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Segments | 6 Months Ended
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Jun. 30, 2018
Segment Reporting [Abstract] |
Segments | Segments We have three reportable segments. These segments consist of our Health Plans segment, which constitutes the vast majority of our operations; our Molina Medicaid Solutions segment; and our Other segment. Our reportable segments are consistent with how we currently manage the business and view the markets we serve. Recent Developments – Molina Medicaid Solutions Segment In late 2017, as part of the 2017 Restructuring Plan, management decided to pursue the divestiture of MMS. In June 2018, we entered into a definitive agreement to sell Molina Medicaid Solutions (MMS) to DXC Technology Company. The divestiture, expected to close in the third quarter of 2018, is subject to the satisfaction of customary closing conditions and the receipt of certain third party consents and regulatory approvals. We expect the net cash selling price for the equity interests of MMS to approximate $220 million after certain adjustments. As of June 30, 2018, Molina Medicaid Solutions’ major classes of assets and liabilities were as follows:
| (In millions)
Cash and cash equivalents | $ | 9 |
Receivables and prepaid expenses | 41 |
Goodwill and property, equipment, and capitalized software, net | 70 |
Deferred contract costs and other assets | 110 |
Total assets held for sale | $ | 230 |
Accounts payable and accrued and other liabilities | $ | 27 |
Deferred revenue | 39 |
Total liabilities held for sale | $ | 66 |
Description of Earnings Measures for Reportable Segments Gross margin is the appropriate earnings measure for our reportable segments, based on how our chief operating decision maker currently reviews results, assesses performance, and allocates resources. Gross margin for our Health Plans segment is referred to as “Medical margin,” and for our Molina Medicaid Solutions and Other segments, as “Service margin.” Medical margin represents the amount earned by the Health Plans segment after medical care costs are deducted from premium revenue. The medical care ratio represents medical care costs as a percentage of premium revenue, and is one of the key metrics used to assess the performance of the Health Plans segment. Therefore, the underlying medical margin is the most important measure of earnings reviewed by the chief operating decision maker. The service margin is equal to service revenue minus cost of service revenue. The following table presents total revenue by segment. Inter-segment revenue was insignificant for all periods presented.
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In millions)
Total revenue: |  |  |  |  |  |  |
Health Plans | $ | 4,752 |  |  | $ | 4,868 |  |  | $ | 9,261 |  |  | $ | 9,639 |
Molina Medicaid Solutions | 48 |  |  | 47 |  |  | 99 |  |  | 93 |
Other | 83 |  |  | 84 |  |  | 169 |  |  | 171 |
Consolidated | $ | 4,883 |  |  | $ | 4,999 |  |  | $ | 9,529 |  |  | $ | 9,903 |
The following table reconciles gross margin by segment to consolidated income (loss) before income taxes:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In millions)
Gross margin: |  |  |  |  |  |  |
Health Plans | $ | 664 |  |  | $ | 249 |  |  | $ | 1,265 |  |  | $ | 786 |
Molina Medicaid Solutions | 4 |  |  | 4 |  |  | 12 |  |  | 8 |
Other | 5 |  |  | 1 |  |  | 11 |  |  | 6 |
Total gross margin | 673 |  |  | 254 |  |  | 1,288 |  |  | 800 |
Add: other operating revenues (1) | 242 |  |  | 130 |  |  | 431 |  |  | 255 |
Less: other operating expenses (2) | (573 | ) |  | (671 | ) |  | (1,155 | ) |  | (1,260 | )
Operating income (loss) | 342 |  |  | (287 | ) |  | 564 |  |  | (205 | )
Other expenses (income), net | 37 |  |  | 27 |  |  | 80 |  |  | (22 | )
Income (loss) before income taxes | $ | 305 |  |  | $ | (314 | ) |  | $ | 484 |  |  | $ | (183 | )
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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, impairment losses, and restructuring and separation costs.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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