Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2018

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.



	Three Months Ended March 31,
	2018		2017
	(In millions)
Cash and cash equivalents	$	3,729	$	3,198
Restricted cash and cash equivalents	95		95
Total cash, cash equivalents, and restricted cash and cash equivalents presented in the statements of cash flows	$	3,824	$	3,293

Schedule of Cash and Cash Equivalents

The restricted cash and cash equivalents presented below are included in non-current “Restricted investments” in the accompanying consolidated balance sheets.



	Three Months Ended March 31,
	2018		2017
	(In millions)
Cash and cash equivalents	$	3,729	$	3,198
Restricted cash and cash equivalents	95		95
Total cash, cash equivalents, and restricted cash and cash equivalents presented in the statements of cash flows	$	3,824	$	3,293

Quality incentive premium revenue recognized

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 March 31, 2018 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 March 31, 2018.



	Three Months Ended March 31,
	2018			2017
	(Dollars in millions)
Maximum available quality incentive premium - current period	$	40		$	38
Quality incentive premium revenue recognized in current period:
Earned current period	$	24		$	19
Earned prior periods	11			5
Total	$	35		$	24

Quality incentive premium revenue recognized as a percentage of total premium revenue	0.8		%	0.5		%

Segment reporting

The following table presents the opening and closing balances of receivables, deferred contract costs (contract assets), and deferred revenue (contract liabilities) from contracts with customers, by segment.



	March 31, 2018		December 31, 2017
	(In millions)
Receivables:
Molina Medicaid Solutions	$	41	$	30
Other	46		44
Deferred contract costs (contract assets) – Molina Medicaid Solutions	103		101
Deferred revenue (contract liabilities) – Molina Medicaid Solutions	41		49

The following table presents total revenue by segment. Inter-segment revenue is insignificant for all periods presented.



	Three Months Ended March 31,
	2018		2017
	(In millions)
Total revenue:
Health Plans	$	4,509	$	4,771
Molina Medicaid Solutions	51		46
Other	86		87
Consolidated	$	4,646	$	4,904

The following table reconciles gross margin by segment to consolidated income before income tax expense:



	Three Months Ended March 31,
	2018			2017
	(In millions)
Gross margin:
Health Plans	$	601		$	537
Molina Medicaid Solutions	8			4
Other	6			5
Total gross margin	615			546
Add: other operating revenues ⁽¹⁾	189			125
Less: other operating expenses ⁽²⁾	(582		)	(589		)
Operating income	222			82
Other expenses (income), net	43			(49		)
Income before income taxes	$	179		$	131

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(1)	Other operating revenues include premium tax revenue, health insurer fees reimbursed, and investment income and other revenue.


(2)	Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fees, depreciation and amortization, and restructuring and separation costs.