Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Registrant

The condensed balance sheets as of December 31, 2023 and 2022, and the related condensed statements of income, comprehensive income and cash flows for each of the three years in the period ended December 31, 2023 for our parent company Molina Healthcare, Inc. (the “Registrant”), are presented below.

Condensed Balance Sheets


	December 31,
	2023		2022

	(In millions, except per-share data)
ASSETS
Current assets:
Cash and cash equivalents	$	694	$	329
Investments	48		46

Due from affiliates	174		143
Prepaid expenses and other current assets	133		106
Total current assets	1,049		624
Property, equipment, and capitalized software, net	234		224
Goodwill and intangible assets, net	825		731
Investments in subsidiaries	4,911		4,142
Deferred income taxes, net	57		37
Advances to related parties and other assets	94		78
Total assets	$	7,170	$	5,836
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, accrued liabilities and other	$	527	$	448
Total current liabilities	527		448
Long-term debt	2,180		2,176
Finance lease liabilities	205		215
Other long-term liabilities	43		33
Total liabilities	2,955		2,872
Stockholders’ equity:
Common stock, $0.001 par value; 150 million shares authorized; outstanding: 58 million shares at each of December 31, 2023 and December 31, 2022	—		—
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding	—		—
Additional paid-in capital	410		328
Accumulated other comprehensive loss	(82)		(160)
Retained earnings	3,887		2,796
Total stockholders’ equity	4,215		2,964
Total liabilities and stockholders’ equity	$	7,170	$	5,836

See accompanying notes.

Condensed Statements of Income


	Year Ended December 31,
	2023		2022		2021

	(In millions)
Revenue:
Administrative services fees	$	2,038	$	1,826	$	1,496
Investment income and other revenue	27		8		11
Total revenue	2,065		1,834		1,507
Expenses:
General and administrative expenses	1,952		1,721		1,424
Depreciation and amortization	131		141		98
Impairment	—		138		—
Other	20		—		5
Total operating expenses	2,103		2,000		1,527
Operating loss	(38)		(166)		(20)
Interest expense	109		110		120
Other expenses, net	—		—		25
Total other expenses, net	109		110		145
Loss before income tax benefit and equity in net earnings of subsidiaries	(147)		(276)		(165)
Income tax benefit	(7)		(42)		(21)
Net loss before equity in net earnings of subsidiaries	(140)		(234)		(144)
Equity in net earnings of subsidiaries	1,231		1,026		803
Net income	$	1,091	$	792	$	659

Condensed Statements of Comprehensive Income


	Year Ended December 31,
	2023		2022		2021

	(In millions)
Net income	$	1,091	$	792	$	659
Other comprehensive income (loss):
Unrealized investment income (loss)	102		(204)		(55)
Less: effect of income taxes	24		(49)		(13)
Other comprehensive income (loss), net of tax	78		(155)		(42)
Comprehensive income	$	1,169	$	637	$	617

See accompanying notes.

Condensed Statements of Cash Flows


	Year Ended December 31,
	2023		2022		2021

	(In millions)
Operating activities:
Net cash provided by operating activities	$	81	$	119	$	60
Investing activities:
Capital contributions to subsidiaries	(221)		(159)		(440)
Dividends received from subsidiaries	705		668		564
Purchases of investments	(2)		(29)		(27)
Proceeds from sales and maturities of investments	1		49		21
Purchases of property, equipment and capitalized software	(79)		(86)		(70)
Net cash paid in business combinations	(74)		—		(263)
Change in amounts due to/from affiliates	5		(69)		40
Other, net	7		3		(3)
Net cash provided by (used in) investing activities	342		377		(178)
Financing activities:
Common stock purchases	—		(400)		(128)
Common stock withheld to settle employee tax obligations	(60)		(54)		(53)
Contingent consideration liabilities settled	—		(20)		(20)
Proceeds from senior notes offering, net of issuance costs	—		—		740
Repayment of senior notes	—		—		(723)






Other, net	2		33		1
Net cash used in financing activities	(58)		(441)		(183)
Net increase (decrease) in cash and cash equivalents	365		55		(301)
Cash and cash equivalents at beginning of period	329		274		575
Cash and cash equivalents at end of period	$	694	$	329	$	274

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, marketing, purchasing, risk management, actuarial, finance, accounting, compliance, 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 2023, 2022, and 2021 for these services amounted to $2,038 million, $1,826 million, and $1,496 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.