Molina Healthcare Reports First Quarter 2017 Results
Molina Healthcare, Inc. (NYSE: MOH)
- Net income per diluted share for the quarter of $1.37.
- Adjusted net income per diluted share for the quarter of $1.47.
- Results include the benefit of a $75 million ($0.84 per diluted share) acquisition termination fee
received in the first quarter.
- Full year 2017 earnings per diluted share and adjusted earnings per diluted share guidance revised to
reflect acquisition termination fee; full year 2017 guidance is otherwise confirmed.
Molina Healthcare, Inc. (NYSE: MOH) today reported its financial results for the first quarter of 2017.
“While we are pleased with the results we reported today, we understand that they represent only one step along the path to
improving on our 2016 results,” said Joseph White, interim chief executive officer and chief financial officer of Molina
Healthcare, Inc. “Our entire Company is focused on improving our profitability in 2017 and beyond.”
First Quarter 2017 Compared with First Quarter 2016
Net income per diluted share increased to $1.37 in the first quarter of 2017 compared with $0.43 reported for the first quarter
of 2016. Adjusted net income per diluted share increased to $1.47 in the first quarter of 2017, compared with $0.51 in the first
quarter of 2016. Income before income taxes increased $67 million to $131 million in the first quarter of 2017 from $64 million in
the first quarter of 2016.
First quarter financial performance was affected by the following developments:
- As previously reported, we received a payment of $75 million ($0.84 per diluted share) relating
to the termination of a proposed Medicare acquisition, which was recorded as other income in the first quarter of 2017.
- The performance of our Marketplace program was consistent with management’s expectations. Income
before income taxes increased by $8 million ($0.09 per diluted share) as a result of a reduction to the premium deficiency
reserve established for the Marketplace program at December 31, 2016. The reserve, which was $30 million at December 31,
2016, decreased to $22 million as of March 31, 2017.
- The performance of our combined Medicaid and Medicare programs was consistent with management’s
expectations, with the exception of the unfavorable prior-period development of medical claims liabilities in Illinois discussed
below.
- Medical costs at the Illinois health plan related to dates of service in 2016 and earlier reduced
income before income taxes by approximately $20 million ($0.22 per diluted share) in the first quarter. Excluding this
out-of-period impact in Illinois, the medical care ratio for our combined Medicaid and Medicare programs was consistent with the
expectations reflected in our previously announced full year 2017 Outlook.
- General and administrative expenses as a percentage of total revenue (the “G&A ratio”) were 8.9%
in the first quarter, consistent with the G&A ratio anticipated in our previously announced full year 2017 Outlook. As
expected, our G&A ratio increased over 2016 primarily due to: 1) increased investment in systems and infrastructure; 2)
employee bonuses recorded in 2017 but not in 2016; 3) costs associated with increased Marketplace enrollment in 2017; and 4) the
reduction to revenue as a result of the 2017 Health Insurer Fee (HIF) moratorium.
- The effective tax rate in the first quarter of 2017, while consistent with our previously announced
full year 2017 Outlook, dropped substantially from prior year levels due primarily to the 2017 HIF moratorium.
2017 Outlook
The Company is confirming its 2017 Outlook for earnings per diluted share and adjusted earnings per diluted share, to $2.53 and
$2.90, respectively, and revising the 2017 Outlook for the impact of the $75 million acquisition termination fee received in the
first quarter of 2017.
Conference Call
Management will host a conference call and webcast to discuss Molina Healthcare’s first quarter results at 5:00 p.m. Eastern
time on Tuesday, May 2, 2017. The number to call for the interactive teleconference is (212) 231-2909. A telephonic replay of the
conference call will be available from 7:00 p.m. Eastern time on Tuesday, May 2, 2017, through 6:00 p.m. Eastern Time on Wednesday,
May 3, 2017, by dialing (800) 633-8284 and entering confirmation number 21849898. A live audio broadcast of Molina Healthcare’s
conference call will be available on our website, molinahealthcare.com. A 30-day online replay will be available approximately an hour following the conclusion of
the live broadcast.
About Molina Healthcare
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed health care services under the Medicaid and Medicare programs
and through the state insurance marketplaces. Through our locally operated health plans in 12 states across the nation and in the
Commonwealth of Puerto Rico, Molina currently serves approximately 4.8 million members. Dr. C. David Molina founded our company in
1980 as a provider organization serving low-income families in Southern California. Today, we continue his mission of providing
high quality and cost-effective health care to those who need it most. For more information about Molina Healthcare, please visit
our website at molinahealthcare.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This earnings release contains
“forward-looking statements” regarding our plans, expectations, and anticipated future events. Actual results could differ
materially due to numerous known and unknown risks and uncertainties. Those known risks and uncertainties include, but are not
limited to, the following:
- the success of our profit improvement and cost-cutting initiatives;
- the numerous political and market-based uncertainties associated with the Affordable Care Act (the
“ACA”) or “Obamacare,” including any potential repeal and replacement of the law, amendment of the law, or move to state block
grants for Medicaid;
- the market dynamics surrounding the ACA Marketplaces, including but not limited to uncertainties
associated with risk transfer requirements, the potential for disproportionate enrollment of higher acuity members, the
withdrawal of cost sharing subsidies and/or premium tax credits, the adequacy of agreed rates, and potential disruption
associated with market withdrawal;
- subsequent adjustments to reported premium revenue based upon subsequent developments or new
information, including changes to estimated amounts payable or receivable related to Marketplace risk adjustment/risk transfer,
risk corridors, and reinsurance;
- management of our medical costs, including our ability to reduce over time the high medical costs
commonly associated with new patient populations;
- our ability to predict with a reasonable degree of accuracy utilization rates, including
utilization rates in new plans, geographies, and programs where we have less experience with patient and provider populations,
and also including utilization rates associated with seasonal flu patterns or other newly emergent diseases;
- significant budget pressures on state governments and their potential inability to maintain
current rates, to implement expected rate increases, or to maintain existing benefit packages or membership eligibility
thresholds or criteria, including the resolution of the Illinois budget impasse and continued payment of all amounts due to our
Illinois health plan;
- the success of our efforts to retain existing government contracts, including those in Illinois,
Washington, Florida, Texas, and New Mexico, and to obtain new government contracts in connection with state requests for
proposals (RFPs) in both existing and new states;
- our ability to manage growth, including maintaining and creating adequate internal systems and
controls relating to authorizations, approvals, provider payments, and the overall success of our care management
initiatives;
- our ability to consummate and realize benefits from acquisitions, and to integrate
acquisitions;
- our receipt of adequate premium rates to support increasing pharmacy costs, including costs
associated with specialty drugs and costs resulting from formulary changes that allow the option of higher-priced non-generic
drugs;
- our ability to operate profitably in an environment where the trend in premium rate increases lags
behind the trend in increasing medical costs;
- the interpretation and implementation of federal or state medical cost expenditure floors,
administrative cost and profit ceilings, premium stabilization programs, profit sharing arrangements, and risk adjustment
provisions;
- our estimates of amounts owed for such cost expenditure floors, administrative cost and profit
ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions;
- the Medicaid expansion cost corridors in California, New Mexico and Washington, and any other
retroactive adjustment to revenue where methodologies and procedures are subject to interpretation or dependent upon information
about the health status of participants other than Molina members;
- the interpretation and implementation of at-risk premium rules and state contract performance
requirements regarding the achievement of certain quality measures, and our ability to recognize revenue amounts associated
therewith;
- cyber-attacks or other privacy or data security incidents resulting in an inadvertent unauthorized
disclosure of protected health information;
- the success of our health plan in Puerto Rico, including the resolution of the Puerto Rico debt
crisis, payment of all amounts due under our Medicaid contract, the effect of the PROMESA law, and our efforts to better manage
the health care costs of our Puerto Rico health plan;
- the success and renewal of our duals demonstration programs in California, Illinois, Michigan,
Ohio, South Carolina, and Texas;
- the accurate estimation of incurred but not reported or paid medical costs across our health
plans;
- efforts by states to recoup previously paid and recognized premium amounts;
- the continuation and renewal of the government contracts of our health plans, Molina Medicaid
Solutions, and Pathways, and the terms under which such contracts are renewed;
- complications, member confusion, or enrollment backlogs related to the annual renewal of Medicaid
coverage;
- government audits and reviews, or potential investigations, and any fine, sanction, enrollment
freeze, monitoring program, or premium recovery that may result therefrom;
- changes with respect to our provider contracts and the loss of providers;
- approval by state regulators of dividends and distributions by our health plan
subsidiaries;
- changes in funding under our contracts as a result of regulatory changes, programmatic
adjustments, or other reforms;
- high dollar claims related to catastrophic illness;
- the favorable resolution of litigation, arbitration, or administrative proceedings;
- the relatively small number of states in which we operate health plans;
- the availability of adequate financing on acceptable terms to fund and capitalize our expansion
and growth, repay our outstanding indebtedness at maturity and meet our liquidity needs, including the interest expense and other
costs associated with such financing;
- our failure to comply with the financial or other covenants in our credit agreement or the
indentures governing our outstanding notes;
- the sufficiency of our funds on hand to pay the amounts due upon conversion or maturity of our
outstanding notes;
- the failure of a state in which we operate to renew its federal Medicaid waiver;
- changes generally affecting the managed care or Medicaid management information systems
industries;
- increases in government surcharges, taxes, and assessments, including but not limited to the
deductibility of certain compensation costs;
- newly emergent viruses or widespread epidemics, public catastrophes or terrorist attacks, and
associated public alarm;
- increasing competition and consolidation in the Medicaid industry;
and numerous other risk factors, including those discussed in our periodic reports and filings with the Securities and
Exchange Commission. These reports can be accessed under the investor relations tab of our website or on the SEC’s website at
sec.gov . Given these risks and uncertainties, we can give no assurances that our forward-looking
statements will prove to be accurate, or that any other results or events projected or contemplated by our forward-looking
statements will in fact occur, and we caution investors not to place undue reliance on these statements. All forward-looking
statements in this release represent our judgment as of May 2, 2017, and we disclaim any obligation to update any forward-looking
statements to conform the statement to actual results or changes in our expectations.
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
|
|
(Dollar amounts in millions,
except per-share amounts)
|
| Revenue: |
|
|
|
|
| Premium revenue |
|
$ |
4,648 |
|
|
$ |
3,995 |
|
| Service revenue |
|
131 |
|
|
140 |
|
| Premium tax revenue |
|
111 |
|
|
109 |
|
| Health insurer fee revenue |
|
— |
|
|
90 |
|
| Investment income and other revenue |
|
14 |
|
|
9 |
|
| Total revenue |
|
4,904 |
|
|
4,343 |
|
| Operating expenses: |
|
|
|
|
| Medical care costs |
|
4,111 |
|
|
3,588 |
|
| Cost of service revenue |
|
122 |
|
|
127 |
|
| General and administrative expenses |
|
439 |
|
|
340 |
|
| Premium tax expenses |
|
111 |
|
|
109 |
|
| Health insurer fee expenses |
|
— |
|
|
58 |
|
| Depreciation and amortization |
|
39 |
|
|
32 |
|
| Total operating expenses |
|
4,822 |
|
|
4,254 |
|
| Operating income |
|
82 |
|
|
89 |
|
| Other (income) expenses, net: |
|
|
|
|
| Interest expense |
|
26 |
|
|
25 |
|
| Other income, net |
|
(75 |
) |
|
— |
|
| Total other (income) expenses, net |
|
(49 |
) |
|
25 |
|
| Income before income tax expense |
|
131 |
|
|
64 |
|
| Income tax expense |
|
54 |
|
|
40 |
|
| Net income |
|
$ |
77 |
|
|
$ |
24 |
|
|
|
|
|
|
| Net income per diluted share |
|
$ |
1.37 |
|
|
$ |
0.43 |
|
|
|
|
|
|
| Diluted weighted average shares outstanding |
|
56.2 |
|
|
56.9 |
|
|
|
|
|
|
| Operating Statistics: |
|
|
|
|
| Medical care ratio (1) |
|
88.4 |
% |
|
89.8 |
% |
| G&A ratio (2) |
|
8.9 |
% |
|
7.8 |
% |
| Premium tax ratio (1) |
|
2.3 |
% |
|
2.6 |
% |
| Effective tax rate |
|
41.6 |
% |
|
61.7 |
% |
| Net profit margin (2) |
|
1.6 |
% |
|
0.6 |
% |
| Net profit margin excluding acquisition termination fee (2) |
|
0.6 |
% |
|
0.6 |
% |
| |
|
|
|
|
|
|
|
(1)Medical care ratio represents medical care costs as a percentage of premium revenue;
premium tax ratio represents premium tax expenses as a percentage of premium revenue plus premium tax revenue.
|
|
(2)G&A ratio represents general and administrative expenses as a percentage of total
revenue. Net profit margin represents net income as a percentage of total revenue. Net profit margin excluding acquisition
termination fee represents net income excluding the acquisition termination fee (net of income taxes at our blended federal
and state statutory tax rate of 37%), as a percentage of total revenue.
|
| |
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
|
(In millions,
except per-share data)
|
| ASSETS |
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
|
$ |
3,198 |
|
|
$ |
2,819 |
|
| Investments |
|
2,056 |
|
|
1,758 |
|
| Receivables |
|
1,006 |
|
|
974 |
|
| Income taxes refundable |
|
— |
|
|
39 |
|
| Prepaid expenses and other current assets |
|
142 |
|
|
131 |
|
| Derivative asset |
|
— |
|
|
267 |
|
| Total current assets |
|
6,402 |
|
|
5,988 |
|
| Property, equipment, and capitalized software, net |
|
447 |
|
|
454 |
|
| Deferred contract costs |
|
89 |
|
|
86 |
|
| Intangible assets, net |
|
131 |
|
|
140 |
|
| Goodwill |
|
620 |
|
|
620 |
|
| Restricted investments |
|
115 |
|
|
110 |
|
| Deferred income taxes |
|
10 |
|
|
10 |
|
| Derivative asset |
|
181 |
|
|
— |
|
| Other assets |
|
43 |
|
|
41 |
|
|
|
$ |
8,038 |
|
|
$ |
7,449 |
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| Current liabilities: |
|
|
|
|
| Medical claims and benefits payable |
|
$ |
1,926 |
|
|
$ |
1,929 |
|
| Amounts due government agencies |
|
1,575 |
|
|
1,202 |
|
| Accounts payable and accrued liabilities |
|
438 |
|
|
385 |
|
| Deferred revenue |
|
461 |
|
|
315 |
|
| Income taxes payable |
|
21 |
|
|
— |
|
| Current portion of long-term debt |
|
1 |
|
|
472 |
|
| Derivative liability |
|
— |
|
|
267 |
|
| Total current liabilities |
|
4,422 |
|
|
4,570 |
|
| Senior notes |
|
1,455 |
|
|
975 |
|
| Lease financing obligations |
|
198 |
|
|
198 |
|
| Deferred income taxes |
|
11 |
|
|
15 |
|
| Derivative liability |
|
181 |
|
|
— |
|
| Other long-term liabilities |
|
44 |
|
|
42 |
|
| Total liabilities |
|
6,311 |
|
|
5,800 |
|
| Stockholders’ equity: |
|
|
|
|
| Common stock, $0.001 par value; 150 shares authorized; outstanding: 57 shares at
March 31, 2017 and December 31, 2016 |
|
— |
|
|
— |
|
| Preferred stock, $0.001 par value; 20 shares authorized, no shares issued and
outstanding |
|
— |
|
|
— |
|
| Additional paid-in capital |
|
841 |
|
|
841 |
|
| Accumulated other comprehensive loss |
|
(1 |
) |
|
(2 |
) |
| Retained earnings |
|
887 |
|
|
810 |
|
| Total stockholders’ equity |
|
1,727 |
|
|
1,649 |
|
|
|
$ |
8,038 |
|
|
$ |
7,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
|
|
(In millions) |
| Operating activities: |
|
|
|
|
| Net income |
|
$ |
77 |
|
|
$ |
24 |
|
| Adjustments to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
| Depreciation and amortization |
|
49 |
|
|
44 |
|
| Deferred income taxes |
|
(5 |
) |
|
30 |
|
| Share-based compensation |
|
6 |
|
|
7 |
|
| Amortization of convertible senior notes and lease financing obligations |
|
8 |
|
|
8 |
|
| Other, net |
|
3 |
|
|
6 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
| Receivables |
|
(32 |
) |
|
(266 |
) |
| Prepaid expenses and other assets |
|
(12 |
) |
|
(202 |
) |
| Medical claims and benefits payable |
|
(3 |
) |
|
255 |
|
| Amounts due government agencies |
|
373 |
|
|
181 |
|
| Accounts payable and accrued liabilities |
|
50 |
|
|
205 |
|
| Deferred revenue |
|
146 |
|
|
(129 |
) |
| Income taxes |
|
59 |
|
|
(24 |
) |
| Net cash provided by operating activities |
|
719 |
|
|
139 |
|
| Investing activities: |
|
|
|
|
| Purchases of investments |
|
(733 |
) |
|
(611 |
) |
| Proceeds from sales and maturities of investments |
|
433 |
|
|
348 |
|
| Purchases of property, equipment, and capitalized software |
|
(26 |
) |
|
(46 |
) |
| Change in restricted investments |
|
(7 |
) |
|
(4 |
) |
| Net cash paid in business combinations |
|
— |
|
|
(2 |
) |
| Other, net |
|
(6 |
) |
|
1 |
|
| Net cash used in investing activities |
|
(339 |
) |
|
(314 |
) |
| Financing activities: |
|
|
|
|
| Proceeds from employee stock plans |
|
1 |
|
|
— |
|
| Other, net |
|
(2 |
) |
|
2 |
|
| Net cash (used in) provided by financing activities |
|
(1 |
) |
|
2 |
|
| Net increase (decrease) in cash and cash equivalents |
|
379 |
|
|
(173 |
) |
| Cash and cash equivalents at beginning of period |
|
2,819 |
|
|
2,329 |
|
| Cash and cash equivalents at end of period |
|
$ |
3,198 |
|
|
$ |
2,156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED HEALTH PLANS SEGMENT MEMBERSHIP
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
| Ending Membership by Program: |
|
|
|
|
|
|
| Temporary Assistance for Needy Families (TANF) and Children’s Health Insurance
Program (CHIP) |
|
2,548,000 |
|
|
2,536,000 |
|
|
2,485,000 |
| Marketplace |
|
1,035,000 |
|
|
526,000 |
|
|
630,000 |
| Medicaid Expansion |
|
684,000 |
|
|
673,000 |
|
|
632,000 |
| Aged, Blind or Disabled (ABD) |
|
401,000 |
|
|
396,000 |
|
|
380,000 |
| Medicare-Medicaid Plan (MMP) - Integrated |
|
55,000 |
|
|
51,000 |
|
|
50,000 |
| Medicare Special Needs Plans |
|
43,000 |
|
|
45,000 |
|
|
43,000 |
|
|
4,766,000 |
|
|
4,227,000 |
|
|
4,220,000 |
| Ending Membership by Health Plan: |
|
|
|
|
|
|
| California |
|
765,000 |
|
|
683,000 |
|
|
676,000 |
| Florida |
|
711,000 |
|
|
553,000 |
|
|
576,000 |
| Illinois |
|
194,000 |
|
|
195,000 |
|
|
206,000 |
| Michigan |
|
417,000 |
|
|
391,000 |
|
|
399,000 |
| New Mexico |
|
270,000 |
|
|
254,000 |
|
|
246,000 |
| New York (1) |
|
34,000 |
|
|
35,000 |
|
|
— |
| Ohio |
|
351,000 |
|
|
332,000 |
|
|
336,000 |
| Puerto Rico |
|
326,000 |
|
|
330,000 |
|
|
339,000 |
| South Carolina |
|
111,000 |
|
|
109,000 |
|
|
102,000 |
| Texas |
|
493,000 |
|
|
337,000 |
|
|
380,000 |
| Utah |
|
172,000 |
|
|
146,000 |
|
|
151,000 |
| Washington |
|
785,000 |
|
|
736,000 |
|
|
672,000 |
| Wisconsin |
|
137,000 |
|
|
126,000 |
|
|
137,000 |
|
|
4,766,000 |
|
|
4,227,000 |
|
|
4,220,000 |
| |
|
|
|
|
|
|
|
|
|
(1) The New York health plan was acquired on August 1, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA
(In millions, except percentages and per-member per-month amounts)
|
|
|
|
|
|
Three Months Ended March 31, 2017 |
|
|
Member
Months (1)
|
|
Premium Revenue |
|
Medical Care Costs |
|
MCR (2) |
|
Medical
Margin
|
|
|
|
Total |
|
PMPM |
|
Total |
|
PMPM |
|
|
| TANF and CHIP |
|
7.7 |
|
|
$ |
1,402 |
|
|
$ |
182.69 |
|
|
$ |
1,304 |
|
|
$ |
170.02 |
|
|
93.1 |
% |
|
$ |
98
|
| Medicaid Expansion |
|
2.0 |
|
|
817 |
|
|
398.70 |
|
|
689 |
|
|
336.51 |
|
|
84.4 |
|
|
128 |
| ABD |
|
1.2 |
|
|
1,196 |
|
|
1,006.84 |
|
|
1,130 |
|
|
951.32 |
|
|
94.5 |
|
|
66 |
| Total Medicaid |
|
10.9 |
|
|
3,415 |
|
|
312.98 |
|
|
3,123 |
|
|
286.35 |
|
|
91.5 |
|
|
292
|
| MMP |
|
0.2 |
|
|
344 |
|
|
2,088.96 |
|
|
307 |
|
|
1,859.41 |
|
|
89.0 |
|
|
37 |
| Medicare |
|
0.1 |
|
|
138 |
|
|
1,068.20 |
|
|
117 |
|
|
902.67 |
|
|
84.5 |
|
|
21 |
| Total Medicare |
|
0.3 |
|
|
482 |
|
|
1,640.63 |
|
|
424 |
|
|
1,439.20 |
|
|
87.7 |
|
|
58 |
| Excluding Marketplace |
|
11.2 |
|
|
3,897 |
|
|
347.84 |
|
|
3,547 |
|
|
316.62 |
|
|
91.0 |
|
|
350
|
| Marketplace |
|
2.9 |
|
|
751 |
|
|
262.16 |
|
|
564 |
|
|
196.72 |
|
|
75.0 |
|
|
187
|
|
|
14.1 |
|
|
$ |
4,648 |
|
|
$ |
330.39 |
|
|
$ |
4,111 |
|
|
$ |
292.20 |
|
|
88.4 |
% |
|
$ |
537 |
|
|
|
|
|
Three Months Ended March 31, 2016 |
|
|
Member
Months (1)
|
|
Premium Revenue |
|
Medical Care Costs |
|
MCR (2) |
|
Medical
Margin
|
|
|
|
Total |
|
PMPM |
|
Total |
|
PMPM |
|
|
| TANF and CHIP |
|
7.4 |
|
|
$ |
1,324 |
|
|
$ |
178.47 |
|
|
$ |
1,198 |
|
|
$ |
161.46 |
|
|
90.5 |
% |
|
$ |
126 |
| Medicaid Expansion |
|
1.9 |
|
|
679 |
|
|
365.11 |
|
|
574 |
|
|
308.30 |
|
|
84.4 |
|
|
105 |
| ABD |
|
1.2 |
|
|
1,112 |
|
|
961.49 |
|
|
1,041 |
|
|
899.79 |
|
|
93.6 |
|
|
71 |
| Total Medicaid |
|
10.5 |
|
|
3,115 |
|
|
298.51 |
|
|
2,813 |
|
|
269.42 |
|
|
90.3 |
|
|
302 |
| MMP |
|
0.1 |
|
|
340 |
|
|
2,220.68 |
|
|
317 |
|
|
2,070.23 |
|
|
93.2 |
|
|
23 |
| Medicare |
|
0.1 |
|
|
131 |
|
|
1,029.10 |
|
|
124 |
|
|
980.49 |
|
|
95.3 |
|
|
7 |
| Total Medicare |
|
0.2 |
|
|
471 |
|
|
1,681.57 |
|
|
441 |
|
|
1,577.21 |
|
|
93.8 |
|
|
30 |
| Excluding Marketplace |
|
10.7 |
|
|
3,586 |
|
|
334.62 |
|
|
3,254 |
|
|
303.59 |
|
|
90.7 |
|
|
332 |
| Marketplace |
|
1.6 |
|
|
409 |
|
|
251.85 |
|
|
334 |
|
|
205.86 |
|
|
81.7 |
|
|
75 |
|
|
12.3 |
|
|
$ |
3,995 |
|
|
$ |
323.73 |
|
|
$ |
3,588 |
|
|
$ |
290.74 |
|
|
89.8 |
% |
|
$ |
407 |
|
|
|
|
|
Twelve Months Ended December 31, 2016 |
|
|
Member
Months (1)
|
|
Premium Revenue |
|
Medical Care Costs |
|
MCR (2) |
|
Medical
Margin
|
|
|
|
Total |
|
PMPM |
|
Total |
|
PMPM |
|
|
| TANF and CHIP |
|
30.2 |
|
|
$ |
5,403 |
|
|
$ |
179.21 |
|
|
$ |
4,950 |
|
|
$ |
164.18 |
|
|
91.6 |
% |
|
$ |
453 |
| Medicaid Expansion |
|
7.8 |
|
|
2,952 |
|
|
378.58 |
|
|
2,475 |
|
|
317.37 |
|
|
83.8 |
|
|
477 |
| ABD |
|
4.7 |
|
|
4,666 |
|
|
991.24 |
|
|
4,277 |
|
|
908.39 |
|
|
91.6 |
|
|
389 |
| Total Medicaid |
|
42.7 |
|
|
13,021 |
|
|
305.28 |
|
|
11,702 |
|
|
274.33 |
|
|
89.9 |
|
|
1,319 |
| MMP |
|
0.6 |
|
|
1,303 |
|
|
2,131.97 |
|
|
1,141 |
|
|
1,866.93 |
|
|
87.6 |
|
|
162 |
| Medicare |
|
0.5 |
|
|
543 |
|
|
1,033.15 |
|
|
515 |
|
|
981.36 |
|
|
95.0 |
|
|
28 |
| Total Medicare |
|
1.1 |
|
|
1,846 |
|
|
1,624.15 |
|
|
1,656 |
|
|
1,457.67 |
|
|
89.7 |
|
|
190 |
| Excluding Marketplace |
|
43.8 |
|
|
14,867 |
|
|
339.51 |
|
|
13,358 |
|
|
305.03 |
|
|
89.8 |
|
|
1,509 |
| Marketplace |
|
6.7 |
|
|
1,525 |
|
|
228.44 |
|
|
1,416 |
|
|
212.17 |
|
|
92.9 |
|
|
109 |
|
|
|
50.5 |
|
|
$ |
16,392 |
|
|
$ |
324.82 |
|
|
$ |
14,774 |
|
|
$ |
292.75 |
|
|
90.1 |
% |
|
$ |
1,618 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) A member month is defined as the aggregate of each month’s ending membership for the
period presented.
|
|
(2) The MCR represents medical costs as a percentage of premium revenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA
(In millions, except percentages and per-member per-month amounts)
|
|
|
|
|
|
Three Months Ended March 31, 2017 |
|
|
Member
Months (1)
|
|
Premium Revenue |
|
Medical Care Costs |
|
MCR (2) |
|
Medical
Margin
|
|
|
|
Total |
|
PMPM |
|
Total |
|
PMPM |
|
|
| California |
|
2.2 |
|
|
$ |
644 |
|
|
$ |
286.92 |
|
|
$ |
510 |
|
|
$ |
227.19 |
|
|
79.2 |
% |
|
$ |
134 |
|
| Florida |
|
2.1 |
|
|
656 |
|
|
316.86 |
|
|
558 |
|
|
269.33 |
|
|
85.0 |
|
|
98 |
|
| Illinois |
|
0.6 |
|
|
161 |
|
|
276.58 |
|
|
180 |
|
|
310.08 |
|
|
112.1 |
|
|
(19 |
) |
| Michigan |
|
1.3 |
|
|
393 |
|
|
316.80 |
|
|
339 |
|
|
273.36 |
|
|
86.3 |
|
|
54 |
|
| New Mexico |
|
0.8 |
|
|
330 |
|
|
406.90 |
|
|
318 |
|
|
392.72 |
|
|
96.5 |
|
|
12 |
|
| New York (3) |
|
0.1 |
|
|
46 |
|
|
441.19 |
|
|
42 |
|
|
409.63 |
|
|
92.8 |
|
|
4 |
|
| Ohio |
|
1.1 |
|
|
541 |
|
|
516.00 |
|
|
479 |
|
|
457.14 |
|
|
88.6 |
|
|
62 |
|
| Puerto Rico |
|
1.0 |
|
|
183 |
|
|
186.51 |
|
|
165 |
|
|
168.18 |
|
|
90.2 |
|
|
18 |
|
| South Carolina |
|
0.3 |
|
|
105 |
|
|
317.07 |
|
|
98 |
|
|
293.34 |
|
|
92.5 |
|
|
7 |
|
| Texas |
|
1.4 |
|
|
684 |
|
|
486.96 |
|
|
602 |
|
|
428.55 |
|
|
88.0 |
|
|
82 |
|
| Utah |
|
0.5 |
|
|
134 |
|
|
264.73 |
|
|
123 |
|
|
242.57 |
|
|
91.6 |
|
|
11 |
|
| Washington |
|
2.3 |
|
|
642 |
|
|
274.74 |
|
|
581 |
|
|
248.40 |
|
|
90.4 |
|
|
61 |
|
| Wisconsin |
|
0.4 |
|
|
127 |
|
|
311.30 |
|
|
108 |
|
|
264.53 |
|
|
85.0 |
|
|
19 |
|
| Other (4) |
|
— |
|
|
2 |
|
|
— |
|
|
8 |
|
|
— |
|
|
— |
|
|
(6 |
) |
|
|
14.1 |
|
|
$ |
4,648 |
|
|
$ |
330.39 |
|
|
$ |
4,111 |
|
|
$ |
292.20 |
|
|
88.4 |
% |
|
$ |
537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016 |
|
|
Member
Months (1)
|
|
Premium Revenue |
|
Medical Care Costs |
|
MCR (2) |
|
Medical
Margin
|
|
|
Total |
|
PMPM |
|
Total |
|
PMPM |
|
|
| California |
|
2.0 |
|
|
$ |
541 |
|
|
$ |
273.42 |
|
|
$ |
469 |
|
|
$ |
236.92 |
|
|
86.7 |
% |
|
$ |
72 |
|
| Florida |
|
1.6 |
|
|
489 |
|
|
295.42 |
|
|
413 |
|
|
249.45 |
|
|
84.4 |
|
|
76 |
|
| Illinois |
|
0.6 |
|
|
149 |
|
|
267.10 |
|
|
132 |
|
|
236.76 |
|
|
88.6 |
|
|
17 |
|
| Michigan |
|
1.2 |
|
|
387 |
|
|
320.14 |
|
|
347 |
|
|
287.34 |
|
|
89.8 |
|
|
40 |
|
| New Mexico |
|
0.7 |
|
|
336 |
|
|
449.52 |
|
|
296 |
|
|
394.77 |
|
|
87.8 |
|
|
40 |
|
| New York (3) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Ohio |
|
1.0 |
|
|
488 |
|
|
489.14 |
|
|
449 |
|
|
450.11 |
|
|
92.0 |
|
|
39 |
|
| Puerto Rico |
|
1.0 |
|
|
181 |
|
|
176.85 |
|
|
174 |
|
|
170.43 |
|
|
96.4 |
|
|
7 |
|
| South Carolina |
|
0.3 |
|
|
84 |
|
|
275.97 |
|
|
67 |
|
|
220.78 |
|
|
80.0 |
|
|
17 |
|
| Texas |
|
1.1 |
|
|
620 |
|
|
580.81 |
|
|
575 |
|
|
538.91 |
|
|
92.8 |
|
|
45 |
|
| Utah |
|
0.4 |
|
|
114 |
|
|
264.62 |
|
|
102 |
|
|
235.88 |
|
|
89.1 |
|
|
12 |
|
| Washington |
|
2.0 |
|
|
506 |
|
|
255.41 |
|
|
458 |
|
|
231.18 |
|
|
90.5 |
|
|
48 |
|
| Wisconsin |
|
0.4 |
|
|
97 |
|
|
250.36 |
|
|
92 |
|
|
238.01 |
|
|
95.1 |
|
|
5 |
|
| Other (4) |
|
— |
|
|
3 |
|
|
— |
|
|
14 |
|
|
— |
|
|
— |
|
|
(11 |
) |
|
|
12.3 |
|
|
$ |
3,995 |
|
|
$ |
323.73 |
|
|
$ |
3,588 |
|
|
$ |
290.74 |
|
|
89.8 |
% |
|
$ |
407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) A member month is defined as the aggregate of each month’s ending membership for the
period presented.
|
|
(2) The MCR represents medical costs as a percentage of premium revenue.
|
|
(3) The New York health plan was acquired on August 1, 2016.
|
|
(4) “Other” medical care costs include primarily medically related administrative costs
at the parent company, and direct delivery costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA
(In millions, except percentages and per-member per-month amounts)
|
|
|
|
|
The following tables provide the details of our medical care costs for the periods indicated:
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
|
|
Amount |
|
PMPM |
|
% of
Total
|
|
Amount |
|
PMPM |
|
% of
Total
|
| Fee for service |
|
$ |
3,086 |
|
|
$ |
219.32 |
|
|
75.1 |
% |
|
$ |
2,737 |
|
|
$ |
221.77 |
|
|
76.3 |
% |
| Pharmacy |
|
616 |
|
|
43.76 |
|
|
15.0 |
|
|
525 |
|
|
42.53 |
|
|
14.6 |
|
| Capitation |
|
324 |
|
|
23.06 |
|
|
7.9 |
|
|
295 |
|
|
23.87 |
|
|
8.2 |
|
| Direct delivery |
|
22 |
|
|
1.58 |
|
|
0.5 |
|
|
16 |
|
|
1.34 |
|
|
0.5 |
|
| Other |
|
63 |
|
|
4.48 |
|
|
1.5 |
|
|
15 |
|
|
1.23 |
|
|
0.4 |
|
|
|
$ |
4,111 |
|
|
$ |
292.20 |
|
|
100.0 |
% |
|
$ |
3,588 |
|
|
$ |
290.74 |
|
|
100.0 |
% |
|
|
|
|
|
|
The following table provides the details of our medical claims and benefits payable as of the
dates indicated:
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2017 |
|
2016 |
| Fee-for-service claims incurred but not paid (IBNP) |
|
$ |
1,425 |
|
|
$ |
1,352 |
| Pharmacy payable |
|
133 |
|
|
112 |
| Capitation payable |
|
36 |
|
|
37 |
| Other (1) |
|
332 |
|
|
428 |
|
|
$ |
1,926 |
|
|
$ |
1,929 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) “Other” medical claims and benefits payable include amounts payable to certain providers for which we act as an intermediary
on behalf of various state agencies without assuming financial risk. Such receipts and payments do not impact our consolidated
statements of income. As of March 31, 2017 and December 31, 2016, we had recorded non-risk provider payables of
approximately $131 million and $225 million, respectively.
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE
(Dollars in millions, except per-member amounts)
|
|
|
|
|
|
|
Our claims liability includes a provision for adverse claims deviation based on historical
experience and other factors including, but not limited to, variations in claims payment patterns, changes in utilization and
cost trends, known outbreaks of disease, and large claims. Our reserving methodology is consistently applied across all
periods presented. The amounts displayed for “Components of medical care costs related to: Prior period” represent the amount
by which our original estimate of claims and benefits payable at the beginning of the period were more than the actual amount
of the liability based on information (principally the payment of claims) developed since that liability was first reported.
The following table presents the components of the change in medical claims and benefits payable for the periods
indicated:
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
Year Ended
December 31,
2016
|
|
|
2017 |
|
2016 |
|
| Medical claims and benefits payable, beginning balance |
|
$ |
1,929 |
|
|
$ |
1,685 |
|
|
$ |
1,685 |
|
| Components of medical care costs related to: |
|
|
|
|
|
|
| Current period |
|
4,253 |
|
|
3,755 |
|
|
14,966 |
|
| Prior period |
|
(142 |
) |
|
(167 |
) |
|
(192 |
) |
| Total medical care costs |
|
4,111 |
|
|
3,588 |
|
|
14,774 |
|
|
|
|
|
|
|
|
| Change in non-risk provider payables |
|
(96 |
) |
|
24 |
|
|
58 |
|
| Payments for medical care costs related to: |
|
|
|
|
|
|
| Current period |
|
2,683 |
|
|
2,241 |
|
|
13,304 |
|
| Prior period |
|
1,335 |
|
|
1,116 |
|
|
1,284 |
|
| Total paid |
|
4,018 |
|
|
3,357 |
|
|
14,588 |
|
| Medical claims and benefits payable, ending balance |
|
$ |
1,926 |
|
|
$ |
1,940 |
|
|
$ |
1,929 |
|
|
|
|
|
|
|
|
| Benefit from prior period as a percentage of: |
|
|
|
|
|
|
| Balance at beginning of period |
|
7.4 |
% |
|
10.0 |
% |
|
11.4 |
% |
| Premium revenue, trailing twelve months |
|
0.8 |
% |
|
1.2 |
% |
|
1.2 |
% |
| Medical care costs, trailing twelve months |
|
0.9 |
% |
|
1.3 |
% |
|
1.3 |
% |
|
|
|
|
|
|
|
| Days in claims payable, fee for service (1) |
|
45 |
|
|
46 |
|
|
47 |
|
| |
|
|
|
|
|
|
|
|
|
|
(1) Claims payable at March 31, 2017 and December 31, 2016 includes IBNP and $119 million and $94
million of fee-for-service payables included in “Other” medical claims and benefits payable, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED NON-GAAP FINANCIAL MEASURES
|
|
|
|
|
We use non-GAAP financial measures as supplemental metrics in evaluating our financial performance,
making financing and business decisions, and forecasting and planning for future periods. For these reasons, management
believes such measures are useful supplemental measures to investors in comparing our performance to the performance of other
public companies in the health care industry. These non-GAAP financial measures should be considered as supplements to, and
not as substitutes for or superior to, GAAP measures. See further information regarding non-GAAP measures below the tables
(in millions, except per diluted share amounts).
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2017 |
|
2016 |
|
|
|
|
|
| Net income |
|
$ |
77 |
|
|
$ |
24 |
|
| Adjustments: |
|
|
|
|
| Depreciation, and amortization of intangible assets and capitalized
software |
|
46 |
|
|
37 |
|
| Interest expense |
|
26 |
|
|
25 |
|
| Income tax expense |
|
54 |
|
|
40 |
|
| EBITDA |
|
$ |
203 |
|
|
$ |
126 |
|
|
|
Three Months Ended March 31, |
|
Projected:
Year Ended
December 31,
|
|
2017 |
|
2016 |
|
2017 |
|
|
|
|
|
Amount |
|
Per diluted share |
|
Amount |
|
|
Per diluted share |
|
Amount |
|
Per diluted share (2) |
| Net income |
|
$ |
77 |
|
|
$ |
1.37 |
|
|
$ |
24 |
|
|
|
$ |
0.43 |
|
|
$ |
147 |
|
|
$ |
2.53 |
|
| Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of intangible assets |
|
9 |
|
|
0.16 |
|
|
7 |
|
|
|
0.13 |
|
|
34 |
|
|
0.58 |
|
| Income tax effect (1) |
|
(3 |
) |
|
(0.06 |
) |
|
(2 |
) |
|
|
(0.05 |
) |
|
(12 |
) |
|
(0.21 |
) |
| Amortization of intangible assets, net of tax effect |
|
6 |
|
|
0.10 |
|
|
5 |
|
|
|
0.08 |
|
|
22 |
|
|
0.37 |
|
| Adjusted net income |
|
$ |
83 |
|
|
$ |
1.47 |
|
|
$ |
29 |
|
|
|
$ |
0.51 |
|
|
$ |
169 |
|
|
$ |
2.90 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Income tax effect of adjustment calculated at the blended federal and state statutory
tax rate of 37%.
|
|
(2) Computation assumes 58.2 million diluted weighted average shares outstanding.
|
| |
|
The following are descriptions of the adjustments made to GAAP measures used to calculate the
non-GAAP measures used in this news release:
|
|
Earnings before interest, taxes, depreciation and amortization (EBITDA): Net income
(GAAP) less depreciation, and amortization of intangible assets and capitalized software, interest expense and income tax
expense. We believe that EBITDA is helpful in assessing our ability to meet the cash demands of our operating units.
|
| |
|
Adjusted net income: Net income (GAAP) less amortization of intangible assets, net of income
tax effect calculated at the statutory tax rate of 37%. We believe that adjusted net income is helpful in assessing our
financial performance exclusive of the non-cash impact of the amortization of purchased intangibles.
|
| |
|
Adjusted net income per diluted share: Adjusted net income divided by weighted average common
shares outstanding on a fully diluted basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Molina Healthcare, Inc.
Juan José Orellana, 562-435-3666, ext. 111143
Investor Relations
View source version on businesswire.com: http://www.businesswire.com/news/home/20170502006765/en/