Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Molina Healthcare Reports Fourth Quarter and Year-End 2023 Financial Results By: Molina Healthcare, Inc. via Business Wire February 07, 2024 at 16:15 PM EST Introduces Full Year 2024 Revenue and Earnings Guidance Molina Healthcare, Inc. (NYSE: MOH) (the “Company”) today reported fourth quarter 2023 GAAP earnings per diluted share of $3.70 and adjusted earnings per diluted share of $4.38. The Company also reported full year 2023 GAAP earnings per diluted share of $18.77 and adjusted earnings per diluted share of $20.88. Financial results are summarized below: Three months ended Year ended December 31, December 31, 2023 2022 2023 2022 (In millions, except per-share results) Premium Revenue $8,362 $7,917 $32,529 $30,883 Total Revenue $9,048 $8,223 $34,072 $31,974 GAAP: Net Income $216 $56 $1,091 $792 EPS – Diluted $3.70 $0.96 $18.77 $13.55 Medical Care Ratio (MCR) 89.1% 88.3% 88.1% 88.0% G&A Ratio 7.1% 7.6% 7.2% 7.2% After-tax Margin 2.4% 0.7% 3.2% 2.5% Adjusted: Net Income $255 $240 $1,213 $1,048 EPS – Diluted $4.38 $4.10 $20.88 $17.92 G&A Ratio 7.0% 7.5% 7.2% 7.1% After-tax Margin 2.8% 2.9% 3.6% 3.3% See the Reconciliation of Unaudited Non-GAAP Financial Measures at the end of this release. Full Year Highlights As of December 31, 2023, the Company served approximately 5.0 million members. Premium revenue was approximately $32.5 billion for the full year 2023, an increase of 5% year over year. GAAP net income was $18.77 per diluted share for the full year 2023, an increase of 39% year over year. Adjusted net income was $20.88 per diluted share for the full year 2023, an increase of 17% year over year. The Company issued its full year 2024 earnings guidance with expected premium revenue of approximately $38 billion and adjusted earnings of at least $23.50 per diluted share. “We are very pleased with our fourth quarter and full year results,” said Joseph Zubretsky, President and Chief Executive Officer. “Our 2023 performance reflects the successful execution of our growth strategy which positions us to achieve sustainable and profitable growth in 2024 and beyond.” Premium Revenue Premium revenue was approximately $32.5 billion for the full year 2023, an increase of 5% year over year. The higher premium revenue reflects the impact of acquisitions and new RFP wins, partially offset by Medicaid redeterminations. Net Income GAAP net income for the full year 2023 was $18.77 per diluted share, an increase of 39% year over year. Adjusted net income for the full year 2023 was $20.88 per diluted share, an increase of 17% year over year. Medical Care Ratio (MCR) The consolidated MCR for the full year 2023 was 88.1%, consistent with expectation and in line with the Company’s long-term target range. The Medicaid MCR for the full year 2023 was 88.7%, in line with the Company’s expectation and long-term target range. The full year MCR includes the moderate impact from the net effect of redetermination acuity shifts and risk corridors, as well as the impact of new store additions which typically run above portfolio average in the first year. The Medicare MCR for the full year 2023 was 90.7%, above the Company’s long‑term target range, reflecting higher utilization of supplemental benefits, in-home services, and high-cost drugs throughout the year. The Marketplace MCR for the full year 2023 was 75.3%, below the Company’s long-term target range, reflecting the success of the Company’s product and pricing strategy to return the business to target margins. General and Administrative Expense Ratio The G&A ratio and the adjusted G&A ratio for the full year 2023 were both 7.2%, reflecting continued cost discipline and new business implementation spending throughout the year relating to new contract wins. Balance Sheet Cash and investments at the parent company were $742 million as of December 31, 2023 compared to $375 million as of December 31, 2022. Days in claims payable at December 31, 2023 was 50. Cash Flow Operating cash flow for the year ended December 31, 2023 was $1,662 million, compared to $773 million for the year ended December 31, 2022. The increase in 2023 cash flow was due to the growth in operations and net earnings from organic and new RFP starts and acquisitions, accompanied by the net impact of timing differences in government receivables and payables. 2024 Guidance Premium revenue for the full year is expected to be approximately $38 billion, an increase of approximately 17% from the full year 2023. The Company expects its full year adjusted earnings per share in 2024 to be at least $23.50 per share, representing approximately 13% growth over the full year 2023. Guidance reflects the continued realization of embedded earnings and underlying organic growth. Guidance metrics are summarized below: Full Year 2024 Guidance Premium Revenue $38.0B Total Revenue $39.6B GAAP Net Income $1,278M Adjusted Net Income $1,366M GAAP EPS – Diluted >$22.00 Adjusted EPS – Diluted >$23.50 Diluted weighted average shares 58.1M Year End Total Membership 5.7M Medicaid 5.1M Medicare 270K Marketplace 370K MCR 88.2% GAAP G&A Ratio 7.1% Adjusted G&A Ratio 7.0% Effective Tax Rate 25.7% GAAP After-tax Margin 3.2% Adjusted After-tax Margin 3.4% See the Reconciliations of Unaudited Non-GAAP Financial Measures at the end of this release. Conference Call Management will host a conference call and webcast to discuss Molina Healthcare’s fourth quarter and year ended December 31, 2023 results at 8:00 a.m. Eastern Time on Thursday, February 8, 2024. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 4221213. A telephonic replay of the conference call will be available through Thursday, February 15, 2024, by dialing (877) 344-7529 and entering confirmation number 3687293. 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 healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. 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 and the Company’s accompanying oral remarks contain forward-looking statements. The Company intends such forward-looking statements to be covered under the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements provide current expectations of future events based on certain assumptions, and all statements other than statements of historical fact contained in this earnings release and the Company’s accompanying oral remarks may be forward-looking statements. In some cases, you can identify forward-looking statements by words such as “guidance,” “future,” “anticipates,” “believes,” “embedded,” “estimates,” “expects,” “growth,” “intends,” “plans,” “predicts,” “projects,” “will,” “would,” “could,” “can,” “may,” or the negative of these terms or other similar expressions. Forward-looking statements contained in this earnings release include, but are not limited to, statements regarding its 2024 guidance, expectations with respect to continued realization of embedded earnings and underlying organic growth, and our management’s plans and objectives for future operations and business strategy. Actual results could differ materially due to numerous known and unknown risks and uncertainties. These risks and uncertainties are discussed under the headings “Forward-Looking Statements,” and “Risk Factors,” in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2022, which is on file with the U.S. Securities and Exchange Commission (the “SEC”), and in the Company’s other filings with the SEC, including its Quarterly Reports on Form 10-Q for the periods ended March 31, 2023, June 30, 2023, and September 30, 2023, which are on file with the SEC, and its Annual Report on Form 10-K for the year ended December 31, 2023, to be filed with the SEC. 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 developments 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 7, 2024, and, except as otherwise required by law, the Company disclaims any obligation to update any forward-looking statement to conform the statement to actual results or changes in its expectations. MOLINA HEALTHCARE, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 (In millions, except per-share amounts) Revenue: Premium revenue $ 8,362 $ 7,917 $ 32,529 $ 30,883 Premium tax revenue 552 227 1,069 873 Investment income 114 61 394 143 Other revenue 20 18 80 75 Total revenue 9,048 8,223 34,072 31,974 Operating expenses: Medical care costs 7,454 6,992 28,669 27,175 General and administrative expenses 645 629 2,462 2,311 Premium tax expenses 552 227 1,069 873 Depreciation and amortization 43 47 171 176 Impairment — 208 — 208 Other 38 15 128 58 Total operating expenses 8,732 8,118 32,499 30,801 Operating income 316 105 1,573 1,173 Other expenses, net: Interest expense 27 27 109 110 Total other expenses, net 27 27 109 110 Income before income tax expense 289 78 1,464 1,063 Income tax expense 73 22 373 271 Net income $ 216 $ 56 $ 1,091 $ 792 Net income per share – Diluted $ 3.70 $ 0.96 $ 18.77 $ 13.55 Diluted weighted average shares outstanding 58.2 58.4 58.1 58.5 MOLINA HEALTHCARE, INC. CONSOLIDATED BALANCE SHEETS December 31, 2023 2022 Unaudited (Dollars in millions, except per-share amounts) ASSETS Current assets: Cash and cash equivalents $ 4,848 $ 4,006 Investments 4,259 3,499 Receivables 3,104 2,302 Prepaid expenses and other current assets 331 277 Total current assets 12,542 10,084 Property, equipment, and capitalized software, net 270 259 Goodwill and intangible assets, net 1,449 1,390 Restricted investments 261 238 Deferred income taxes, net 227 220 Other assets 143 123 Total assets $ 14,892 $ 12,314 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 4,204 $ 3,528 Amounts due government agencies 2,294 2,079 Accounts payable, accrued liabilities and other 1,252 889 Deferred revenue 418 359 Total current liabilities 8,168 6,855 Long-term debt 2,180 2,176 Finance lease liabilities 205 215 Other long-term liabilities 124 104 Total liabilities 10,677 9,350 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 $ 14,892 $ 12,314 MOLINA HEALTHCARE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2023 2022 (In millions) Operating activities: Net income $ 1,091 $ 792 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 171 176 Deferred income taxes (31 ) (66 ) Share-based compensation 115 103 Impairment — 208 Other, net 2 8 Receivables (778 ) (95 ) Prepaid expenses and other current assets (69 ) (124 ) Medical claims and benefits payable 580 153 Amounts due government agencies 196 (428 ) Accounts payable, accrued liabilities and other 328 55 Deferred revenue 59 (11 ) Income taxes (2 ) 2 Net cash provided by operating activities 1,662 773 Investing activities: Purchases of investments (1,433 ) (1,913 ) Proceeds from sales and maturities of investments 772 1,398 Net cash paid in business combinations (3 ) (134 ) Purchases of property, equipment, and capitalized software (84 ) (91 ) Other, net 4 (50 ) Net cash used in investing activities (744 ) (790 ) Financing activities: Common stock withheld to settle employee tax obligations (60 ) (54 ) Common stock purchases — (400 ) Contingent consideration liabilities settled — (20 ) Other, net 2 33 Net cash used in financing activities (58 ) (441 ) Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents 860 (458 ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 4,048 4,506 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 4,908 $ 4,048 MOLINA HEALTHCARE, INC. UNAUDITED SEGMENT DATA (Dollars in millions) December 31, 2023 2022 Ending Membership by Segment: Medicaid 4,542,000 4,754,000 Medicare 172,000 156,000 Marketplace 281,000 348,000 Total 4,995,000 5,258,000 Three Months Ended December 31, 2023 2022 Premium Revenue Medical Margin MCR (1) Premium Revenue Medical Margin MCR (1) Medicaid $ 6,782 $ 731 89.2 % $ 6,421 $ 813 87.3 % Medicare 1,057 71 93.3 948 77 91.8 Marketplace 523 106 79.8 548 35 93.8 Consolidated $ 8,362 $ 908 89.1 % $ 7,917 $ 925 88.3 % Year Ended December 31, 2023 2022 Premium Revenue Medical Margin MCR (1) Premium Revenue Medical Margin MCR (1) Medicaid $ 26,327 $ 2,973 88.7 % $ 24,827 $ 2,981 88.0 % Medicare 4,179 388 90.7 3,795 437 88.5 Marketplace 2,023 499 75.3 2,261 290 87.2 Consolidated $ 32,529 $ 3,860 88.1 % $ 30,883 $ 3,708 88.0 % __________________ (1) The MCR represents medical costs as a percentage of premium revenue. MOLINA HEALTHCARE, INC. CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE (Dollars in millions) The Company’s claims liabilities include additional reserves to account for moderately adverse conditions 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. The Company’s reserving methodology is consistently applied across all periods presented. The amounts displayed for “Components of medical care costs related to: Prior year” represent the amounts by which the original estimates of claims and benefits payable at the beginning of the year were more than the actual liabilities based on information (principally the payment of claims) developed since those liabilities were 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, 2023 2022 Unaudited Medical claims and benefits payable, beginning balance $ 3,528 $ 3,363 Components of medical care costs related to: Current year 29,096 27,459 Prior year (427 ) (284 ) Total medical care costs 28,669 27,175 Payments for medical care costs related to: Current year 25,615 24,345 Prior year 2,734 2,670 Total paid 28,349 27,015 Acquired balances, net of post-acquisition adjustments 96 12 Change in non-risk and other provider payables 260 (7 ) Medical claims and benefits payable, ending balance $ 4,204 $ 3,528 Days in Claims Payable (1) 50 47 __________________ (1) The Company calculates Days in Claims Payable using claims incurred but not paid, or IBNP, and other fee-for-service payables included in medical claims and benefits payable, and quarterly fee-for-service related costs included in medical care costs within the Company’s consolidated financial statements. MOLINA HEALTHCARE, INC. RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (In millions, except per diluted share amounts) The Company believes that certain non-GAAP (generally accepted accounting principles) financial measures are useful supplemental measures to investors in comparing the Company’s performance to the performance of other public companies in the health care industry. The non-GAAP financial measures are also used internally to enable management to assess the Company’s performance consistently over time. These non-GAAP financial measures, presented below, should be considered as supplements to, and not as substitutes for or superior to, GAAP measures. Adjustments represent additions and deductions to GAAP net income as indicated in the table below, which include the non-cash impact of amortization of acquired intangible assets, acquisition-related expenses, and the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations. Adjusted G&A Ratio represents the GAAP G&A ratio, recognizing adjustments. Adjusted net income represents GAAP net income recognizing the adjustments, net of tax. The Company believes that adjusted net income is helpful to investors in assessing the Company’s financial performance. Adjusted net income per diluted share represents adjusted net income divided by weighted average common shares outstanding on a fully diluted basis. Adjusted after-tax margin represents adjusted net income, divided by total revenue. Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share GAAP Net income $ 216 $ 3.70 $ 56 $ 0.96 $ 1,091 $ 18.77 $ 792 $ 13.55 Adjustments: Amortization of intangible assets $ 22 $ 0.37 $ 21 $ 0.35 $ 85 $ 1.47 $ 77 $ 1.32 Acquisition-related expenses (1) 3 0.05 11 0.18 7 0.12 49 0.83 Impairment — — 208 3.57 — — 208 3.56 Other (2) 27 0.47 — — 68 1.17 — — Subtotal, adjustments 52 0.89 240 4.10 160 2.76 334 5.71 Income tax effect (13 ) (0.21 ) (56 ) (0.96 ) (38 ) (0.65 ) (78 ) (1.34 ) Adjustments, net of tax 39 0.68 184 3.14 122 2.11 256 4.37 Adjusted net income $ 255 $ 4.38 $ 240 $ 4.10 $ 1,213 $ 20.88 $ 1,048 $ 17.92 __________________ (1) Reflects non-recurring costs associated with acquisitions, including various transaction and certain integration costs. (2) The year ended December 31, 2023, reflects a non-recurring credit loss on 2022 Marketplace risk adjustment receivables due to the insolvency of an issuer in the Texas risk pool, non-recurring litigation costs and one-time termination benefits. The year ended December 31, 2022, includes certain non-recurring costs associated with gain on lease termination and disposal of fixed assets. MOLINA HEALTHCARE, INC. RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (CONTINUED) 2024 GUIDANCE Amount Per Diluted Share (2) GAAP Net income $ 1,278 $ 22.00 Adjustments: Amortization of intangible assets 94 1.62 Acquisition-related expenses 21 0.35 Subtotal, adjustments 115 1.97 Income tax effect (1) (27 ) (0.47 ) Adjustments, net of tax 88 1.50 Adjusted net income $ 1,366 �� $ 23.50 __________________ (1) Income tax effect calculated at the statutory tax rate of approximately 23.9%. (2) Computations assume approximately 58.1 million diluted weighted average shares outstanding. View source version on businesswire.com: https://www.businesswire.com/news/home/20240207058929/en/Contacts Investor Contact: Joseph Krocheski Joseph.Krocheski@molinahealthcare.com 562-549-4100 Media Contact: Caroline Zubieta Caroline.Zubieta@molinahealthcare.com 562-951-1588 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Molina Healthcare Reports Fourth Quarter and Year-End 2023 Financial Results By: Molina Healthcare, Inc. via Business Wire February 07, 2024 at 16:15 PM EST Introduces Full Year 2024 Revenue and Earnings Guidance Molina Healthcare, Inc. (NYSE: MOH) (the “Company”) today reported fourth quarter 2023 GAAP earnings per diluted share of $3.70 and adjusted earnings per diluted share of $4.38. The Company also reported full year 2023 GAAP earnings per diluted share of $18.77 and adjusted earnings per diluted share of $20.88. Financial results are summarized below: Three months ended Year ended December 31, December 31, 2023 2022 2023 2022 (In millions, except per-share results) Premium Revenue $8,362 $7,917 $32,529 $30,883 Total Revenue $9,048 $8,223 $34,072 $31,974 GAAP: Net Income $216 $56 $1,091 $792 EPS – Diluted $3.70 $0.96 $18.77 $13.55 Medical Care Ratio (MCR) 89.1% 88.3% 88.1% 88.0% G&A Ratio 7.1% 7.6% 7.2% 7.2% After-tax Margin 2.4% 0.7% 3.2% 2.5% Adjusted: Net Income $255 $240 $1,213 $1,048 EPS – Diluted $4.38 $4.10 $20.88 $17.92 G&A Ratio 7.0% 7.5% 7.2% 7.1% After-tax Margin 2.8% 2.9% 3.6% 3.3% See the Reconciliation of Unaudited Non-GAAP Financial Measures at the end of this release. Full Year Highlights As of December 31, 2023, the Company served approximately 5.0 million members. Premium revenue was approximately $32.5 billion for the full year 2023, an increase of 5% year over year. GAAP net income was $18.77 per diluted share for the full year 2023, an increase of 39% year over year. Adjusted net income was $20.88 per diluted share for the full year 2023, an increase of 17% year over year. The Company issued its full year 2024 earnings guidance with expected premium revenue of approximately $38 billion and adjusted earnings of at least $23.50 per diluted share. “We are very pleased with our fourth quarter and full year results,” said Joseph Zubretsky, President and Chief Executive Officer. “Our 2023 performance reflects the successful execution of our growth strategy which positions us to achieve sustainable and profitable growth in 2024 and beyond.” Premium Revenue Premium revenue was approximately $32.5 billion for the full year 2023, an increase of 5% year over year. The higher premium revenue reflects the impact of acquisitions and new RFP wins, partially offset by Medicaid redeterminations. Net Income GAAP net income for the full year 2023 was $18.77 per diluted share, an increase of 39% year over year. Adjusted net income for the full year 2023 was $20.88 per diluted share, an increase of 17% year over year. Medical Care Ratio (MCR) The consolidated MCR for the full year 2023 was 88.1%, consistent with expectation and in line with the Company’s long-term target range. The Medicaid MCR for the full year 2023 was 88.7%, in line with the Company’s expectation and long-term target range. The full year MCR includes the moderate impact from the net effect of redetermination acuity shifts and risk corridors, as well as the impact of new store additions which typically run above portfolio average in the first year. The Medicare MCR for the full year 2023 was 90.7%, above the Company’s long‑term target range, reflecting higher utilization of supplemental benefits, in-home services, and high-cost drugs throughout the year. The Marketplace MCR for the full year 2023 was 75.3%, below the Company’s long-term target range, reflecting the success of the Company’s product and pricing strategy to return the business to target margins. General and Administrative Expense Ratio The G&A ratio and the adjusted G&A ratio for the full year 2023 were both 7.2%, reflecting continued cost discipline and new business implementation spending throughout the year relating to new contract wins. Balance Sheet Cash and investments at the parent company were $742 million as of December 31, 2023 compared to $375 million as of December 31, 2022. Days in claims payable at December 31, 2023 was 50. Cash Flow Operating cash flow for the year ended December 31, 2023 was $1,662 million, compared to $773 million for the year ended December 31, 2022. The increase in 2023 cash flow was due to the growth in operations and net earnings from organic and new RFP starts and acquisitions, accompanied by the net impact of timing differences in government receivables and payables. 2024 Guidance Premium revenue for the full year is expected to be approximately $38 billion, an increase of approximately 17% from the full year 2023. The Company expects its full year adjusted earnings per share in 2024 to be at least $23.50 per share, representing approximately 13% growth over the full year 2023. Guidance reflects the continued realization of embedded earnings and underlying organic growth. Guidance metrics are summarized below: Full Year 2024 Guidance Premium Revenue $38.0B Total Revenue $39.6B GAAP Net Income $1,278M Adjusted Net Income $1,366M GAAP EPS – Diluted >$22.00 Adjusted EPS – Diluted >$23.50 Diluted weighted average shares 58.1M Year End Total Membership 5.7M Medicaid 5.1M Medicare 270K Marketplace 370K MCR 88.2% GAAP G&A Ratio 7.1% Adjusted G&A Ratio 7.0% Effective Tax Rate 25.7% GAAP After-tax Margin 3.2% Adjusted After-tax Margin 3.4% See the Reconciliations of Unaudited Non-GAAP Financial Measures at the end of this release. Conference Call Management will host a conference call and webcast to discuss Molina Healthcare’s fourth quarter and year ended December 31, 2023 results at 8:00 a.m. Eastern Time on Thursday, February 8, 2024. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 4221213. A telephonic replay of the conference call will be available through Thursday, February 15, 2024, by dialing (877) 344-7529 and entering confirmation number 3687293. 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 healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. 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 and the Company’s accompanying oral remarks contain forward-looking statements. The Company intends such forward-looking statements to be covered under the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements provide current expectations of future events based on certain assumptions, and all statements other than statements of historical fact contained in this earnings release and the Company’s accompanying oral remarks may be forward-looking statements. In some cases, you can identify forward-looking statements by words such as “guidance,” “future,” “anticipates,” “believes,” “embedded,” “estimates,” “expects,” “growth,” “intends,” “plans,” “predicts,” “projects,” “will,” “would,” “could,” “can,” “may,” or the negative of these terms or other similar expressions. Forward-looking statements contained in this earnings release include, but are not limited to, statements regarding its 2024 guidance, expectations with respect to continued realization of embedded earnings and underlying organic growth, and our management’s plans and objectives for future operations and business strategy. Actual results could differ materially due to numerous known and unknown risks and uncertainties. These risks and uncertainties are discussed under the headings “Forward-Looking Statements,” and “Risk Factors,” in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2022, which is on file with the U.S. Securities and Exchange Commission (the “SEC”), and in the Company’s other filings with the SEC, including its Quarterly Reports on Form 10-Q for the periods ended March 31, 2023, June 30, 2023, and September 30, 2023, which are on file with the SEC, and its Annual Report on Form 10-K for the year ended December 31, 2023, to be filed with the SEC. 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 developments 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 7, 2024, and, except as otherwise required by law, the Company disclaims any obligation to update any forward-looking statement to conform the statement to actual results or changes in its expectations. MOLINA HEALTHCARE, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 (In millions, except per-share amounts) Revenue: Premium revenue $ 8,362 $ 7,917 $ 32,529 $ 30,883 Premium tax revenue 552 227 1,069 873 Investment income 114 61 394 143 Other revenue 20 18 80 75 Total revenue 9,048 8,223 34,072 31,974 Operating expenses: Medical care costs 7,454 6,992 28,669 27,175 General and administrative expenses 645 629 2,462 2,311 Premium tax expenses 552 227 1,069 873 Depreciation and amortization 43 47 171 176 Impairment — 208 — 208 Other 38 15 128 58 Total operating expenses 8,732 8,118 32,499 30,801 Operating income 316 105 1,573 1,173 Other expenses, net: Interest expense 27 27 109 110 Total other expenses, net 27 27 109 110 Income before income tax expense 289 78 1,464 1,063 Income tax expense 73 22 373 271 Net income $ 216 $ 56 $ 1,091 $ 792 Net income per share – Diluted $ 3.70 $ 0.96 $ 18.77 $ 13.55 Diluted weighted average shares outstanding 58.2 58.4 58.1 58.5 MOLINA HEALTHCARE, INC. CONSOLIDATED BALANCE SHEETS December 31, 2023 2022 Unaudited (Dollars in millions, except per-share amounts) ASSETS Current assets: Cash and cash equivalents $ 4,848 $ 4,006 Investments 4,259 3,499 Receivables 3,104 2,302 Prepaid expenses and other current assets 331 277 Total current assets 12,542 10,084 Property, equipment, and capitalized software, net 270 259 Goodwill and intangible assets, net 1,449 1,390 Restricted investments 261 238 Deferred income taxes, net 227 220 Other assets 143 123 Total assets $ 14,892 $ 12,314 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 4,204 $ 3,528 Amounts due government agencies 2,294 2,079 Accounts payable, accrued liabilities and other 1,252 889 Deferred revenue 418 359 Total current liabilities 8,168 6,855 Long-term debt 2,180 2,176 Finance lease liabilities 205 215 Other long-term liabilities 124 104 Total liabilities 10,677 9,350 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 $ 14,892 $ 12,314 MOLINA HEALTHCARE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2023 2022 (In millions) Operating activities: Net income $ 1,091 $ 792 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 171 176 Deferred income taxes (31 ) (66 ) Share-based compensation 115 103 Impairment — 208 Other, net 2 8 Receivables (778 ) (95 ) Prepaid expenses and other current assets (69 ) (124 ) Medical claims and benefits payable 580 153 Amounts due government agencies 196 (428 ) Accounts payable, accrued liabilities and other 328 55 Deferred revenue 59 (11 ) Income taxes (2 ) 2 Net cash provided by operating activities 1,662 773 Investing activities: Purchases of investments (1,433 ) (1,913 ) Proceeds from sales and maturities of investments 772 1,398 Net cash paid in business combinations (3 ) (134 ) Purchases of property, equipment, and capitalized software (84 ) (91 ) Other, net 4 (50 ) Net cash used in investing activities (744 ) (790 ) Financing activities: Common stock withheld to settle employee tax obligations (60 ) (54 ) Common stock purchases — (400 ) Contingent consideration liabilities settled — (20 ) Other, net 2 33 Net cash used in financing activities (58 ) (441 ) Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents 860 (458 ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 4,048 4,506 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 4,908 $ 4,048 MOLINA HEALTHCARE, INC. UNAUDITED SEGMENT DATA (Dollars in millions) December 31, 2023 2022 Ending Membership by Segment: Medicaid 4,542,000 4,754,000 Medicare 172,000 156,000 Marketplace 281,000 348,000 Total 4,995,000 5,258,000 Three Months Ended December 31, 2023 2022 Premium Revenue Medical Margin MCR (1) Premium Revenue Medical Margin MCR (1) Medicaid $ 6,782 $ 731 89.2 % $ 6,421 $ 813 87.3 % Medicare 1,057 71 93.3 948 77 91.8 Marketplace 523 106 79.8 548 35 93.8 Consolidated $ 8,362 $ 908 89.1 % $ 7,917 $ 925 88.3 % Year Ended December 31, 2023 2022 Premium Revenue Medical Margin MCR (1) Premium Revenue Medical Margin MCR (1) Medicaid $ 26,327 $ 2,973 88.7 % $ 24,827 $ 2,981 88.0 % Medicare 4,179 388 90.7 3,795 437 88.5 Marketplace 2,023 499 75.3 2,261 290 87.2 Consolidated $ 32,529 $ 3,860 88.1 % $ 30,883 $ 3,708 88.0 % __________________ (1) The MCR represents medical costs as a percentage of premium revenue. MOLINA HEALTHCARE, INC. CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE (Dollars in millions) The Company’s claims liabilities include additional reserves to account for moderately adverse conditions 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. The Company’s reserving methodology is consistently applied across all periods presented. The amounts displayed for “Components of medical care costs related to: Prior year” represent the amounts by which the original estimates of claims and benefits payable at the beginning of the year were more than the actual liabilities based on information (principally the payment of claims) developed since those liabilities were 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, 2023 2022 Unaudited Medical claims and benefits payable, beginning balance $ 3,528 $ 3,363 Components of medical care costs related to: Current year 29,096 27,459 Prior year (427 ) (284 ) Total medical care costs 28,669 27,175 Payments for medical care costs related to: Current year 25,615 24,345 Prior year 2,734 2,670 Total paid 28,349 27,015 Acquired balances, net of post-acquisition adjustments 96 12 Change in non-risk and other provider payables 260 (7 ) Medical claims and benefits payable, ending balance $ 4,204 $ 3,528 Days in Claims Payable (1) 50 47 __________________ (1) The Company calculates Days in Claims Payable using claims incurred but not paid, or IBNP, and other fee-for-service payables included in medical claims and benefits payable, and quarterly fee-for-service related costs included in medical care costs within the Company’s consolidated financial statements. MOLINA HEALTHCARE, INC. RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (In millions, except per diluted share amounts) The Company believes that certain non-GAAP (generally accepted accounting principles) financial measures are useful supplemental measures to investors in comparing the Company’s performance to the performance of other public companies in the health care industry. The non-GAAP financial measures are also used internally to enable management to assess the Company’s performance consistently over time. These non-GAAP financial measures, presented below, should be considered as supplements to, and not as substitutes for or superior to, GAAP measures. Adjustments represent additions and deductions to GAAP net income as indicated in the table below, which include the non-cash impact of amortization of acquired intangible assets, acquisition-related expenses, and the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations. Adjusted G&A Ratio represents the GAAP G&A ratio, recognizing adjustments. Adjusted net income represents GAAP net income recognizing the adjustments, net of tax. The Company believes that adjusted net income is helpful to investors in assessing the Company’s financial performance. Adjusted net income per diluted share represents adjusted net income divided by weighted average common shares outstanding on a fully diluted basis. Adjusted after-tax margin represents adjusted net income, divided by total revenue. Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share GAAP Net income $ 216 $ 3.70 $ 56 $ 0.96 $ 1,091 $ 18.77 $ 792 $ 13.55 Adjustments: Amortization of intangible assets $ 22 $ 0.37 $ 21 $ 0.35 $ 85 $ 1.47 $ 77 $ 1.32 Acquisition-related expenses (1) 3 0.05 11 0.18 7 0.12 49 0.83 Impairment — — 208 3.57 — — 208 3.56 Other (2) 27 0.47 — — 68 1.17 — — Subtotal, adjustments 52 0.89 240 4.10 160 2.76 334 5.71 Income tax effect (13 ) (0.21 ) (56 ) (0.96 ) (38 ) (0.65 ) (78 ) (1.34 ) Adjustments, net of tax 39 0.68 184 3.14 122 2.11 256 4.37 Adjusted net income $ 255 $ 4.38 $ 240 $ 4.10 $ 1,213 $ 20.88 $ 1,048 $ 17.92 __________________ (1) Reflects non-recurring costs associated with acquisitions, including various transaction and certain integration costs. (2) The year ended December 31, 2023, reflects a non-recurring credit loss on 2022 Marketplace risk adjustment receivables due to the insolvency of an issuer in the Texas risk pool, non-recurring litigation costs and one-time termination benefits. The year ended December 31, 2022, includes certain non-recurring costs associated with gain on lease termination and disposal of fixed assets. MOLINA HEALTHCARE, INC. RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (CONTINUED) 2024 GUIDANCE Amount Per Diluted Share (2) GAAP Net income $ 1,278 $ 22.00 Adjustments: Amortization of intangible assets 94 1.62 Acquisition-related expenses 21 0.35 Subtotal, adjustments 115 1.97 Income tax effect (1) (27 ) (0.47 ) Adjustments, net of tax 88 1.50 Adjusted net income $ 1,366 �� $ 23.50 __________________ (1) Income tax effect calculated at the statutory tax rate of approximately 23.9%. (2) Computations assume approximately 58.1 million diluted weighted average shares outstanding. View source version on businesswire.com: https://www.businesswire.com/news/home/20240207058929/en/Contacts Investor Contact: Joseph Krocheski Joseph.Krocheski@molinahealthcare.com 562-549-4100 Media Contact: Caroline Zubieta Caroline.Zubieta@molinahealthcare.com 562-951-1588
Molina Healthcare, Inc. (NYSE: MOH) (the “Company”) today reported fourth quarter 2023 GAAP earnings per diluted share of $3.70 and adjusted earnings per diluted share of $4.38. The Company also reported full year 2023 GAAP earnings per diluted share of $18.77 and adjusted earnings per diluted share of $20.88. Financial results are summarized below: Three months ended Year ended December 31, December 31, 2023 2022 2023 2022 (In millions, except per-share results) Premium Revenue $8,362 $7,917 $32,529 $30,883 Total Revenue $9,048 $8,223 $34,072 $31,974 GAAP: Net Income $216 $56 $1,091 $792 EPS – Diluted $3.70 $0.96 $18.77 $13.55 Medical Care Ratio (MCR) 89.1% 88.3% 88.1% 88.0% G&A Ratio 7.1% 7.6% 7.2% 7.2% After-tax Margin 2.4% 0.7% 3.2% 2.5% Adjusted: Net Income $255 $240 $1,213 $1,048 EPS – Diluted $4.38 $4.10 $20.88 $17.92 G&A Ratio 7.0% 7.5% 7.2% 7.1% After-tax Margin 2.8% 2.9% 3.6% 3.3% See the Reconciliation of Unaudited Non-GAAP Financial Measures at the end of this release. Full Year Highlights As of December 31, 2023, the Company served approximately 5.0 million members. Premium revenue was approximately $32.5 billion for the full year 2023, an increase of 5% year over year. GAAP net income was $18.77 per diluted share for the full year 2023, an increase of 39% year over year. Adjusted net income was $20.88 per diluted share for the full year 2023, an increase of 17% year over year. The Company issued its full year 2024 earnings guidance with expected premium revenue of approximately $38 billion and adjusted earnings of at least $23.50 per diluted share. “We are very pleased with our fourth quarter and full year results,” said Joseph Zubretsky, President and Chief Executive Officer. “Our 2023 performance reflects the successful execution of our growth strategy which positions us to achieve sustainable and profitable growth in 2024 and beyond.” Premium Revenue Premium revenue was approximately $32.5 billion for the full year 2023, an increase of 5% year over year. The higher premium revenue reflects the impact of acquisitions and new RFP wins, partially offset by Medicaid redeterminations. Net Income GAAP net income for the full year 2023 was $18.77 per diluted share, an increase of 39% year over year. Adjusted net income for the full year 2023 was $20.88 per diluted share, an increase of 17% year over year. Medical Care Ratio (MCR) The consolidated MCR for the full year 2023 was 88.1%, consistent with expectation and in line with the Company’s long-term target range. The Medicaid MCR for the full year 2023 was 88.7%, in line with the Company’s expectation and long-term target range. The full year MCR includes the moderate impact from the net effect of redetermination acuity shifts and risk corridors, as well as the impact of new store additions which typically run above portfolio average in the first year. The Medicare MCR for the full year 2023 was 90.7%, above the Company’s long‑term target range, reflecting higher utilization of supplemental benefits, in-home services, and high-cost drugs throughout the year. The Marketplace MCR for the full year 2023 was 75.3%, below the Company’s long-term target range, reflecting the success of the Company’s product and pricing strategy to return the business to target margins. General and Administrative Expense Ratio The G&A ratio and the adjusted G&A ratio for the full year 2023 were both 7.2%, reflecting continued cost discipline and new business implementation spending throughout the year relating to new contract wins. Balance Sheet Cash and investments at the parent company were $742 million as of December 31, 2023 compared to $375 million as of December 31, 2022. Days in claims payable at December 31, 2023 was 50. Cash Flow Operating cash flow for the year ended December 31, 2023 was $1,662 million, compared to $773 million for the year ended December 31, 2022. The increase in 2023 cash flow was due to the growth in operations and net earnings from organic and new RFP starts and acquisitions, accompanied by the net impact of timing differences in government receivables and payables. 2024 Guidance Premium revenue for the full year is expected to be approximately $38 billion, an increase of approximately 17% from the full year 2023. The Company expects its full year adjusted earnings per share in 2024 to be at least $23.50 per share, representing approximately 13% growth over the full year 2023. Guidance reflects the continued realization of embedded earnings and underlying organic growth. Guidance metrics are summarized below: Full Year 2024 Guidance Premium Revenue $38.0B Total Revenue $39.6B GAAP Net Income $1,278M Adjusted Net Income $1,366M GAAP EPS – Diluted >$22.00 Adjusted EPS – Diluted >$23.50 Diluted weighted average shares 58.1M Year End Total Membership 5.7M Medicaid 5.1M Medicare 270K Marketplace 370K MCR 88.2% GAAP G&A Ratio 7.1% Adjusted G&A Ratio 7.0% Effective Tax Rate 25.7% GAAP After-tax Margin 3.2% Adjusted After-tax Margin 3.4% See the Reconciliations of Unaudited Non-GAAP Financial Measures at the end of this release. Conference Call Management will host a conference call and webcast to discuss Molina Healthcare’s fourth quarter and year ended December 31, 2023 results at 8:00 a.m. Eastern Time on Thursday, February 8, 2024. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 4221213. A telephonic replay of the conference call will be available through Thursday, February 15, 2024, by dialing (877) 344-7529 and entering confirmation number 3687293. 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 healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. 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 and the Company’s accompanying oral remarks contain forward-looking statements. The Company intends such forward-looking statements to be covered under the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements provide current expectations of future events based on certain assumptions, and all statements other than statements of historical fact contained in this earnings release and the Company’s accompanying oral remarks may be forward-looking statements. In some cases, you can identify forward-looking statements by words such as “guidance,” “future,” “anticipates,” “believes,” “embedded,” “estimates,” “expects,” “growth,” “intends,” “plans,” “predicts,” “projects,” “will,” “would,” “could,” “can,” “may,” or the negative of these terms or other similar expressions. Forward-looking statements contained in this earnings release include, but are not limited to, statements regarding its 2024 guidance, expectations with respect to continued realization of embedded earnings and underlying organic growth, and our management’s plans and objectives for future operations and business strategy. Actual results could differ materially due to numerous known and unknown risks and uncertainties. These risks and uncertainties are discussed under the headings “Forward-Looking Statements,” and “Risk Factors,” in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2022, which is on file with the U.S. Securities and Exchange Commission (the “SEC”), and in the Company’s other filings with the SEC, including its Quarterly Reports on Form 10-Q for the periods ended March 31, 2023, June 30, 2023, and September 30, 2023, which are on file with the SEC, and its Annual Report on Form 10-K for the year ended December 31, 2023, to be filed with the SEC. 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 developments 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 7, 2024, and, except as otherwise required by law, the Company disclaims any obligation to update any forward-looking statement to conform the statement to actual results or changes in its expectations. MOLINA HEALTHCARE, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 (In millions, except per-share amounts) Revenue: Premium revenue $ 8,362 $ 7,917 $ 32,529 $ 30,883 Premium tax revenue 552 227 1,069 873 Investment income 114 61 394 143 Other revenue 20 18 80 75 Total revenue 9,048 8,223 34,072 31,974 Operating expenses: Medical care costs 7,454 6,992 28,669 27,175 General and administrative expenses 645 629 2,462 2,311 Premium tax expenses 552 227 1,069 873 Depreciation and amortization 43 47 171 176 Impairment — 208 — 208 Other 38 15 128 58 Total operating expenses 8,732 8,118 32,499 30,801 Operating income 316 105 1,573 1,173 Other expenses, net: Interest expense 27 27 109 110 Total other expenses, net 27 27 109 110 Income before income tax expense 289 78 1,464 1,063 Income tax expense 73 22 373 271 Net income $ 216 $ 56 $ 1,091 $ 792 Net income per share – Diluted $ 3.70 $ 0.96 $ 18.77 $ 13.55 Diluted weighted average shares outstanding 58.2 58.4 58.1 58.5 MOLINA HEALTHCARE, INC. CONSOLIDATED BALANCE SHEETS December 31, 2023 2022 Unaudited (Dollars in millions, except per-share amounts) ASSETS Current assets: Cash and cash equivalents $ 4,848 $ 4,006 Investments 4,259 3,499 Receivables 3,104 2,302 Prepaid expenses and other current assets 331 277 Total current assets 12,542 10,084 Property, equipment, and capitalized software, net 270 259 Goodwill and intangible assets, net 1,449 1,390 Restricted investments 261 238 Deferred income taxes, net 227 220 Other assets 143 123 Total assets $ 14,892 $ 12,314 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Medical claims and benefits payable $ 4,204 $ 3,528 Amounts due government agencies 2,294 2,079 Accounts payable, accrued liabilities and other 1,252 889 Deferred revenue 418 359 Total current liabilities 8,168 6,855 Long-term debt 2,180 2,176 Finance lease liabilities 205 215 Other long-term liabilities 124 104 Total liabilities 10,677 9,350 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 $ 14,892 $ 12,314 MOLINA HEALTHCARE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2023 2022 (In millions) Operating activities: Net income $ 1,091 $ 792 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 171 176 Deferred income taxes (31 ) (66 ) Share-based compensation 115 103 Impairment — 208 Other, net 2 8 Receivables (778 ) (95 ) Prepaid expenses and other current assets (69 ) (124 ) Medical claims and benefits payable 580 153 Amounts due government agencies 196 (428 ) Accounts payable, accrued liabilities and other 328 55 Deferred revenue 59 (11 ) Income taxes (2 ) 2 Net cash provided by operating activities 1,662 773 Investing activities: Purchases of investments (1,433 ) (1,913 ) Proceeds from sales and maturities of investments 772 1,398 Net cash paid in business combinations (3 ) (134 ) Purchases of property, equipment, and capitalized software (84 ) (91 ) Other, net 4 (50 ) Net cash used in investing activities (744 ) (790 ) Financing activities: Common stock withheld to settle employee tax obligations (60 ) (54 ) Common stock purchases — (400 ) Contingent consideration liabilities settled — (20 ) Other, net 2 33 Net cash used in financing activities (58 ) (441 ) Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents 860 (458 ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period 4,048 4,506 Cash, cash equivalents, and restricted cash and cash equivalents at end of period $ 4,908 $ 4,048 MOLINA HEALTHCARE, INC. UNAUDITED SEGMENT DATA (Dollars in millions) December 31, 2023 2022 Ending Membership by Segment: Medicaid 4,542,000 4,754,000 Medicare 172,000 156,000 Marketplace 281,000 348,000 Total 4,995,000 5,258,000 Three Months Ended December 31, 2023 2022 Premium Revenue Medical Margin MCR (1) Premium Revenue Medical Margin MCR (1) Medicaid $ 6,782 $ 731 89.2 % $ 6,421 $ 813 87.3 % Medicare 1,057 71 93.3 948 77 91.8 Marketplace 523 106 79.8 548 35 93.8 Consolidated $ 8,362 $ 908 89.1 % $ 7,917 $ 925 88.3 % Year Ended December 31, 2023 2022 Premium Revenue Medical Margin MCR (1) Premium Revenue Medical Margin MCR (1) Medicaid $ 26,327 $ 2,973 88.7 % $ 24,827 $ 2,981 88.0 % Medicare 4,179 388 90.7 3,795 437 88.5 Marketplace 2,023 499 75.3 2,261 290 87.2 Consolidated $ 32,529 $ 3,860 88.1 % $ 30,883 $ 3,708 88.0 % __________________ (1) The MCR represents medical costs as a percentage of premium revenue. MOLINA HEALTHCARE, INC. CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE (Dollars in millions) The Company’s claims liabilities include additional reserves to account for moderately adverse conditions 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. The Company’s reserving methodology is consistently applied across all periods presented. The amounts displayed for “Components of medical care costs related to: Prior year” represent the amounts by which the original estimates of claims and benefits payable at the beginning of the year were more than the actual liabilities based on information (principally the payment of claims) developed since those liabilities were 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, 2023 2022 Unaudited Medical claims and benefits payable, beginning balance $ 3,528 $ 3,363 Components of medical care costs related to: Current year 29,096 27,459 Prior year (427 ) (284 ) Total medical care costs 28,669 27,175 Payments for medical care costs related to: Current year 25,615 24,345 Prior year 2,734 2,670 Total paid 28,349 27,015 Acquired balances, net of post-acquisition adjustments 96 12 Change in non-risk and other provider payables 260 (7 ) Medical claims and benefits payable, ending balance $ 4,204 $ 3,528 Days in Claims Payable (1) 50 47 __________________ (1) The Company calculates Days in Claims Payable using claims incurred but not paid, or IBNP, and other fee-for-service payables included in medical claims and benefits payable, and quarterly fee-for-service related costs included in medical care costs within the Company’s consolidated financial statements. MOLINA HEALTHCARE, INC. RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (In millions, except per diluted share amounts) The Company believes that certain non-GAAP (generally accepted accounting principles) financial measures are useful supplemental measures to investors in comparing the Company’s performance to the performance of other public companies in the health care industry. The non-GAAP financial measures are also used internally to enable management to assess the Company’s performance consistently over time. These non-GAAP financial measures, presented below, should be considered as supplements to, and not as substitutes for or superior to, GAAP measures. Adjustments represent additions and deductions to GAAP net income as indicated in the table below, which include the non-cash impact of amortization of acquired intangible assets, acquisition-related expenses, and the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations. Adjusted G&A Ratio represents the GAAP G&A ratio, recognizing adjustments. Adjusted net income represents GAAP net income recognizing the adjustments, net of tax. The Company believes that adjusted net income is helpful to investors in assessing the Company’s financial performance. Adjusted net income per diluted share represents adjusted net income divided by weighted average common shares outstanding on a fully diluted basis. Adjusted after-tax margin represents adjusted net income, divided by total revenue. Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share GAAP Net income $ 216 $ 3.70 $ 56 $ 0.96 $ 1,091 $ 18.77 $ 792 $ 13.55 Adjustments: Amortization of intangible assets $ 22 $ 0.37 $ 21 $ 0.35 $ 85 $ 1.47 $ 77 $ 1.32 Acquisition-related expenses (1) 3 0.05 11 0.18 7 0.12 49 0.83 Impairment — — 208 3.57 — — 208 3.56 Other (2) 27 0.47 — — 68 1.17 — — Subtotal, adjustments 52 0.89 240 4.10 160 2.76 334 5.71 Income tax effect (13 ) (0.21 ) (56 ) (0.96 ) (38 ) (0.65 ) (78 ) (1.34 ) Adjustments, net of tax 39 0.68 184 3.14 122 2.11 256 4.37 Adjusted net income $ 255 $ 4.38 $ 240 $ 4.10 $ 1,213 $ 20.88 $ 1,048 $ 17.92 __________________ (1) Reflects non-recurring costs associated with acquisitions, including various transaction and certain integration costs. (2) The year ended December 31, 2023, reflects a non-recurring credit loss on 2022 Marketplace risk adjustment receivables due to the insolvency of an issuer in the Texas risk pool, non-recurring litigation costs and one-time termination benefits. The year ended December 31, 2022, includes certain non-recurring costs associated with gain on lease termination and disposal of fixed assets. MOLINA HEALTHCARE, INC. RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (CONTINUED) 2024 GUIDANCE Amount Per Diluted Share (2) GAAP Net income $ 1,278 $ 22.00 Adjustments: Amortization of intangible assets 94 1.62 Acquisition-related expenses 21 0.35 Subtotal, adjustments 115 1.97 Income tax effect (1) (27 ) (0.47 ) Adjustments, net of tax 88 1.50 Adjusted net income $ 1,366 �� $ 23.50 __________________ (1) Income tax effect calculated at the statutory tax rate of approximately 23.9%. (2) Computations assume approximately 58.1 million diluted weighted average shares outstanding. View source version on businesswire.com: https://www.businesswire.com/news/home/20240207058929/en/
Investor Contact: Joseph Krocheski Joseph.Krocheski@molinahealthcare.com 562-549-4100 Media Contact: Caroline Zubieta Caroline.Zubieta@molinahealthcare.com 562-951-1588