Supplemental Condensed Consolidating Financial Information

12 Months Ended

Dec. 31, 2017

Condensed Financial Information [Abstract]

Supplemental Condensed Consolidating Financial Information

As discussed in Note 11, “Debt,” we have outstanding $700 million aggregate principal amount of 5.375% Notes due November 15, 2022, unless earlier redeemed. The 5.375% Notes were registered in September 2016, and are fully and unconditionally guaranteed by certain of our wholly owned subsidiaries on a joint and several basis, with exceptions considered customary for such guarantees.

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 as guarantors of our amended Credit Facility, the 5.375% Notes, and the 4.875% Notes.

For all periods presented, the following condensed consolidating financial statements present Molina Healthcare, Inc. (as “Parent Guarantor”), the subsidiary guarantors (as “Other Guarantors”), the subsidiary non-guarantors (as “Non-Guarantors”) and “Eliminations,” according to the guarantor structure as assessed as of and for the year ended December 31, 2017.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS



	Year Ended December 31, 2017
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations			Consolidated
	(In millions)
Revenue:
Total revenue	$	1,333		$	194		$	19,712		$	(1,356	)	$	19,883
Expenses:
Medical care costs	16			—			17,058			(1		)	17,073
Cost of service revenue	—			171			321			—			492
General and administrative expenses	1,082			17			1,850			(1,355		)	1,594
Premium tax expenses	—			—			438			—			438
Depreciation and amortization	93			1			43			—			137
Impairment losses	39			28			403			—			470
Restructuring and separation costs	153			8			73			—			234
Total operating expenses	1,383			225			20,186			(1,356		)	20,438
Operating loss	(50		)	(31		)	(474		)	—			(555		)
Interest expense	117			—			1			—			118
Other income	(61		)	—			—			—			(61		)
Loss before income taxes	(106		)	(31		)	(475		)	—			(612		)
Income tax expense (benefit)	8			(21		)	(87		)	—			(100		)
Net loss before equity in earnings of subsidiaries	(114		)	(10		)	(388		)	—			(512		)
Equity in net earnings of subsidiaries	(398		)	(156		)	—			554			—
Net loss	$	(512	)	$	(166	)	$	(388	)	$	554		$	(512	)



	Year Ended December 31, 2016
	Parent Guarantor			Other Guarantors		Non-Guarantors		Eliminations			Consolidated
	(In millions)
Revenue:
Total revenue	$	1,078		$	202	$	17,584	$	(1,082	)	$	17,782
Expenses:
Medical care costs	73			—		14,702		(1		)	14,774
Cost of service revenue	—			174		311		—			485
General and administrative expenses	899			16		1,559		(1,081		)	1,393
Premium tax expenses	—			—		468		—			468
Health insurer fees	—			—		217		—			217
Depreciation and amortization	95			1		43		—			139
Total operating expenses	1,067			191		17,300		(1,082		)	17,476
Operating income	11			11		284		—			306
Total other expenses, net	101			—		—		—			101
(Loss) income before income taxes	(90		)	11		284		—			205
Income tax (benefit) expense	(24		)	3		174		—			153
Net (loss) income before equity in earnings of subsidiaries	(66		)	8		110		—			52
Equity in net earnings of subsidiaries	118			1		—		(119		)	—
Net income	$	52		$	9	$	110	$	(119	)	$	52



	Year Ended December 31, 2015
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations			Consolidated
	(In millions)
Revenue:
Total revenue	$	931		$	195		$	13,980		$	(928	)	$	14,178
Expenses:
Medical care costs	55			—			11,740			(1		)	11,794
Cost of service revenue	—			140			53			—			193
General and administrative expenses	797			31			1,245			(927		)	1,146
Premium tax expenses	—			—			397			—			397
Health insurer fees	—			—			157			—			157
Depreciation and amortization	82			1			21			—			104
Total operating expenses	934			172			13,613			(928		)	13,791
Operating (loss) income	(3		)	23			367			—			387
Total other expenses, net	66			—			(1		)	—			65
(Loss) income before income taxes	(69		)	23			368			—			322
Income tax (benefit) expense	(21		)	7			193			—			179
Net (loss) income before equity in earnings of subsidiaries	(48		)	16			175			—			143
Equity in net earnings of subsidiaries	191			(1		)	—			(190		)	—
Net income	$	143		$	15		$	175		$	(190	)	$	143

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE (LOSS) INCOME



	Year Ended December 31, 2017
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations		Consolidated

	(In millions)
Net loss	$	(512	)	$	(166	)	$	(388	)	$	554	$	(512	)
Other comprehensive loss, net of tax	(3		)	—			(2		)	2		(3		)
Comprehensive loss	$	(515	)	$	(166	)	$	(390	)	$	556	$	(515	)



	Year Ended December 31, 2016
	Parent Guarantor		Other Guarantors		Non-Guarantors		Eliminations			Consolidated

	(In millions)
Net income	$	52	$	9	$	110	$	(119	)	$	52
Other comprehensive income, net of tax	2		—		1		(1		)	2
Comprehensive income	$	54	$	9	$	111	$	(120	)	$	54



	Year Ended December 31, 2015
	Parent Guarantor			Other Guarantors		Non-Guarantors			Eliminations			Consolidated

	(In millions)
Net income	$	143		$	15	$	175		$	(190	)	$	143
Other comprehensive loss, net of tax	(3		)	—		(3		)	3			(3		)
Comprehensive income	$	140		$	15	$	172		$	(187	)	$	140

MOLINA HEALTHCARE, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS



	December 31, 2017
	Parent Guarantor		Other Guarantors			Non-Guarantors			Eliminations			Consolidated
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	504	$	28		$	2,654		$	—		$	3,186
Investments	192		—			2,332			—			2,524
Restricted investments	169		—			—			—			169
Receivables	2		30			839			—			871
Income tax refundable	16		(8		)	46			—			54
Due from (to) affiliates	148		(6		)	(142		)	—			—
Prepaid expenses and other current assets	87		22			92			(16		)	185
Derivative asset	522		—			—			—			522
Total current assets	1,640		66			5,821			(16		)	7,511
Property, equipment, and capitalized software, net	223		33			86			—			342
Deferred contract costs	—		101			—			—			101
Goodwill and intangible assets, net	15		43			197			—			255
Restricted investments	—		—			119			—			119
Investment in subsidiaries, net	2,306		82			—			(2,388		)	—
Deferred income taxes	17		—			101			(15		)	103
Other assets	32		2			7			(1		)	40
	$	4,233	$	327		$	6,331		$	(2,420	)	$	8,471
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	3	$	—		$	2,189		$	—		$	2,192
Amounts due government agencies	—		1			1,541			—			1,542
Accounts payable and accrued liabilities	178		40			148			—			366
Deferred revenue	—		49			233			—			282
Current portion of long-term debt	653		—			16			(16		)	653
Derivative liability	522		—			—			—			522
Total current liabilities	1,356		90			4,127			(16		)	5,557
Long-term debt	1,516		—			—			—			1,516
Deferred income taxes	—		15			—			(15		)	—
Other long-term liabilities	24		2			36			(1		)	61
Total liabilities	2,896		107			4,163			(32		)	7,134
Total stockholders’ equity	1,337		220			2,168			(2,388		)	1,337
	$	4,233	$	327		$	6,331		$	(2,420	)	$	8,471

MOLINA HEALTHCARE, INC.

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

MOLINA HEALTHCARE, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



	Year Ended December 31, 2017
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Operating activities:
Net cash provided by operating activities	$	166		83			555			—		$	804
Investing activities:
Purchases of investments	(352		)	—			(2,366		)	—		(2,718		)
Proceeds from sales and maturities of investments	168			—			1,603			—		1,771
Purchases of property, equipment and capitalized software	(67		)	(11		)	(8		)	—		(86		)
Increase in restricted investments	—			—			(12		)	—		(12		)
Capital contributions to subsidiaries	(370		)	2			368			—		—
Dividends received from subsidiaries	286			(25		)	(261		)	—		—
Change in amounts due to/from affiliates	(49		)	1			48			—		—
Other, net	—			(28		)	—			—		(28		)
Net cash used in by investing activities	(384		)	(61		)	(628		)	—		(1,073		)
Financing activities:
Proceeds from senior notes offering, net of issuance costs	325			—			—			—		325
Proceeds from borrowings under credit facility	300			—			—			—		300
Proceeds from employee stock plans	19			—			—			—		19
Cash paid for financing transaction fees	(7		)	—			—			—		(7		)
Other, net	(1		)	—			—			—		(1		)
Net cash provided by financing activities	636			—			—			—		636
Net increase (decrease) in cash and cash equivalents	418			22			(73		)	—		367
Cash and cash equivalents at beginning of period	86			6			2,727			—		2,819
Cash and cash equivalents at end of period	$	504		$	28		$	2,654		$	—	$	3,186



	Year Ended December 31, 2016
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Operating activities:
Net cash provided by operating activities	$	55		48			570			—		$	673
Investing activities:
Purchases of investments	(115		)	—			(1,814		)	—		(1,929		)
Proceeds from sales and maturities of investments	188			—			1,778			—		1,966
Purchases of property, equipment and capitalized software	(125		)	(29		)	(22		)	—		(176		)
Decrease in restricted investments	—			—			4			—		4
Net cash paid in business combinations	—			(5		)	(43		)	—		(48		)
Capital contributions to subsidiaries	(386		)	7			379			—		—
Dividends received from subsidiaries	101			—			(101		)	—		—
Change in amounts due to/from affiliates	(18		)	(2		)	20			—		—
Other, net	6			(26		)	1			—		(19		)
Net cash (used in) provided by investing activities	(349		)	(55		)	202			—		(202		)
Financing activities:
Proceeds from employee stock plans	18			—			—			—		18
Other, net	2			—			(1		)	—		1
Net cash provided by financing activities	20			—			(1		)	—		19
Net (decrease) increase in cash and cash equivalents	(274		)	(7		)	771			—		490
Cash and cash equivalents at beginning of period	360			13			1,956			—		2,329
Cash and cash equivalents at end of period	$	86		$	6		$	2,727		$	—	$	2,819



	Year Ended December 31, 2015
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Operating activities:
Net cash provided by operating activities	$	113		51			961			—		$	1,125
Investing activities:
Purchases of investments	(244		)	—			(1,679		)	—		(1,923		)
Proceeds from sales and maturities of investments	118			—			1,008			—		1,126
Purchases of property, equipment and capitalized software	(91		)	(20		)	(21		)	—		(132		)
Decrease in restricted investments	—			5			(11		)	—		(6		)
Net cash paid in business combinations	—			(174		)	(276		)	—		(450		)
Capital contributions to subsidiaries	(770		)	236			534			—		—
Dividends received from subsidiaries	142			—			(142		)	—		—
Change in amounts due to/from affiliates	(68		)	(63		)	131			—		—
Other, net	—			(35		)	—			—		(35		)
Net cash used in investing activities	(913		)	(51		)	(456		)	—		(1,420		)
Financing activities:
Proceeds from senior notes offerings, net of issuance costs	689			—			—			—		689
Proceeds from common stock offering, net of issuance costs	373			—			—			—		373
Proceeds from employee stock plans	18			—			—			—		18
Other, net	5			—			—			—		5
Net cash provided by financing activities	1,085			—			—			—		1,085
Net increase in cash and cash equivalents	285			—			505			—		790
Cash and cash equivalents at beginning of period	75			13			1,451			—		1,539
Cash and cash equivalents at end of period	$	360		$	13		$	1,956		$	—	$	2,329