Introduces Full Year 2022 Earnings Guidance

LONG BEACH, Calif.--(BUSINESS WIRE)-- Molina Healthcare, Inc. (NYSE: MOH) (the “Company”) today reported fourth quarter 2021 GAAP earnings per diluted share of $1.74 and adjusted earnings per diluted share of $2.88. The Company also reported full year 2021 GAAP earnings per diluted share of $11.25 and adjusted earnings per diluted share of $13.54. Financial results are summarized below:

Full Year Highlights

• As of December 31, 2021, the Company served approximately 5.2 million members, an increase of 1.2 million members or 29% year over year.

• Premium revenue was approximately $26.9 billion for the full year 2021, an increase of 47% year over year.

• GAAP earnings were $11.25 per diluted share.

• Adjusted earnings were $13.54 per diluted share.

• The net effect of COVID decreased net income by approximately $3.50 per diluted share in the full year 2021.

• The Company issued its full year 2022 earnings guidance with premium revenue of approximately $28.5 billion and 26% adjusted EPS growth to no less than $17.00 per diluted share.

“We are very pleased with the quarter and our full year results,” said Joseph Zubretsky, President and CEO. “Our proven momentum enables us to continue building this valuable and exemplary health care franchise. We are proud to serve our members in this challenging time while sustaining profitable growth.”

Texas Acquisition

On January 3, 2022, the Company announced that it closed its acquisition of Cigna Corporation’s Texas Medicaid contracts on January 1, 2022.

Premium Revenue

Premium revenue was approximately $26.9 billion for the full year 2021, an increase of 47% compared to the full year 2020. The higher premium revenue reflects increased organic membership in all lines of business and the impact of acquisitions.

Net Income

Net income for the year ended December 31, 2021, was $11.25 per diluted share, compared to $11.23 per diluted share in the year ended December 31, 2020. Adjusted net income for the year ended December 31, 2021, was $13.54 per diluted share, compared to $10.67 per diluted share in the year ended December 31, 2020. The net effect of COVID decreased full year 2021 GAAP and adjusted EPS by $3.50 per diluted share, compared to $2.30 per diluted share a year earlier.

Medical Care Ratio

The consolidated MCR for the year ended December 31, 2021, was 88.3%, compared to 86.5% for 2020. The net effect of COVID increased the consolidated MCR by approximately 90 basis points and impacted all three lines of business. In the prior year, the net effect of COVID increased the consolidated MCR by approximately 50 basis points.

• The Medicaid MCR increased to 88.7% in 2021 compared to 87.4% in 2020 mainly due to portfolio mix, but remained squarely in line with the Company’s long-term target.

• The Medicare MCR increased to 87.2% in 2021 compared to 86.0% in 2020, driven primarily by the net effect of COVID and also in line with the Company’s long-term target.

• The Marketplace MCR increased to 86.9% in 2021 compared to 78.7% in 2020, primarily due to the higher net effect of COVID and non-COVID utilization by Special Enrollment Period members.

General and Administrative Expense Ratio

The G&A ratio for the full year 2021 was 7.4%, compared to 7.6% for the full year 2020. The adjusted G&A ratio was 7.2% for the full year 2021, compared to 7.6% for the full year 2020 reflecting the benefits of scale produced by the Company’s growth and continued disciplined cost management while making the appropriate investments to fuel growth.

Balance Sheet

Cash and investments at the parent company amounted to $348 million as of December 31, 2021, compared to $644 million as of December 31, 2020. The decrease was due to acquisitions and share repurchases partially offset by dividends received from regulated health plan subsidiaries. In November 2021, the Company closed on its private offering of $750 million principal amount of 3.875% senior notes due May 15, 2032. The Company used the proceeds to redeem the entire $700 million outstanding principal amount of its 5.375% senior notes due 2022.

Cash Flow

Operating cash flow for the year ended December 31, 2021, amounted to $2.1 billion and was higher compared to the year ended December 31, 2020, primarily due to growth in operations and the net impact of timing differences in government receivables and payables.

2022 Guidance

The Company expects its full year 2022 total revenue to be approximately $29.5 billion, an increase of approximately 6% from the full year 2021.

Premium revenue for the full year 2022 is expected to be approximately $28.5 billion, an increase of approximately 6% from the full year 2021.

The Company expects its full year 2022 adjusted earnings per share to be no less than $17.00 per share, or 26% growth over the prior year, with key metrics in line with the Company’s long-term targets.

Guidance reflects:

• Lower net effect of COVID;

• Continued strong performance in Medicare and Medicaid;

• The restoration of mid-single digit pretax margin in our Marketplace business; and

• The impact of regulatory headwinds created by the mid-year resumption of redeterminations and the carveout of pharmacy benefits in our California and Ohio contracts.

See the Reconciliation of Unaudited Non-GAAP Financial Measures at the end of this release.

Conference Call

Management is hosting a conference call and webcast to discuss Molina Healthcare’s fourth quarter and year-end 2021 results at 8:00 a.m. Eastern Time on Thursday, February 10, 2022. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 8807414. A telephonic replay of the conference call will be available through Thursday, February 24, 2022, by dialing (877) 344-7529 and entering confirmation number 9770251. 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. Through its locally operated health plans, Molina Healthcare served approximately 5.2 million members as of December 31, 2021. 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 regarding its 2022 guidance, as well as its plans and expectations regarding future developments. 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, 2020, which is on file with the SEC, and also in its Quarterly Report on Form 10-Q for the periods ended March 31, 2021, June 30, 2021, and September 30, 2021, which are on file with the SEC. Additional information will also be set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which the Company expects to file on or about February 14, 2022.

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 9, 2022, 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.

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:

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.

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Investor Contact: Joseph Krocheski, [email protected], 562-951-8382

Media Contact: Caroline Zubieta, [email protected], 562-951-1588

Source: Molina Healthcare, Inc.