Company Quick10K Filing
Quick10K
Molina Healthcare
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$128.38 63 $8,040
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-07-30 Earnings, Exhibits
8-K 2019-05-30 Regulation FD, Exhibits
8-K 2019-05-13 Shareholder Vote
8-K 2019-04-29 Earnings, Exhibits
8-K 2019-02-11 Earnings, Exhibits
8-K 2019-02-04 Enter Agreement, Regulation FD, Exhibits
8-K 2019-01-31 Enter Agreement, Other Events, Exhibits
8-K 2019-01-07 Regulation FD, Exhibits
8-K 2019-01-03 Regulation FD, Exhibits
8-K 2018-10-31 Earnings, Exhibits
8-K 2018-10-25 Enter Agreement, M&A, Regulation FD, Exhibits
8-K 2018-10-01 Regulation FD, Exhibits
8-K 2018-08-13 Leave Agreement
8-K 2018-07-31 Earnings, Exhibits
8-K 2018-07-11 Other Events, Exhibits
8-K 2018-07-09 Regulation FD, Exhibits
8-K 2018-06-26 Enter Agreement, Regulation FD, Exhibits
8-K 2018-06-18 Regulation FD, Exhibits
8-K 2018-05-31 Regulation FD, Exhibits
8-K 2018-05-25 Officers, Regulation FD, Exhibits
8-K 2018-05-24 Regulation FD, Exhibits
8-K 2018-05-23 Officers, Regulation FD, Exhibits
8-K 2018-05-07 Shareholder Vote, Exhibits
8-K 2018-03-05 Other Events, Exhibits
8-K 2018-02-28 Amend Bylaw, Other Events, Exhibits
8-K 2018-02-23 Officers, Regulation FD, Exhibits
8-K 2018-02-12 Earnings, Impairments, Exhibits
8-K 2018-02-01 Regulation FD
8-K 2018-01-10 Officers, Regulation FD, Exhibits
8-K 2018-01-08 Regulation FD, Exhibits
8-K 2018-01-02 Enter Agreement, Off-BS Arrangement, Exhibits
PHG Koninklijke Philips Nv 38,020
LNG Cheniere Energy 16,720
ACIA Acacia Communications 2,230
CTBI Community Trust Bancorp 746
UNT Unit 653
HCCH HL Acquisitions 70
ISNS Image Sensing Systems 28
KERX Keryx Biopharmaceuticals 0
RBIZ Realbiz Media Group 0
IMPV Imperva 0
MOH 2019-06-30
EX-10.1 ex101_2019-rsa.htm
EX-10.2 a2019equityincentiveplan.htm
EX-10.3 ex103_2019eip-rsa.htm
EX-10.4 ex104_2019eip-psu.htm
EX-31.1 moh-06302019xex311.htm
EX-31.2 moh-06302019xex312.htm
EX-32.1 moh-06302019xex321.htm
EX-32.2 moh-06302019xex322.htm

Molina Healthcare Earnings 2019-06-30

MOH 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
false--12-31Q2201900011799290.011250.011250.01625P5YP3Y0.0010.00115000000015000000062000000630000000.02452770.016250.011250.048750.016250.0010.0012000000020000000000000 0001179929 2019-01-01 2019-06-30 0001179929 2019-07-26 0001179929 2019-04-01 2019-06-30 0001179929 us-gaap:TechnologyServiceMember 2019-01-01 2019-06-30 0001179929 2018-01-01 2018-06-30 0001179929 2018-04-01 2018-06-30 0001179929 us-gaap:HealthCarePremiumMember 2019-01-01 2019-06-30 0001179929 us-gaap:HealthCarePremiumMember 2018-01-01 2018-06-30 0001179929 us-gaap:HealthCarePremiumMember 2018-04-01 2018-06-30 0001179929 us-gaap:HealthCarePremiumMember 2019-04-01 2019-06-30 0001179929 us-gaap:TechnologyServiceMember 2018-01-01 2018-06-30 0001179929 us-gaap:TechnologyServiceMember 2019-04-01 2019-06-30 0001179929 us-gaap:TechnologyServiceMember 2018-04-01 2018-06-30 0001179929 2018-12-31 0001179929 2019-06-30 0001179929 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001179929 2019-01-01 2019-03-31 0001179929 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001179929 2019-03-31 0001179929 us-gaap:CommonStockMember 2018-12-31 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001179929 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001179929 us-gaap:RetainedEarningsMember 2019-06-30 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001179929 us-gaap:CommonStockMember 2019-06-30 0001179929 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001179929 us-gaap:RetainedEarningsMember 2018-12-31 0001179929 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001179929 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001179929 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001179929 us-gaap:CommonStockMember 2019-03-31 0001179929 us-gaap:AccountingStandardsUpdate201602Member us-gaap:RetainedEarningsMember 2019-01-01 0001179929 us-gaap:RetainedEarningsMember 2019-03-31 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001179929 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001179929 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001179929 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001179929 us-gaap:CommonStockMember 2018-03-31 0001179929 2018-06-30 0001179929 2017-12-31 0001179929 us-gaap:AccountingStandardsUpdate201409Member us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001179929 2018-01-01 2018-03-31 0001179929 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0001179929 us-gaap:CommonStockMember 2018-06-30 0001179929 2018-03-31 0001179929 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0001179929 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0001179929 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001179929 us-gaap:RetainedEarningsMember 2017-12-31 0001179929 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001179929 us-gaap:CommonStockMember 2017-12-31 0001179929 us-gaap:AccountingStandardsUpdate201409Member us-gaap:RetainedEarningsMember 2018-01-01 0001179929 us-gaap:AccountingStandardsUpdate201409Member 2018-01-01 0001179929 us-gaap:RetainedEarningsMember 2018-03-31 0001179929 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0001179929 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0001179929 us-gaap:RetainedEarningsMember 2018-06-30 0001179929 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001179929 moh:CashConvertibleSeniorNotesDue2020WarrantsMember 2019-03-31 0001179929 moh:CashConvertibleSeniorNotesDue2020WarrantsMember 2018-06-30 0001179929 moh:ConvertibleSeniorNotesDue2044Member us-gaap:ConvertibleDebtMember 2018-03-31 0001179929 moh:CashConvertibleSeniorNotesDue2020WarrantsMember 2019-06-30 0001179929 moh:CallOptionDerivativeAssetMember 2019-01-01 2019-06-30 0001179929 moh:CallOptionDerivativeAssetMember 2018-01-01 2018-06-30 0001179929 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-01-01 2019-06-30 0001179929 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2018-01-01 2018-06-30 0001179929 moh:CallOptionDerivativeAssetMember 2019-06-30 0001179929 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-06-30 0001179929 moh:ConvertibleSeniorNotesDue2044Member us-gaap:ConvertibleDebtMember 2019-06-30 0001179929 moh:HealthPlansMember 2019-06-30 0001179929 moh:HealthPlansMember 2019-01-01 2019-06-30 0001179929 moh:MedicaidExpansionMember 2018-12-31 0001179929 moh:MedicaidExpansionMember 2019-06-30 0001179929 moh:CMSSubsidiesMember 2018-01-01 2018-06-30 0001179929 srt:MinimumMember moh:CaliforniaIllinoisNewMexicoOhioSouthCarolinaTexasWashingtonandWisconsinMember 2019-01-01 2019-06-30 0001179929 srt:MaximumMember moh:CaliforniaIllinoisNewMexicoOhioSouthCarolinaTexasWashingtonandWisconsinMember 2019-01-01 2019-06-30 0001179929 moh:A1.625NotesMember 2019-06-30 0001179929 moh:CurrentLiabilitiesMember us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2018-12-31 0001179929 moh:CurrentLiabilitiesMember us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-06-30 0001179929 us-gaap:AssetBackedSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member moh:CurrentInvestmentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:AssetBackedSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2018-12-31 0001179929 us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:OtherInvestmentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member moh:CurrentInvestmentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member 2018-12-31 0001179929 us-gaap:USTreasuryNotesSecuritiesMember 2018-12-31 0001179929 moh:CurrentInvestmentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:OtherInvestmentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:CertificatesOfDepositMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:DerivativeFinancialInstrumentsAssetsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:OtherInvestmentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:AssetBackedSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member moh:MunicipalSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:AssetBackedSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:DerivativeFinancialInstrumentsAssetsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:CertificatesOfDepositMember 2018-12-31 0001179929 us-gaap:DerivativeFinancialInstrumentsAssetsMember 2018-12-31 0001179929 moh:MunicipalSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:USTreasuryNotesSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member moh:MunicipalSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member 2018-12-31 0001179929 us-gaap:OtherInvestmentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:USTreasuryNotesSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:CertificatesOfDepositMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:USTreasuryNotesSecuritiesMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:DerivativeFinancialInstrumentsAssetsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member moh:MunicipalSecuritiesMember 2018-12-31 0001179929 us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0001179929 us-gaap:CertificatesOfDepositMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0001179929 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2018-12-31 0001179929 us-gaap:FairValueInputsLevel2Member moh:CurrentInvestmentsMember 2018-12-31 0001179929 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:RevolvingCreditFacilityMember 2018-12-31 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:ConvertibleDebtMember 2018-12-31 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:ConvertibleDebtMember 2018-12-31 0001179929 moh:A4.875SeniorNotesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:SeniorNotesMember 2018-12-31 0001179929 moh:A4.875SeniorNotesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:SeniorNotesMember 2019-06-30 0001179929 moh:SeniorNotesDue2022Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:SeniorNotesMember 2019-06-30 0001179929 moh:A4.875SeniorNotesMember us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2019-06-30 0001179929 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0001179929 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:RevolvingCreditFacilityMember 2019-06-30 0001179929 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-06-30 0001179929 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-06-30 0001179929 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:RevolvingCreditFacilityMember 2018-12-31 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:ConvertibleDebtMember 2019-06-30 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:ConvertibleDebtMember 2019-06-30 0001179929 moh:A4.875SeniorNotesMember us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2018-12-31 0001179929 moh:SeniorNotesDue2022Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2019-06-30 0001179929 moh:SeniorNotesDue2022Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2018-12-31 0001179929 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0001179929 moh:SeniorNotesDue2022Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:SeniorNotesMember 2018-12-31 0001179929 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:RevolvingCreditFacilityMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:CommercialMortgageBackedSecuritiesMember 2019-06-30 0001179929 us-gaap:USTreasuryNotesSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:CommercialMortgageBackedSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:CertificatesOfDepositMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:CommercialMortgageBackedSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:DerivativeFinancialInstrumentsAssetsMember 2019-06-30 0001179929 us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0001179929 us-gaap:CertificatesOfDepositMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:DerivativeFinancialInstrumentsAssetsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member moh:MunicipalSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member moh:MunicipalSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0001179929 moh:MunicipalSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member moh:CurrentInvestmentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:OtherInvestmentsMember 2019-06-30 0001179929 us-gaap:OtherInvestmentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:AssetBackedSecuritiesMember 2019-06-30 0001179929 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:OtherInvestmentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:USTreasuryNotesSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:AssetBackedSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-06-30 0001179929 us-gaap:AssetBackedSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:CertificatesOfDepositMember 2019-06-30 0001179929 us-gaap:CommercialMortgageBackedSecuritiesMember 2019-06-30 0001179929 moh:CurrentInvestmentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member moh:CurrentInvestmentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:AssetBackedSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:USTreasuryNotesSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member moh:CurrentInvestmentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel2Member us-gaap:OtherInvestmentsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:CertificatesOfDepositMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member moh:MunicipalSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0001179929 us-gaap:DerivativeFinancialInstrumentsAssetsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:DerivativeFinancialInstrumentsAssetsMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel1Member us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2019-06-30 0001179929 us-gaap:FairValueInputsLevel3Member us-gaap:USTreasuryNotesSecuritiesMember 2019-06-30 0001179929 us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:ConvertibleDebtMember 2019-06-30 0001179929 moh:A4.875SeniorNotesMember us-gaap:SeniorNotesMember 2019-06-30 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:ConvertibleDebtMember 2018-12-31 0001179929 moh:SeniorNotesDue2022Member us-gaap:SeniorNotesMember 2019-06-30 0001179929 moh:OtherFinancialInstrumentsMember 2018-12-31 0001179929 moh:OtherFinancialInstrumentsMember 2019-06-30 0001179929 moh:TermLoanMember us-gaap:LineOfCreditMember 2019-06-30 0001179929 moh:TermLoanMember us-gaap:LineOfCreditMember 2018-12-31 0001179929 moh:A4.875SeniorNotesMember us-gaap:SeniorNotesMember 2018-12-31 0001179929 moh:SeniorNotesDue2022Member us-gaap:SeniorNotesMember 2018-12-31 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:ConvertibleDebtMember 2019-01-01 2019-06-30 0001179929 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-01-31 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:ConvertibleDebtMember 2019-01-01 2019-03-31 0001179929 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2017-01-31 0001179929 moh:TermLoanMember us-gaap:LineOfCreditMember 2019-04-01 2019-06-30 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:ConvertibleDebtMember 2019-04-01 2019-06-30 0001179929 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-01-01 2019-06-30 0001179929 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-01-01 2019-06-30 0001179929 moh:A4.875SeniorNotesMember us-gaap:SeniorNotesMember 2017-06-06 0001179929 us-gaap:LetterOfCreditMember us-gaap:LineOfCreditMember 2019-06-30 0001179929 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-06-30 0001179929 moh:CashConvertibleSeniorNotesDue2020Member us-gaap:ConvertibleDebtMember 2018-01-01 2018-12-31 0001179929 moh:CashConvertibleSeniorNotesDue2020WarrantsMember 2019-04-01 2019-06-30 0001179929 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-04-01 2019-06-30 0001179929 us-gaap:EmbeddedDerivativeFinancialInstrumentsMember 2019-01-01 2019-03-31 0001179929 moh:CashConvertibleSeniorNotesDue2020WarrantsMember 2019-01-01 2019-03-31 0001179929 moh:CashConvertibleSeniorNotesDue2020Member 2019-06-30 0001179929 moh:CurrentAssetsMember moh:CallOptionDerivativeAssetMember 2019-06-30 0001179929 moh:CurrentAssetsMember moh:CallOptionDerivativeAssetMember 2018-12-31 0001179929 us-gaap:PerformanceSharesMember 2019-01-01 2019-06-30 0001179929 us-gaap:RestrictedStockMember 2019-06-30 0001179929 us-gaap:PerformanceSharesMember 2019-06-30 0001179929 us-gaap:RestrictedStockUnitsRSUMember 2018-12-31 0001179929 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0001179929 us-gaap:RestrictedStockUnitsRSUMember 2019-06-30 0001179929 us-gaap:RestrictedStockMember 2018-12-31 0001179929 us-gaap:RestrictedStockMember 2019-01-01 2019-06-30 0001179929 us-gaap:PerformanceSharesMember 2018-12-31 0001179929 us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-06-30 0001179929 us-gaap:PerformanceSharesMember 2018-01-01 2018-06-30 0001179929 us-gaap:RestrictedStockMember 2018-01-01 2018-06-30 0001179929 moh:EquityIncentivePlanMember 2019-06-30 0001179929 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001179929 2013-01-01 2013-12-31 0001179929 moh:EmployeeStockPurchasePlanMember 2019-06-30 0001179929 2013-12-31 0001179929 us-gaap:EmployeeStockOptionMember 2019-06-30 0001179929 us-gaap:CommonStockMember 2019-01-01 2019-06-30 0001179929 us-gaap:ContractTerminationMember moh:A2017RestructuringPlanMember 2019-04-01 2019-06-30 0001179929 moh:ITRestructuringMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-06-30 0001179929 us-gaap:ContractTerminationMember moh:A2017RestructuringPlanMember 2019-06-30 0001179929 moh:ProfessionalServicesFeesMember moh:ITRestructuringMember us-gaap:AllOtherSegmentsMember 2018-01-01 2019-06-30 0001179929 moh:ITRestructuringMember us-gaap:AllOtherSegmentsMember 2019-06-30 0001179929 moh:ITRestructuringMember us-gaap:AllOtherSegmentsMember 2018-01-01 2019-06-30 0001179929 us-gaap:OtherRestructuringMember moh:A2017RestructuringPlanMember 2019-04-01 2019-06-30 0001179929 moh:ITRestructuringMember 2018-12-31 0001179929 moh:ITRestructuringMember 2019-06-30 0001179929 us-gaap:OneTimeTerminationBenefitsMember moh:ITRestructuringMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-06-30 0001179929 moh:A2017RestructuringPlanMember 2018-12-31 0001179929 us-gaap:OneTimeTerminationBenefitsMember moh:ITRestructuringMember us-gaap:AllOtherSegmentsMember 2018-01-01 2019-06-30 0001179929 moh:ProfessionalServicesFeesMember moh:ITRestructuringMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-06-30 0001179929 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-06-30 0001179929 us-gaap:MaterialReconcilingItemsMember 2018-04-01 2018-06-30 0001179929 us-gaap:OperatingSegmentsMember moh:HealthPlansMember 2018-01-01 2018-06-30 0001179929 us-gaap:MaterialReconcilingItemsMember 2018-01-01 2018-06-30 0001179929 us-gaap:OperatingSegmentsMember 2019-01-01 2019-06-30 0001179929 us-gaap:OperatingSegmentsMember 2019-04-01 2019-06-30 0001179929 us-gaap:OperatingSegmentsMember 2018-01-01 2018-06-30 0001179929 us-gaap:MaterialReconcilingItemsMember 2019-01-01 2019-06-30 0001179929 us-gaap:MaterialReconcilingItemsMember 2019-04-01 2019-06-30 0001179929 us-gaap:OperatingSegmentsMember moh:HealthPlansMember 2019-04-01 2019-06-30 0001179929 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-06-30 0001179929 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember 2019-04-01 2019-06-30 0001179929 us-gaap:OperatingSegmentsMember moh:HealthPlansMember 2019-01-01 2019-06-30 0001179929 us-gaap:OperatingSegmentsMember moh:HealthPlansMember 2018-04-01 2018-06-30 0001179929 us-gaap:OperatingSegmentsMember 2018-04-01 2018-06-30 0001179929 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember 2018-04-01 2018-06-30 0001179929 us-gaap:AllOtherSegmentsMember 2019-01-01 2019-06-30 0001179929 moh:HealthPlansMember 2019-04-01 2019-06-30 0001179929 moh:HealthPlansMember 2018-04-01 2018-06-30 0001179929 moh:HealthPlansMember 2018-01-01 2018-06-30 0001179929 us-gaap:AllOtherSegmentsMember 2019-04-01 2019-06-30 0001179929 us-gaap:AllOtherSegmentsMember 2018-04-01 2018-06-30 0001179929 us-gaap:AllOtherSegmentsMember 2018-01-01 2018-06-30 0001179929 srt:MinimumMember 2019-06-30 0001179929 srt:MaximumMember 2019-06-30 xbrli:shares iso4217:USD moh:Security moh:member moh:State xbrli:pure iso4217:USD xbrli:shares moh:Segment
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
FORM 10-Q
 
 
 
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission file number: 001-31719
 
 
 
 
molinalogo2016a26.jpg
MOLINA HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
Delaware
 
13-4204626
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
200 Oceangate, Suite 100
 
 
Long Beach,
California
 
90802
(Address of principal executive offices)
 
(Zip Code)
(562) 435-3666
(Registrant’s telephone number, including area code)
 
 
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.001 Par Value
MOH
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer   Accelerated Filer Non-Accelerated Filer (do not check if a smaller reporting company)
Smaller reporting company 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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No  
The number of shares of the issuer’s Common Stock, $0.001 par value, outstanding as of July 26, 2019, was approximately 62,711,000.


Table of Contents

MOLINA HEALTHCARE, INC. FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED June 30, 2019

TABLE OF CONTENTS
ITEM NUMBER
Page
 
 
 
PART I - Financial Information
 
 
 
 
1.
 
 
 
2.
 
 
 
3.
 
 
 
4.
 
 
 
Part II - Other Information
 
 
 
 
1.
 
 
 
1A.
 
 
 
2.
 
 
 
3.
Defaults Upon Senior Securities
Not Applicable.
 
 
 
4.
Mine Safety Disclosures
Not Applicable.
 
 
 
5.
Other Information
Not Applicable.
 
 
 
6.
 
 
 
 
 
 
 
 
 
 



Table of Contents


CONSOLIDATED STATEMENTS OF INCOME
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(In millions, except per-share amounts)
(Unaudited)
Revenue:
 
 
 
 
 
 
 
Premium revenue
$
4,049

 
$
4,514

 
$
8,001

 
$
8,837

Premium tax revenue
110

 
106

 
248

 
210

Health insurer fees reimbursed

 
104

 

 
165

Service revenue

 
127

 

 
261

Investment income and other revenue
34

 
32

 
63

 
56

Total revenue
4,193

 
4,883

 
8,312

 
9,529

Operating expenses:
 
 
 
 
 
 
 
Medical care costs
3,466

 
3,850

 
6,837

 
7,572

General and administrative expenses
328

 
335

 
630

 
687

Premium tax expenses
110

 
106

 
248

 
210

Health insurer fees

 
99

 

 
174

Depreciation and amortization
22

 
25

 
47

 
51

Restructuring costs
2

 
8

 
5

 
33

Cost of service revenue

 
118

 

 
238

Total operating expenses
3,928

 
4,541

 
7,767

 
8,965

Operating income
265

 
342

 
545

 
564

Other expenses, net:
 
 
 
 
 
 
 
Interest expense
22

 
32

 
45

 
65

Other (income) expenses, net
(14
)
 
5

 
(17
)
 
15

Total other expenses, net
8

 
37

 
28

 
80

Income before income tax expense
257

 
305

 
517

 
484

Income tax expense
61

 
103

 
123

 
175

Net income
$
196

 
$
202

 
$
394

 
$
309

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
Basic
$
3.15

 
$
3.29

 
$
6.34

 
$
5.10

Diluted
$
3.06

 
$
3.02

 
$
6.04

 
$
4.68

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(In millions)
(Unaudited)
Net income
$
196

 
$
202

 
$
394

 
$
309

Other comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized investment income (loss)
10

 
1

 
17

 
(6
)
Less: effect of income taxes
2

 

 
4

 
(1
)
Other comprehensive income (loss), net of tax
8

 
1

 
13

 
(5
)
Comprehensive income
$
204

 
$
203

 
$
407

 
$
304

See accompanying notes.

Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 3

Table of Contents

CONSOLIDATED BALANCE SHEETS
 
June 30,
2019
 
December 31,
2018
 
(Dollars in millions,
except per-share amounts)
 
(Unaudited)
 
 
ASSETS
Current assets:
 
 
 
Cash and cash equivalents
$
2,253

 
$
2,826

Investments
2,070

 
1,681

Receivables
1,239

 
1,330

Prepaid expenses and other current assets
132

 
149

Derivative asset
169

 
476

Total current assets
5,863

 
6,462

Property, equipment, and capitalized software, net
373

 
241

Goodwill and intangible assets, net
180

 
190

Restricted investments
98

 
120

Deferred income taxes
70

 
117

Other assets
106

 
24

 
$
6,690

 
$
7,154

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
Medical claims and benefits payable
$
1,767

 
$
1,961

Amounts due government agencies
984

 
967

Accounts payable and accrued liabilities
373

 
390

Deferred revenue
30

 
211

Current portion of long-term debt
65

 
241

Derivative liability
169

 
476

Total current liabilities
3,388

 
4,246

Long-term debt
1,241

 
1,020

Finance lease liabilities
232

 
197

Other long-term liabilities
93

 
44

Total liabilities
4,954

 
5,507

Stockholders’ equity:
 
 
 
Common stock, $0.001 par value, 150 million shares authorized; outstanding: 63 million shares at June 30, 2019, and 62 million shares at December 31, 2018

 

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

 

Additional paid-in capital
240

 
643

Accumulated other comprehensive income (loss)
5

 
(8
)
Retained earnings
1,491

 
1,012

Total stockholders’ equity
1,736

 
1,647

 
$
6,690

 
$
7,154

See accompanying notes.

Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 4

Table of Contents

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
 
 
Common Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Income
 
Retained
Earnings
 
Total
 
Outstanding
 
Amount
 
 
 
 
 
(In millions)
 
(Unaudited)
Balance at December 31, 2018
62

 
$

 
$
643

 
$
(8
)
 
$
1,012

 
$
1,647

Net income

 

 

 

 
198

 
198

Adoption of new accounting standard

 

 

 

 
85

 
85

Partial termination of 1.125% Warrants

 

 
(103
)
 

 

 
(103
)
Other comprehensive income, net

 

 

 
5

 

 
5

Share-based compensation
1

 

 
3

 

 

 
3

Balance at March 31, 2019
63

 

 
543

 
(3
)
 
1,295

 
1,835

Net income

 

 

 

 
196

 
196

Partial termination of 1.125% Warrants

 

 
(321
)
 

 

 
(321
)
Other comprehensive income, net

 

 

 
8

 

 
8

Share-based compensation

 

 
18

 

 

 
18

Balance at June 30, 2019
63

 
$

 
$
240

 
$
5

 
$
1,491

 
$
1,736



 
Common Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Total
 
Outstanding
 
Amount
 
 
 
 
 
(In millions)
 
(Unaudited)
Balance at December 31, 2017
60

 
$

 
$
1,044

 
$
(5
)
 
$
298

 
$
1,337

Net income

 

 

 

 
107

 
107

Adoption of new accounting standards

 

 

 
(1
)
 
7

 
6

Exchange of 1.625% Convertible Notes
2

 

 
108

 

 

 
108

Other comprehensive loss, net

 

 

 
(6
)
 

 
(6
)
Share-based compensation

 

 
1

 

 

 
1

Balance at March 31, 2018
62

 

 
1,153

 
(12
)
 
412

 
1,553

Net income

 

 

 

 
202

 
202

Partial termination of 1.125% Warrants

 

 
(113
)
 

 

 
(113
)
Other comprehensive income, net

 

 

 
1

 

 
1

Share-based compensation

 

 
15

 

 

 
15

Balance at June 30, 2018
62

 
$

 
$
1,055

 
$
(11
)
 
$
614

 
$
1,658


See accompanying notes.

Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 5

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Six Months Ended June 30,
 
2019
 
2018
 
(In millions)
(Unaudited)
Operating activities:
 
 
 
Net income
$
394

 
$
309

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
47

 
73

Deferred income taxes
19

 
(6
)
Share-based compensation
19

 
13

Amortization of convertible senior notes and finance lease liabilities
4

 
13

(Gain) loss on debt extinguishment
(17
)
 
15

Non-cash restructuring costs

 
17

Other, net
3

 
4

Changes in operating assets and liabilities:
 
 
 
Receivables
91

 
(315
)
Prepaid expenses and other current assets
18

 
(181
)
Medical claims and benefits payable
(194
)
 
(267
)
Amounts due government agencies
17

 
205

Accounts payable and accrued liabilities
(61
)
 
349

Deferred revenue
(181
)
 
(42
)
Income taxes
(3
)
 
127

Net cash provided by operating activities
156

 
314

Investing activities:
 
 
 
Purchases of investments
(1,162
)
 
(914
)
Proceeds from sales and maturities of investments
791

 
1,335

Purchases of property, equipment and capitalized software
(20
)
 
(14
)
Other, net
(2
)
 
(9
)
Net cash (used in) provided by investing activities
(393
)
 
398

Financing activities:
 
 
 
Repayment of principal amount of 1.125% Convertible Notes
(185
)
 
(89
)
Cash paid for partial settlement of 1.125% Conversion Option
(473
)
 
(134
)
Cash received for partial termination of 1.125% Call Option
473

 
134

Cash paid for partial termination of 1.125% Warrants
(424
)
 
(113
)
Proceeds from borrowings under Term Loan Facility
220

 

Repayment of Credit Facility

 
(300
)
Other, net
27

 
(1
)
Net cash used in financing activities
(362
)
 
(503
)
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents
(599
)
 
209

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
$
2,327

 
$
3,499


Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 6

Table of Contents


CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
 
Six Months Ended June 30,
 
2019
 
2018
 
(In millions)
(Unaudited)
Supplemental cash flow information:
 
 
 
 
 
 
 
Schedule of non-cash investing and financing activities:
 
 
 
Common stock used for share-based compensation
$
(7
)
 
$
(6
)
 
 
 
 
Details of change in fair value of derivatives, net:
 
 
 
Gain on 1.125% Call Option
$
166

 
$
135

Loss on 1.125% Conversion Option
(166
)
 
(135
)
Change in fair value of derivatives, net
$

 
$

 
 
 
 
1.625% Convertible Notes exchange transaction:
 
 
 
Common stock issued in exchange for 1.625% Convertible Notes
$

 
$
131

Component allocated to additional paid-in capital, net of income taxes

 
(23
)
Net increase to additional paid-in capital
$

 
$
108

See accompanying notes.


Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 7

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2019

1. Organization and Basis of Presentation
Organization and Operations
Molina Healthcare, Inc. provides managed healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces (the “Marketplace”). We currently have two reportable segments: our Health Plans segment and our Other segment. We manage the vast majority of our operations through our Health Plans segment. The Other segment includes the historical results of the Medicaid management information systems (“MMIS”) and behavioral health subsidiaries we sold in the fourth quarter of 2018, as well as certain corporate amounts not allocated to the Health Plans segment. Prior to the fourth quarter of 2018, the MMIS subsidiary was reported as a stand-alone segment.
The Health Plans segment consists of health plans operating in 14 states and the Commonwealth of Puerto Rico. As of June 30, 2019, these health plans served approximately 3.4 million members eligible for Medicaid, Medicare, and other government-sponsored healthcare programs for low-income families and individuals including Marketplace members, most of whom receive government subsidies for premiums. The health plans are generally operated by our respective wholly owned subsidiaries in those states, each of which is licensed as a health maintenance organization (“HMO”).
Our health plans’ state Medicaid contracts generally have terms of three to five years. These contracts typically contain renewal options exercisable by the state Medicaid agency, and allow either the state or the health plan to terminate the contract with or without cause. Such contracts are subject to risk of loss in states that issue requests for proposal (“RFPs”) open to competitive bidding by other health plans. If one of our health plans is not a successful responsive bidder to a state RFP, its contract may not be renewed.
In addition to contract renewal, our state Medicaid contracts may be periodically amended to include or exclude certain health benefits (such as pharmacy services, behavioral health services, or long-term care services); populations such as the aged, blind or disabled; and regions or service areas.
Consolidation and Interim Financial Information
The consolidated financial statements include the accounts of Molina Healthcare, Inc., and its subsidiaries. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the interim periods presented have been included; such adjustments consist of normal recurring adjustments. All significant intercompany balances and transactions have been eliminated. The consolidated results of operations for the six months ended June 30, 2019, are not necessarily indicative of the results for the entire year ending December 31, 2019.
The unaudited consolidated interim financial statements have been prepared under the assumption that users of the interim financial data have either read or have access to our audited consolidated financial statements for the fiscal year ended December 31, 2018. Accordingly, certain disclosures that would substantially duplicate the disclosures contained in our December 31, 2018, audited consolidated financial statements have been omitted. These unaudited consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements for the fiscal year ended December 31, 2018.
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Principal areas requiring the use of estimates include:
The determination of medical claims and benefits payable of our Health Plans segment;
Health plans’ contractual provisions that may limit revenue recognition based upon the costs incurred or the profits realized under a specific contract;
Health plans’ quality incentives that allow us to recognize incremental revenue if certain quality standards are met;
Settlements under risk or savings sharing programs;
The assessment of long-lived and intangible assets, and goodwill for impairment;

Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 8

Table of Contents

The determination of reserves for potential absorption of claims unpaid by insolvent providers;
The determination of reserves for litigation outcomes;
The determination of valuation allowances for deferred tax assets; and
The determination of unrecognized tax benefits.

2. Significant Accounting Policies
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and short-term, highly liquid investments that are both readily convertible into known amounts of cash and have a maturity of three months or less on the date of purchase. The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts presented in the accompanying consolidated statements of cash flows. The restricted cash and cash equivalents presented below are included in non-current “Restricted investments” in the accompanying consolidated balance sheets.
 
June 30,
 
2019
 
2018
 
(In millions)
Cash and cash equivalents
$
2,253

 
$
3,401

Restricted cash and cash equivalents
74

 
98

Total cash, cash equivalents, and restricted cash and cash equivalents presented in the statements of cash flows
$
2,327

 
$
3,499


Premium Revenue
Premium revenue is fixed in advance of the periods covered and, except as described below, is not generally subject to significant accounting estimates. Premium revenues are recognized in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred. Certain components of premium revenue are subject to accounting estimates and fall into the following categories:
Contractual Provisions That May Adjust or Limit Revenue or Profit
Medicaid Program
Medical Cost Floors (Minimums), and Medical Cost Corridors. A portion of our premium revenue may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded liabilities under the terms of such contract provisions of $93 million and $103 million at June 30, 2019 and December 31, 2018, respectively. Approximately $76 million and $87 million of the liabilities accrued at June 30, 2019 and December 31, 2018, respectively, relate to our participation in Medicaid Expansion programs.
In certain circumstances, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. Receivables relating to such provisions were insignificant at June 30, 2019 and December 31, 2018.
Profit Sharing and Profit Ceiling. Our contracts with certain states contain profit-sharing or profit ceiling provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. Liabilities for profits in excess of the amount we are allowed to retain under these provisions were insignificant at June 30, 2019 and December 31, 2018.
Retroactive Premium Adjustments. State Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we must adjust our premium revenue in the period in which we learn of the adjustment, based on our best estimate of the ultimate premium we expect to realize for the period being adjusted.
Medicare Program
Risk Adjusted Premiums. Our Medicare premiums are subject to retroactive increase or decrease based on the health status of our Medicare members (as measured by member risk score). We estimate our members’ risk scores and the related amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health status, risk scores and Centers for Medicare and Medicaid Services

Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 9

Table of Contents

(“CMS”) practices. Consolidated balance sheet amounts related to anticipated Medicare risk adjusted premiums and Medicare Part D settlements were insignificant at June 30, 2019 and December 31, 2018.
Minimum MLR. The Affordable Care Act (“ACA”) has established a minimum annual medical loss ratio (“Minimum MLR”) of 85% for Medicare. The medical loss ratio represents medical costs as a percentage of premium revenue. Federal regulations define what constitutes medical costs and premium revenue. If the Minimum MLR is not met, we may be required to pay rebates to the federal government. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. The amounts payable for the Medicare Minimum MLR were not significant at June 30, 2019 and December 31, 2018.
Marketplace Program
Risk Adjustment. Under this program, our health plans’ composite risk scores are compared with the overall average risk score for the relevant state and market pool. Generally, our health plans will make a risk adjustment payment into the pool if their composite risk scores are below the average risk score (risk adjustment payable), and will receive a risk adjustment payment from the pool if their composite risk scores are above the average risk score (risk adjustment receivable). We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income. As of June 30, 2019, Marketplace risk adjustment payables amounted to $625 million and related receivables amounted to $71 million, or a net of $554 million. Approximately $390 million of the net amount at June 30, 2019 relates to 2018 dates of service. As of December 31, 2018, Marketplace risk adjustment payables amounted to $466 million and related receivables amounted to $34 million, or a net of $432 million.
Minimum MLR. The ACA has established a Minimum MLR of 80% for the Marketplace. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. The Marketplace risk adjustment program is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. Aggregate balance sheet amounts related to the Minimum MLR were insignificant at June 30, 2019 and December 31, 2018.
A summary of the categories of amounts due government agencies follows:
 
June 30,
2019
 
December 31,
2018
 
(In millions)
Medicaid program:
 
 
 
Medical cost floors and corridors
$
93

 
$
103

Other amounts due to states
93

 
81

Marketplace program:
 
 
 
Risk adjustment
625

 
466

Cost sharing reduction (“CSR”)

 
183

Other
173

 
134

Total amounts due government agencies
$
984

 
$
967


Quality Incentives
At many of our health plans, revenue ranging from approximately 1% to 4% of certain health plan premiums is earned only if certain performance measures are met.
The following table quantifies the quality incentive premium revenue recognized for the periods presented, including the amounts earned in the periods presented and prior periods. Although the reasonably possible effects of a change in estimate related to quality incentive premium revenue as of June 30, 2019, are not known, we have no reason to believe that the adjustments to prior years noted below are not indicative of the potential future changes in our estimates as of June 30, 2019.

Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 10

Table of Contents

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(In millions)
Maximum available quality incentive premium - current period
$
46

 
$
47

 
$
91

 
$
87

 
 
 
 
 
 
 
 
Quality incentive premium revenue recognized in current period:
 
 
 
 
 
 
 
Earned current period
$
37

 
$
34

 
$
63

 
$
58

Earned prior periods
10

 
12

 
30

 
23

Total
$
47

 
$
46

 
$
93

 
81

 
 
 
 
 
 
 
 
Quality incentive premium revenue recognized as a percentage of total premium revenue
1.2
%
 
1.0
%
 
1.2
%
 
0.9
%

Medical Care Costs
Marketplace Program
In the first half of 2018, we recognized a benefit of approximately $76 million in reduced medical care costs related to 2017 dates of service as a result of the federal government’s confirmation that the reconciliation of 2017 Marketplace CSR subsidies would be performed on an annual basis. In the fourth quarter of 2017, we had assumed a nine-month reconciliation of this item pending confirmation of the time period to which the 2017 reconciliation would be applied.
Leases
Right-of-use (“ROU”) assets represent our right to use the underlying assets over the lease term, and lease liabilities represent our obligation for lease payments arising from the related leases. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease terms may include options to extend or terminate the lease when we believe it is reasonably certain that we will exercise such options. If applicable, we account for lease and non-lease components within a lease as a single lease component.
Because most of our leases do not provide an implicit interest rate, we generally use our incremental borrowing rate to determine the present value of lease payments. Lease expenses for operating lease payments are recognized on a straight-line basis over the lease term, and the related ROU assets and liabilities are reduced to the present value of the remaining lease payments at the end of each period. Finance lease payments reduce finance lease liabilities, the related ROU assets are amortized on a straight-line basis over the lease term, and interest expense is recognized using the effective interest method.
The significant majority of our operating leases consist of long-term operating leases for office space. Short-term leases (those with terms of 12 months or less) are not recorded as ROU assets or liabilities in the consolidated balance sheets. For certain leases that represent a portfolio of similar assets, such as a fleet of vehicles, we apply a portfolio approach to account for the related operating lease ROU assets and liabilities, rather than account for such assets and the related liabilities individually. A nominal number of our lease agreements include rental payments that adjust periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
For further information, including the amount and location of the ROU assets and lease liabilities recognized in the accompanying consolidated balance sheet, see Note 13, “Leases.” For further information regarding our adoption and implementation of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), see Recent Accounting Pronouncements Adopted, below.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments, receivables, and restricted investments. Our investments and a portion of our cash equivalents are managed by professional portfolio managers operating under documented investment guidelines. Our portfolio managers must obtain our prior approval before selling investments where the loss position of those investments exceeds certain levels. Our investments consist primarily of investment-grade debt securities with a maximum maturity of 10 years, or 10 years average life for structured securities. Restricted investments are invested principally in certificates of deposit and U.S. Treasury securities. Concentration of credit risk with respect to

Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 11

Table of Contents

accounts receivable is generally limited because our payors consist principally of the federal government, and governments of each state or commonwealth in which our health plan subsidiaries operate.
Income Taxes
The provision for income taxes is determined using an estimated annual effective tax rate, which generally differs from the U.S. federal statutory rate primarily because of foreign and state taxes, nondeductible expenses such as the Health Insurer Fee (“HIF”), certain compensation, and other general and administrative expenses. The effective tax rate will not be impacted by HIF in 2019 given the 2019 HIF moratorium.
The effective tax rate may be subject to fluctuations during the year as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including projected pretax earnings, the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers.
Recent Accounting Pronouncements Adopted
Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Topic 842, which was subsequently modified by several ASUs issued in 2017 and 2018. Topic 842 was issued to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most prominent among the changes in Topic 842 is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. In addition, Topic 842’s disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. Topic 842’s transition provisions are applied using a modified retrospective approach; entities may elect whether to apply the transition provisions, including disclosure requirements, at the beginning of the earliest comparative period presented or on the adoption date.
We adopted Topic 842 effective January 1, 2019, and elected to apply the transition provisions as of that date. Accordingly, we recognized the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings on January 1, 2019. In addition, we elected the available practical expedients and implemented internal controls and key system functionality to enable the preparation of financial information on adoption.
As indicated in the accompanying consolidated statements of stockholders’ equity, the cumulative effect adjustment was an increase of $85 million to retained earnings, relating primarily to the transition provisions for sale-leaseback arrangements that did not qualify for sale treatment. Accordingly, such arrangements for certain office buildings were de-recognized and recorded as finance lease ROU assets and lease liabilities. The difference between the de-recognized assets and lease financing obligations resulted in an increase to retained earnings. The recognition of these arrangements as finance lease ROU assets and lease liabilities will not materially impact our consolidated results of operations over the terms of the leases.
Software Licenses. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We early adopted ASU 2018-15 effective January 1, 2019, using the prospective method, with no material impact to our financial condition, results of operations or cash flows. Adoption of this guidance may be significant to us in the future depending on the extent to which we use cloud computing arrangements that qualify as service contracts.
Recent Accounting Pronouncements Not Yet Adopted
Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as modified by:
ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses;
ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments; and
ASU 2019-05, Financial Instruments - Credit Losses (Topic 326), Targeted Transition Relief.
This standard introduces a new current expected credit loss (“CECL”) model for measuring expected credits losses for certain types of financial instruments and replaces the incurred loss model. The CECL model requires

Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 12

Table of Contents

companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount companies expect to collect over the instrument’s contractual life after consideration of historical experience, current conditions, and reasonable and supportable forecasts. This standard also introduces targeted changes to the available-for-sale (“AFS”) debt securities impairment model. ASU 2016-13 is effective beginning January 1, 2020, and must be adopted as a cumulative effect adjustment to retained earnings; early adoption is permitted.
We have determined that the CECL model will apply primarily to “Receivables” and “Restricted investments” reported in our consolidated balance sheets. The AFS debt securities impairment model will apply to “Investments” reported in our consolidated balance sheets. We are currently evaluating the processes and controls necessary to adopt and implement ASU 2016-13, along with the effects the adoption will have on our consolidated results of operations and financial condition.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not have, nor does management expect such pronouncements to have, a significant impact on our present or future consolidated financial statements.

3. Net Income per Share
The following table sets forth the calculation of net income per share:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(In millions, except net income per share)
Numerator:
 
 
 
 
 
 
 
Net income
$
196

 
$
202

 
$
394

 
$
309

Denominator:
 
 
 
 
 
 
 
Shares outstanding at the beginning of the period
62.1

 
61.2

 
62.1

 
59.3

Weighted-average number of shares issued:
 
 
 
 
 
 
 
Exchange of 1.625% Convertible Notes

 

 

 
1.1

Stock-based compensation

 

 

 
0.1

Denominator for net income per share, basic
62.1

 
61.2

 
62.1

 
60.5

Effect of dilutive securities:
 
 
 
 
 
 
 
1.125% Warrants (1)
1.3

 
4.9

 
2.4

 
4.8

1.625% Convertible Notes

 
0.4

 

 
0.5

Stock-based compensation
0.6

 
0.2

 
0.6

 
0.2

Denominator for net income per share, diluted
64.0

 
66.7

 
65.1

 
66.0

 
 
 
 
 
 
 
 
Net income per share: (2)
 
 
 
 
 
 
 
Basic
$
3.15

 
$
3.29

 
$
6.34

 
$
5.10

Diluted
$
3.06

 
$
3.02

 
$
6.04

 
$
4.68

 
 
 
 
 
 
 
 
Potentially dilutive common shares excluded from calculations: (1)
 
 
 
 
 
 
 
Stock-based compensation

 
0.4

 

 
0.4

______________________________
(1)
For more information and definitions regarding the 1.125% Warrants, including partial termination transactions, refer to Note 9, “Stockholders' Equity.” The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method. Certain potentially dilutive common shares issuable were not included in the computation of diluted net income per share because to do so would have been anti-dilutive.
(2)
Source data for calculations in thousands.

Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 13

Table of Contents

4. Fair Value Measurements
We consider the carrying amounts of current assets and current liabilities (not including derivatives and the current portion of long-term debt) to approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment. For our financial instruments measured at fair value on a recurring basis, we prioritize the inputs used in measuring fair value according to the three-tier fair value hierarchy. For a description of the methods and assumptions that we use to a) estimate the fair value; and b) determine the classification according to the fair value hierarchy for each financial instrument, see Note 4, “Fair Value Measurements,” in our 2018 Annual Report on Form 10-K.
Derivative financial instruments include the 1.125% Call Option derivative asset and the 1.125% Conversion Option derivative liability (see Note 8Derivatives,” for definitions and further information). These derivatives are not actively traded and are valued based on an option pricing model that uses observable and unobservable market data for inputs. Significant market data inputs used to determine fair value as of June 30, 2019, included the price of our common stock, the time to maturity of the derivative instruments, the risk-free interest rate, and the implied volatility of our common stock. The 1.125% Call Option derivative asset and the 1.125% Conversion Option derivative liability were designed such that changes in their fair values would offset, with minimal impact to the consolidated statements of income. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such derivative instruments is mitigated.
The net changes in fair value of Level 3 financial instruments were insignificant to our results of operations for the six months ended June 30, 2019.
Our financial instruments measured at fair value on a recurring basis at June 30, 2019, were as follows:
 
Total
 
Observable Inputs (Level 1)
 
Directly or Indirectly Observable Inputs (Level 2)
 
Unobservable Inputs (Level 3)
 
(In millions)
Corporate debt securities
$
1,297

 
$

 
$
1,297

 
$

Mortgage-backed securities
249

 

 
249

 

Asset-backed securities
161

 

 
161

 

Government-sponsored enterprise securities (“GSEs”)
159

 

 
159

 

Municipal securities
109

 

 
109

 

U.S. Treasury notes
87

 

 
87

 

Certificate of deposit
6

 

 
6

 

Other
2

 

 
2

 

  Subtotal - current investments
2,070

 

 
2,070

 

1.125% Call Option derivative asset
169

 

 

 
169

Total assets
$
2,239

 
$

 
$
2,070

 
$
169

 
 
 
 
 
 
 
 
1.125% Conversion Option derivative liability
$
169

 
$

 
$

 
$
169

Total liabilities
$
169

 
$

 
$

 
$
169


Molina Healthcare, Inc. June 30, 2019 Form 10-Q | 14

Table of Contents

Our financial instruments measured at fair value on a recurring basis at December 31, 2018, were as follows:
 
Total
 
Observable Inputs (Level 1)
 
Directly or Indirectly Observable Inputs (Level 2)
 
Unobservable Inputs (Level 3)
 
(In millions)
Corporate debt securities
$
1,123

 
$

 
$
1,123

 
$

Asset-backed securities
82

 

 
82

 

GSEs
163

 

 
163

 

Municipal securities
114

 

 
114

 

U.S. Treasury notes
181

 

 
181

 

Certificates of deposit
14

 

 
14

 

Other
4

 

 
4

 

  Subtotal - current investments
1,681

 

 
1,681

 

1.125% Call Option derivative asset
476

 

 

 
476

Total assets
$
2,157

 
$

 
$
1,681

 
$
476

 
 
 
 
 
 
 
 
1.125% Conversion Option derivative liability
$
476

 
$

 
$

 
$
476

Total liabilities
$
476

 
$

 
$

 
$
476


Fair Value Measurements – Disclosure Only
The carrying amounts and estimated fair values of our notes payable are classified as Level 2 financial instruments. Fair value for these securities is determined using a market approach based on quoted market prices for similar securities in active markets or quoted prices for identical securities in inactive markets. The carrying amount and estimated fair value of the Term Loan Facility is classified as a Level 3 financial instrument, because certain inputs used to determine its fair value are not observable. As of June 30, 2019, the carrying amount of the Term Loan Facility approximates fair value because its interest rate is a variable rate that approximates rates currently available to us.
 
June 30, 2019
 
December 31, 2018
 
Carrying
Amount
 

Fair Value
 
Carrying
Amount
 

Fair Value
 
(In millions)
5.375% Notes
$
695

 
$
732

 
$
694

 
$
674

4.875% Notes
326

 
335

 
326