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Condensed Financial Information of Registrant | 12 Months Ended
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Dec. 31, 2018
Condensed Financial Information Disclosure [Abstract] |
Condensed Financial Information of Registrant | Condensed Financial Information of Registrant The condensed balance sheets as of December 31, 2018 and 2017, and the related condensed statements of operations, comprehensive income (loss) and cash flows for each of the three years in the period ended December 31, 2018 for our parent company Molina Healthcare, Inc. (the “Registrant”), are presented below. Condensed Balance Sheets
| December 31,
| 2018 |  | 2017
| (In millions, except share data)
ASSETS
Current assets: |  |  |  |
Cash and cash equivalents | $ | 70 |  |  | $ | 504 |
Investments | 100 |  |  | 192 |
Restricted investments | — |  |  | 169 |
Receivables | 2 |  |  | 2 |
Due from affiliates | 90 |  |  | 148 |
Prepaid expenses and other current assets | 47 |  |  | 103 |
Derivative asset | 476 |  |  | 522 |
Total current assets | 785 |  |  | 1,640 |
Property, equipment, and capitalized software, net | 176 |  |  | 223 |
Goodwill and intangible assets, net | 13 |  |  | 15 |
Investments in subsidiaries | 2,768 |  |  | 2,306 |
Deferred income taxes | 39 |  |  | 17 |
Advances to related parties and other assets | 40 |  |  | 32 |
| $ | 3,821 |  |  | $ | 4,233 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities: |  |  |
Medical claims and benefits payable | $ | 4 |  |  | $ | 3 |
Accounts payable and accrued liabilities | 223 |  |  | 178 |
Current portion of long-term debt | 241 |  |  | 653 |
Derivative liability | 476 |  |  | 522 |
Total current liabilities | 944 |  |  | 1,356 |
Long-term debt | 1,020 |  |  | 1,318 |
Lease financing obligations | 197 |  |  | 198 |
Other long-term liabilities | 13 |  |  | 24 |
Total liabilities | 2,174 |  |  | 2,896 |
Stockholders’ equity: |  |  |
Common stock, $0.001 par value; 150 million shares authorized; outstanding: |  |  |  |
62 million shares at December 31, 2018 and 60 million shares at December 31, 2017 | — |  |  | — |
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding | — |  |  | — |
Additional paid-in capital | 643 |  |  | 1,044 |
Accumulated other comprehensive loss | (8 | ) |  | (5 | )
Retained earnings | 1,012 |  |  | 298 |
Total stockholders’ equity | 1,647 |  |  | 1,337 |
| $ | 3,821 |  |  | $ | 4,233 |
See accompanying notes. Condensed Statements of Operations
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
| (In millions)
Revenue: |  |  |  |  |
Management fees | $ | 1,138 |  |  | $ | 1,317 |  |  | $ | 1,062 |
Investment income and other revenue | 17 |  |  | 16 |  |  | 16 |
Total revenue | 1,155 |  |  | 1,333 |  |  | 1,078 |
Expenses: |  |  |  |  |  |
Medical care costs | 8 |  |  | 16 |  |  | 73 |
General and administrative expenses | 1,007 |  |  | 1,082 |  |  | 899 |
Depreciation and amortization | 69 |  |  | 93 |  |  | 95 |
Restructuring and separation costs | 35 |  |  | 153 |  |  | — |
Impairment losses | — |  |  | 39 |  |  | — |
Total operating expenses | 1,119 |  |  | 1,383 |  |  | 1,067 |
Gain on sale of subsidiary | 37 |  |  | — |  |  | — |
Operating income (loss) | 73 |  |  | (50 | ) |  | 11 |
Interest expense | 114 |  |  | 117 |  |  | 101 |
Other expense (income) | 17 |  |  | (61 | ) |  | — |
Loss before income tax (benefit) expense and equity in net earnings (losses) of subsidiaries | (58 | ) |  | (106 | ) |  | (90 | )
Income tax (benefit) expense | (14 | ) |  | 8 |  |  | (24 | )
Net loss before equity in net earnings (losses) of subsidiaries | (44 | ) |  | (114 | ) |  | (66 | )
Equity in net earnings (losses) of subsidiaries | 751 |  |  | (398 | ) |  | 118 |
Net income (loss) | $ | 707 |  |  | $ | (512 | ) |  | $ | 52 |
Condensed Statements of Comprehensive Income (Loss)
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
| (In millions)
Net income (loss) | $ | 707 |  |  | $ | (512 | ) |  | $ | 52 |
Other comprehensive (loss) income: |  |  |  |  |
Unrealized investment (loss) gain | (3 | ) |  | (5 | ) |  | 3 |
Less: effect of income taxes | (1 | ) |  | (2 | ) |  | 1 |
Other comprehensive (loss) income, net of tax | (2 | ) |  | (3 | ) |  | 2 |
Comprehensive income (loss) | $ | 705 |  |  | $ | (515 | ) |  | $ | 54 |
See accompanying notes. Condensed Statements of Cash Flows
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
| (In millions)
Operating activities: |  |  |  |  |
Net cash provided by operating activities | $ | 118 |  |  | $ | 166 |  |  | $ | 55 |
Investing activities: |  |  |  |  |  |
Capital contributions to subsidiaries | (145 | ) |  | (370 | ) |  | (386 | )
Dividends received from subsidiaries | 298 |  |  | 286 |  |  | 101 |
Purchases of investments | (136 | ) |  | (331 | ) |  | (115 | )
Proceeds from sales and maturities of investments | 388 |  |  | 156 |  |  | 188 |
Purchases of property, equipment and capitalized software | (22 | ) |  | (67 | ) |  | (125 | )
Net cash received from sale of subsidiaries | 242 |  |  | — |  |  | — |
Change in amounts due to/from affiliates | 6 |  |  | (49 | ) |  | (18 | )
Other, net | — |  |  | — |  |  | 6 |
Net cash provided by (used in) investing activities | 631 |  |  | (375 | ) |  | (349 | )
Financing activities: |  |  |  |  |  |
Repayment of credit facility | (300 | ) |  | — |  |  | — |
Repayment of principal amount of 1.125% Convertible Notes | (298 | ) |  | — |  |  | — |
Cash paid for partial settlement of 1.125% Conversion Option | (623 | ) |  | — |  |  | — |
Cash received for partial settlement of 1.125% Call Option | 623 |  |  | — |  |  | — |
Cash paid for partial termination of 1.125% Warrants | (549 | ) |  | — |  |  | — |
Repayment of principal amount of 1.625% Convertible Notes | (64 | ) |  | — |  |  | — |
Proceeds from senior notes offerings, net of issuance costs | — |  |  | 325 |  |  | — |
Proceeds from borrowings under credit facility | — |  |  | 300 |  |  | — |
Other, net | 19 |  |  | 11 |  |  | 20 |
Net cash (used in) provided by financing activities | (1,192 | ) |  | 636 |  |  | 20 |
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | (443 | ) |  | 427 |  |  | (274 | )
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 513 |  |  | 86 |  |  | 360 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | $ | 70 |  |  | $ | 513 |  |  | $ | 86 |
Notes to Condensed Financial Information of Registrant Note A - Basis of Presentation The Registrant was incorporated in 2002. Prior to that date, Molina Healthcare of California (formerly known as Molina Medical Centers) operated as a California health plan and as the parent company for three other state health plans. In June 2003, the employees and operations of the corporate entity were transferred from Molina Healthcare of California to the Registrant. The Registrant’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The accompanying condensed financial information of the Registrant should be read in conjunction with the consolidated financial statements and accompanying notes. Note B - Transactions with Subsidiaries The Registrant provides certain centralized medical and administrative services to our subsidiaries pursuant to administrative services agreements that include, but are not limited to, information technology, product development and administration, underwriting, claims processing, customer service, certain care management services, human resources, legal, marketing, purchasing, risk management, actuarial, underwriting, finance, accounting, legal and public relations. Fees are based on the fair market value of services rendered and are recorded as operating revenue. Payment is subordinated to the subsidiaries’ ability to comply with minimum capital and other restrictive financial requirements of the states in which they operate. Charges in 2018, 2017, and 2016 for these services amounted to $1,137 million, $1,317 million, and $1,062 million, respectively, and are included in operating revenue. The Registrant and its subsidiaries are included in the consolidated federal and state income tax returns filed by the Registrant. Income taxes are allocated to each subsidiary in accordance with an intercompany tax allocation agreement. The agreement allocates income taxes in an amount generally equivalent to the amount which would be expensed by the subsidiary if it filed a separate tax return. Net operating loss benefits are paid to the subsidiary by the Registrant to the extent such losses are utilized in the consolidated tax returns. Note C - Dividends and Capital Contributions When the Registrant receives dividends from its subsidiaries, such amounts are recorded as a reduction to the investments in the respective subsidiaries. For all periods presented, the Registrant made capital contributions to certain subsidiaries primarily to comply with minimum net worth requirements and to fund business combinations. Such amounts have been recorded as an increase in investment in the respective subsidiaries.

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=108774443&loc=d3e5283-111683 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 235 -Section S99 -Paragraph 2 -Subparagraph (SX 210.9-06) -URI http://asc.fasb.org/extlink&oid=6882215&loc=d3e537971-122884 + Details
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