LONG BEACH, Calif.--(BUSINESS WIRE)-- Molina Healthcare, Inc. (NYSE: MOH):

• Net loss of $230 million for the quarter, or $4.10 per diluted share.
• Restructuring plan now underway is expected to reduce annualized run-rate expenses by $300 million to $400 million upon completion in 2018.
• $200 million total reduction to annualized run-rate expenses resulting from staff reductions expected to be achieved by the end of 2017 in time for full realization in 2018.
• Annualized salary eliminations of $55 million achieved so far in the third quarter of 2017.
• Direct delivery operations will be restructured during the second half of 2017.
• 2018 Marketplace participation to be terminated in Utah and Wisconsin; additional states in review.
• 2017 earnings per share guidance withdrawn.

Molina Healthcare, Inc. (NYSE: MOH) today reported its financial results for the second quarter of 2017.

“We are disappointed with our bottom-line results for this quarter and have taken aggressive and urgent steps to substantially improve our financial performance going forward,” said Joseph White, chief financial officer and interim president and chief executive officer of Molina Healthcare, Inc. “Following a thorough review of our business operations, we have begun to implement a Company-wide restructuring plan that we expect will reduce annualized run-rate expenses by between $300 million and $400 million by late 2018 when fully implemented, with approximately $200 million of these run-rate reductions expected to be achieved by the end of 2017 and in time for full realization in 2018. In the past, we have been focused on top line growth, often at the expense of bottom line results. While we expect to enjoy continued RFP and organic growth in our Medicaid managed care business, we are now intensively focused on improved operating performance and efficiency as the path to greater profitability and shareholder returns.”

Second Quarter 2017 Compared with Second Quarter 2016

Net loss per diluted share was $4.10 in the second quarter of 2017 compared with net income per diluted share of $0.58 reported for the second quarter of 2016. Loss before income tax benefit for the second quarter of 2017 was $314 million.

Certain significant items increased loss before income tax benefit in the second quarter of 2017 by approximately $330 million. Specifically:

• We recorded $72 million in non-cash impairment losses for goodwill and intangibles, primarily relating to our Pathways subsidiary. In the course of developing our restructuring and profitability improvement plan, we determined that future benefits to be derived from Pathways (including integration with our health plans) will be less than previously anticipated. While such impairment losses have a short-term impact on profitability, there is no impact to our cash flows. Pathways experienced operating losses of $8 million for the quarter ended June 30, 2017 and $12 million for the six months ended June 30, 2017.

• Medical care costs related to 2016 service dates were significantly in excess of what the Company usually experiences for out-of-period claims development, particularly at the Florida, Illinois, New Mexico, and Puerto Rico health plans. In total, we experienced out-of-period claims development that was approximately $85 million higher than expected at December 31, 2016.
• We recorded $44 million for Marketplace changes in estimates, including risk transfer and cost sharing subsidies, related to 2016 service dates. Liabilities for risk transfer payments and cost sharing subsidies that were estimated at December 31, 2016 were finalized during the second quarter of 2017.
• Loss before income tax benefit increased by $78 million as a result of an increase to the premium deficiency reserve established for the Marketplace program. The reserve, which was $22 million at March 31, 2017, increased to $100 million as of June 30, 2017. Based upon revenue and cost trends observed in the second quarter of 2017, we now believe that Marketplace performance in the second half of 2017 will fall substantially short of previous expectations. Marketplace performance has been most disappointing in Florida, Utah, Washington, and Wisconsin.
• We recorded $43 million in restructuring and separation costs in the second quarter of 2017 related primarily to contractually required termination benefits paid to our former chief executive officer and chief financial officer. Also included in these costs are consulting fees incurred for the development and implementation of our corporate restructuring initiatives.

In addition to the items noted above, ongoing poor performance at our Florida, Illinois, New Mexico and Puerto Rico health plans in 2017 all contributed to our disappointing financial performance in the second quarter of 2017.

The table below summarizes the impact of these significant items on the Company’s financial performance.

Summary of Significant Items Affecting 2017 Financial Results
			Three Months Ended										Six Months Ended
			June 30, 2017										June 30, 2017
			(In millions, except per diluted share amounts)
			Amount					Per DilutedShare (1)					Amount					Per DilutedShare (1)
Impairment losses			$	72				$	1.01				$	72				$	1.02
Losses at behavioral health subsidiary exclusive of impairment			8					0.09					12					0.14
Medical care costs related to prior year service dates that were in excess of historical expectations			85					0.95					74					0.84
Marketplace adjustments related to risk transfer, cost sharing subsidies, and other items for 2016 service dates			44					0.49					47					0.53
Marketplace premium deficiency reserve for 2017 service dates			78					0.87					70					0.79
Restructuring and separation costs			43					0.68					43					0.68
Termination fee received for Terminated Medicare acquisition			—					—					(75		)			(0.84		)
			$	330				$	4.09				$	243				$	3.16

____________________
(1)	Except for certain items that are not deductible for tax purposes, per diluted share amounts are generally calculated at our statutory income tax rate of 37%, which is in excess of the effective tax rate recorded in our consolidated statements of operations.

Income Tax (Benefit) Expense

The effective tax rate benefit for 2017 was less than the statutory tax rate benefit due to the relatively large amount of our reported expenses that are not deductible for tax purposes.

Restructuring and Profit Improvement Plan

As a result of our poor operating performance and catalyzed by our change in management, we accelerated the implementation of a comprehensive restructuring and profitability improvement plan (the Restructuring Plan). Under the Restructuring Plan, we are taking the following actions:

1. We are streamlining our organizational structure, including the elimination of redundant layers of management, the consolidation of regional support services, and other reductions to our workforce, to improve efficiency as well as the speed and quality of our decision-making.
2. We are re-designing core operating processes such as provider payment, utilization management, quality monitoring and improvement, and information technology to achieve more effective and cost efficient outcomes.
3. We are remediating high cost provider contracts and building around high quality, cost-effective networks.
4. We are restructuring our existing direct delivery operations.
5. We are reviewing our vendor base to ensure that we are partnering with the lowest-cost, most-effective vendors.
6. Throughout this process, we are taking precautions to ensure that our actions do not impede our ability to continue to deliver quality health care, retain existing managed care contracts, and to secure new managed care contracts.

In total, we estimate that the Restructuring Plan will reduce annualized run-rate expenses by approximately $300 million to $400 million upon its completion in late 2018. $200 million of these run-rate reductions, which are a result of staff reductions, will be in place by December 2017, and therefore will fully contribute to our 2018 results. Since the close of the second quarter, we have already achieved $55 million of our annualized run-rate reduction target as a result of staff reductions taken on July 27th. All savings targets discussed in regards to the Restructuring Plan represent annualized run-rate savings that we expect to achieve during the year following the indicated implementation date. One-time costs associated with the Restructuring Plan are expected to exceed the benefits realized in 2017 due to the upfront payment of implementation costs and the delayed benefit of full savings until the beginning of 2018.

We estimate that total pre-tax costs associated with the Restructuring Plan will be approximately $130 million to $150 million for the second half of 2017, with an additional $40 million to be incurred in 2018.

As part of the Restructuring Plan, we are reducing our corporate and health plans workforce by approximately 10%, or 1,500 full-time-equivalent employees. This workforce rightsizing, which represents 7% of the total number of our employees, is expected to be completed by the end of 2017. Affected employees will be offered severance and outplacement assistance.

“This reduction in our workforce is a difficult, but necessary, step as we concentrate our efforts on achieving operational excellence and improved efficiency. By transforming the entire enterprise into a leaner, more streamlined organization, we can enhance our decision-making, improve our operating performance, and grow our margins,” said Mr. White.

Actions Taken to Remediate 2018 Marketplace Performance

In addition to the Restructuring Plan, we are taking these further steps to improve profitability in 2018:

1. We are exiting the Utah and Wisconsin ACA Marketplaces effective December 31, 2017. For the three months ended June 30, 2017, these two health plans reported a total of $127 million in Marketplace premium revenue (16% of consolidated Marketplace premium revenue), and a combined Marketplace medical care ratio of 128%.
2. In our remaining Marketplace plans, we are increasing 2018 premiums by 55%. The increase takes into account the absence of cost sharing reduction subsidies. Had we assumed that cost sharing reduction subsidies would be funded for 2018, the premium increase would have been 30%.
3. We are also reducing the scope of our 2018 participation in the Washington Marketplace.
4. We continue to closely monitor the current political and programmatic developments pertaining to our 2018 participation in other Marketplace states, and subject to those developments, will withdraw from 2018 participation as may be necessary.

Withdrawing 2017 Outlook

We are withdrawing our previously issued 2017 full-year earnings per diluted share and adjusted earnings per diluted share guidance. Among the reasons for withdrawing guidance are:

• Our results for the quarter ended June 30, 2017.
• Uncertain medical cost trends in the Florida, Illinois, New Mexico, and Puerto Rico health plans.
• Uncertainty around the funding of Marketplace cost sharing subsidies.
• Potential variability in the timing of benefits achieved and costs incurred as a result of the Restructuring Plan.

Update on Search for Permanent Chief Executive Officer

Our search for a permanent chief executive officer is well underway and we are encouraged by the response.

Conference Call

Management will host a conference call and webcast to discuss Molina Healthcare’s second quarter results at 5:00 p.m. Eastern time on Wednesday, August 2, 2017. The number to call for the interactive teleconference is (212) 231-2909. A telephonic replay of the conference call will be available from 7:00 p.m. Eastern time on Wednesday, August 2, 2017, through 6:00 p.m. Eastern Time on Thursday, August 3, 2017, by dialing (800) 633-8284 and entering confirmation number 21855049. A live audio broadcast of Molina Healthcare’s conference call will be available on our 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 our health plans operating in 12 states across the nation and in the Commonwealth of Puerto Rico, Molina currently serves approximately 4.7 million members. Dr. C. David Molina founded our company in 1980 to serve low-income families in Southern California. Today, we continue his mission of providing high quality and cost-effective health care to those who need it most. For more information about Molina Healthcare, please visit our website at molinahealthcare.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This earnings release contains “forward-looking statements” regarding our 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 success of the Restructuring Plan, including the timing of the benefits realized;
• the numerous political and market-based uncertainties associated with the Affordable Care Act (the “ACA”) or “Obamacare,” including any potential repeal and replacement of the law, amendment of the law, or move to state block grants for Medicaid;
• the market dynamics surrounding the ACA Marketplaces, including but not limited to uncertainties associated with risk transfer requirements, the potential for disproportionate enrollment of higher acuity members, the withdrawal of cost sharing subsidies and/or premium tax credits, the adequacy of agreed rates, and potential disruption associated with market withdrawal;
• 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/risk transfer, risk corridors, and reinsurance;
• effective management of our medical costs;
• our 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, including the payment of all amounts due to our Illinois health plan following the resolution of the Illinois budget impasse;
• the success of our efforts to retain existing government contracts, including those in Florida, Illinois, New Mexico, Puerto Rico, and Texas, and to obtain new government contracts in connection with state requests for proposals (RFPs) in both existing and new states;
• any adverse impact resulting from the significant changes to our executive leadership team and the rightsizing of our workforce;
• the impact of our decision to exit the Utah and Wisconsin ACA Marketplace markets effective December 31, 2017;
• our ability to manage our operations, including maintaining and creating adequate internal systems and controls relating to authorizations, approvals, provider payments, and the overall success of our care management initiatives;
• our ability to consummate and realize benefits from acquisitions or divestitures;
• our 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;
• our 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;
• our estimates of amounts owed for such cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions;
• the Medicaid expansion cost corridors in California, New Mexico, and Washington, 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 our ability to recognize revenue amounts associated therewith;
• cyber-attacks or other privacy or data security incidents resulting in an inadvertent unauthorized disclosure of protected health information;
• the success of our health plan in Puerto Rico, including the resolution of the Puerto Rico debt crisis, payment of all amounts due under our Medicaid contract, the effect of the PROMESA law, and our efforts to better manage the health care costs of our Puerto Rico health plan;
• the success and renewal of our 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 our health plans;
• efforts by states to recoup previously paid and recognized premium amounts;
• the continuation and renewal of the government contracts of our health plans, Molina Medicaid Solutions, and Pathways, and the terms under which such contracts are renewed;
• complications, member confusion, or enrollment backlogs related to the annual renewal of Medicaid coverage;
• government audits and reviews, or potential investigations, and any fine, sanction, enrollment freeze, monitoring program, or premium recovery that may result therefrom, including any potential demand by the state of New Mexico to recover purportedly underpaid premium taxes;
• changes with respect to our provider contracts and the loss of providers;
• approval by state regulators of dividends and distributions by our health plan subsidiaries;
• changes in funding under our 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;
• the relatively small number of states in which we operate health plans;
• the availability of adequate financing on acceptable terms to fund and capitalize our expansion and growth, repay our outstanding indebtedness at maturity and meet our liquidity needs, including the interest expense and other costs associated with such financing;
• our failure to comply with the financial or other covenants in our credit agreement or the indentures governing our outstanding notes;
• the sufficiency of our funds on hand to pay the amounts due upon conversion or maturity of our outstanding notes;
• the failure of a state in which we operate to renew its federal Medicaid waiver;
• changes generally affecting the managed care or Medicaid management information systems industries;
• increases in government surcharges, taxes, and assessments, including but not limited to the deductibility of certain compensation costs;
• newly emergent viruses or widespread epidemics, public catastrophes or terrorist attacks, and associated public alarm;
• increasing competition and consolidation in the Medicaid industry;

and numerous other risk factors, including those discussed in our periodic reports and filings with the Securities and Exchange Commission. These reports can be accessed under the investor relations tab of our website or on the SEC’s website at sec.gov. Given these risks and uncertainties, we can give no assurances that our forward-looking statements will prove to be accurate, or that any other results or events projected or contemplated by our forward-looking statements will in fact occur, and we caution investors not to place undue reliance on these statements. All forward-looking statements in this release represent our judgment as of August 2, 2017, and we disclaim any obligation to update any forward-looking statements to conform the statement to actual results or changes in our expectations.

MOLINA HEALTHCARE, INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
			Three Months Ended June 30,										Six Months Ended June 30,
			2017					2016					2017					2016
			(Dollar amounts in millions, except per-share amounts)
Revenue:
Premium revenue			$	4,740				$	4,029				$	9,388				$	8,024
Service revenue			129					135					260					275
Premium tax revenue			114					109					225					218
Health insurer fee revenue			—					76					—					166
Investment income and other revenue			16					10					30					19
Total revenue			4,999					4,359					9,903					8,702
Operating expenses:
Medical care costs			4,491					3,594					8,602					7,182
Cost of service revenue			124					116					246					243
General and administrative expenses			405					351					844					691
Premium tax expenses			114					109					225					218
Health insurer fee expenses			—					50					—					108
Depreciation and amortization			37					34					76					66
Impairment losses			72					—					72					—
Restructuring and separation costs			43					—					43					—
Total operating expenses			5,286					4,254					10,108					8,508
Operating (loss) income			(287		)			105					(205		)			194
Other expenses (income), net:
Interest expense			27					25					53					50
Other income, net			—					—					(75		)			—
Total other expenses (income), net			27					25					(22		)			50
(Loss) income before income tax (benefit) expense			(314		)			80					(183		)			144
Income tax (benefit) expense			(84		)			47					(30		)			87
Net (loss) income			$	(230	)			$	33				$	(153	)			$	57
Net (loss) income per diluted share			$	(4.10	)			$	0.58				$	(2.74	)			$	1.01
Diluted weighted average shares outstanding			56.2					55.5					56.1					56.3
Operating Statistics:
Medical care ratio (1)			94.8		%			89.2		%			91.6		%			89.5		%
G&A ratio (2)			8.1		%			8.1		%			8.5		%			7.9		%
Premium tax ratio (1)			2.4		%			2.6		%			2.3		%			2.6		%
Effective tax rate			26.8		%			59.8		%			16.0		%			60.7		%
Net profit margin (2)			(4.6		)%			0.7		%			(1.5		)%			0.7		%

__________________
(1)	Medical care ratio represents medical care costs as a percentage of premium revenue; premium tax ratio represents premium tax expenses as a percentage of premium revenue plus premium tax revenue.
(2)	G&A ratio represents general and administrative expenses as a percentage of total revenue. Net profit margin represents net (loss) income as a percentage of total revenue.

MOLINA HEALTHCARE, INC. UNAUDITED CONSOLIDATED BALANCE SHEETS
			June 30,					December 31,
			2017					2016
			(In millions,except per-share data)
ASSETS
Current assets:
Cash and cash equivalents			$	2,979				$	2,819
Investments			2,192					1,758
Restricted investments			325					—
Receivables			1,006					974
Income taxes refundable			68					39
Prepaid expenses and other current assets			159					131
Derivative asset			440					267
Total current assets			7,169					5,988
Property, equipment, and capitalized software, net			449					454
Deferred contract costs			93					86
Intangible assets, net			112					140
Goodwill			559					620
Restricted investments			118					110
Deferred income taxes			36					10
Other assets			47					41
			$	8,583				$	7,449
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable			$	2,077				$	1,929
Amounts due government agencies			1,844					1,202
Accounts payable and accrued liabilities			375					385
Deferred revenue			284					315
Current portion of long-term debt			773					472
Derivative liability			440					267
Total current liabilities			5,793					4,570
Senior notes			1,017					975
Lease financing obligations			198					198
Deferred income taxes			—					15
Other long-term liabilities			54					42
Total liabilities			7,062					5,800
Stockholders’ equity:
Common stock, $0.001 par value; 150 shares authorized; outstanding: 57 shares at June 30, 2017 and December 31, 2016			—					—
Preferred stock, $0.001 par value; 20 shares authorized, no shares issued and outstanding			—					—
Additional paid-in capital			865					841
Accumulated other comprehensive loss			(1		)			(2		)
Retained earnings			657					810
Total stockholders’ equity			1,521					1,649
			$	8,583				$	7,449

MOLINA HEALTHCARE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
			Three Months Ended June 30,										Six Months Ended June 30,
			2017					2016					2017					2016
			(In millions)
Operating activities:
Net (loss) income			$	(230	)			$	33				$	(153	)			$	57
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization			47					45					96					89
Impairment losses			72					—					72					—
Deferred income taxes			(36		)			9					(41		)			39
Share-based compensation, including accelerated share-based compensation			29					9					35					16
Amortization of convertible senior notes and lease financing obligations			8					7					16					15
Other, net			4					5					7					11
Changes in operating assets and liabilities:
Receivables			—					(149		)			(32		)			(415		)
Prepaid expenses and other assets			(26		)			59					(38		)			(143		)
Medical claims and benefits payable			151					(173		)			148					82
Amounts due government agencies			269					328					642					509
Accounts payable and accrued liabilities			(68		)			(58		)			(18		)			147
Deferred revenue			(178		)			10					(32		)			(119		)
Income taxes			(89		)			14					(30		)			(10		)
Net cash (used in) provided by operating activities			(47		)			139					672					278
Investing activities:
Purchases of investments			(903		)			(363		)			(1,636		)			(974		)
Proceeds from sales and maturities of investments			441					464					874					812
Purchases of property, equipment, and capitalized software			(34		)			(56		)			(60		)			(102		)
(Increase) decrease in restricted investments held-to-maturity			(3		)			9					(10		)			5
Net cash paid in business combinations			—					(6		)			—					(8		)
Other, net			(7		)			(7		)			(13		)			(6		)
Net cash (used in) provided by investing activities			(506		)			41					(845		)			(273		)
Financing activities:
Proceeds from senior notes offerings, net of issuance costs			325					—					325					—
Proceeds from employee stock plans			10					10					11					10
Other, net			(1		)			(1		)			(3		)			1
Net cash provided by financing activities			334					9					333					11
Net (decrease) increase in cash and cash equivalents			(219		)			189					160					16
Cash and cash equivalents at beginning of period			3,198					2,156					2,819					2,329
Cash and cash equivalents at end of period			$	2,979				$	2,345				$	2,979				$	2,345

MOLINA HEALTHCARE, INC. UNAUDITED HEALTH PLANS SEGMENT MEMBERSHIP
			June 30, 2017				December 31,2016				June 30, 2016
Ending Membership by Program:
Temporary Assistance for Needy Families (TANF) and Children’s Health Insurance Program (CHIP)			2,517,000				2,536,000				2,500,000
Marketplace			949,000				526,000				597,000
Medicaid Expansion			678,000				673,000				654,000
Aged, Blind or Disabled (ABD)			408,000				396,000				387,000
Medicare-Medicaid Plan (MMP) - Integrated			54,000				51,000				51,000
Medicare Special Needs Plans			44,000				45,000				44,000
			4,650,000				4,227,000				4,233,000
Ending Membership by Health Plan:
California			766,000				683,000				680,000
Florida			672,000				553,000				565,000
Illinois			163,000				195,000				201,000
Michigan			414,000				391,000				393,000
New Mexico			266,000				254,000				251,000
New York (1)			34,000				35,000				—
Ohio			351,000				332,000				341,000
Puerto Rico			322,000				330,000				336,000
South Carolina			112,000				109,000				105,000
Texas			465,000				337,000				367,000
Utah			167,000				146,000				151,000
Washington			788,000				736,000				709,000
Wisconsin			130,000				126,000				134,000
			4,650,000				4,227,000				4,233,000

____________________
(1)	The New York health plan was acquired on August 1, 2016.

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA (In millions, except percentages and per-member per-month amounts)
			Three Months Ended June 30, 2017
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
TANF and CHIP			7.6				$	1,391				$	182.47				$	1,315				$	172.48				94.5	%			$	76
Medicaid Expansion			2.1				786					383.07					689					335.26					87.5				97
ABD			1.2				1,285					1,053.89					1,245					1,020.85					96.9				40
Total Medicaid			10.9				3,462					317.79					3,249					298.10					93.8				213
MMP			0.1				361					2,217.44					333					2,050.20					92.5				28
Medicare			0.2				148					1,126.14					126					963.34					85.5				22
Total Medicare			0.3				509					1,730.91					459					1,565.65					90.5				50
Excluding Marketplace			11.2				3,971					354.87					3,708					331.36					93.4				263
Marketplace			2.8				769					267.37					783					272.37					101.9				(14		)
			14.0				$	4,740				$	336.98				$	4,491				$	319.29				94.8	%			$	249
			Three Months Ended June 30, 2016
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
TANF and CHIP			7.5				$	1,302				$	173.57				$	1,202				$	160.26				92.3	%			$	100
Medicaid Expansion			1.9				742					378.19					634					323.56					85.6				108
ABD			1.2				1,168					991.38					1,038					881.80					88.9				130
Total Medicaid			10.6				3,212					301.86					2,874					270.27					89.5				338
MMP			0.2				315					2,093.29					270					1,792.78					85.6				45
Medicare			0.2				129					997.44					127					974.30					97.7				2
Total Medicare			0.4				444					1,584.77					397					1,412.96					89.2				47
Excluding Marketplace			11.0				3,656					334.86					3,271					299.67					89.5				385
Marketplace			1.8				373					206.88					323					178.79					86.4				50
			12.8				$	4,029				$	316.72				$	3,594				$	282.54				89.2	%			$	435

____________________
(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.

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA (In millions, except percentages and per-member per-month amounts)
			Six Months Ended June 30, 2017
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
TANF and CHIP			15.3				$	2,793				$	182.58				$	2,619				$	171.25				93.8	%			$	174
Medicaid Expansion			4.1				1,603					390.88					1,378					335.88					85.9				225
ABD			2.4				2,481					1,030.68					2,375					986.54					95.7				106
Total Medicaid			21.8				6,877					315.39					6,372					292.22					92.7				505
MMP			0.3				705					2,152.75					640					1,954.15					90.8				65
Medicare			0.3				286					1,097.36					243					933.20					85.0				43
Total Medicare			0.6				991					1,685.72					883					1,502.36					89.1				108
Excluding Marketplace			22.4				7,868					351.35					7,255					323.98					92.2				613
Marketplace			5.7				1,520					264.77					1,347					234.62					88.6				173
			28.1				$	9,388				$	333.68				$	8,602				$	305.74				91.6	%			$	786
			Six Months Ended June 30, 2016
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
TANF and CHIP			14.9				$	2,626				$	176.00				$	2,400				$	160.85				91.4	%			$	226
Medicaid Expansion			3.8				1,421					371.82					1,208					316.13					85.0				213
ABD			2.4				2,280					976.58					2,079					890.71					91.2				201
Total Medicaid			21.1				6,327					300.19					5,687					269.86					89.9				640
MMP			0.3				655					2,157.55					587					1,932.73					89.6				68
Medicare			0.3				260					1,013.04					251					977.35					96.5				9
Total Medicare			0.6				915					1,633.08					838					1,494.92					91.5				77
Excluding Marketplace			21.7				7,242					334.74					6,525					301.61					90.1				717
Marketplace			3.4				782					228.19					657					191.62					84.0				125
			25.1				$	8,024				$	320.17				$	7,182				$	286.57				89.5	%			$	842

____________________
(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.

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—NON-MARKETPLACE (In millions, except percentages and per-member per-month amounts)
			Three Months Ended June 30, 2017
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			1.9				$	598				$	318.89				$	539				$	287.36				90.1	%			$	59
Florida			1.1				380					347.20					370					337.92					97.3				10
Illinois			0.5				149					289.51					174					336.76					116.3				(25		)
Michigan			1.1				390					333.26					358					305.40					91.6				32
New Mexico			0.8				321					443.13					311					428.58					96.7				10
New York (3)			0.1				46					457.96					45					442.16					96.5				1
Ohio			1.0				529					536.90					489					496.41					92.5				40
Puerto Rico			0.9				179					184.28					189					194.42					105.5				(10		)
South Carolina			0.4				111					326.57					102					304.14					93.1				9
Texas			0.7				524					752.01					473					679.43					90.3				51
Utah			0.3				89					313.93					76					267.15					85.1				13
Washington			2.2				618					276.90					546					244.58					88.3				72
Wisconsin			0.2				34					170.98					26					130.54					76.3				8
Other (4)			—				3					—					10					—					—				(7		)
			11.2				$	3,971				$	354.87				$	3,708				$	331.36				93.4	%			$	263
			Three Months Ended June 30, 2016
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			1.9				$	519				$	281.99				$	472				$	256.37				90.9	%			$	47
Florida			1.0				314					312.23					289					287.84					92.2				25
Illinois			0.6				154					256.17					137					227.71					88.9				17
Michigan			1.2				366					312.88					332					283.89					90.7				34
New Mexico			0.7				328					468.35					296					422.37					90.2				32
New York (3)			—				—					—					—					—					—				—
Ohio			0.9				474					479.41					427					431.46					90.0				47
Puerto Rico			1.0				170					169.04					175					173.49					102.6				(5		)
South Carolina			0.3				87					277.22					71					226.27					81.6				16
Texas			0.8				580					784.32					470					633.94					80.8				110
Utah			0.3				86					293.39					74					254.59					86.8				12
Washington			2.1				538					263.41					484					237.43					90.1				54
Wisconsin			0.2				36					166.95					27					120.69					72.3				9
Other (4)			—				4					—					17					—					—				(13		)
			11.0				$	3,656				$	334.86				$	3,271				$	299.67				89.5	%			$	385

____________________
(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.
(3)	The New York health plan was acquired on August 1, 2016.
(4)	“Other” medical care costs include primarily medically related administrative costs at the parent company, and direct delivery costs.

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—NON-MARKETPLACE (In millions, except percentages and per-member per-month amounts)
			Six Months Ended June 30, 2017
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			3.7				$	1,170				$	313.76				$	1,023				$	274.42				87.5	%			$	147
Florida			2.2				744					343.29					722					333.23					97.1				22
Illinois			1.1				310					282.66					354					322.63					114.1				(44		)
Michigan			2.3				772					330.34					690					295.02					89.3				82
New Mexico			1.5				629					432.98					610					419.65					96.9				19
New York (3)			0.2				92					449.48					87					425.72					94.7				5
Ohio			2.0				1,049					532.35					951					482.73					90.7				98
Puerto Rico			1.9				362					185.40					354					181.24					97.8				8
South Carolina			0.7				216					321.85					200					298.79					92.8				16
Texas			1.4				1,051					751.94					962					687.96					91.5				89
Utah			0.6				178					313.56					148					260.43					83.1				30
Washington			4.4				1,223					275.05					1,081					243.18					88.4				142
Wisconsin			0.4				67					168.16					53					133.25					79.2				14
Other (4)			—				5					—					20					—					—				(15		)
			22.4				$	7,868				$	351.35				$	7,255				$	323.98				92.2	%			$	613
			Six Months Ended June 30, 2016
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			3.7				$	1,028				$	281.37				$	918				$	251.15				89.3	%			$	110
Florida			2.0				639					322.01					575					290.08					90.1				64
Illinois			1.2				303					261.43					269					232.06					88.8				34
Michigan			2.4				751					317.13					678					286.40					90.3				73
New Mexico			1.4				651					465.65					580					414.80					89.1				71
New York (3)			—				—					—					—					—					—				—
Ohio			1.9				952					485.86					869					443.08					91.2				83
Puerto Rico			2.0				351					172.98					349					171.95					99.4				2
South Carolina			0.6				171					276.61					138					223.58					80.8				33
Texas			1.5				1,116					752.54					982					661.63					87.9				134
Utah			0.6				172					295.69					150					259.29					87.7				22
Washington			4.0				1,030					259.79					931					234.95					90.4				99
Wisconsin			0.4				72					164.90					52					118.37					71.8				20
Other (4)			—				6					—					34					—					—				(28		)
			21.7				$	7,242				$	334.74				$	6,525				$	301.61				90.1	%			$	717

____________________
(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.
(3)	The New York health plan was acquired on August 1, 2016.
(4)	“Other” medical care costs include primarily medically related administrative costs at the parent company, and direct delivery costs.

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—MARKETPLACE (In millions, except percentages and per-member per-month amounts)
			Three Months Ended June 30, 2017
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			0.5				$	81				$	186.90				$	67				$	154.23				82.5	%			$	14
Florida			0.9				269					284.60					317					336.78					118.3				(48		)
Michigan			0.1				16					204.15					10					135.89					66.6				6
New Mexico			—				31					367.98					23					266.91					72.5				8
Ohio			—				24					377.94					27					404.20					106.9				(3		)
Texas			0.7				177					247.49					129					180.92					73.1				48
Utah			0.2				41					186.87					53					239.50					128.2				(12		)
Washington			0.2				44					317.42					49					359.87					113.4				(5		)
Wisconsin			0.2				86					434.01					109					550.81					126.9				(23		)
Other (3)			—				—					—					(1		)			—					—				1
			2.8				$	769				$	267.37				$	783				$	272.37				101.9	%			$	(14	)
			Three Months Ended June 30, 2016
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			0.1				$	35				$	159.56				$	21				$	99.15				62.1	%			$	14
Florida			0.8				150					217.96					137					198.93					91.3				13
Michigan			—				3					235.15					2					176.34					75.0				1
New Mexico			0.1				14					240.40					9					164.00					68.2				5
Ohio			0.1				9					294.90					6					210.36					71.3				3
Texas			0.3				55					146.76					29					78.56					53.5				26
Utah			0.2				24					146.37					32					195.18					133.3				(8		)
Washington			—				21					291.91					16					205.59					70.4				5
Wisconsin			0.2				63					335.32					69					369.55					110.2				(6		)
Other (3)			—				(1		)			—					2					—					—				(3		)
			1.8				$	373				$	206.88				$	323				$	178.79				86.4	%			$	50

____________________
(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.
(3)	“Other” medical care costs include primarily medically related administrative costs at the parent company, and direct delivery costs.

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—MARKETPLACE (In millions, except percentages and per-member per-month amounts)
			Six Months Ended June 30, 2017
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			0.9				$	153				$	185.68				$	93				$	112.20				60.4	%			$	60
Florida			1.9				561					288.81					523					269.48					93.3				38
Michigan			0.2				27					177.12					17					116.21					65.6				10
New Mexico			0.1				53					317.10					42					249.90					78.8				11
Ohio			0.1				45					356.20					44					339.26					95.2				1
Texas			1.4				334					235.07					242					171.07					72.8				92
Utah			0.4				86					194.68					104					233.85					120.1				(18		)
Washington			0.3				81					310.26					95					362.78					116.9				(14		)
Wisconsin			0.4				180					443.86					190					469.01					105.7				(10		)
Other (3)			—				—					—					(3		)			—					—				3
			5.7				$	1,520				$	264.77				$	1,347				$	234.62				88.6	%			$	173
			Six Months Ended June 30, 2016
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			0.3				$	67				$	173.55				$	44				$	115.80				66.7	%			$	23
Florida			1.4				314					230.11					264					193.24					84.0				50
Michigan			—				5					208.83					3					141.43					67.7				2
New Mexico			0.1				27					251.96					21					192.53					76.4				6
Ohio			0.1				19					330.26					13					241.55					73.1				6
Texas			0.7				139					199.62					92					132.77					66.5				47
Utah			0.3				52					169.84					58					187.64					110.5				(6		)
Washington			0.1				35					267.82					27					200.50					74.9				8
Wisconsin			0.4				124					348.84					136					382.15					109.5				(12		)
Other (3)			—				—					—					(1		)			—					—				1
			3.4				$	782				$	228.19				$	657				$	191.62				84.0	%			$	125

____________________
(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.
(3)	“Other” medical care costs include primarily medically related administrative costs at the parent company, and direct delivery costs.

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—TOTAL (In millions, except percentages and per-member per-month amounts)
			Three Months Ended June 30, 2017
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			2.4				$	679				$	294.09				$	606				$	262.34				89.2	%			$	73
Florida			2.0				649					318.21					687					337.39					106.0				(38		)
Illinois			0.5				149					289.51					174					336.76					116.3				(25		)
Michigan			1.2				406					325.38					368					295.06					90.7				38
New Mexico			0.8				352					435.34					334					411.83					94.6				18
New York (3)			0.1				46					457.96					45					442.16					96.5				1
Ohio			1.0				553					527.14					516					490.75					93.1				37
Puerto Rico			0.9				179					184.28					189					194.42					105.5				(10		)
South Carolina			0.4				111					326.57					102					304.14					93.1				9
Texas			1.4				701					495.93					602					426.41					86.0				99
Utah			0.5				130					258.10					129					255.00					98.8				1
Washington			2.4				662					279.21					595					251.16					90.0				67
Wisconsin			0.4				120					303.59					135					342.43					112.8				(15		)
Other (4)			—				3					—					9					—					—				(6		)
			14.0				$	4,740				$	336.98				$	4,491				$	319.29				94.8	%			$	249
			Three Months Ended June 30, 2016
			MemberMonths (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			2.0				$	554				$	268.95				$	493				$	239.63				89.1	%			$	61
Florida			1.8				464					273.90					426					251.69					91.9				38
Illinois			0.6				154					256.17					137					227.71					88.9				17
Michigan			1.2				369					312.18					334					282.86					90.6				35
New Mexico			0.8				342					451.72					305					403.52					89.3				37
New York (3)			—				—					—					—					—					—				—
Ohio			1.0				483					473.91					433					424.87					89.7				50
Puerto Rico			1.0				170					169.04					175					173.49					102.6				(5		)
South Carolina			0.3				87					277.22					71					226.27					81.6				16
Texas			1.1				635					571.14					499					448.23					78.5				136
Utah			0.5				110					240.26					106					233.12					97.0				4
Washington			2.1				559					264.40					500					236.32					89.4				59
Wisconsin			0.4				99					244.88					96					235.88					96.3				3
Other (4)			—				3					—					19					—					—				(16		)
			12.8				$	4,029				$	316.72				$	3,594				$	282.54				89.2	%			$	435

____________________
(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.
(3)	The New York health plan was acquired on August 1, 2016.
(4)	“Other” medical care costs include primarily medically related administrative costs at the parent company, and direct delivery costs.

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA—TOTAL (In millions, except percentages and per-member per-month amounts)
			Six Months Ended June 30, 2017
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			4.6				$	1,323				$	290.56				$	1,116				$	245.02				84.3	%			$	207
Florida			4.1				1,305					317.53					1,245					303.09					95.5				60
Illinois			1.1				310					282.66					354					322.63					114.1				(44		)
Michigan			2.5				799					321.10					707					284.24					88.5				92
New Mexico			1.6				682					421.11					652					402.27					95.5				30
New York (3)			0.2				92					449.48					87					425.72					94.7				5
Ohio			2.1				1,094					521.57					995					473.95					90.9				99
Puerto Rico			1.9				362					185.40					354					181.24					97.8				8
South Carolina			0.7				216					321.85					200					298.79					92.8				16
Texas			2.8				1,385					491.46					1,204					427.48					87.0				181
Utah			1.0				264					261.42					252					248.77					95.2				12
Washington			4.7				1,304					276.99					1,176					249.79					90.2				128
Wisconsin			0.8				247					307.50					243					302.95					98.5				4
Other (4)			—				5					—					17					—					—				(12		)
			28.1				$	9,388				$	333.68				$	8,602				$	305.74				91.6	%			$	786
			Six Months Ended June 30, 2016
			Member Months (1)				Premium Revenue										Medical Care Costs										MCR (2)				MedicalMargin
							Total					PMPM					Total					PMPM
California			4.0				$	1,095				$	271.14				$	962				$	238.30				87.9	%			$	133
Florida			3.4				953					284.53					839					250.58					88.1				114
Illinois			1.2				303					261.43					269					232.06					88.8				34
Michigan			2.4				756					316.18					681					285.13					90.2				75
New Mexico			1.5				678					450.62					601					399.17					88.6				77
New York (3)			—				—					—					—					—					—				—
Ohio			2.0				971					481.44					882					437.35					90.8				89
Puerto Rico			2.0				351					172.98					349					171.95					99.4				2
South Carolina			0.6				171					276.61					138					223.58					80.8				33
Texas			2.2				1,255					575.87					1,074					492.65					85.5				181
Utah			0.9				224					252.08					208					234.46					93.0				16
Washington			4.1				1,065					260.05					958					233.84					89.9				107
Wisconsin			0.8				196					247.57					188					236.92					95.7				8
Other (4)			—				6					—					33					—					—				(27		)
			25.1				$	8,024				$	320.17				$	7,182				$	286.57				89.5	%			$	842

____________________
(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.
(3)	The New York health plan was acquired on August 1, 2016.
(4)	“Other” medical care costs include primarily medically related administrative costs at the parent company, and direct delivery costs.

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED HEALTH PLANS SEGMENT 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 June 30,
			2017												2016
			Amount				PMPM				% of Total				Amount				PMPM				% of Total
Fee for service			$	3,348			$	238.04			74.5	%			$	2,620			$	206.01				72.9	%
Pharmacy				650				46.23			14.5					529				41.59				14.7
Capitation				356				25.29			7.9					304				23.87				8.5
Direct delivery				22				1.54			0.5					18				1.39				0.5
Other				115				8.19			2.6					123				9.68				3.4
			$	4,491			$	319.29			100.0	%			$	3,594			$	282.54				100.0	%
			Six Months Ended June 30,
			2017												2016
			Amount				PMPM				% of Total				Amount				PMPM				% of Total
Fee for service			$	6,434			$	228.68			74.8	%			$	5,357			$	213.77				74.6	%
Pharmacy				1,266				45.00			14.7					1,054				42.05				14.7
Capitation				680				24.17			7.9					599				23.87				8.3
Direct delivery				44				1.56			0.5					34				1.36				0.5
Other				178				6.33			2.1					138				5.52				1.9
			$	8,602			$	305.74			100.0	%			$	7,182			$	286.57				100.0	%
The following table provides the details of our medical claims and benefits payable as of the dates indicated:
																			June 30,				December 31,
																			2017				2016
Fee-for-service claims incurred but not paid (IBNP)																			$	1,478			$	1,352
Pharmacy payable																				121				112
Capitation payable																				45				37
Other (1)																				433				428
																			$	2,077			$	1,929

____________________
(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 June 30, 2017 and December 31, 2016, we had recorded non-risk provider payables of approximately $111 million and $225 million, respectively.

MOLINA HEALTHCARE, INC. UNAUDITED CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE (Dollars in millions, except per-member amounts)
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 were more 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:
			Six Months Ended June 30,										Year EndedDecember 31,2016
			2017					2016
Medical claims and benefits payable, beginning balance			$	1,929				$	1,685				$	1,685
Components of medical care costs related to:
Current period			8,633					7,371					14,966
Prior period			(31		)			(189		)			(192		)
Total medical care costs			8,602					7,182					14,774
Change in non-risk provider payables			(114		)			24					58
Payments for medical care costs related to:
Current period			6,883					5,885					13,304
Prior period			1,457					1,240					1,284
Total paid			8,340					7,125					14,588
Medical claims and benefits payable, ending balance			$	2,077				$	1,766				$	1,929
Benefit from prior period as a percentage of:
Balance at beginning of period			1.6		%			11.3		%			11.4		%
Premium revenue, trailing twelve months			0.2		%			1.3		%			1.2		%
Medical care costs, trailing twelve months			0.2		%			1.4		%			1.3		%
Days in claims payable, fee for service (1)			46					48					47

____________________
(1)	Claims payable includes primarily IBNP. Additionally, it includes certain fee-for-service payables reported in “Other” medical claims and benefits payable amounting to $157 million, $74 million and $94 million, as of June 30, 2017, June 30, 2016, and December 31, 2016, respectively.

MOLINA HEALTHCARE, INC. UNAUDITED NON-GAAP FINANCIAL MEASURES
We use 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 (in millions, except per diluted share amounts).
			Three Months Ended June 30,										Six Months Ended June 30,
			2017					2016					2017					2016
Net (loss) income			$	(230	)			$	33				$	(153	)			$	57
Adjustments:
Depreciation, and amortization of intangible assets and capitalized software			44					39					90					76
Interest expense			27					25					53					50
Income tax (benefit) expense			(84		)			47					(30		)			87
EBITDA			$	(243	)			$	144				$	(40	)			$	270

			Three Months Ended June 30,																				Six Months Ended June 30,
			2017										2016										2017										2016
			Amount					PerDilutedshare					Amount					PerDiluted share					Amount					PerDiluted share					Amount					PerDilutedshare
Net (loss) income			$	(230	)			$	(4.10	)			$	33				$	0.58				$	(153	)			$	(2.74	)			$	57				$	1.01
Adjustment:
Amortization of intangible assets			8					0.14					8					0.14					17					0.30					15					0.27
Income tax effect (1)			(3		)			(0.05		)			(3		)			(0.05		)			(6		)			(0.11		)			(5		)			(0.10		)
Amortization of intangible assets, net of tax effect			5					0.09					5					0.09					11					0.19					10					0.17
Adjusted net (loss) income			$	(225	)			$	(4.01	)			$	38				$	0.67				$	(142	)			$	(2.55	)			$	67				$	1.18
____________________
(1) Income tax effect of adjustment calculated at the blended federal and state statutory tax rate of 37%.
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 (loss) income (GAAP) less depreciation, and amortization of intangible assets and capitalized software, interest expense and income tax (benefit) expense. We believe that EBITDA is helpful in assessing our ability to meet the cash demands of our operating units. Adjusted net (loss) income: Net (loss) income (GAAP) less amortization of intangible assets, net of income tax effect calculated at the statutory tax rate of 37%. We believe that adjusted net (loss) income is helpful in assessing our financial performance exclusive of the non-cash impact of the amortization of purchased intangibles. Adjusted net (loss) income per diluted share: Adjusted net (loss) income divided by weighted average common shares outstanding on a fully diluted basis.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170802006305/en/

Molina Healthcare, Inc.

Juan José Orellana, 562-435-3666, ext. 111143

Investor Relations

Source: Molina Healthcare, Inc.