EX-99.1 2 moh-12312018xer.htm EXHIBIT 99.1
MOH Announces Fourth Quarter and Year-End 2018 Results
Page 1
February 11, 2019

News Release
Contact:
Ryan Kubota
Investor Relations
562-435-3666, ext. 119057
MOLINA HEALTHCARE ANNOUNCES FOURTH QUARTER AND YEAR-END 2018 RESULTS AND
PROVIDES FISCAL YEAR 2019 GUIDANCE

• | Net income per diluted share on a GAAP basis was $3.01 in the fourth quarter of 2018 and $10.61 for the year ended December 31, 2018

• | Fourth quarter 2018 results include a net charge of $0.81 per diluted share, and 2018 results include a net charge of $0.22 per diluted share, for non-run-rate items

• | The overall medical care ratio in the fourth quarter improved to 84.6% from 86.4%, sequentially, when excluding non-run rate items

• | After-tax margin was 4.3% in the fourth quarter and 3.7% for the full-year 2018

• | The Company issued 2019 guidance of $9.25 - $9.75 net income per diluted share on a GAAP basis, which does not include any prior-period reserve development

Long Beach, California (February 11, 2019) - Molina Healthcare, Inc. (NYSE: MOH) today reported its financial results for the fourth quarter and year ended December 31, 2018, and provided its guidance for fiscal year 2019.
“We have accomplished much over the last year as we executed the first phase of our margin recovery and sustainability plan,” said Joe Zubretsky, president and CEO. “Our full year results are a capstone to a very successful beginning of this margin turnaround and growth story.
“Our guidance for 2019 reflects continued strength as we sustain our margins while beginning to execute the growth phase of our strategy.”
Consolidated Results
Fourth Quarter of 2018 Compared With Third Quarter of 2018
Net income increased to $201 million, from $197 million in the third quarter of 2018. Net income per diluted share increased to $3.01, from $2.90 in the third quarter of 2018.
Premium revenue increased $101 million, or 2%, in the fourth quarter of 2018 compared with the third quarter of 2018. The sequential increase was mainly in Medicaid and was attributed to a lower non-run rate reduction in revenues for retroactive California Medicaid Expansion risk corridor adjustments and favorable rate changes in other programs that include retroactivity back to earlier periods in 2018.
Overall, the medical care ratio (“MCR”) decreased to 85.1%, from 87.4% in the third quarter of 2018. Excluding the $24 million retroactive California Medicaid Expansion risk corridor adjustment, related mainly to the 2017-18 state fiscal period, the MCR would have been 84.6% in the fourth quarter of 2018. Excluding the $57 million retroactive California Medicaid Expansion risk corridor adjustment related to the 2016-17 state fiscal period and a small benefit from the 2017 Marketplace cost sharing reduction (“CSR”), the MCR would have been 86.4% in the third quarter of 2018. The sequential improvement in the overall underlying MCR was due to decreases in the Medicaid, Medicare and Marketplace MCRs as follows:
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MOH Announces Fourth Quarter and Year-End 2018 Results
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February 11, 2019

• | The Medicaid MCR decreased slightly to 88.8%, from 90.5% in the third quarter of 2018. Excluding the $24 million retroactive California Medicaid Expansion risk corridor adjustment related mainly to the 2017-18 state fiscal period, the Medicaid MCR would have been 88.2% in the fourth quarter of 2018. Excluding the $57 million retroactive California Medicaid Expansion risk corridor adjustment related to the 2016-17 state fiscal period, the MCR would have been 89.0% in the third quarter of 2018. The sequential decrease was mainly due to improved performance in the Aged, Blind or Disabled (“ABD”) and Temporary Assistance for Needy Families (“TANF”) programs.

• | The Medicare MCR decreased to 80.8%, from 87.3% in the third quarter of 2018, mainly due to improved performance in our Medicare-Medicaid Integrated plans (“MMPs”).

• | The Marketplace MCR decreased to 62.9%, from 64.1% in the third quarter of 2018. Excluding the benefit of the 2017 CSR, the Marketplace MCR would have been 65.3% in the third quarter of 2018. The sequential decrease is mainly attributable to an increase in premium revenue.

The general and administrative (“G&A”) expense ratio increased to 7.2%, from 6.6% in the third quarter of 2018, due to seasonally higher spending, including sales and marketing initiatives related to the open enrollment period for the Marketplace and Medicare programs.
Fourth Quarter of 2018 Compared With Fourth Quarter of 2017
Net income for the fourth quarter of 2018 was $201 million, compared with a net loss of $262 million for the fourth quarter of 2017. Net income per diluted share was $3.01 for the fourth quarter of 2018 compared with a net loss per diluted share of $4.59 reported for the fourth quarter of 2017. In the fourth quarter of 2017, we recorded impairment losses and restructuring costs of $342 million, or $4.03 net loss per diluted share.
Capital Plan Progress
In the fourth quarter of 2018, we repaid $62 million aggregate principal amount of our 1.125% Notes and entered into privately negotiated termination agreements to terminate the respective portion of the related 1.125% Call Option and 1.125% Warrants. Year to date, we have reduced the principal amount of outstanding debt by $759 million.
Sale of Pathways Behavioral Health Subsidiary
We closed on the sale of the Pathways behavioral health subsidiary in October 2018. As a result of this transaction, we recorded a net loss of $32 million, or $0.48 per diluted share.
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February 11, 2019
2019 Guidance
The following table summarizes 2019 Guidance (1):

Premium revenue |  | ~$15.8B
Premium tax revenue |  | ~$375M
Investment income and other revenue |  | ~$195M
Total revenue |  | ~$16.3B
Medical care costs |  | ~$13.7B
Medical care ratio (2) |  | 86.7% - 87.0%
General and administrative expenses |  | ~$1.2B
G&A ratio (3) |  | 7.5% - 7.7%
Premium tax expenses |  | ~$375M
Depreciation and amortization |  | ~$85M
Interest expense and other expenses, net |  | ~$100M
Income before income taxes |  | $790M - $840M
Net income |  | $600M - $630M
EBITDA (4) |  | $975M - $1,025M
Effective tax rate |  | 24.5% - 25.0%
After-tax margin (3) |  | 3.7% - 3.9%
Diluted weighted average shares |  | ~64.7M
Net income per share |  | $9.25 - $9.75
End-of-year by membership by government program: |  |
Medicaid and Medicare |  | 3.2M
Marketplace |  | 250K - 275K

__________________

(1) | All amounts are estimates and do not include non-recurring significant items. Earnings per diluted share as shown is calculated on a GAAP basis; actual results may differ materially. See the Company’s risk factors as discussed in its 2018 Form 10-K and other filings and the statements below in this press release after the heading “Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.”

(2) | Medical care ratio represents medical care costs as a percentage of premium revenue.

(3) | G&A ratio represents general and administrative expenses as a percentage of total revenue. After-tax margin represents net income as a percentage of total revenue.

(4) | See reconciliation of non-GAAP financial measures at the end of this release.

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February 11, 2019
Conference Call
Management will host a conference call and webcast to discuss Molina Healthcare’s fourth quarter and year-end 2018 results at 8:30 a.m. Eastern time on Tuesday, February 12, 2019. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 2698825. A telephonic replay of the conference call will be available through Tuesday, February 19, 2019, by dialing (877) 344-7529 and entering confirmation number 10127491. A live audio broadcast of this conference call will be available on Molina Healthcare’s website, molinahealthcare.com. A 30-day online replay will be available approximately an hour following the conclusion of the live broadcast.
About Molina Healthcare
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed health care services under the Medicaid and Medicare programs and through the state insurance marketplaces. Through its locally operated health plans, Molina Healthcare served approximately 3.8 million members as of December 31, 2018. For more information about Molina Healthcare, please visit molinahealthcare.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This earnings release contains “forward-looking statements” regarding the Company’s 2018 revised guidance, as well as its plans, expectations, and anticipated future events. Actual results could differ materially due to numerous known and unknown risks and uncertainties. Those known risks and uncertainties include, but are not limited to, the following:

• | the numerous political, judicial and market-based uncertainties associated with the Affordable Care Act (the “ACA”) or “Obamacare,” including the ultimate outcome on appeal of the Texas et al. v. U.S. et al. matter;

• | the market dynamics surrounding the ACA Marketplaces, including but not limited to uncertainties associated with risk adjustment requirements, the potential for disproportionate enrollment of higher acuity members, the discontinuation of premium tax credits, and the adequacy of agreed rates;

• | subsequent adjustments to reported premium revenue based upon subsequent developments or new information, including changes to estimated amounts payable or receivable related to Marketplace risk adjustment;

• | effective management of the Company’s medical costs;

• | the Company’s ability to predict with a reasonable degree of accuracy utilization rates, including utilization rates associated with seasonal flu patterns or other newly emergent diseases;

• | significant budget pressures on state governments and their potential inability to maintain current rates, to implement expected rate increases, or to maintain existing benefit packages or membership eligibility thresholds or criteria;

• | the full reimbursement of the ACA health insurer fee, or HIF;

• | the success of the Company’s efforts to retain existing or awarded government contracts, including the success of any requests for proposal protest filings or defenses;

• | the success of the Company’s profit improvement and maintenance initiatives, including the timing and amounts of the benefits realized, and administrative and medical cost savings achieved;

• | the Company’s ability to manage its operations, including maintaining and creating adequate internal systems and controls relating to authorizations, approvals, provider payments, and the overall success of its care management initiatives;

• | the Company’s receipt of adequate premium rates to support increasing pharmacy costs, including costs associated with specialty drugs and costs resulting from formulary changes that allow the option of higher-priced non-generic drugs;

• | the Company’s ability to operate profitably in an environment where the trend in premium rate increases lags behind the trend in increasing medical costs;

• | the interpretation and implementation of federal or state medical cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit sharing arrangements, and risk adjustment provisions and requirements;

• | the Company’s estimates of amounts owed for such cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions;

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• | the Medicaid expansion medical cost corridor, and any other retroactive adjustment to revenue where methodologies and procedures are subject to interpretation or dependent upon information about the health status of participants other than Molina members;

• | the interpretation and implementation of at-risk premium rules and state contract performance requirements regarding the achievement of certain quality measures, and the Company’s ability to recognize revenue amounts associated therewith;

• | the Company’s ability to successfully recognize the intended cost savings and other intended benefits of outsourcing certain services and functions to third parties, and its ability to manage the risk that such third parties may not perform contracted functions and services in a timely, satisfactory and compliant manner;

• | cyber-attacks or other privacy or data security incidents resulting in an inadvertent unauthorized disclosure of protected health information;

• | the success of the Company’s health plan in Puerto Rico, including the resolution of the debt crisis and the effect of the PROMESA law, and the impact of any future significant weather events;

• | the success and renewal of the Company’s duals demonstration programs in California, Illinois, Michigan, Ohio, South Carolina, and Texas;

• | the accurate estimation of incurred but not reported or paid medical costs across the Company’s health plans;

• | efforts by states to recoup previously paid and recognized premium amounts;

• | complications, member confusion, eligibility redeterminations, or enrollment backlogs related to the annual renewal of Medicaid coverage;

• | government audits, reviews, comment letters, or potential investigations, and any fine, sanction, enrollment freeze, monitoring program, or premium recovery that may result therefrom;

• | changes with respect to the Company’s provider contracts and the loss of providers;

• | approval by state regulators of dividends and distributions by the Company’s health plan subsidiaries;

• | changes in funding under the Company’s contracts as a result of regulatory changes, programmatic adjustments, or other reforms;

• | high dollar claims related to catastrophic illness;

• | the favorable resolution of litigation, arbitration, or administrative proceedings, including litigation involving the ACA to which we ourselves are not a direct party;

• | the relatively small number of states in which we operate health plans, including the greater scale and revenues of the Company’s California, Ohio, Texas, and Washington health plans;

• | the availability of adequate financing on acceptable terms to fund and capitalize the Company’s expansion and growth, repay the Company’s outstanding indebtedness at maturity and meet its liquidity needs, including the interest expense and other costs associated with such financing;

• | the Company’s failure to comply with the financial or other covenants in its credit agreement or the indentures governing its outstanding notes;

• | the sufficiency of the Company’s funds on hand to pay the amounts due upon conversion or maturity of its outstanding notes;

• | the failure of a state in which we operate to renew its federal Medicaid waiver;

• | the loss of services of a key executive;

• | changes generally affecting the managed care industry;

• | increases in government surcharges, taxes, and assessments;

• | newly emergent viruses or widespread epidemics, public catastrophes or terrorist attacks, and associated public alarm;

• | the unexpected loss of the leadership of one or more of our senior executives;

• | increasing competition and consolidation in the Medicaid industry;

and numerous other risk factors, including those discussed in the Company’s periodic reports and filings with the Securities and Exchange Commission. These reports can be accessed under the investor relations tab of the Company’s website or on the SEC’s website at sec.gov. Given these risks and uncertainties, the Company can give no assurances that its forward-looking statements will prove to be accurate, or that any other results or events projected or contemplated by its forward-looking statements will in fact occur, and the Company cautions investors not to place undue reliance on these statements. All forward-looking statements in this release represent the Company’s judgment as of February 11, 2019, and the Company
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February 11, 2019
disclaims any obligation to update any forward-looking statements to conform the statement to actual results or changes in its expectations.
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MOH Announces Fourth Quarter and Year-End 2018 Results
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February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

| Three Months Ended December 31, |  | Year Ended December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In millions, except per-share amounts)
Revenue: |  |  |  |  |  |  |
Premium revenue | $ | 4,438 |  |  | $ | 4,689 |  |  | $ | 17,612 |  |  | $ | 18,854 |
Service revenue | 16 |  |  | 131 |  |  | 407 |  |  | 521 |
Premium tax revenue | 97 |  |  | 107 |  |  | 417 |  |  | 438 |
Health insurer fees reimbursed | 81 |  |  | — |  |  | 329 |  |  | — |
Investment income and other revenue | 32 |  |  | 22 |  |  | 125 |  |  | 70 |
Total revenue | 4,664 |  |  | 4,949 |  |  | 18,890 |  |  | 19,883 |
Operating expenses: |  |  |  |  |  |  |
Medical care costs | 3,775 |  |  | 4,251 |  |  | 15,137 |  |  | 17,073 |
Cost of service revenue | 15 |  |  | 123 |  |  | 364 |  |  | 492 |
General and administrative expenses | 335 |  |  | 367 |  |  | 1,333 |  |  | 1,594 |
Premium tax expenses | 97 |  |  | 107 |  |  | 417 |  |  | 438 |
Health insurer fees | 87 |  |  | — |  |  | 348 |  |  | — |
Depreciation and amortization | 23 |  |  | 28 |  |  | 99 |  |  | 137 |
Restructuring and separation costs | 8 |  |  | 73 |  |  | 46 |  |  | 234 |
Impairment losses | — |  |  | 269 |  |  | — |  |  | 470 |
Total operating expenses | 4,340 |  |  | 5,218 |  |  | 17,744 |  |  | 20,438 |
Loss on sales of subsidiaries, net of gain | (52 | ) |  | — |  |  | (15 | ) |  | — |
Operating income (loss) | 272 |  |  | (269 | ) |  | 1,131 |  |  | (555 | )
Other expenses, net: |  |  |  |  |  |  |
Interest expense | 24 |  |  | 33 |  |  | 115 |  |  | 118 |
Other (income) expenses, net | (8 | ) |  | 14 |  |  | 17 |  |  | (61 | )
Total other expenses, net | 16 |  |  | 47 |  |  | 132 |  |  | 57 |
Income (loss) before income tax expense (benefit) | 256 |  |  | (316 | ) |  | 999 |  |  | (612 | )
Income tax expense (benefit) | 55 |  |  | (54 | ) |  | 292 |  |  | (100 | )
Net income (loss) | $ | 201 |  |  | $ | (262 | ) |  | $ | 707 |  |  | $ | (512 | )
Net income (loss) per diluted share | $ | 3.01 |  |  | $ | (4.59 | ) |  | $ | 10.61 |  |  | $ | (9.07 | )
Diluted weighted average shares outstanding | 66.6 |  |  | 57.1 |  |  | 66.6 |  |  | 56.4 |
Operating Statistics: |  |  |  |  |  |  |
Medical care ratio | 85.1 | % |  | 90.7 | % |  | 85.9 | % |  | 90.6 | %
G&A ratio | 7.2 | % |  | 7.4 | % |  | 7.1 | % |  | 8.0 | %
Premium tax ratio | 2.2 | % |  | 2.2 | % |  | 2.3 | % |  | 2.3 | %
Effective income tax expense (benefit) rate | 21.4 | % |  | (17.2 | )% |  | 29.2 | % |  | (16.4 | )%
After-tax margin | 4.3 | % |  | (5.3 | )% |  | 3.7 | % |  | (2.6 | )%

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MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS

| December 31,
| 2018 |  | 2017
| (In millions, except share data)
ASSETS
Current assets: |  |  |
Cash and cash equivalents | $ | 2,826 |  |  | $ | 3,186 |
Investments | 1,681 |  |  | 2,524 |
Restricted investments | — |  |  | 169 |
Receivables | 1,330 |  |  | 871 |
Prepaid expenses and other current assets | 149 |  |  | 239 |
Derivative asset | 476 |  |  | 522 |
Total current assets | 6,462 |  |  | 7,511 |
Property, equipment, and capitalized software, net | 241 |  |  | 342 |
Goodwill and intangible assets, net | 190 |  |  | 255 |
Restricted investments | 120 |  |  | 119 |
Deferred income taxes | 117 |  |  | 103 |
Other assets | 24 |  |  | 141 |
| $ | 7,154 |  |  | $ | 8,471 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities: |  |  |
Medical claims and benefits payable | $ | 1,961 |  |  | $ | 2,192 |
Amounts due government agencies | 967 |  |  | 1,542 |
Accounts payable and accrued liabilities | 390 |  |  | 366 |
Deferred revenue | 211 |  |  | 282 |
Current portion of long-term debt | 241 |  |  | 653 |
Derivative liability | 476 |  |  | 522 |
Total current liabilities | 4,246 |  |  | 5,557 |
Long-term debt | 1,020 |  |  | 1,318 |
Lease financing obligations | 197 |  |  | 198 |
Other long-term liabilities | 44 |  |  | 61 |
Total liabilities | 5,507 |  |  | 7,134 |
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 |
| $ | 7,154 |  |  | $ | 8,471 |

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MOLINA HEALTHCARE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

| Three Months Ended |  | Year Ended
| December 31, |  | December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In millions)
Operating activities: |  |  |  |  |  |  |
Net income (loss) | $ | 201 |  |  | $ | (262 | ) |  | $ | 707 |  |  | $ | (512 | )
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |  |  |  |  |  |  |
Depreciation and amortization | 23 |  |  | 39 |  |  | 127 |  |  | 178 |
Deferred income taxes | 26 |  |  | (26 | ) |  | (6 | ) |  | (94 | )
Share-based compensation | 7 |  |  | 8 |  |  | 27 |  |  | 46 |
Non-cash restructuring costs | — |  |  | 11 |  |  | 17 |  |  | 60 |
Amortization of convertible senior notes and lease financing obligations | 4 |  |  | 8 |  |  | 22 |  |  | 32 |
Loss on sales of subsidiaries, net of gain | 52 |  |  | — |  |  | 15 |  |  | — |
Loss on debt extinguishment | (3 | ) |  | 14 |  |  | 22 |  |  | 14 |
Impairment losses | — |  |  | 269 |  |  | — |  |  | 470 |
Other, net | (2 | ) |  | 8 |  |  | 4 |  |  | 21 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |
Receivables | (23 | ) |  | 131 |  |  | (530 | ) |  | 103 |
Prepaid expenses and other current assets | 123 |  |  | (3 | ) |  | 6 |  |  | (56 | )
Medical claims and benefits payable | (82 | ) |  | (286 | ) |  | (226 | ) |  | 263 |
Amounts due government agencies | (63 | ) |  | 219 |  |  | (574 | ) |  | 341 |
Accounts payable and accrued liabilities | (353 | ) |  | (102 | ) |  | 45 |  |  | (12 | )
Deferred revenue | 34 |  |  | (187 | ) |  | (21 | ) |  | (34 | )
Income taxes | (67 | ) |  | 6 |  |  | 51 |  |  | (16 | )
Net cash (used in) provided by operating activities | (123 | ) |  | (153 | ) |  | (314 | ) |  | 804 |
Investing activities: |  |  |  |  |  |  |
Purchases of investments | (242 | ) |  | (803 | ) |  | (1,444 | ) |  | (2,697 | )
Proceeds from sales and maturities of investments | 375 |  |  | 223 |  |  | 2,445 |  |  | 1,759 |
Net cash received from sales of subsidiaries | 190 |  |  | — |  |  | 190 |  |  | — |
Purchases of property, equipment, and capitalized software | (6 | ) |  | (1 | ) |  | (30 | ) |  | (86 | )
Other, net | 5 |  |  | (5 | ) |  | (18 | ) |  | (38 | )
Net cash provided by (used in) investing activities | 322 |  |  | (586 | ) |  | 1,143 |  |  | (1,062 | )
Financing activities: |  |  |  |  |  |  |
Repayment of credit facility | — |  |  | — |  |  | (300 | ) |  | — |
Repayment of principal amount of 1.125% Convertible Notes | (62 | ) |  | — |  |  | (298 | ) |  | — |
Cash paid for partial settlement of 1.125% Conversion Option | (146 | ) |  | — |  |  | (623 | ) |  | — |
Cash received for partial termination of 1.125% Call Option | 146 |  |  | — |  |  | 623 |  |  | — |
Cash paid for partial termination of 1.125% Warrants | (130 | ) |  | — |  |  | (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 | 11 |  |  | 4 |  |  | 18 |  |  | 11 |
Net cash (used in) provided by financing activities | (181 | ) |  | 4 |  |  | (1,193 | ) |  | 636 |
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents | 18 |  |  | (735 | ) |  | (364 | ) |  | 378 |
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | 2,908 |  |  | 4,025 |  |  | 3,290 |  |  | 2,912 |
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | $ | 2,926 |  |  | $ | 3,290 |  |  | $ | 2,926 |  |  | $ | 3,290 |

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MOLINA HEALTHCARE, INC.
UNAUDITED HEALTH PLANS SEGMENT MEMBERSHIP

| As of December 31,
| 2018 |  | 2017 |  | 2016
Ending Membership by Government Program: |  |  |  |  |
Temporary Assistance for Needy Families (“TANF”) and Children’s Health Insurance Program (“CHIP”) | 2,295,000 |  |  | 2,457,000 |  |  | 2,536,000 |
Medicaid Expansion | 660,000 |  |  | 668,000 |  |  | 673,000 |
Aged, Blind or Disabled (“ABD”) | 406,000 |  |  | 412,000 |  |  | 396,000 |
Total Medicaid | 3,361,000 |  |  | 3,537,000 |  |  | 3,605,000 |
Medicare-Medicaid Plan (“MMP”) - Integrated | 54,000 |  |  | 57,000 |  |  | 51,000 |
Medicare Special Needs Plans | 44,000 |  |  | 44,000 |  |  | 45,000 |
Total Medicare | 98,000 |  |  | 101,000 |  |  | 96,000 |
Total Medicaid and Medicare | 3,459,000 |  |  | 3,638,000 |  |  | 3,701,000 |
Marketplace | 362,000 |  |  | 815,000 |  |  | 526,000 |
| 3,821,000 |  |  | 4,453,000 |  |  | 4,227,000 |
Ending Membership by Health Plan: |  |  |  |  |
California | 608,000 |  |  | 746,000 |  |  | 683,000 |
Florida | 313,000 |  |  | 625,000 |  |  | 553,000 |
Illinois | 224,000 |  |  | 165,000 |  |  | 195,000 |
Michigan | 383,000 |  |  | 398,000 |  |  | 391,000 |
New Mexico | 222,000 |  |  | 253,000 |  |  | 254,000 |
Ohio | 302,000 |  |  | 327,000 |  |  | 332,000 |
Puerto Rico | 252,000 |  |  | 314,000 |  |  | 330,000 |
South Carolina | 120,000 |  |  | 116,000 |  |  | 109,000 |
Texas | 423,000 |  |  | 430,000 |  |  | 337,000 |
Washington | 781,000 |  |  | 777,000 |  |  | 736,000 |
Other (1) | 193,000 |  |  | 302,000 |  |  | 307,000 |
| 3,821,000 |  |  | 4,453,000 |  |  | 4,227,000 |

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(1) | “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results.

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MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
BY GOVERNMENT PROGRAM
(In millions, except percentages and per-member per-month amounts)

| Three Months Ended December 31, 2018
| Member Months (1) |  | Premium Revenue |  | Medical Care Costs |  | MCR (2) |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
TANF and CHIP | 7.1 |  |  | $ | 1,363 |  |  | $ | 189.86 |  |  | $ | 1,203 |  |  | $ | 167.61 |  |  | 88.3 | % |  | $ | 160 |
Medicaid Expansion | 2.0 |  |  | 700 |  |  | 349.05 |  |  | 630 |  |  | 314.34 |  |  | 90.1 |  |  | 70 |
ABD | 1.3 |  |  | 1,367 |  |  | 1,094.14 |  |  | 1,213 |  |  | 970.49 |  |  | 88.7 |  |  | 154 |
Total Medicaid | 10.4 |  |  | 3,430 |  |  | 328.79 |  |  | 3,046 |  |  | 292.00 |  |  | 88.8 |  |  | 384 |
MMP | 0.2 |  |  | 366 |  |  | 2,263.41 |  |  | 300 |  |  | 1,855.34 |  |  | 82.0 |  |  | 66 |
Medicare | 0.1 |  |  | 161 |  |  | 1,206.96 |  |  | 126 |  |  | 944.65 |  |  | 78.3 |  |  | 35 |
Total Medicare | 0.3 |  |  | 527 |  |  | 1,784.58 |  |  | 426 |  |  | 1,442.57 |  |  | 80.8 |  |  | 101 |
Total Medicaid and Medicare | 10.7 |  |  | 3,957 |  |  | 368.93 |  |  | 3,472 |  |  | 323.72 |  |  | 87.7 |  |  | 485 |
Marketplace | 1.1 |  |  | 481 |  |  | 437.79 |  |  | 303 |  |  | 275.56 |  |  | 62.9 |  |  | 178 |
| 11.8 |  |  | $ | 4,438 |  |  | $ | 375.33 |  |  | $ | 3,775 |  |  | $ | 319.24 |  |  | 85.1 | % |  | $ | 663 |

| Three Months Ended December 31, 2017
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
TANF and CHIP | 7.4 |  |  | $ | 1,369 |  |  | $ | 183.95 |  |  | $ | 1,250 |  |  | $ | 168.00 |  |  | 91.3 | % |  | $ | 119 |
Medicaid Expansion | 2.0 |  |  | 774 |  |  | 386.22 |  |  | 629 |  |  | 313.89 |  |  | 81.3 |  |  | 145 |
ABD | 1.3 |  |  | 1,366 |  |  | 1,100.22 |  |  | 1,229 |  |  | 989.56 |  |  | 89.9 |  |  | 137 |
Total Medicaid | 10.7 |  |  | 3,509 |  |  | 328.28 |  |  | 3,108 |  |  | 290.76 |  |  | 88.6 |  |  | 401 |
MMP | 0.2 |  |  | 363 |  |  | 2,142.07 |  |  | 341 |  |  | 2,006.07 |  |  | 93.7 |  |  | 22 |
Medicare | 0.1 |  |  | 152 |  |  | 1,155.15 |  |  | 124 |  |  | 948.16 |  |  | 82.1 |  |  | 28 |
Total Medicare | 0.3 |  |  | 515 |  |  | 1,710.94 |  |  | 465 |  |  | 1,543.93 |  |  | 90.2 |  |  | 50 |
Total Medicaid and Medicare | 11.0 |  |  | 4,024 |  |  | 366.18 |  |  | 3,573 |  |  | 325.12 |  |  | 88.8 |  |  | 451 |
Marketplace | 2.4 |  |  | 665 |  |  | 268.39 |  |  | 678 |  |  | 273.92 |  |  | 102.1 |  |  | (13 | )
| 13.4 |  |  | $ | 4,689 |  |  | $ | 348.20 |  |  | $ | 4,251 |  |  | $ | 315.70 |  |  | 90.7 | % |  | $ | 438 |

__________________

(1) | A member month is defined as the aggregate of each month’s ending membership for the period presented.

(2) | The MCR represents medical costs as a percentage of premium revenue.

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 12
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
BY GOVERNMENT PROGRAM
(In millions, except percentages and per-member per-month amounts)

| Year Ended December 31, 2018
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
TANF and CHIP | 29.4 |  |  | $ | 5,508 |  |  | $ | 187.04 |  |  | $ | 4,908 |  |  | $ | 166.66 |  |  | 89.1 | % |  | $ | 600 |
Medicaid Expansion | 8.1 |  |  | 2,884 |  |  | 356.81 |  |  | 2,587 |  |  | 320.11 |  |  | 89.7 |  |  | 297 |
ABD | 5.0 |  |  | 5,231 |  |  | 1,049.26 |  |  | 4,763 |  |  | 955.22 |  |  | 91.0 |  |  | 468 |
Total Medicaid | 42.5 |  |  | 13,623 |  |  | 320.43 |  |  | 12,258 |  |  | 288.31 |  |  | 90.0 |  |  | 1,365 |
MMP | 0.7 |  |  | 1,443 |  |  | 2,192.58 |  |  | 1,241 |  |  | 1,885.59 |  |  | 86.0 |  |  | 202 |
Medicare | 0.5 |  |  | 631 |  |  | 1,180.46 |  |  | 511 |  |  | 955.81 |  |  | 81.0 |  |  | 120 |
Total Medicare | 1.2 |  |  | 2,074 |  |  | 1,738.85 |  |  | 1,752 |  |  | 1,468.77 |  |  | 84.5 |  |  | 322 |
Total Medicaid and Medicare | 43.7 |  |  | 15,697 |  |  | 359.14 |  |  | 14,010 |  |  | 320.53 |  |  | 89.2 |  |  | 1,687 |
Marketplace | 4.9 |  |  | 1,915 |  |  | 392.97 |  |  | 1,127 |  |  | 231.33 |  |  | 58.9 |  |  | 788 |
| 48.6 |  |  | $ | 17,612 |  |  | $ | 362.54 |  |  | $ | 15,137 |  |  | $ | 311.59 |  |  | 85.9 | % |  | $ | 2,475 |

| Year Ended December 31, 2017
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
TANF and CHIP | 30.2 |  |  | $ | 5,554 |  |  | $ | 183.75 |  |  | $ | 5,111 |  |  | $ | 169.09 |  |  | 92.0 | % |  | $ | 443 |
Medicaid Expansion | 8.1 |  |  | 3,150 |  |  | 388.42 |  |  | 2,674 |  |  | 329.73 |  |  | 84.9 |  |  | 476 |
ABD | 4.9 |  |  | 5,135 |  |  | 1,050.41 |  |  | 4,863 |  |  | 994.80 |  |  | 94.7 |  |  | 272 |
Total Medicaid | 43.2 |  |  | 13,839 |  |  | 320.16 |  |  | 12,648 |  |  | 292.61 |  |  | 91.4 |  |  | 1,191 |
MMP | 0.7 |  |  | 1,446 |  |  | 2,177.72 |  |  | 1,317 |  |  | 1,982.36 |  |  | 91.0 |  |  | 129 |
Medicare | 0.5 |  |  | 601 |  |  | 1,143.63 |  |  | 493 |  |  | 939.67 |  |  | 82.2 |  |  | 108 |
Total Medicare | 1.2 |  |  | 2,047 |  |  | 1,722.47 |  |  | 1,810 |  |  | 1,523.15 |  |  | 88.4 |  |  | 237 |
Total Medicaid and Medicare | 44.4 |  |  | 15,886 |  |  | 357.68 |  |  | 14,458 |  |  | 325.53 |  |  | 91.0 |  |  | 1,428 |
Marketplace | 10.8 |  |  | 2,968 |  |  | 274.47 |  |  | 2,615 |  |  | 241.84 |  |  | 88.1 |  |  | 353 |
| 55.2 |  |  | $ | 18,854 |  |  | $ | 341.39 |  |  | $ | 17,073 |  |  | $ | 309.14 |  |  | 90.6 | % |  | $ | 1,781 |

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 13
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
MEDICAID AND MEDICARE BY HEALTH PLAN
(In millions, except percentages and per-member per-month amounts)

| Three Months Ended December 31, 2018
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
California | 1.8 |  |  | $ | 485 |  |  | $ | 282.83 |  |  | $ | 425 |  |  | $ | 247.56 |  |  | 87.5 | % |  | $ | 60 |
Florida | 1.0 |  |  | 370 |  |  | 376.80 |  |  | 345 |  |  | 351.20 |  |  | 93.2 |  |  | 25 |
Illinois | 0.7 |  |  | 242 |  |  | 361.29 |  |  | 196 |  |  | 291.63 |  |  | 80.7 |  |  | 46 |
Michigan | 1.1 |  |  | 389 |  |  | 348.47 |  |  | 320 |  |  | 287.33 |  |  | 82.5 |  |  | 69 |
New Mexico | 0.6 |  |  | 305 |  |  | 489.86 |  |  | 265 |  |  | 425.85 |  |  | 86.9 |  |  | 40 |
Ohio | 0.9 |  |  | 607 |  |  | 662.51 |  |  | 527 |  |  | 575.69 |  |  | 86.9 |  |  | 80 |
Puerto Rico | 0.8 |  |  | 147 |  |  | 173.81 |  |  | 135 |  |  | 158.97 |  |  | 91.5 |  |  | 12 |
South Carolina | 0.3 |  |  | 126 |  |  | 352.67 |  |  | 106 |  |  | 299.17 |  |  | 84.8 |  |  | 20 |
Texas | 0.6 |  |  | 581 |  |  | 865.75 |  |  | 538 |  |  | 801.34 |  |  | 92.6 |  |  | 43 |
Washington | 2.3 |  |  | 512 |  |  | 225.52 |  |  | 455 |  |  | 200.72 |  |  | 89.0 |  |  | 57 |
Other (1) | 0.6 |  |  | 193 |  |  | 344.31 |  |  | 160 |  |  | 283.96 |  |  | 82.5 |  |  | 33 |
| 10.7 |  |  | $ | 3,957 |  |  | $ | 368.93 |  |  | $ | 3,472 |  |  | $ | 323.72 |  |  | 87.7 | % |  | $ | 485 |
| Three Months Ended December 31, 2017
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
| Total |  | PMPM |  | Total |  | PMPM |  |
California | 1.8 |  |  | $ | 621 |  |  | $ | 335.46 |  |  | $ | 531 |  |  | $ | 286.70 |  |  | 85.5 | % |  | $ | 90 |
Florida | 1.1 |  |  | 390 |  |  | 358.34 |  |  | 349 |  |  | 320.47 |  |  | 89.4 |  |  | 41 |
Illinois | 0.5 |  |  | 146 |  |  | 294.68 |  |  | 146 |  |  | 295.25 |  |  | 100.2 |  |  | — |
Michigan | 1.1 |  |  | 383 |  |  | 339.23 |  |  | 325 |  |  | 287.60 |  |  | 84.8 |  |  | 58 |
New Mexico | 0.7 |  |  | 325 |  |  | 465.52 |  |  | 279 |  |  | 400.84 |  |  | 86.1 |  |  | 46 |
Ohio | 1.0 |  |  | 532 |  |  | 555.50 |  |  | 460 |  |  | 480.48 |  |  | 86.5 |  |  | 72 |
Puerto Rico | 0.9 |  |  | 179 |  |  | 187.49 |  |  | 178 |  |  | 187.68 |  |  | 100.1 |  |  | 1 |
South Carolina | 0.4 |  |  | 116 |  |  | 337.14 |  |  | 111 |  |  | 320.47 |  |  | 95.1 |  |  | 5 |
Texas | 0.7 |  |  | 558 |  |  | 796.86 |  |  | 510 |  |  | 728.72 |  |  | 91.4 |  |  | 48 |
Washington | 2.2 |  |  | 610 |  |  | 275.76 |  |  | 540 |  |  | 243.70 |  |  | 88.4 |  |  | 70 |
Other | 0.6 |  |  | 164 |  |  | 292.88 |  |  | 144 |  |  | 256.26 |  |  | 87.5 |  |  | 20 |
| 11.0 |  |  | $ | 4,024 |  |  | $ | 366.18 |  |  | $ | 3,573 |  |  | $ | 325.12 |  |  | 88.8 | % |  | $ | 451 |

__________________

(1) | “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results.

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 14
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
MEDICAID AND MEDICARE BY HEALTH PLAN
(In millions, except percentages and per-member per-month amounts)

| Year Ended December 31, 2018
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
California | 7.1 |  |  | $ | 1,931 |  |  | $ | 273.59 |  |  | $ | 1,724 |  |  | $ | 244.21 |  |  | 89.3 | % |  | $ | 207 |
Florida | 4.2 |  |  | 1,517 |  |  | 360.98 |  |  | 1,414 |  |  | 336.43 |  |  | 93.2 |  |  | 103 |
Illinois | 2.5 |  |  | 793 |  |  | 322.87 |  |  | 670 |  |  | 272.61 |  |  | 84.4 |  |  | 123 |
Michigan | 4.5 |  |  | 1,550 |  |  | 344.42 |  |  | 1,303 |  |  | 289.53 |  |  | 84.1 |  |  | 247 |
New Mexico | 2.6 |  |  | 1,241 |  |  | 474.10 |  |  | 1,140 |  |  | 435.65 |  |  | 91.9 |  |  | 101 |
Ohio | 3.7 |  |  | 2,277 |  |  | 608.29 |  |  | 2,001 |  |  | 534.59 |  |  | 87.9 |  |  | 276 |
Puerto Rico | 3.7 |  |  | 696 |  |  | 186.59 |  |  | 636 |  |  | 170.45 |  |  | 91.4 |  |  | 60 |
South Carolina | 1.4 |  |  | 495 |  |  | 351.38 |  |  | 429 |  |  | 304.85 |  |  | 86.8 |  |  | 66 |
Texas | 2.7 |  |  | 2,296 |  |  | 839.70 |  |  | 2,092 |  |  | 765.12 |  |  | 91.1 |  |  | 204 |
Washington | 9.1 |  |  | 2,178 |  |  | 240.42 |  |  | 1,999 |  |  | 220.72 |  |  | 91.8 |  |  | 179 |
Other | 2.2 |  |  | 723 |  |  | 329.06 |  |  | 602 |  |  | 273.55 |  |  | 83.1 |  |  | 121 |
| 43.7 |  |  | $ | 15,697 |  |  | $ | 359.14 |  |  | $ | 14,010 |  |  | $ | 320.53 |  |  | 89.2 | % |  | $ | 1,687 |
| Year Ended December 31, 2017
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
| Total |  | PMPM |  | Total |  | PMPM |  |
California | 7.4 |  |  | $ | 2,392 |  |  | $ | 321.46 |  |  | $ | 2,117 |  |  | $ | 284.53 |  |  | 88.5 | % |  | $ | 275 |
Florida | 4.3 |  |  | 1,522 |  |  | 350.15 |  |  | 1,461 |  |  | 335.97 |  |  | 96.0 |  |  | 61 |
Illinois | 2.1 |  |  | 593 |  |  | 286.69 |  |  | 638 |  |  | 308.41 |  |  | 107.6 |  |  | (45 | )
Michigan | 4.6 |  |  | 1,545 |  |  | 334.22 |  |  | 1,360 |  |  | 294.15 |  |  | 88.0 |  |  | 185 |
New Mexico | 2.9 |  |  | 1,258 |  |  | 439.95 |  |  | 1,166 |  |  | 407.94 |  |  | 92.7 |  |  | 92 |
Ohio | 3.9 |  |  | 2,130 |  |  | 544.98 |  |  | 1,894 |  |  | 484.66 |  |  | 88.9 |  |  | 236 |
Puerto Rico | 3.8 |  |  | 732 |  |  | 190.13 |  |  | 691 |  |  | 179.65 |  |  | 94.5 |  |  | 41 |
South Carolina | 1.4 |  |  | 445 |  |  | 328.41 |  |  | 412 |  |  | 304.04 |  |  | 92.6 |  |  | 33 |
Texas | 2.8 |  |  | 2,150 |  |  | 769.82 |  |  | 1,978 |  |  | 708.20 |  |  | 92.0 |  |  | 172 |
Washington | 8.9 |  |  | 2,445 |  |  | 275.64 |  |  | 2,143 |  |  | 241.55 |  |  | 87.6 |  |  | 302 |
Other | 2.3 |  |  | 674 |  |  | 292.92 |  |  | 598 |  |  | 259.85 |  |  | 88.7 |  |  | 76 |
| 44.4 |  |  | $ | 15,886 |  |  | $ | 357.68 |  |  | $ | 14,458 |  |  | $ | 325.53 |  |  | 91.0 | % |  | $ | 1,428 |

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 15
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
MARKETPLACE BY HEALTH PLAN
(In millions, except percentages and per-member per-month amounts)

| Three Months Ended December 31, 2018
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
California | — |  |  | $ | 48 |  |  | $ | 322.39 |  |  | $ | 36 |  |  | $ | 248.84 |  |  | 77.2 | % |  | $ | 12 |
Florida | 0.1 |  |  | 62 |  |  | 526.44 |  |  | 32 |  |  | 278.60 |  |  | 52.9 |  |  | 30 |
Michigan | 0.1 |  |  | 11 |  |  | 259.20 |  |  | 8 |  |  | 166.54 |  |  | 64.3 |  |  | 3 |
New Mexico | 0.1 |  |  | 22 |  |  | 328.32 |  |  | 19 |  |  | 302.79 |  |  | 92.2 |  |  | 3 |
Ohio | 0.1 |  |  | 27 |  |  | 512.33 |  |  | 20 |  |  | 366.62 |  |  | 71.6 |  |  | 7 |
Texas | 0.7 |  |  | 269 |  |  | 440.81 |  |  | 153 |  |  | 250.66 |  |  | 56.9 |  |  | 116 |
Washington | — |  |  | 44 |  |  | 697.31 |  |  | 35 |  |  | 536.80 |  |  | 77.0 |  |  | 9 |
Other (1) | — |  |  | (2 | ) |  | NM |  |  | — |  |  | NM |  |  | NM |  |  | (2 | )
| 1.1 |  |  | $ | 481 |  |  | $ | 437.79 |  |  | $ | 303 |  |  | $ | 275.56 |  |  | 62.9 | % |  | $ | 178 |
| Three Months Ended December 31, 2017
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
| Total |  | PMPM |  | Total |  | PMPM |  |
California | 0.5 |  |  | $ | 68 |  |  | $ | 163.41 |  |  | $ | 75 |  |  | $ | 181.70 |  |  | 111.2 | % |  | $ | (7 | )
Florida | 0.8 |  |  | 225 |  |  | 283.63 |  |  | 251 |  |  | 316.67 |  |  | 111.6 |  |  | (26 | )
Michigan | 0.1 |  |  | 10 |  |  | 153.52 |  |  | 11 |  |  | 166.49 |  |  | 108.5 |  |  | (1 | )
New Mexico | 0.1 |  |  | 28 |  |  | 387.65 |  |  | 22 |  |  | 291.42 |  |  | 75.2 |  |  | 6 |
Ohio | — |  |  | 18 |  |  | 355.81 |  |  | 17 |  |  | 317.65 |  |  | 89.3 |  |  | 1 |
Texas | 0.5 |  |  | 146 |  |  | 242.38 |  |  | 166 |  |  | 276.16 |  |  | 113.9 |  |  | (20 | )
Washington | 0.1 |  |  | 40 |  |  | 321.91 |  |  | 28 |  |  | 233.26 |  |  | 72.5 |  |  | 12 |
Other | 0.3 |  |  | 130 |  |  | 364.63 |  |  | 108 |  |  | 305.05 |  |  | 83.7 |  |  | 22 |
| 2.4 |  |  | $ | 665 |  |  | $ | 268.39 |  |  | $ | 678 |  |  | $ | 273.92 |  |  | 102.1 | % |  | $ | (13 | )

__________________

(1) | “Other” includes the Utah and Wisconsin health plans, where we did not participate in the Marketplace in 2018. Therefore, the ratios for 2018 periods are not meaningful (NM).

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 16
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
MARKETPLACE BY HEALTH PLAN
(In millions, except percentages and per-member per-month amounts)

| Year Ended December 31, 2018
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
California | 0.6 |  |  | $ | 219 |  |  | $ | 325.84 |  |  | $ | 125 |  |  | $ | 187.37 |  |  | 57.5 | % |  | $ | 94 |
Florida | 0.6 |  |  | 273 |  |  | 498.66 |  |  | 99 |  |  | 181.52 |  |  | 36.4 |  |  | 174 |
Michigan | 0.2 |  |  | 51 |  |  | 250.69 |  |  | 31 |  |  | 150.11 |  |  | 59.9 |  |  | 20 |
New Mexico | 0.3 |  |  | 115 |  |  | 403.55 |  |  | 74 |  |  | 260.29 |  |  | 64.5 |  |  | 41 |
Ohio | 0.3 |  |  | 111 |  |  | 477.03 |  |  | 78 |  |  | 334.32 |  |  | 70.1 |  |  | 33 |
Texas | 2.7 |  |  | 948 |  |  | 356.06 |  |  | 593 |  |  | 222.89 |  |  | 62.6 |  |  | 355 |
Washington | 0.2 |  |  | 183 |  |  | 664.48 |  |  | 140 |  |  | 506.07 |  |  | 76.2 |  |  | 43 |
Other | — |  |  | 15 |  |  | NM |  |  | (13 | ) |  | NM |  |  | NM |  |  | 28 |
| 4.9 |  |  | $ | 1,915 |  |  | $ | 392.97 |  |  | $ | 1,127 |  |  | $ | 231.33 |  |  | 58.9 | % |  | $ | 788 |
| Year Ended December 31, 2017
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
| Total |  | PMPM |  | Total |  | PMPM |  |
California | 1.7 |  |  | $ | 309 |  |  | $ | 185.88 |  |  | $ | 231 |  |  | $ | 138.61 |  |  | 74.6 | % |  | $ | 78 |
Florida | 3.6 |  |  | 1,046 |  |  | 293.35 |  |  | 1,009 |  |  | 283.17 |  |  | 96.5 |  |  | 37 |
Michigan | 0.3 |  |  | 51 |  |  | 180.26 |  |  | 38 |  |  | 135.64 |  |  | 75.2 |  |  | 13 |
New Mexico | 0.3 |  |  | 110 |  |  | 349.50 |  |  | 84 |  |  | 264.14 |  |  | 75.6 |  |  | 26 |
Ohio | 0.2 |  |  | 86 |  |  | 363.24 |  |  | 81 |  |  | 340.44 |  |  | 93.7 |  |  | 5 |
Texas | 2.6 |  |  | 663 |  |  | 250.08 |  |  | 517 |  |  | 195.20 |  |  | 78.1 |  |  | 146 |
Washington | 0.5 |  |  | 163 |  |  | 317.39 |  |  | 156 |  |  | 304.74 |  |  | 96.0 |  |  | 7 |
Other | 1.6 |  |  | 540 |  |  | 340.13 |  |  | 499 |  |  | 314.21 |  |  | 92.4 |  |  | 41 |
| 10.8 |  |  | $ | 2,968 |  |  | $ | 274.47 |  |  | $ | 2,615 |  |  | $ | 241.84 |  |  | 88.1 | % |  | $ | 353 |

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 17
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
TOTAL BY HEALTH PLAN
(In millions, except percentages and per-member per-month amounts)

| Three Months Ended December 31, 2018
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
California | 1.8 |  |  | $ | 533 |  |  | $ | 285.98 |  |  | $ | 461 |  |  | $ | 247.66 |  |  | 86.6 | % |  | $ | 72 |
Florida | 1.1 |  |  | 432 |  |  | 392.68 |  |  | 377 |  |  | 343.49 |  |  | 87.5 |  |  | 55 |
Illinois | 0.7 |  |  | 242 |  |  | 361.29 |  |  | 196 |  |  | 291.63 |  |  | 80.7 |  |  | 46 |
Michigan | 1.2 |  |  | 400 |  |  | 344.96 |  |  | 328 |  |  | 282.58 |  |  | 81.9 |  |  | 72 |
New Mexico | 0.7 |  |  | 327 |  |  | 474.44 |  |  | 284 |  |  | 414.10 |  |  | 87.3 |  |  | 43 |
Ohio | 1.0 |  |  | 634 |  |  | 654.39 |  |  | 547 |  |  | 564.37 |  |  | 86.2 |  |  | 87 |
Puerto Rico | 0.8 |  |  | 147 |  |  | 173.81 |  |  | 135 |  |  | 158.97 |  |  | 91.5 |  |  | 12 |
South Carolina | 0.3 |  |  | 126 |  |  | 352.67 |  |  | 106 |  |  | 299.17 |  |  | 84.8 |  |  | 20 |
Texas | 1.3 |  |  | 850 |  |  | 663.84 |  |  | 691 |  |  | 539.68 |  |  | 81.3 |  |  | 159 |
Washington | 2.3 |  |  | 556 |  |  | 238.21 |  |  | 490 |  |  | 209.76 |  |  | 88.1 |  |  | 66 |
Other (1) | 0.6 |  |  | 191 |  |  | 344.44 |  |  | 160 |  |  | 285.37 |  |  | 82.9 |  |  | 31 |
| 11.8 |  |  | $ | 4,438 |  |  | $ | 375.33 |  |  | $ | 3,775 |  |  | $ | 319.24 |  |  | 85.1 | % |  | $ | 663 |
| Three Months Ended December 31, 2017
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
| Total |  | PMPM |  | Total |  | PMPM |  |
California | 2.3 |  |  | $ | 689 |  |  | $ | 303.98 |  |  | $ | 606 |  |  | $ | 267.49 |  |  | 88.0 | % |  | $ | 83 |
Florida | 1.9 |  |  | 615 |  |  | 326.80 |  |  | 600 |  |  | 318.86 |  |  | 97.6 |  |  | 15 |
Illinois | 0.5 |  |  | 146 |  |  | 294.68 |  |  | 146 |  |  | 295.25 |  |  | 100.2 |  |  | — |
Michigan | 1.2 |  |  | 393 |  |  | 329.50 |  |  | 336 |  |  | 281.26 |  |  | 85.4 |  |  | 57 |
New Mexico | 0.8 |  |  | 353 |  |  | 458.22 |  |  | 301 |  |  | 390.58 |  |  | 85.2 |  |  | 52 |
Ohio | 1.0 |  |  | 550 |  |  | 545.09 |  |  | 477 |  |  | 471.99 |  |  | 86.6 |  |  | 73 |
Puerto Rico | 0.9 |  |  | 179 |  |  | 187.49 |  |  | 178 |  |  | 187.68 |  |  | 100.1 |  |  | 1 |
South Carolina | 0.4 |  |  | 116 |  |  | 337.14 |  |  | 111 |  |  | 320.47 |  |  | 95.1 |  |  | 5 |
Texas | 1.2 |  |  | 704 |  |  | 541.55 |  |  | 676 |  |  | 520.34 |  |  | 96.1 |  |  | 28 |
Washington | 2.3 |  |  | 650 |  |  | 278.21 |  |  | 568 |  |  | 243.15 |  |  | 87.4 |  |  | 82 |
Other | 0.9 |  |  | 294 |  |  | 320.77 |  |  | 252 |  |  | 275.23 |  |  | 85.8 |  |  | 42 |
| 13.4 |  |  | $ | 4,689 |  |  | $ | 348.20 |  |  | $ | 4,251 |  |  | $ | 315.70 |  |  | 90.7 | % |  | $ | 438 |

__________________

(1) | “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results.

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 18
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—
TOTAL BY HEALTH PLAN
(In millions, except percentages and per-member per-month amounts)

| Year Ended December 31, 2018
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
|  | Total |  | PMPM |  | Total |  | PMPM |  |
California | 7.7 |  |  | $ | 2,150 |  |  | $ | 278.13 |  |  | $ | 1,849 |  |  | $ | 239.28 |  |  | 86.0 | % |  | $ | 301 |
Florida | 4.8 |  |  | 1,790 |  |  | 376.84 |  |  | 1,513 |  |  | 318.58 |  |  | 84.5 |  |  | 277 |
Illinois | 2.5 |  |  | 793 |  |  | 322.87 |  |  | 670 |  |  | 272.61 |  |  | 84.4 |  |  | 123 |
Michigan | 4.7 |  |  | 1,601 |  |  | 340.35 |  |  | 1,334 |  |  | 283.47 |  |  | 83.3 |  |  | 267 |
New Mexico | 2.9 |  |  | 1,356 |  |  | 467.17 |  |  | 1,214 |  |  | 418.44 |  |  | 89.6 |  |  | 142 |
Ohio | 4.0 |  |  | 2,388 |  |  | 600.62 |  |  | 2,079 |  |  | 522.89 |  |  | 87.1 |  |  | 309 |
Puerto Rico | 3.7 |  |  | 696 |  |  | 186.59 |  |  | 636 |  |  | 170.45 |  |  | 91.4 |  |  | 60 |
South Carolina | 1.4 |  |  | 495 |  |  | 351.38 |  |  | 429 |  |  | 304.85 |  |  | 86.8 |  |  | 66 |
Texas | 5.4 |  |  | 3,244 |  |  | 601.23 |  |  | 2,685 |  |  | 497.75 |  |  | 82.8 |  |  | 559 |
Washington | 9.3 |  |  | 2,361 |  |  | 252.92 |  |  | 2,139 |  |  | 229.13 |  |  | 90.6 |  |  | 222 |
Other | 2.2 |  |  | 738 |  |  | 336.86 |  |  | 589 |  |  | 268.17 |  |  | 79.6 |  |  | 149 |
| 48.6 |  |  | $ | 17,612 |  |  | $ | 362.54 |  |  | $ | 15,137 |  |  | $ | 311.59 |  |  | 85.9 | % |  | $ | 2,475 |
| Year Ended December 31, 2017
| Member Months |  | Premium Revenue |  | Medical Care Costs |  | MCR |  | Medical Margin
| Total |  | PMPM |  | Total |  | PMPM |  |
California | 9.1 |  |  | $ | 2,701 |  |  | $ | 296.68 |  |  | $ | 2,348 |  |  | $ | 257.86 |  |  | 86.9 | % |  | $ | 353 |
Florida | 7.9 |  |  | 2,568 |  |  | 324.56 |  |  | 2,470 |  |  | 312.18 |  |  | 96.2 |  |  | 98 |
Illinois | 2.1 |  |  | 593 |  |  | 286.69 |  |  | 638 |  |  | 308.41 |  |  | 107.6 |  |  | (45 | )
Michigan | 4.9 |  |  | 1,596 |  |  | 325.43 |  |  | 1,398 |  |  | 285.11 |  |  | 87.6 |  |  | 198 |
New Mexico | 3.2 |  |  | 1,368 |  |  | 430.97 |  |  | 1,250 |  |  | 393.67 |  |  | 91.3 |  |  | 118 |
Ohio | 4.1 |  |  | 2,216 |  |  | 534.56 |  |  | 1,975 |  |  | 476.39 |  |  | 89.1 |  |  | 241 |
Puerto Rico | 3.8 |  |  | 732 |  |  | 190.13 |  |  | 691 |  |  | 179.65 |  |  | 94.5 |  |  | 41 |
South Carolina | 1.4 |  |  | 445 |  |  | 328.41 |  |  | 412 |  |  | 304.04 |  |  | 92.6 |  |  | 33 |
Texas | 5.4 |  |  | 2,813 |  |  | 516.84 |  |  | 2,495 |  |  | 458.50 |  |  | 88.7 |  |  | 318 |
Washington | 9.4 |  |  | 2,608 |  |  | 277.93 |  |  | 2,299 |  |  | 245.01 |  |  | 88.2 |  |  | 309 |
Other | 3.9 |  |  | 1,214 |  |  | 312.20 |  |  | 1,097 |  |  | 282.06 |  |  | 90.3 |  |  | 117 |
| 55.2 |  |  | $ | 18,854 |  |  | $ | 341.39 |  |  | $ | 17,073 |  |  | $ | 309.14 |  |  | 90.6 | % |  | $ | 1,781 |

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 19
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED FINANCIAL DATA
(In millions, except percentages and per-member per-month amounts)
The following tables provide the details of our medical care costs for the periods indicated:

| Three Months Ended December 31,
| 2018 |  | 2017
| Amount |  | PMPM |  | % of Total |  | Amount |  | PMPM |  | % of Total
Fee for service | $ | 2,807 |  |  | $ | 237.39 |  |  | 74.4 | % |  | $ | 3,052 |  |  | $ | 226.66 |  |  | 71.8 | %
Pharmacy | 493 |  |  | 41.68 |  |  | 13.1 |  |  | 659 |  |  | 48.88 |  |  | 15.4 |
Capitation | 293 |  |  | 24.83 |  |  | 7.7 |  |  | 338 |  |  | 25.13 |  |  | 8.0 |
Other | 182 |  |  | 15.34 |  |  | 4.8 |  |  | 202 |  |  | 15.03 |  |  | 4.8 |
| $ | 3,775 |  |  | $ | 319.24 |  |  | 100.0 | % |  | $ | 4,251 |  |  | $ | 315.70 |  |  | 100.0 | %

| Year Ended December 31,
| 2018 |  | 2017
| Amount |  | PMPM |  | % of Total |  | Amount |  | PMPM |  | % of Total
Fee for service | $ | 11,278 |  |  | $ | 232.15 |  |  | 74.5 | % |  | $ | 12,682 |  |  | $ | 229.63 |  |  | 74.3 | %
Pharmacy | 2,138 |  |  | 44.01 |  |  | 14.1 |  |  | 2,563 |  |  | 46.40 |  |  | 15.0 |
Capitation | 1,184 |  |  | 24.38 |  |  | 7.8 |  |  | 1,360 |  |  | 24.63 |  |  | 8.0 |
Other | 537 |  |  | 11.05 |  |  | 3.6 |  |  | 468 |  |  | 8.48 |  |  | 2.7 |
| $ | 15,137 |  |  | $ | 311.59 |  |  | 100.0 | % |  | $ | 17,073 |  |  | $ | 309.14 |  |  | 100.0 | %

The following table provides the details of our medical claims and benefits payable as of the dates indicated:

| December 31,
| 2018 |  | 2017
Fee-for-service claims incurred but not paid (IBNP) | $ | 1,562 |  |  | $ | 1,717 |
Pharmacy payable | 115 |  |  | 112 |
Capitation payable | 52 |  |  | 67 |
Other (1) | 232 |  |  | 296 |
| $ | 1,961 |  |  | $ | 2,192 |

______________________

(1) | “Other” medical claims and benefits payable include amounts payable to certain providers for which we act as an intermediary on behalf of various state agencies without assuming financial risk. Such receipts and payments do not impact our consolidated statements of operations. As of December 31, 2018 and 2017, we had recorded non-risk provider payables of approximately $107 million and $122 million, respectively.

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 20
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE
(Dollars in millions)
Our claims liability includes a provision for adverse claims deviation based on historical experience and other factors including, but not limited to, variations in claims payment patterns, changes in utilization and cost trends, known outbreaks of disease, and large claims. Our reserving methodology is consistently applied across all periods presented. The amounts displayed for “Components of medical care costs related to: Prior period” represent the amount by which our original estimate of claims and benefits payable at the beginning of the period was (more) less than the actual amount of the liability based on information (principally the payment of claims) developed since that liability was first reported. The following table presents the components of the change in medical claims and benefits payable for the periods indicated:

| Year Ended December 31,
| 2018 |  | 2017
Medical claims and benefits payable, beginning balance | $ | 2,192 |  |  | $ | 1,929 |
Components of medical care costs related to: |  |  |
Current period | 15,478 |  |  | 17,037 |
Prior period (1) | (341 | ) |  | 36 |
Total medical care costs | 15,137 |  |  | 17,073 |
Change in non-risk provider payables | 13 |  |  | (106 | )
Payments for medical care costs related to: |  |  |
Current period | 13,671 |  |  | 15,130 |
Prior period | 1,710 |  |  | 1,574 |
Total paid | 15,381 |  |  | 16,704 |
Medical claims and benefits payable, ending balance | $ | 1,961 |  |  | $ | 2,192 |
Days in claims payable, fee for service (2) | 53 |  |  | 54 |

______________________

(1) | Includes the 2018 benefit of the 2017 Marketplace CSR reimbursement of $81 million.

(2) | Claims payable includes primarily IBNP. It also includes certain fee-for-service payables reported in “Other” medical claims and benefits payable amounting to $43 million and $99 million, as of December 31, 2018 and 2017, respectively.

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 21
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED SUMMARY OF SIGNIFICANT ITEMS AFFECTING CURRENT QUARTER AND
YEAR-TO-DATE FINANCIAL RESULTS
(In millions, except per diluted share amounts)
The table below summarizes the impact of certain items significant to our financial performance in the periods presented. The individual items presented below increase (decrease) income before income tax expense.

| Three Months Ended December 31, 2018 |  | Year Ended December 31, 2018
| Amount |  | Per Diluted Share (1) |  | Amount |  | Per Diluted Share (1)
Retroactive California Medicaid Expansion risk corridor | $ | (24 | ) |  | $ | (0.28 | ) |  | $ | (81 | ) |  | $ | (0.95 | )
Marketplace risk adjustment, for 2017 dates of service | — |  |  | — |  |  | 56 |  |  | 0.66 |
Marketplace CSR subsidies, for 2017 dates of service | — |  |  | — |  |  | 81 |  |  | 0.95 |
Loss on sales of subsidiaries, net of gain | (52 | ) |  | (0.48 | ) |  | (15 | ) |  | (0.05 | )
Restructuring costs | (8 | ) |  | (0.09 | ) |  | (46 | ) |  | (0.54 | )
Gain (loss) on debt extinguishment | 3 |  |  | 0.04 |  |  | (22 | ) |  | (0.29 | )
| $ | (81 | ) |  | $ | (0.81 | ) |  | $ | (27 | ) |  | $ | (0.22 | )

(1) | Except for permanent differences between GAAP and tax (such as certain expenses that are not deductible for tax purposes), per diluted share amounts are generally calculated at the statutory income tax rate of 22%.

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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 22
February 11, 2019
MOLINA HEALTHCARE, INC.
UNAUDITED NON-GAAP FINANCIAL MEASURES
(In millions, except per diluted share amounts)
We use non-generally accepted accounting principles, or non-GAAP, financial measures as supplemental metrics in evaluating our financial performance, making financing and business decisions, and forecasting and planning for future periods. For these reasons, management believes such measures are useful supplemental measures to investors in comparing our performance to the performance of other public companies in the health care industry. These non-GAAP financial measures should be considered as supplements to, and not as substitutes for or superior to, GAAP measures. See further information regarding non-GAAP measures below the tables.

| Three Months Ended December 31, |  | Year Ended December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
Net income (loss) | $ | 201 |  |  | $ | (262 | ) |  | $ | 707 |  |  | $ | (512 | )
Adjustments: |  |  |  |  |  |  |
Depreciation, and amortization of intangible assets and capitalized software | 23 |  |  | 36 |  |  | 118 |  |  | 165 |
Interest expense | 24 |  |  | 33 |  |  | 115 |  |  | 118 |
Income tax expense (benefit) | 55 |  |  | (54 | ) |  | 292 |  |  | (100 | )
EBITDA | $ | 303 |  |  | $ | (247 | ) |  | $ | 1,232 |  |  | $ | (329 | )

| Three Months Ended December 31, |  | Year Ended December 31,
2018 |  | 2017 |  | 2018 |  | 2017
| Amount |  | Per Diluted Share |  | Amount |  | Per Diluted Share |  | Amount |  | Per Diluted Share |  | Amount |  | Per Diluted Share
Net income (loss) | $ | 201 |  |  | $ | 3.01 |  |  | $ | (262 | ) |  | $ | (4.59 | ) |  | $ | 707 |  |  | $ | 10.61 |  |  | $ | (512 | ) |  | $ | (9.07 | )
Adjustment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of intangible assets | 6 |  |  | 0.08 |  |  | 6 |  |  | 0.11 |  |  | 22 |  |  | 0.32 |  |  | 30 |  |  | 0.55 |
Income tax effect (1) | (1 | ) |  | (0.02 | ) |  | (2 | ) |  | (0.04 | ) |  | (5 | ) |  | (0.07 | ) |  | (11 | ) |  | (0.20 | )
Amortization of intangible assets, net of tax effect | 5 |  |  | 0.06 |  |  | 4 |  |  | 0.07 |  |  | 17 |  |  | 0.25 |  |  | 19 |  |  | 0.35 |
Adjusted net income (loss) | $ | 206 |  |  | $ | 3.07 |  |  | $ | (258 | ) |  | $ | (4.52 | ) |  | $ | 724 |  |  | $ | 10.86 |  |  | $ | (493 | ) |  | $ | (8.72 | )

________________________

(1) | Income tax effect of adjustments calculated at the blended federal and state statutory tax rate of 22% and 37% for 2018 and 2017, respectively.

The following are descriptions of the adjustments made to GAAP measures used to calculate the non-GAAP measures used in this news release:
Earnings before interest, taxes, depreciation and amortization (“EBITDA”): Net income (loss) on a GAAP basis less depreciation, and amortization of intangible assets and capitalized software, interest expense and income tax expense. We believe that EBITDA is helpful in assessing our ability to meet the cash demands of our operating units.
Adjusted net income: Net income (loss) on a GAAP basis less amortization of intangible assets, net of income tax effect calculated at the statutory tax rate. We believe that adjusted net income (loss) is helpful in assessing our financial performance exclusive of the non-cash impact of the amortization of purchased intangibles.
Adjusted net income per diluted share: Adjusted net income (loss) divided by weighted average common shares outstanding on a fully diluted basis.
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MOH Announces Fourth Quarter and Year-End 2018 Results
Page 23
February 11, 2019
MOLINA HEALTHCARE, INC.
2019 GUIDANCE
Reconciliation of Non-GAAP Financial Measures

| Low End |  | High End
| (In millions)
Net income | $ | 600 |  |  | $ | 630 |
Adjustments: |  |  |
Depreciation, and amortization of intangible assets and capitalized software | 85 |  |  | 85 |
Interest expense | 100 |  |  | 100 |
Income tax expense | 190 |  |  | 210 |
EBITDA | $ | 975 |  |  | $ | 1,025 |

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