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Supplemental Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2017

Condensed Financial Information [Abstract]

Supplemental Condensed Consolidating Financial Information

Supplemental Condensed Consolidating Financial Information

The 5.375% Notes described in Note 7, “Debt,” are fully and unconditionally guaranteed by certain of our 100% owned subsidiaries on a joint and several basis, with certain exceptions considered customary for such guarantees. The 5.375% Notes and the guarantees are effectively subordinated to all of our and our guarantors’ existing and future secured debt to the extent of the assets securing such debt. In addition, the 5.375% Notes and the guarantees are structurally subordinated to all indebtedness and other liabilities and preferred stock, if any, of our subsidiaries that do not guarantee the 5.375% Notes.

As discussed in Note 7, “Debt,” the First Amendment to the Credit Facility provided that all guarantors immediately prior to January 3, 2017, other than Molina Information Systems, LLC, d/b/a Molina Medicaid Solutions, Molina Pathways, LLC, and Pathways Health and Community Support LLC, were automatically and unconditionally released from their obligations as guarantors under the Credit Facility and the 5.375% Notes.

The following condensed consolidating financial statements present Molina Healthcare, Inc. (as parent guarantor), the subsidiary guarantors, the subsidiary non-guarantors and eliminations, according to the guarantor structure as assessed at the most recent balance sheet date, June 30, 2017.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

	Three Months Ended June 30, 2017
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Revenue:
Total revenue	$	289			$	51			$	4,952			$	(293	)		$	4,999
Expenses:
Medical care costs	3				—				4,488				—				4,491
Cost of service revenue	—				43				81				—				124
General and administrative expenses	258				7				433				(293		)		405
Premium tax expenses	—				—				114				—				114
Depreciation and amortization	25				—				12				—				37
Impairment losses	—				—				72				—				72
Restructuring and separation costs	43				—				—				—				43
Total operating expenses	329				50				5,200				(293		)		5,286
Operating (loss) income	(40		)		1				(248		)		—				(287		)
Interest expense	27				—				—				—				27
(Loss) income before income taxes	(67		)		1				(248		)		—				(314		)
Income tax benefit	(14		)		—				(70		)		—				(84		)
Net (loss) income before equity in net losses of subsidiaries	(53		)		1				(178		)		—				(230		)
Equity in net losses of subsidiaries	(177		)		(64		)		—				241				—
Net loss	$	(230	)		$	(63	)		$	(178	)		$	241			$	(230	)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE LOSS

	Three Months Ended June 30, 2017
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Net loss	$	(230	)		$	(63	)		$	(178	)		$	241			$	(230	)
Other comprehensive loss, net of tax	—				—				—				—				—
Comprehensive loss	$	(230	)		$	(63	)		$	(178	)		$	241			$	(230	)

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

	Three Months Ended June 30, 2016
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Revenue:
Total revenue	$	261			$	47			$	4,311			$	(260	)		$	4,359
Expenses:
Medical care costs	19				—				3,575				—				3,594
Cost of service revenue	—				23				93				—				116
General and administrative expenses	219				24				368				(260		)		351
Premium tax expenses	—				—				109				—				109
Health insurer fee expenses	—				—				50				—				50
Depreciation and amortization	23				1				10				—				34
Total operating expenses	261				48				4,205				(260		)		4,254
Operating (loss) income	—				(1		)		106				—				105
Interest expense	25				—				—				—				25
(Loss) income before income taxes	(25		)		(1		)		106				—				80
Income tax (benefit) expense	(12		)		(1		)		60				—				47
Net (loss) income before equity in net earnings of subsidiaries	(13		)		—				46				—				33
Equity in net earnings of subsidiaries	46				1				—				(47		)		—
Net income	$	33			$	1			$	46			$	(47	)		$	33

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended June 30, 2016
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Net income	$	33			$	1			$	46			$	(47	)		$	33
Other comprehensive income, net of tax	2				—				2				(2		)		2
Comprehensive income	$	35			$	1			$	48			$	(49	)		$	35

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

	Six Months Ended June 30, 2017
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Revenue:
Total revenue	$	630			$	99			$	9,809			$	(635	)		$	9,903
Expenses:
Medical care costs	7				—				8,595				—				8,602
Cost of service revenue	—				85				161				—				246
General and administrative expenses	555				14				910				(635		)		844
Premium tax expenses	—				—				225				—				225
Depreciation and amortization	52				—				24				—				76
Impairment losses	—				—				72				—				72
Restructuring and separation costs	43				—				—				—				43
Total operating expenses	657				99				9,987				(635		)		10,108
Operating loss	(27		)		—				(178		)		—				(205		)
Interest expense	53				—				—				—				53
Other income, net	(75		)		—				—				—				(75		)
Loss before income taxes	(5		)		—				(178		)		—				(183		)
Income tax expense (benefit)	17				—				(47		)		—				(30		)
Net loss before equity in net losses of subsidiaries	(22		)		—				(131		)		—				(153		)
Equity in net losses of subsidiaries	(131		)		(66		)		—				197				—
Net loss	$	(153	)		$	(66	)		$	(131	)		$	197			$	(153	)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE LOSS

	Six Months Ended June 30, 2017
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Net loss	$	(153	)		$	(66	)		$	(131	)		$	197			$	(153	)
Other comprehensive income, net of tax	1				—				1				(1		)		1
Comprehensive loss	$	(152	)		$	(66	)		$	(130	)		$	196			$	(152	)

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

	Six Months Ended June 30, 2016
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Revenue:
Total revenue	$	512			$	99			$	8,601			$	(510	)		$	8,702
Expenses:
Medical care costs	31				—				7,151				—				7,182
Cost of service revenue	—				88				155				—				243
General and administrative expenses	436				9				756				(510		)		691
Premium tax expenses	—				—				218				—				218
Health insurer fee expenses	—				—				108				—				108
Depreciation and amortization	45				3				18				—				66
Total operating expenses	512				100				8,406				(510		)		8,508
Operating (loss) income	—				(1		)		195				—				194
Interest expense	50				—				—				—				50
(Loss) income before income taxes	(50		)		(1		)		195				—				144
Income tax (benefit) expense	(28		)		(1		)		116				—				87
Net (loss) income before equity in earnings of subsidiaries	(22		)		—				79				—				57
Equity in net earnings of subsidiaries	79				3				—				(82		)		—
Net income	$	57			$	3			$	79			$	(82	)		$	57

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

	Six Months Ended June 30, 2016
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Net income	$	57			$	3			$	79			$	(82	)		$	57
Other comprehensive income, net of tax	8				—				7				(7		)		8
Comprehensive income	$	65			$	3			$	86			$	(89	)		$	65

CONDENSED CONSOLIDATING BALANCE SHEETS

	June 30, 2017
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	109			$	32			$	2,838			$	—			$	2,979
Investments	56				—				2,136				—				2,192
Restricted investments	325				—				—				—				325
Receivables	2				30				974				—				1,006
Income taxes refundable	7				1				60				—				68
Due from (to) affiliates	137				(6		)		(131		)		—				—
Prepaid expenses and other current assets	70				21				68				—				159
Derivative asset	440				—				—				—				440
Total current assets	1,146				78				5,945				—				7,169
Property, equipment, and capitalized software, net	297				47				105				—				449
Deferred contract costs	—				93				—				—				93
Goodwill and intangible assets, net	56				72				543				—				671
Restricted investments	—				—				118				—				118
Investment in subsidiaries, net	2,597				181				—				(2,778		)		—
Deferred income taxes	10				(43		)		79				(10		)		36
Other assets	55				2				6				(16		)		47
	$	4,161			$	430			$	6,796			$	(2,804	)		$	8,583
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	—			$	—			$	2,077			$	—			$	2,077
Amounts due government agencies	—				—				1,844				—				1,844
Accounts payable and accrued liabilities	170				35				170				—				375
Deferred revenue	—				49				235				—				284
Current portion of long-term debt	773				—				—				—				773
Derivative liability	440				—				—				—				440
Total current liabilities	1,383				84				4,326				—				5,793
Long-term debt	1,215				—				16				(16		)		1,215
Deferred income taxes	10				—				—				(10		)		—
Other long-term liabilities	32				1				21				—				54
Total liabilities	2,640				85				4,363				(26		)		7,062
Total stockholders’ equity	1,521				345				2,433				(2,778		)		1,521
	$	4,161			$	430			$	6,796			$	(2,804	)		$	8,583

CONDENSED CONSOLIDATING BALANCE SHEETS

	December 31, 2016
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	86			$	6			$	2,727			$	—			$	2,819
Investments	178				—				1,580				—				1,758
Receivables	2				34				938				—				974
Income tax refundable	17				4				18				—				39
Due from (to) affiliates	104				(5		)		(99		)		—				—
Prepaid expenses and other current assets	58				30				43				—				131
Derivative asset	267				—				—				—				267
Total current assets	712				69				5,207				—				5,988
Property, equipment, and capitalized software, net	301				46				107				—				454
Deferred contract costs	—				86				—				—				86
Goodwill and intangible assets, net	58				73				629				—				760
Restricted investments	—				—				110				—				110
Investment in subsidiaries, net	2,609				246				—				(2,855		)		—
Deferred income taxes	10				—				—				—				10
Other assets	48				3				6				(16		)		41
	$	3,738			$	523			$	6,059			$	(2,871	)		$	7,449
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	1			$	—			$	1,928			$	—			$	1,929
Amounts due government agencies	—				—				1,202				—				1,202
Accounts payable and accrued liabilities	146				34				205				—				385
Deferred revenue	—				40				275				—				315
Current portion of long-term debt	472				—				—				—				472
Derivative liability	267				—				—				—				267
Total current liabilities	886				74				3,610				—				4,570
Long-term debt	1,173				—				16				(16		)		1,173
Deferred income taxes	11				39				(35		)		—				15
Other long-term liabilities	19				1				22				—				42
Total liabilities	2,089				114				3,613				(16		)		5,800
Total stockholders’ equity	1,649				409				2,446				(2,855		)		1,649
	$	3,738			$	523			$	6,059			$	(2,871	)		$	7,449

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Six Months Ended June 30, 2017
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Operating activities:
Net cash provided by operating activities	$	90			$	44			$	538			$	—			$	672
Investing activities:
Purchases of investments	(330		)		—				(1,306		)		—				(1,636		)
Proceeds from sales and maturities of investments	127				—				747				—				874
Purchases of property, equipment and capitalized software	(45		)		(9		)		(6		)		—				(60		)
Increase in restricted investments held-to-maturity	—				—				(10		)		—				(10		)
Capital contributions to/from subsidiaries	(238		)		2				236				—				—
Dividends to/from subsidiaries	120				—				(120		)		—				—
Change in amounts due to/from affiliates	(34		)		2				32				—				—
Other, net	—				(13		)		—				—				(13		)
Net cash used in investing activities	(400		)		(18		)		(427		)		—				(845		)
Financing activities:
Proceeds from senior notes offerings, net of issuance costs	325				—				—				—				325
Proceeds from employee stock plans	11				—				—				—				11
Other, net	(3		)		—				—				—				(3		)
Net cash provided by financing activities	333				—				—				—				333
Net increase in cash and cash equivalents	23				26				111				—				160
Cash and cash equivalents at beginning of period	86				6				2,727				—				2,819
Cash and cash equivalents at end of period	$	109			$	32			$	2,838			$	—			$	2,979

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Six Months Ended June 30, 2016
	Parent Guarantor				Other Guarantors				Non-Guarantors				Eliminations				Consolidated
	(In millions)
Operating activities:
Net cash (used in) provided by operating activities	$	(21	)		$	20			$	279			$	—			$	278
Investing activities:
Purchases of investments	(67		)		—				(907		)		—				(974		)
Proceeds from sales and maturities of investments	67				—				745				—				812
Purchases of property, equipment and capitalized software	(73		)		(19		)		(10		)		—				(102		)
Decrease in restricted investments held-to-maturity	—				—				5				—				5
Net cash paid in business combinations	—				(1		)		(7		)		—				(8		)
Capital contributions to/from subsidiaries	(106		)		2				104				—				—
Dividends to/from subsidiaries	50				—				(50		)		—				—
Change in amounts due to/from affiliates	(13		)		2				11				—				—
Other, net	5				(12		)		1				—				(6		)
Net cash used in investing activities	(137		)		(28		)		(108		)		—				(273		)
Financing activities:
Proceeds from employee stock plans	10				—				—				—				10
Other, net	2				—				(1		)		—				1
Net cash provided by (used in) financing activities	12				—				(1		)		—				11
Net (decrease) increase in cash and cash equivalents	(146		)		(8		)		170				—				16
Cash and cash equivalents at beginning of period	360				13				1,956				—				2,329
Cash and cash equivalents at end of period	$	214			$	5			$	2,126			$	—			$	2,345

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Condensed Financial Information [Abstract]

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X

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The entire disclosure for condensed financial statements.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04)
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e24072-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=84161450&loc=d3e5614-111684

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.10-01(a))
-URI http://asc.fasb.org/extlink&oid=27015980&loc=d3e46468-122699

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