328 236 
Accumulated other comprehensive loss(160)(5)
Retained earnings2,796 2,399 
Total stockholders’ equity2,964 2,630 
Total liabilities and stockholders’ equity$12,314 $12,209 
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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 7
February 8, 2023
MOLINA HEALTHCARE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended
December 31,
20222021
(In millions)
Operating activities:
Net income$792 $659 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization176 131 
Deferred income taxes(66)(24)
Share-based compensation
103 72 
Loss on debt repayment— 25 
Impairment208 — 
Other, net
33 
Changes in operating assets and liabilities:
Receivables(95)(415)
Prepaid expenses and other current assets(124)(19)
Medical claims and benefits payable153 471 
Amounts due government agencies (428)1,046 
Accounts payable, accrued liabilities and other55 138 
Deferred revenue(11)(5)
Income taxes
Net cash provided by operating activities
773 2,119 
Investing activities:
Purchases of investments(1,913)(2,713)
Proceeds from sales and maturities of investments
1,398 1,329 
Net cash paid in business combinations(134)(129)
Purchases of property, equipment, and capitalized software
(91)(77)
Other, net (50)(63)
Net cash used in investing activities(790)(1,653)
Financing activities:
Common stock purchases
(400)(128)
Common stock withheld to settle employee tax obligations(54)(53)
Contingent consideration liabilities settled(20)(20)
Proceeds from senior notes offering, net of issuance costs— 740 
Repayment of senior notes— (723)
Other, net 33 
Net cash used in financing activities(441)(183)
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents(458)283 
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period
4,506 4,223 
Cash, cash equivalents, and restricted cash and cash equivalents at end of period
$4,048 $4,506 
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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 8
February 8, 2023
MOLINA HEALTHCARE, INC.
UNAUDITED SEGMENT DATA
(Dollars in millions)


December 31,
2022
2021
Ending Membership by Segment:
Medicaid4,754,000 4,329,000 
Medicare156,000 142,000 
Marketplace348,000 728,000 
Total5,258,000 5,199,000 



Three Months Ended December 31,
20222021
Premium RevenueMedical
Margin
MCR (1)
Premium RevenueMedical
Margin
MCR (1)
Medicaid $6,421 $813 87.3 %$5,441 $635 88.3 %
Medicare 948 77 91.8 873 101 88.3 
Marketplace548 35 93.8 852 68 92.1 
Consolidated$7,917 $925 88.3 %$7,166 $804 88.8 %
Year Ended December 31,
20222021
Premium RevenueMedical
Margin
MCR (1)
Premium RevenueMedical
Margin
MCR (1)
Medicaid $24,827 $2,981 88.0 %$20,461 $2,322 88.7 %
Medicare 3,795 437 88.5 3,361 430 87.2 
Marketplace2,261 290 87.2 3,033 399 86.9 
Consolidated$30,883 $3,708 88.0 %$26,855 $3,151 88.3 %
(1)The MCR represents medical costs as a percentage of premium revenue.

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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 9
February 8, 2023
MOLINA HEALTHCARE, INC.
CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE
(Dollars in millions)

The Company’s claims liabilities include additional reserves to account for moderately adverse conditions 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 year” represent the amounts by which the original estimates of claims and benefits payable at the beginning of the year were more than the actual liabilities based on information (principally the payment of claims) developed since those liabilities were 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,
20222021
Unaudited
Medical claims and benefits payable, beginning balance
$3,363 $2,696 
Components of medical care costs related to:
Current year27,459 23,943 
Prior year(284)(239)
Total medical care costs27,175 23,704 
Payments for medical care costs related to:
Current year24,345 21,148 
Prior year2,670 2,080 
Total paid27,015 23,228 
Acquired balances, net of post-acquisition adjustments12 197 
Change in non-risk and other provider payables(7)(6)
Medical claims and benefits payable, ending balance
$3,528 $3,363 
Days in Claims Payable (1)
47 51 
__________________
(1)The Company calculates Days in Claims Payable using claims incurred but not paid, or IBNP, and other fee-for-service payables included in medical claims and benefits payable, and quarterly fee-for-service related costs included in medical care costs within the Company’s consolidated financial statements.

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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 10
February 8, 2023
MOLINA HEALTHCARE, INC.
RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES
(In millions, except per diluted share amounts)

The Company believes that certain non-GAAP (generally accepted accounting principles) financial 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. The non-GAAP financial measures are also used internally to enable management to assess the Company’s performance consistently over time. These non-GAAP financial measures, presented below, should be considered as supplements to, and not as substitutes for or superior to, GAAP measures.
Adjustments represent additions and deductions to GAAP net income as indicated in the table below, which include the non-cash impact of amortization of acquired intangible assets, acquisition-related expenses, and the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations.
Adjusted G&A Ratio represents the GAAP G&A ratio, recognizing adjustments.
Adjusted net income represents GAAP net income recognizing the adjustments, net of tax. The Company believes that adjusted net income is helpful to investors in assessing the Company’s financial performance.
Adjusted net income per diluted share represents adjusted net income divided by weighted average common shares outstanding on a fully diluted basis.
Adjusted after-tax margin represents adjusted net income, divided by total revenue.
Three Months Ended December 31,Year Ended December 31,
2022202120222021
AmountPer Diluted ShareAmountPer Diluted ShareAmountPer Diluted ShareAmountPer Diluted Share
Net income
$56 $0.96 $103 $1.74 $792 $13.55 $659 $11.25 
Adjustments:
Impairment
$208 $3.57 $— $— $208 $3.56 $— $— 
Amortization of intangible assets
21 0.35 14 0.23 77 1.32 49 0.83 
Acquisition-related expenses (1)
11 0.18 49 0.84 49 0.83 93 1.59 
Loss on debt repayment— — 25 0.43 — — 25 0.43 
Other (2)
— — — — — — 0.16 
Subtotal, adjustments
240 4.10 88 1.50 334 5.71 176 3.01 
Income tax effect
(56)(0.96)(21)(0.36)(78)(1.34)(42)(0.72)
Adjustments, net of tax
184 3.14 67 1.14 256 4.37 134 2.29 
Adjusted net income
$240 $4.10 $170 $2.88 $1,048 $17.92 $793 $13.54 
__________________
(1)Reflects non-recurring costs associated with acquisitions, including various transaction and certain integration costs.
(2)The year ended December 31, 2022 includes gain on lease termination and disposal of fixed assets. The year ended December 31, 2021 includes change in premium deficiency reserves, loss on sale of property, and restructuring costs.

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Molina Healthcare, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results
Page 11
February 8, 2023
MOLINA HEALTHCARE, INC.
RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (CONTINUED)
2023 GUIDANCE


Amount
Per Diluted Share (2)
Net income
$1,077 $18.53 
Adjustments:
Amortization of intangible assets92 1.58 
Acquisition-related expenses
0.02 
Subtotal, adjustments
93 1.60 
Income tax effect (1)
(22)(0.38)
Adjustments, net of tax
71 1.22 
Adjusted net income per diluted share
$1,148 $19.75 
__________________
(1)Income tax effect calculated at the statutory tax rate of approximately 23.7%.
(2)Computations assume approximately 58.1 million diluted weighted average shares outstanding.
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