Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | MOLINA HEALTHCARE INC |
Entity Central Index Key | 1,179,929 |
Document Type | 8-K |
Document Period End Date | Jul. 28, 2016 |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | |||
Cash and cash equivalents | $ 2,345 | $ 2,329 | $ 1,539 |
Investments | 1,968 | 1,801 | 1,019 |
Receivables | 1,012 | 597 | 596 |
Income taxes refundable | 23 | 13 | 0 |
Prepaid expenses and other current assets | 197 | 192 | 49 |
Derivative asset | 0 | 374 | 0 |
Total current assets | 5,545 | 5,306 | 3,203 |
Property, equipment, and capitalized software, net | 448 | 393 | 341 |
Deferred contract costs | 80 | 81 | 54 |
Intangible assets, net | 146 | 122 | 89 |
Goodwill | 611 | 519 | 272 |
Restricted investments | 107 | 109 | 102 |
Deferred income taxes | 0 | 18 | 15 |
Derivative asset | 226 | 0 | 329 |
Other assets | 39 | 28 | 30 |
Total Assets | 7,202 | 6,576 | 4,435 |
Current liabilities: | |||
Medical claims and benefits payable | 1,766 | 1,685 | 1,201 |
Amounts due government agencies | 1,238 | 729 | 527 |
Accounts payable and accrued liabilities | 537 | 362 | 242 |
Deferred revenue | 104 | 223 | 196 |
Income taxes payable | 0 | 9 | |
Current portion of long-term debt | 1 | 449 | 0 |
Derivative liability | 0 | 374 | 0 |
Total current liabilities | 3,646 | 3,822 | 2,175 |
Senior notes | 1,428 | 962 | 690 |
Lease financing obligations | 198 | 198 | 157 |
Deferred income taxes | 25 | 0 | |
Derivative liability | 226 | 0 | 329 |
Other long-term liabilities | 38 | 37 | 34 |
Total liabilities | 5,561 | 5,019 | 3,425 |
Stockholders’ equity: | |||
Common stock | 0 | 0 | 0 |
Preferred stock | 0 | 0 | 0 |
Additional paid-in capital | 822 | 803 | 396 |
Accumulated other comprehensive gain (loss) | 4 | (4) | (1) |
Retained earnings | 815 | 758 | 615 |
Total stockholders' equity | 1,641 | 1,557 | 1,010 |
Total liabilities and stockholders' equity | $ 7,202 | $ 6,576 | $ 4,435 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | |||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 |
Common stock, shares outstanding | 57,000,000 | 56,000,000 | 50,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||||
Revenue: | |||||||||||||
Premium revenue | $ 4,029 | $ 3,304 | $ 8,024 | $ 6,275 | $ 13,241 | $ 9,023 | $ 6,179 | ||||||
Service revenue | 135 | 47 | 275 | 99 | 253 | 210 | 205 | ||||||
Premium tax revenue | 109 | 95 | 218 | 190 | 397 | 294 | 172 | ||||||
Health insurer fee revenue | 76 | 74 | 166 | 122 | 264 | 120 | 0 | ||||||
Investment income | 8 | 4 | 16 | 7 | 18 | 8 | 7 | ||||||
Other revenue | 2 | 1 | 3 | 3 | 5 | 12 | 26 | ||||||
Total revenue | 4,359 | [1] | 3,525 | [1] | 8,702 | [1] | 6,696 | [1] | 14,178 | 9,667 | [2] | 6,589 | [2] |
Operating expenses: | |||||||||||||
Medical care costs | 3,594 | 2,929 | 7,182 | 5,565 | 11,794 | 8,076 | 5,380 | ||||||
Cost of service revenue | 116 | 33 | 243 | 69 | 193 | 157 | 161 | ||||||
General and administrative expenses | 351 | 287 | 691 | 543 | 1,146 | 765 | 666 | ||||||
Premium tax expenses | 109 | 95 | 218 | 190 | 397 | 294 | 172 | ||||||
Health insurer fee expenses | 50 | 40 | 108 | 81 | 157 | 89 | 0 | ||||||
Depreciation and amortization | 34 | 25 | 66 | 50 | 104 | 93 | 73 | ||||||
Total operating expenses | 4,254 | 3,409 | 8,508 | 6,498 | 13,791 | 9,474 | 6,452 | ||||||
Operating income | 105 | 116 | 194 | 198 | 387 | 193 | 137 | ||||||
Interest expense | 25 | 15 | 50 | 30 | 66 | 57 | 52 | ||||||
Other (income) expense, net | (1) | 1 | 4 | ||||||||||
Total other expenses, net | (25) | (15) | (50) | (30) | 65 | 58 | 56 | ||||||
Income before income tax expense | 80 | 101 | 144 | 168 | 322 | 135 | 81 | ||||||
Income tax expense | 47 | 62 | 87 | 101 | 179 | 73 | 36 | ||||||
Income from continuing operations | 39 | 143 | 62 | 45 | |||||||||
Income from discontinued operations, net of tax | 0 | 0 | 8 | ||||||||||
Net income | $ 33 | $ 39 | $ 57 | $ 67 | $ 143 | $ 62 | $ 53 | ||||||
Earnings Per Share [Abstract] | |||||||||||||
Income from continuing operations (in dollars per share) | $ 2.75 | $ 1.34 | $ 0.98 | ||||||||||
(Loss) income from discontinued operations (in dollars per share) | 0 | (0.01) | 0.18 | ||||||||||
Basic net income per share (in dollars per share) | $ 0.58 | [3] | $ 0.78 | [3],[4] | $ 1.02 | [3] | $ 1.36 | [3] | 2.75 | 1.33 | 1.16 | ||
Earnings Per Share, Diluted [Abstract] | |||||||||||||
Income from continuing operations (in dollars per share) | 2.58 | 1.30 | 0.96 | ||||||||||
(Loss) income from discontinued operations (in dollars per share) | 0 | (0.01) | 0.17 | ||||||||||
Diluted net income per share (in dollars per share) | $ 0.58 | [3] | $ 0.72 | [3],[4] | $ 1.01 | [3] | $ 1.29 | [3] | $ 2.58 | $ 1.29 | $ 1.13 | ||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||||
Basic (in shares) | 55 | 50 | 55 | 50 | 52 | 47 | 46 | ||||||
Diluted (in shares) | 55 | 54 | 56 | 52 | 56 | 48 | 47 | ||||||
[1] | Total revenue consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. | ||||||||||||
[2] | Total revenues consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. | ||||||||||||
[3] | Source data for calculations in thousands. | ||||||||||||
[4] | The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the year ended December 31, 2014, the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock. |
CONSOLIDATED STATEMENTS OF INC5
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Income (loss) from discontinued operations, tax expense (benefit) | $ 0 | $ 0 | $ (10) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | ||||||||||||||
Net income | $ 33 | $ 30 | $ 46 | $ 39 | $ 28 | $ 34 | $ 16 | $ 8 | $ 4 | $ 57 | $ 67 | $ 143 | $ 62 | $ 53 |
Other comprehensive income (loss): | ||||||||||||||
Unrealized investment gain (loss) | 4 | (3) | 13 | (1) | (5) | 0 | (1) | |||||||
Less: effect of income taxes | 2 | (1) | 5 | 0 | (2) | 0 | 0 | |||||||
Other comprehensive income (loss), net of tax | 2 | (2) | 8 | (1) | (3) | 0 | (1) | |||||||
Comprehensive income | $ 35 | $ 37 | $ 65 | $ 66 | $ 140 | $ 62 | $ 52 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Operating activities: | |||||||
Net income | $ 57 | $ 67 | $ 143 | $ 62 | $ 53 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 89 | 62 | 126 | 134 | [1] | 94 | [1] |
Deferred income taxes | 39 | 7 | (7) | (2) | (32) | ||
Share-based compensation | 16 | 9 | 23 | 22 | 29 | ||
Amortization of convertible senior notes and lease financing obligations | 15 | 15 | 30 | 27 | 23 | ||
Other, net | 11 | 9 | 19 | 7 | 18 | ||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||
Receivables | (415) | (35) | 56 | (298) | (149) | ||
Prepaid expenses and other current assets | (143) | (97) | (35) | (20) | (23) | ||
Medical claims and benefits payable | 82 | 292 | 482 | 531 | 175 | ||
Amounts due government agencies | 509 | 298 | 202 | 470 | 28 | ||
Accounts payable and accrued liabilities | 147 | 158 | 84 | 11 | 33 | ||
Deferred revenue | (119) | (138) | 24 | 74 | (20) | ||
Income taxes | (10) | 1 | (22) | 42 | (39) | ||
Net cash provided by operating activities | 278 | 648 | 1,125 | 1,060 | 190 | ||
Investing activities: | |||||||
Purchases of investments | (974) | (993) | (1,923) | (953) | (770) | ||
Proceeds from sales and maturities of investments | 812 | 541 | 1,126 | 633 | 400 | ||
Purchases of equipment | (102) | (66) | (132) | (115) | (98) | ||
Change in restricted investments | 5 | (14) | (6) | (34) | (19) | ||
Net cash paid in business combinations | (8) | (8) | (450) | (44) | (62) | ||
Other, net | (6) | (17) | (35) | (23) | 6 | ||
Net cash used in investing activities | (273) | (557) | (1,420) | (536) | (543) | ||
Financing activities: | |||||||
Proceeds from senior notes offerings, net of issuance costs | 689 | 123 | 538 | ||||
Proceeds from common stock offering, net of issuance costs | 0 | 373 | 373 | 0 | 0 | ||
Proceeds from sale-leaseback transactions | 0 | 0 | 159 | ||||
Purchase of call option | 0 | 0 | (149) | ||||
Proceeds from issuance of warrants | 0 | 0 | 75 | ||||
Contingent consideration liabilities settled | 0 | (50) | 0 | ||||
Treasury stock purchases | 0 | 0 | (53) | ||||
Principal payments on term loan | 0 | 0 | (48) | ||||
Repayment of amount borrowed under credit facility | 0 | 0 | (40) | ||||
Proceeds from employee stock plans | 10 | 8 | 18 | 14 | 9 | ||
Principal payments on convertible senior notes | 0 | (10) | 0 | ||||
Other, net | 1 | 3 | 5 | 2 | 2 | ||
Net cash provided by financing activities | 11 | 384 | 1,085 | 79 | 493 | ||
Net increase in cash and cash equivalents | 16 | 475 | 790 | 603 | 140 | ||
Cash and cash equivalents at beginning of period | 2,329 | 1,539 | 1,539 | 936 | 796 | ||
Cash and cash equivalents at end of period | 2,345 | 2,014 | 2,329 | 1,539 | 936 | ||
Supplemental cash flow information: | |||||||
Income taxes | 197 | 30 | 95 | ||||
Interest | 38 | 29 | 35 | ||||
Schedule of non-cash investing and financing activities: | |||||||
Senior notes exchange transaction | 0 | 177 | 0 | ||||
Retirement of treasury stock | 0 | 0 | 56 | ||||
Increase in non-cash lease financing obligation - related party | 0 | 14 | 27 | ||||
Common stock used for stock-based compensation | (7) | (9) | (15) | (9) | (8) | ||
Details of business combinations: | |||||||
Fair value of assets acquired | (131) | 0 | (389) | (52) | (122) | ||
Fair value of liabilities assumed | 41 | 0 | 0 | ||||
Fair value of contingent consideration liabilities incurred | 0 | 0 | 60 | ||||
Payable to seller | 21 | (8) | 0 | 8 | 0 | ||
Amounts advanced for acquisitions | 102 | 0 | (102) | 0 | 0 | ||
Net cash paid in business combinations | (8) | (8) | (450) | (44) | (62) | ||
Details of change in fair value of derivatives, net: | |||||||
Change in fair value of derivatives, net | 0 | 0 | 0 | 0 | (4) | ||
Gain on 1.125% Notes Call Option | |||||||
Details of change in fair value of derivatives, net: | |||||||
Change in fair value of derivatives, net | (148) | (179) | 45 | 143 | 37 | ||
Loss on 1.125% Notes Conversion Option | |||||||
Details of change in fair value of derivatives, net: | |||||||
Change in fair value of derivatives, net | $ 148 | $ 179 | (45) | (143) | (37) | ||
Loss on 1.125% Warrants | |||||||
Details of change in fair value of derivatives, net: | |||||||
Change in fair value of derivatives, net | $ 0 | $ 0 | $ (4) | ||||
[1] | Depreciation and amortization reported in accompanying consolidated statements of cash flows. |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock |
Beginning Balance, shares at Dec. 31, 2012 | 47 | 47 | ||||
Beginning Balance at Dec. 31, 2012 | $ 782 | $ 0 | $ 285 | $ 0 | $ 500 | $ (3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 53 | 53 | ||||
Other comprehensive income, net of tax | (1) | (1) | ||||
Purchase of treasury stock, shares | (2) | |||||
Purchase of treasury stock | (53) | (53) | ||||
Retirement of treasury stock | 0 | (56) | 56 | |||
Issuance of warrants | 79 | 79 | ||||
Number of common stock issued (in shares) | 1 | |||||
Share-based compensation | 31 | $ 0 | 31 | |||
Tax benefit from share-based compensation | $ 2 | 2 | ||||
Ending Balance, shares at Dec. 31, 2013 | 46 | 46 | ||||
Ending Balance at Dec. 31, 2013 | $ 893 | $ 0 | 341 | (1) | 553 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 62 | 62 | ||||
Other comprehensive income, net of tax | 0 | |||||
Shares issued in connection with conversions, shares | 2 | |||||
Convertible senior notes transactions, including issuance costs | 22 | $ 0 | 22 | |||
Number of common stock issued (in shares) | 2 | |||||
Share-based compensation | 30 | $ 0 | 30 | |||
Tax benefit from share-based compensation | $ 3 | 3 | ||||
Ending Balance, shares at Dec. 31, 2014 | 49 | 50 | ||||
Ending Balance at Dec. 31, 2014 | $ 1,010 | $ 0 | 396 | (1) | 615 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 28 | |||||
Ending Balance, shares at Mar. 31, 2015 | 49 | |||||
Beginning Balance, shares at Dec. 31, 2014 | 49 | 50 | ||||
Beginning Balance at Dec. 31, 2014 | $ 1,010 | $ 0 | 396 | (1) | 615 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 143 | 143 | ||||
Other comprehensive income, net of tax | (3) | (3) | ||||
Common stock offering transaction, including issuance costs, shares | 6 | |||||
Common stock offering transaction, including issuance costs | 373 | 373 | ||||
Number of common stock issued (in shares) | 0 | |||||
Share-based compensation | 26 | $ 0 | 26 | |||
Tax benefit from share-based compensation | $ 8 | 8 | ||||
Ending Balance, shares at Dec. 31, 2015 | 55 | 56 | ||||
Ending Balance at Dec. 31, 2015 | $ 1,557 | $ 0 | $ 803 | $ (4) | $ 758 | $ 0 |
Basis of Presentation
Basis of Presentation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Basis of Presentation | Basis of Presentation Organization and Operations Molina Healthcare, Inc. provides quality health care to people receiving government assistance. We offer cost-effective Medicaid-related solutions to meet the health care needs of low-income families and individuals, and to assist government agencies in their administration of the Medicaid program. We have three reportable segments. These segments include our Health Plans and Molina Medicaid Solutions segments, which comprise the vast majority of our operations, and our Other segment. As of December 31, 2015, we changed our reporting structure as a result of the Pathways acquisition in November 2015, which is reported in Other. All prior periods reported conform to this presentation. Our Health Plans segment consists of health plans in 11 states and the Commonwealth of Puerto Rico, and includes our direct delivery business. As of June 30, 2016 , these health plans served 4.2 million members eligible for Medicaid, Medicare, and other government-sponsored health care programs for low-income families and individuals. Additionally, we serve Health Insurance Marketplace (Marketplace) members, most of whom receive government premium subsidies. The health plans are operated by our respective wholly owned subsidiaries in those states, each of which is licensed as a health maintenance organization (HMO). Our direct delivery business consists primarily of the operation of primary care clinics in several states in which we operate. Our Molina Medicaid Solutions segment provides business processing and information technology development and administrative services to Medicaid agencies in Idaho, Louisiana, Maine, New Jersey, West Virginia, and the U.S. Virgin Islands, and drug rebate administration services in Florida. Our Other segment includes businesses, such as our Pathways behavioral health and social services provider, that do not meet the quantitative thresholds for a reportable segment as defined by U.S. generally accepted accounting principles (GAAP), as well as corporate amounts not allocated to other reportable segments. Market Updates - Health Plans Illinois. On January 1, 2016, our Illinois health plan closed on its acquisition of the Medicaid membership, and certain assets related to the Medicaid business of, Accountable Care Chicago, LLC, also known as MyCare Chicago and Loyola Physician Partners, LLC. See Note 4 , " Business Combinations ," for further information. On March 1, 2016, our Illinois health plan closed on its acquisition of the Medicaid membership, and certain assets related to the Medicaid business, of Better Health Network, LLC. See Note 4 , " Business Combinations ," for further information. Michigan. On January 1, 2016, our Michigan health plan closed on its acquisition of the Medicaid and MIChild membership, and certain Medicaid and MIChild assets, of HAP Midwest Health Plan, Inc. See Note 4 , " Business Combinations ," for further information. New York. On April 19, 2016, we entered into an agreement with Universal American Corp. to acquire all outstanding equity interests of Today's Options of New York, Inc., which operates the Total Care Medicaid plan. Subject to regulatory approvals and the satisfaction of other closing conditions, we expect the transaction to close in the second half of 2016. Washington. On January 1, 2016, our Washington health plan closed on its acquisition of the Medicaid contracts, and certain assets related to the operation of the Medicaid business, of Columbia United Providers, Inc. See Note 4 , " Business Combinations ," for further information. Consolidation and Interim Financial Information The consolidated financial statements include the accounts of Molina Healthcare, Inc., its subsidiaries, and variable interest entities (VIEs) in which Molina Healthcare, Inc. is considered to be the primary beneficiary. Such VIEs are insignificant to our consolidated financial position and results of operations. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the interim periods presented have been included; such adjustments consist of normal recurring adjustments. All significant intercompany balances and transactions have been eliminated. The consolidated results of operations for the current interim period are not necessarily indicative of the results for the entire year ending December 31, 2016 . The unaudited consolidated interim financial statements have been prepared under the assumption that users of the interim financial data have either read or have access to our audited consolidated financial statements for the fiscal year ended December 31, 2015 . Accordingly, certain disclosures that would substantially duplicate the disclosures contained in the December 31, 2015 audited consolidated financial statements have been omitted. These unaudited consolidated interim financial statements should be read in conjunction with our December 31, 2015 audited consolidated financial statements. | Basis of Presentation Organization and Operations Molina Healthcare, Inc. provides quality health care to people receiving government assistance. We offer cost-effective Medicaid-related solutions to meet the health care needs of low-income families and individuals, and to assist government agencies in their administration of the Medicaid program. We have three reportable segments. These segments include our Health Plans and Molina Medicaid Solutions segments, which comprise the vast majority of our operations, and our Other segment. As of December 31, 2015, we changed our reporting structure as a result of the Pathways acquisition in November 2015, which is reported in Other. See Note 20 , " Segment Information ," for further details. Our Health Plans segment consists of health plans in 11 states and the Commonwealth of Puerto Rico, and includes our direct delivery business. As of December 31, 2015 , these health plans served over 3.5 million members eligible for Medicaid, Medicare, and other government-sponsored health care programs for low-income families and individuals. Additionally, we serve Health Insurance Marketplace members, most of whom receive government premium subsidies. The health plans are operated by our respective wholly owned subsidiaries in those states, each of which is licensed as a health maintenance organization (HMO). Our direct delivery business consists primarily of the operation of primary care clinics in several states in which we operate. Our health plans’ state Medicaid contracts generally have terms of three to four years. These contracts typically contain renewal options exercisable by the state Medicaid agency, and allow either the state or the health plan to terminate the contract with or without cause. Our health plan subsidiaries have generally been successful in retaining their contracts, but such contracts are subject to risk of loss when a state issues a new request for proposals (RFP) open to competitive bidding by other health plans. If one of our health plans is not a successful responsive bidder to a state RFP, its contract may be subject to non-renewal. In addition to contract renewal, our state Medicaid contracts may be periodically amended to include or exclude certain health benefits (such as pharmacy services, behavioral health services, or long-term care services); populations such as the aged, blind or disabled (ABD); and regions or service areas. Our Molina Medicaid Solutions segment provides business processing and information technology development and administrative services to Medicaid agencies in Idaho, Louisiana, Maine, New Jersey, West Virginia, and the U.S. Virgin Islands, and drug rebate administration services in Florida. Our Other segment includes other businesses, such as our Pathways behavioral health and social services provider, that do not meet the quantitative thresholds for a reportable segment as defined by U.S. generally accepted accounting principles (GAAP), as well as corporate amounts not allocated to other reportable segments. Market Update—Other Pathways. On November 1, 2015, we acquired all of the outstanding ownership interests in Pathways Health and Community Support LLC (Pathways), formerly known as Providence Human Services, LLC. Pathways is one of the largest national providers of accessible, outcome-based behavioral/mental health and social services with operations in 23 states and the District of Columbia. See Note 4 , " Business Combinations ," for further information. Market Updates—Health Plans Medicare-Medicaid Plans . To coordinate care for those who qualify to receive both Medicare and Medicaid services (the "dual eligible"), and to deliver services to these individuals in a more financially efficient manner, some states have undertaken demonstration programs to integrate Medicare and Medicaid services for dual eligible individuals. The health plans participating in such demonstrations are referred to as Medicare-Medicaid Plans (MMPs). We operate MMPs in six states. Our MMPs in California, Illinois, and Ohio offered coverage beginning in 2014; our MMPs in South Carolina and Texas offered coverage beginning in the first quarter of 2015; and our MMP in Michigan offered coverage beginning in the second quarter of 2015. At December 31, 2015 , our membership included approximately 51,000 integrated MMP members. Florida. On November 1, 2015, our Florida health plan closed on its acquisition of the Medicaid contracts, and certain assets related to operation of the Medicaid business, of Integral Health Plan, Inc. See Note 4 , " Business Combinations ," for further information. On August 1, 2015, our Florida health plan closed on its acquisition of the Medicaid contracts, and certain assets related to the operation of the Medicaid business, of Preferred Medical Plan, Inc. See Note 4 , " Business Combinations ," for further information. Illinois. On January 1, 2016, our Illinois health plan closed on its acquisition of the Medicaid membership, and certain assets related to the Medicaid business of, Accountable Care Chicago, LLC, also known as MyCare Chicago. We assumed approximately 58,000 Medicaid members in this acquisition. On January 1, 2016, our Illinois health plan closed on its acquisition of the Medicaid membership, and certain assets related to the Medicaid business, of Loyola Physician Partners, LLC. We assumed approximately 21,000 Medicaid members in this acquisition. On November 30, 2015, we announced that our Illinois health plan entered into an agreement to assume the membership and certain Medicaid assets of Better Health Network, LLC (Better Health). As of November 30, 2015, Better Health served approximately 40,000 members in the Medicaid Family Health program in Cook County. Subject to regulatory approvals and the satisfaction of other closing conditions, we expect the transaction to close during the first half of 2016. Michigan. On January 1, 2016, our Michigan health plan closed on its acquisition of the Medicaid and MIChild membership, and certain Medicaid and MIChild assets, of HAP Midwest Health Plan, Inc. We assumed approximately 81,000 Medicaid and MIChild members in this acquisition. In October 2015, the Michigan Department of Health and Human Services announced that Molina Healthcare of Michigan was recommended to serve the state's Medicaid members under Michigan's Comprehensive Health Plan, which commenced on January 1, 2016. The new contract has a five -year term with three one -year extensions, and covers Regions 2 through 6, and 8 through 10 of the state, representing an expansion into 18 additional counties compared with the previous Michigan Medicaid contract. On September 1, 2015, our Michigan health plan closed on its acquisition of the Medicaid and MIChild contracts, and certain provider agreements, of HealthPlus of Michigan and its subsidiary, HealthPlus Partners, Inc. See Note 4 , " Business Combinations ," for further information. Puerto Rico. Effective April 1, 2015, our Puerto Rico health plan served its first members. As of December 31, 2015 , our Puerto Rico plan enrollment amounted to approximately 348,000 members. Washington. In November 2015, our Washington health plan was selected by the Washington State Health Care Authority (HCA) to negotiate and enter into managed care contracts for the Southwest region of the state's Apple Health Fully Integrated Managed Care Program. Molina Healthcare of Washington was selected by HCA pursuant to the request for proposal HCA issued in August 2015. The start date for the new contract is scheduled for April 1, 2016. On January 1, 2016, our Washington health plan closed on its acquisition of the Medicaid membership and certain Medicaid assets of Columbia United Providers, Inc. We assumed approximately 57,000 Medicaid members in this acquisition. Market Update—Molina Medicaid Solutions New Jersey. On April 9, 2015, the state of New Jersey announced its selection of Molina Medicaid Solutions to design and operate that state's new Medicaid management information system (MMIS). The new contract was effective May 1, 2015, and has a term of 10 years with three one -year renewal options. Molina Medicaid Solutions was the state's incumbent MMIS provider, and was awarded the new contract as a result of Molina Medicaid Solutions' submission in response to the state of New Jersey's request for proposals. Consolidation The consolidated financial statements include the accounts of Molina Healthcare, Inc., its subsidiaries, and variable interest entities in which Molina Healthcare, Inc. is considered to be the primary beneficiary. See Note 18 , " Variable Interest Entities (VIEs) ," for more information regarding these variable interest entities. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the periods presented have been included; such adjustments consist of normal recurring adjustments. All significant inter-company balances and transactions have been eliminated in consolidation. Financial information related to subsidiaries acquired during any year is included only for periods subsequent to their acquisition. Presentation and Reclassifications Beginning in 2013, after our Medicaid contract with the state of Missouri expired, we have reported the results relating to the Missouri health plan as discontinued operations for all periods presented. Additionally, we abandoned our equity interests in the Missouri health plan during the second quarter of 2013, resulting in the recognition of a tax benefit of $10 million , which is also included in discontinued operations in the consolidated statements of income. The Missouri health plan's premium revenues were insignificant for all periods presented. We have reclassified certain amounts in the 2014 consolidated balance sheet to conform to the 2015 presentation relating to the presentation of deferred taxes and debt issuance costs. Both reclassifications are a result of recently adopted accounting pronouncements. See Note 2 , " Significant Accounting Policies ," for further information. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Principal areas requiring the use of estimates include: • The determination of medical claims and benefits payable of our Health Plans segment; • Health plan contractual provisions that may limit revenue recognition based upon the costs incurred or the profits realized under a specific contract; • Health plan quality incentives that allow us to recognize incremental revenue if certain quality standards are met; • Molina Medicaid Solutions segment revenue and cost recognition; • Settlements under risk or savings sharing programs; • The assessment of deferred contract costs, deferred revenue, long-lived and intangible assets, and goodwill for impairment; • The determination of professional and general liability claims, and reserves for potential absorption of claims unpaid by insolvent providers; • The determination of reserves for the outcome of litigation; • The determination of valuation allowances for deferred tax assets; and • The determination of unrecognized tax benefits. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Significant Accounting Policies | Significant Accounting Policies Revenue Recognition – Health Plans Segment Premium revenue is fixed in advance of the periods covered and except as described below, is not generally subject to significant accounting estimates. Premium revenues are recognized in the month that members are entitled to receive health care services, and premiums collected in advance are deferred. Certain components of premium revenue are subject to accounting estimates and fall into the following categories: Contractual Provisions That May Adjust or Limit Revenue or Profit Medicaid Medical Cost Floors (Minimums), Medical Cost Corridors, and Administrative Cost Ceilings (Maximums): A portion of our premium revenue may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded a liability under the terms of such contract provisions of $326 million and $214 million at June 30, 2016 and December 31, 2015 , respectively, to amounts due government agencies. Approximately $297 million and $208 million of the liability accrued at June 30, 2016 and December 31, 2015 , respectively, relates to our participation in Medicaid Expansion programs. In certain circumstances, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. We recorded receivables of $1 million and $3 million at June 30, 2016 and December 31, 2015 , respectively, relating to such provisions. Profit Sharing and Profit Ceiling: Our contracts with certain states contain profit-sharing or profit ceiling provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. Under these provisions, we recorded a liability of $1 million and $10 million at June 30, 2016 and December 31, 2015 , respectively, for profit in excess of the amount we are allowed to retain. Retroactive Premium Adjustments: The state Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we must adjust our premium revenue in the period in which we learn of the adjustment, rather than in the months of service to which the retroactive adjustment applies. In the first quarter of 2016 our Florida health plan recorded a retroactive increase to Medicaid premium revenue of approximately $18 million , relating to dates of service prior to 2016. Cost Plus Retroactive Premium Adjustments: In New Mexico, when members are retroactively enrolled into our health plan, we earn revenue only to the extent of the actual medical costs incurred by us for services provided during those retroactive periods, plus a small percentage of that medical cost for administration and profit. This arrangement first became effective July 1, 2014 (retroactive to January 1, 2014). We are paid normal monthly capitation rates for the retroactive eligibility periods, and the difference between those capitation rates and the amounts due to us on a cost plus basis are periodically settled with the state. To date, no such settlement has been made. During the years ended December 31, 2014 and 2015, our New Mexico contract was not specific as to the definition of retroactive membership, and the amount we owe the state (or that the state owes us) for the difference between capitation received and amounts due to us under the cost plus arrangement during those periods varies widely depending upon the definition of retroactive membership. Although we believe that the amount we have recorded as a liability for this matter is consistent with the state’s expectations, we cannot be certain that the state will not seek to recover an amount in excess of our recorded liability. Medicare Risk Adjustment: Our Medicare premiums are subject to retroactive increase or decrease based on the health status of our Medicare members (as measured by member risk score). We estimate our members' risk scores and the related amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health status, risk scores and federal Centers for Medicare and Medicaid Services (CMS) practices. Based on our estimates, we have recorded a net receivable of $19 million and a net payable of $4 million for anticipated Medicare risk adjustment premiums at June 30, 2016 and December 31, 2015 , respectively. Marketplace Premium Stabilization Programs: The Affordable Care Act (ACA) established Marketplace premium stabilization programs effective January 1, 2014. These programs, commonly referred to as the "3R's," include a permanent risk adjustment program, a transitional reinsurance program, and a temporary risk corridor program. We record receivables or payables related to the 3R programs and the Minimum MLR when the amounts are reasonably estimable as described below, and, for receivables, collection is reasonably assured. Our receivables (payables) for each of these programs, as of the dates indicated, were as follows: June 30, 2016 December 31, Current Benefit Year Prior Benefit Years Total (In millions) Risk adjustment $ (220 ) $ (254 ) $ (474 ) $ (214 ) Reinsurance 57 24 81 36 Risk corridor (9 ) (3 ) (12 ) (10 ) Minimum MLR (17 ) (2 ) (19 ) (3 ) • Risk adjustment: Under this permanent program, our health plans' composite risk scores are compared to the overall average risk score for the relevant state and market pool. Generally, our health plans will pay into the pool if their composite risk scores are below the average risk score, and will receive funds from the pool if their composite risk scores are above the average risk score. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income. On June 30, 2016, CMS released the final update on risk adjustment and reinsurance payments for the 2015 benefit year, and we adjusted our accruals accordingly. • Reinsurance: This program is designed to provide reimbursement to insurers for high cost members. Our health plans pay an annual contribution on a per-member basis, and are eligible for recoveries if claims for individual members exceed a specified threshold, up to a maximum amount. This three-year program will end on December 31, 2016. We recognize the assessments to fund the transitional reinsurance program as a reduction to premium revenue in our consolidated statements of income. We recognize recoveries under the reinsurance program as a reduction to medical care costs in our consolidated statements of income. • Risk corridor: This program is intended to limit gains and losses of insurers by comparing allowable costs to a target amount as defined by the CMS. Variances from the target amount exceeding certain thresholds may result in amounts due to or receivables due from CMS. This three-year program will end on December 31, 2016. Due to uncertainties as to the amount of federal funding available to support the risk corridor program, we do not recognize amounts receivable under this program. All liabilities are recognized as incurred. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk corridor program as an adjustment to premium revenue in our consolidated statements of income. Additionally, the ACA established a minimum annual medical loss ratio (Minimum MLR) of 80% for the Marketplace. The medical loss ratio represents medical costs as a percentage of premium revenue. What constitutes medical costs and premium revenue are specifically defined by federal regulations. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. Each of the 3R programs is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. Quality Incentives At several of our health plans, revenue ranging from approximately 1% to 3% of certain health plan premiums is earned only if certain performance measures are met. During the second quarter, we were informed by the Texas Department of Health and Human Services that it will not recoup any quality revenue for calendar years 2014, 2015, and 2016. Therefore, we recognized previously deferred quality revenue amounting to approximately $51 million in the second quarter of 2016. Of the $51 million adjustment, $44 million related to 2015 and 2014 dates of service, and $7 million related to the first quarter of 2016. The following table quantifies the quality incentive premium revenue recognized for the periods presented, including the amounts earned in the periods presented and prior periods. Although the reasonably possible effects of a change in estimate related to quality incentive premium revenue as of June 30, 2016 are not known, we have no reason to believe that the adjustments to prior years noted below are not indicative of the potential future changes in our estimates as of June 30, 2016 , other than the Texas quality revenue recognized in the second quarter of 2016 described above. Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions) Maximum available quality incentive premium - current period $ 41 $ 28 $ 81 $ 58 Amount of quality incentive premium revenue recognized in current period: Earned current period $ 36 $ 11 $ 54 $ 21 Earned prior periods 49 11 54 11 Total $ 85 $ 22 $ 108 32 Quality incentive premium revenue recognized as a percentage of total premium revenue 2.1 % 0.7 % 1.3 % 0.5 % Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate, which is generally greater than the U.S. federal statutory rate primarily because of state taxes, nondeductible expenses such as the Health Insurer Fee (HIF), certain compensation, and other general and administrative expenses. The effective tax rate may be subject to fluctuations during the year, particularly as a result of the level of pretax earnings, and also as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers. Recent Accounting Pronouncements Revenue Recognition. In May 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-12, Revenue from Contracts with Customers (Topic 606). The amendments, which address transition, collectibility, non-cash consideration and the presentation of sales and other similar taxes, do not change the core principles of ASU 2014-09, but rather address implementation issues and are intended to result in more consistent application. We intend to adopt this standard on January 1, 2018. We are evaluating the potential effects of the adoption to our financial statements. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing , which amends certain aspects of ASC 606, Revenue from Contracts with Customers . ASU 2016-10 amends step two of the new revenue standard’s five-step model to include guidance on immaterial promised goods or services, shipping and handling activities and identifying when promises represent performance obligations. ASU 2016-10 also provides guidance related to licensing such as, but not limited to, sales-based and usage-based royalties and renewals of license that provide a right to use intellectual property. We intend to adopt this standard on January 1, 2018. We are evaluating the potential effects of the adoption to our financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers - Principal vs. Agent Considerations , which amends the principal–versus–agent implementation guidance in ASC 606. ASU 2016-08 clarifies that an entity should evaluate whether it is the principal or agent for each specified good or service promised in a contract with a customer as defined in ASC 606. The entity must first identify each specified good or service to be provided to the customer and then assess whether it controls each specified good or service. The ASU also removed two of the five indicators used in evaluating control under the old guidance and reframes the remaining three indicators. We intend to adopt this standard on January 1, 2018. We are evaluating the potential effects of the adoption to our financial statements. Credit Losses. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments , which changes how companies measure credit losses on most financial instruments measured at amortized cost, such as loans, receivables and held-to-maturity debt securities. Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. ASU 2016-13 is effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. We are evaluating the potential effects of the adoption to our financial statements. Stock Compensation. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation , which simplifies several aspects of accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax and classification in the statement of cash flows. ASU 2016-09 is effective for fiscal periods beginning after December 15, 2016 and must be adopted using the modified retrospective approach except for classification in the statement of cash flows, which must be adopted using either the prospective or retrospective approach. Early adoption is permitted. We are evaluating the potential effects of the adoption to our financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (SEC) did not have, or are not believed by management to have, a material impact on our present or future consolidated financial statements. | Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments that are both readily convertible into known amounts of cash and have a maturity of three months or less on the date of purchase. Investments Our investments are principally held in debt securities, which are grouped into two separate categories for accounting and reporting purposes: available-for-sale securities, and held-to-maturity securities. Available-for-sale securities are recorded at fair value and unrealized gains and losses, if any, are recorded in stockholders’ equity as other comprehensive income, net of applicable income taxes. Held-to-maturity securities are recorded at amortized cost, which approximates fair value, and unrealized holding gains or losses are not generally recognized. Realized gains and losses and unrealized losses judged to be other than temporary with respect to available-for-sale and held-to-maturity securities are included in the determination of net income. The cost of securities sold is determined using the specific-identification method. Our investment policy requires that all of our investments have final maturities of 10 years or less (excluding variable rate securities where interest rates may be periodically reset), and that the average maturity be three years or less. Investments and restricted investments are subject to interest rate risk and will decrease in value if market rates increase. Declines in interest rates over time will reduce our investment income. In general, our available-for-sale securities are classified as current assets without regard to the securities’ contractual maturity dates because they may be readily liquidated. We monitor our investments for other-than-temporary impairment. For comprehensive discussions of the fair value and classification of our current and non-current investments, see Note 5 , " Fair Value Measurements ," Note 6 , " Investments ," and Note 10 , " Restricted Investments ." Receivables Receivables are readily determinable and because our creditors are primarily state governments, our allowance for doubtful accounts is immaterial. Any amounts determined to be uncollectible are charged to expense when such determination is made. See Note 7 , " Receivables ." Property, Equipment, and Capitalized Software Property and equipment are stated at historical cost. Replacements and major improvements are capitalized, and repairs and maintenance are charged to expense as incurred. Furniture and equipment are generally depreciated using the straight-line method over estimated useful lives ranging from three to seven years. Software developed for internal use is capitalized. Software is generally amortized over its estimated useful life of three years. Leasehold improvements are amortized over the term of the lease, or over their useful lives from five to 10 years, whichever is shorter. Buildings are depreciated over their estimated useful lives of 31.5 to 40 years. See Note 8 , " Property, Equipment, and Capitalized Software ." As discussed below, the costs associated with certain of our Molina Medicaid Solutions segment equipment and software are capitalized and recorded as deferred contract costs. Such costs are amortized on a straight-line basis over the shorter of the useful life or the contract period. Depreciation and Amortization Depreciation and amortization related to our Health Plans segment is all recorded in "Depreciation and amortization" in the consolidated statements of income. Depreciation and amortization related to our Molina Medicaid Solutions segment is recorded within three different headings in the consolidated statements of income as follows: • Amortization of purchased intangibles relating to customer relationships is reported as amortization within the heading "Depreciation and amortization;" • Amortization of purchased intangibles relating to contract backlog is recorded as a reduction of "Service revenue;" and • Amortization of capitalized software is recorded within the heading "Cost of service revenue." The following table presents all depreciation and amortization recorded in our consolidated statements of income, regardless of whether the item appears as depreciation and amortization, a reduction of revenue, or as cost of service revenue. Year Ended December 31, 2015 2014 2013 (In millions) Depreciation, and amortization of capitalized software, continuing operations $ 87 $ 75 $ 55 Amortization of intangible assets, continuing operations 17 18 18 Depreciation and amortization, continuing operations 104 93 73 Amortization recorded as reduction of service revenue 1 3 3 Amortization of capitalized software recorded as cost of service revenue 21 38 18 Depreciation and amortization reported in the statement of cash flows $ 126 $ 134 $ 94 Long-Lived Assets, including Intangible Assets Long-lived assets consist primarily of property, equipment, capitalized software and intangible assets. Finite-lived, separately-identified intangible assets acquired in business combinations are assets that represent future expected benefits but lack physical substance (such as purchased contract rights and provider contracts). Intangible assets are initially recorded at fair value and are then amortized on a straight-line basis over their expected useful lives, generally between two and 15 years. Our intangible assets are subject to impairment tests when events or circumstances indicate that a finite-lived intangible asset’s (or asset group’s) carrying value may not be recoverable. Consideration is given to a number of potential impairment indicators. For example, our health plan subsidiaries have generally been successful in obtaining the renewal by amendment of their contracts in each state prior to the actual expiration of their contracts. However, there can be no assurance that these contracts will continue to be renewed. Following the identification of any potential impairment indicators, to determine whether an impairment exists, we would compare the carrying amount of a finite-lived intangible asset with the undiscounted cash flows that are expected to result from the use of the asset or related group of assets. If it is determined that the carrying amount of the asset is not recoverable, the amount by which the carrying value exceeds the estimated fair value is recorded as an impairment. No significant impairment charges relating to long-lived assets, including intangible assets, were recorded in the years ended December 31, 2015 , 2014 , and 2013 . Goodwill Goodwill represents the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses. Goodwill is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. To determine whether goodwill is impaired, we measure the fair values of our reporting units and compare them to the carrying values of the respective units, including goodwill. If the fair value is less than the carrying value of the reporting unit, then the implied value of goodwill would be calculated and compared with the carrying amount of goodwill to determine whether goodwill is impaired. We estimate the fair values of our reporting units using discounted cash flows. To determine fair values, we must make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations, capital requirements and income taxes), long-term growth rates for determining terminal value, and discount rates. No impairment charges relating to goodwill were recorded in the years ended December 31, 2015 , 2014 , and 2013 . Business Combinations Accounting for acquisitions requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income. Refer to Note 4 , " Business Combinations ," for further details regarding our 2015 acquisitions. Restricted Investments Restricted investments, which consist of certificates of deposit and U.S. treasury securities, are designated as held-to-maturity and are carried at amortized cost, which approximates fair value. The use of these funds is limited to specific purposes as required by regulation in the various states in which we operate, or as protection against the insolvency of capitated providers. We have the ability to hold our restricted investments until maturity and, as a result, we would not expect the value of these investments to decline significantly due to a sudden change in market interest rates. See Note 10 , " Restricted Investments ." Delegated Provider Insolvency Circumstances may arise where providers to whom we have delegated risk are unable to pay claims they have incurred with third parties in connection with referral services (including hospital inpatient services) provided to our members. The inability of delegated providers to pay referral claims presents us with both immediate financial risk and potential disruption to member care. Depending on states’ laws, we may be held liable for such unpaid referral claims even though the delegated provider has contractually assumed such risk. Additionally, competitive pressures may force us to pay such claims even when we have no legal obligation to do so. To reduce the risk that delegated providers are unable to pay referral claims, we monitor the operational and financial performance of such providers. We also maintain contingency plans that include transferring members to other providers in response to potential network instability. In certain instances, we have required providers to place funds on deposit with us as protection against their potential insolvency. These reserves are frequently in the form of segregated funds received from the provider and held by us or placed in a third-party financial institution. These funds may be used to pay claims that are the financial responsibility of the provider in the event the provider is unable to meet these obligations. Additionally, we have recorded liabilities for estimated losses arising from provider instability or insolvency in excess of provider funds on deposit with us. Such liabilities were not material at December 31, 2015 and 2014 . Premium Revenue - Health Plans Premium revenue is generated primarily from our Medicaid, Medicare and Marketplace contracts, including agreements with other managed care organizations for which we operate as a subcontractor. Premium revenue is generally received based on per member per month (PMPM) rates established in advance of the periods covered. These premium revenues are recognized in the month that members are entitled to receive health care services, and premiums collected in advance are deferred. The state Medicaid programs and the federal Medicare program periodically adjust premium. Additionally, many of our contracts contain provisions that may adjust or limit revenue or profit, as described below. Consequently, we recognize premium revenue as it is earned under such provisions. The following table summarizes premium revenue from continuing operations for the periods indicated: Year Ended December 31, 2015 2014 2013 Amount % of Total Amount % of Total Amount % of Total (Dollars in millions) California $ 2,200 16.6 % $ 1,523 16.9 % $ 750 12.1 % Florida 1,199 9.0 439 4.9 265 4.3 Illinois 397 3.0 153 1.7 8 0.1 Michigan 1,067 8.1 781 8.7 676 11.0 New Mexico 1,237 9.3 1,076 11.9 447 7.2 Ohio 2,034 15.4 1,553 17.2 1,099 17.8 Puerto Rico 567 4.3 — — — — South Carolina 348 2.6 381 4.2 — — Texas 1,961 14.8 1,318 14.6 1,291 20.9 Utah 331 2.5 310 3.4 311 5.0 Washington 1,602 12.1 1,305 14.5 1,168 18.9 Wisconsin 261 2.0 156 1.7 143 2.3 Direct delivery 37 0.3 28 0.3 21 0.4 $ 13,241 100.0 % $ 9,023 100.0 % $ 6,179 100.0 % Certain components of premium revenue are subject to accounting estimates and fall into the following categories: Contractual Provisions That May Adjust or Limit Revenue or Profit Medicaid Medical Cost Floors (Minimums), Medical Cost Corridors, and Administrative Cost Ceilings (Maximums): A portion of certain premiums received by our health plans may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded a liability under the terms of such contract provisions of $224 million and $392 million at December 31, 2015 and December 31, 2014 , respectively, to amounts due government agencies. Approximately $208 million of the liability accrued at December 31, 2015 relates to our participation in Medicaid expansion programs. In certain circumstances, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. We had $3 million recorded at December 31, 2015 relating to such provisions. No such receivables were recorded at December 31, 2014 . Profit Sharing and Profit Ceiling: Our contracts with certain states contain profit-sharing or profit ceiling provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage, in some cases in accordance with a tiered rebate schedule. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. As a result of profits in excess of the amount we are allowed to retain, we recorded a liability of $10 million at December 31, 2015 . The amount recorded at December 31, 2014 was insignificant. Retroactive Premium Adjustments: In New Mexico, when members are retroactively enrolled into our health plan we earn revenue only to the extent of the actual medical costs incurred by us for services provided during those retroactive periods, plus a small percentage of that medical cost for administration and profit. This cost plus arrangement for members retroactively enrolled in our health plan first became effective July 1, 2014 (retroactive to January 1, 2014). We are paid normal monthly capitation rates for the retroactive eligibility periods, and the difference between those capitation rates and the amounts due us on a cost plus basis are periodically settled with the state. To date, no such settlement has been made with the state. Our New Mexico contract is not specific as to the definition of retroactive membership, and the amount we owe the state (or that the state owes us) for the difference between capitation received and amounts due us under the cost plus arrangement varies widely depending upon the definition of retroactive membership. In August 2015 the state provided us with a request for payment under the terms of this contract provision for the period January 1, 2014 through December 31, 2014. That request was based upon definitions of retroactive membership that were at odds with our interpretations of that term. The New Mexico health plan reduced revenue by approximately $24 million in 2015 as a result of aligning more closely our definition of retroactive membership with the state's definition. Using the state's definition of retroactive membership, however, we estimate that the state will ultimately seek repayment of an amount that ranges from $15 million to $20 million higher than what we have accrued. We do not believe that any reasonable definition of retroactive membership supports the state's position, and expect to resolve this matter with payment of the amount we have accrued at December 31, 2015. We are currently engaged in discussions with the state regarding the appropriate amount, if any, owed to the state under this contract term. Medicare Risk Adjustment: Based on member encounter data that we submit to the Centers for Medicare and Medicaid Services (CMS), our Medicare premiums are subject to retroactive increase or decrease based upon member medical conditions for up to two years after the original year of service. We estimate the amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health care utilization patterns and CMS practices. Based on our knowledge of member health care utilization patterns and expenses, we have recorded a net payable of $4 million and a net receivable of $8 million for anticipated Medicare risk adjustment premiums at December 31, 2015 and December 31, 2014 , respectively. Marketplace Premium Stabilization Programs: The Affordable Care Act (ACA) established Marketplace premium stabilization programs effective January 1, 2014. These programs, commonly referred to as the "3R's," include a permanent risk adjustment program, a transitional reinsurance program, and a temporary risk corridor program. • Permanent risk adjustment program: Under this permanent program, our health plans' risk scores are compared to the overall average risk score for the relevant state and market pool. Generally, our health plans will pay into the pool if their risk scores are below the average risk score, and will receive funds from the pool if their risk scores are above the average risk score. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income. • Transitional reinsurance program: This program is designed to provide reimbursement to insurers for high cost members. Our health plans pay an annual contribution on a per-member basis, and are eligible for recoveries if claims for individual members exceed a specified threshold, up to a maximum amount. This three-year program will end on December 31, 2016. We recognize the assessments to fund the transitional reinsurance program as a reduction to premium revenue in our consolidated statements of income. We recognize recoveries under the reinsurance program as a reduction to medical care costs in our consolidated statements of income. • Temporary risk corridor program: This program is intended to limit gains and losses of insurers by comparing allowable costs to a target amount as defined by the U.S. Department of Health and Human Services (HHS). Variances from the target amount exceeding certain thresholds may result in amounts due to or receivables due from HHS. This three-year program will end on December 31, 2016. Due to uncertainties as to the amount of federal funding available to support the risk corridor program, we do not recognize amounts receivable under this program. All liabilities are recognized as incurred. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk corridor program as an adjustment to premium revenue in our consolidated statements of income. Additionally, the ACA established a minimum annual medical loss ratio (Minimum MLR) of 80% for the Marketplace. The medical loss ratio represents medical costs as a percentage of premium revenue. What constitutes medical costs and premium revenue are specifically defined by federal regulations. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. Each of the 3R programs is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. We record receivables or payables related to the 3R programs and the Minimum MLR when the amounts are reasonably estimable as described above, and, for receivables, collection is reasonably assured. Our receivables (payables) for each of these programs, as of the dates indicated, were as follows (in millions): December 31, 2015 December 31, 2014 Risk adjustment $ (214 ) $ (5 ) Reinsurance 36 5 Risk corridor (10 ) — Minimum MLR (3 ) — Quality Incentives At several of our health plans, revenue ranging from approximately 1% to 4% of certain health plan premiums is earned if certain performance measures are met. The following table quantifies the quality incentive premium revenue recognized for the periods presented, including the amounts earned in the period presented and prior periods. Although the reasonably possible effects of a change in estimate related to quality incentive premium revenue as of December 31, 2015 are not known, we have no reason to believe that the adjustments to prior years noted below are not indicative of the potential future changes in our estimates as of December 31, 2015 . Year Ended December 31, 2015 2014 2013 (In millions) Maximum available quality incentive premium - current period $ 118 $ 90 $ 63 Amount of quality incentive premium revenue recognized in current period: Earned current period $ 66 $ 40 $ 46 Earned prior periods 13 4 9 Total $ 79 $ 44 $ 55 Total premium revenue recognized for state health plans with quality incentive premiums $ 11,107 $ 7,084 $ 2,980 Medical Care Costs - Health Plans Expenses related to medical care services are captured in the following categories: • Fee-for-service expenses: Nearly all hospital services and the majority of our primary care and physician specialist services and LTSS costs are paid on a fee-for-service basis. Under fee-for-service arrangements, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of services. Such expenses are recorded in the period in which the related services are dispensed. The costs of drugs administered in a physician or hospital setting that are not billed through our pharmacy benefit manager are included in fee-for-service costs. • Pharmacy expenses: All drug, injectibles, and immunization costs paid through our pharmacy benefit manager are classified as pharmacy expenses. As noted above, drugs and injectibles not paid through our pharmacy benefit manager are included in fee-for-service costs, except in those limited instances where we capitate drug and injectible costs. • Capitation expenses: Many of our primary care physicians and a small portion of our specialists and hospitals are paid on a capitated basis. Under capitation arrangements, we pay a fixed amount PMPM to the provider without regard to the frequency, extent, or nature of the medical services actually furnished. Under capitated arrangements, we remain liable for the provision of certain health care services. Capitation payments are fixed in advance of the periods covered and are not subject to significant accounting estimates. These payments are expensed in the period the providers are obligated to provide services. The financial risk for pharmacy services for a small portion of our membership is delegated to capitated providers. • Direct delivery expenses: All costs associated with our direct delivery of medical care are separately identified. • Other medical expenses: All medically related administrative costs, certain provider incentive costs, and other health care expenses are classified as other medical expenses. Medically related administrative costs include, for example, expenses relating to health education, quality assurance, case management, care coordination, disease management, and 24-hour on-call nurses. Salary and benefit costs are a substantial portion of these expenses. For the years ended December 31, 2015 , 2014 , and 2013 , medically related administrative costs were $398 million , $263 million , and $153 million , respectively. The following table provides the details of our consolidated medical care costs from continuing operations for the periods indicated (dollars in millions, except PMPM amounts): Year Ended December 31, 2015 2014 2013 Amount PMPM % of Total Amount PMPM % of Total Amount PMPM % of Total Fee-for-service $ 8,572 $ 218.35 72.7 % $ 5,673 $ 202.87 70.2 % $ 3,612 $ 160.43 67.1 % Pharmacy 1,610 41.01 13.7 1,273 45.54 15.8 935 41.54 17.4 Capitation 982 25.02 8.3 748 26.77 9.3 604 26.83 11.2 Direct delivery 128 3.26 1.1 96 3.44 1.2 48 2.14 0.9 Other 502 12.79 4.2 286 10.22 3.5 181 8.05 3.4 Total $ 11,794 $ 300.43 100.0 % $ 8,076 $ 288.84 100.0 % $ 5,380 $ 238.99 100.0 % Our medical care costs include amounts that have been paid by us through the reporting date, as well as estimated liabilities for medical care costs incurred but not paid by us as of the reporting date. Such medical care cost liabilities include, among other items, unpaid fee-for-service claims, capitation payments owed providers, unpaid pharmacy invoices, and various medically related administrative costs that have been incurred but not paid. We use judgment to determine the appropriate assumptions for determining the required estimates. The most important element in estimating our medical care costs is our estimate for fee-for-service claims which have been incurred but not paid by us. These fee-for-service costs that have been incurred but have not been paid at the reporting date are collectively referred to as medical costs that are incurred but not paid (IBNP). Our IBNP claims reserve, as reported in our balance sheet, represents our best estimate of the total amount of claims we will ultimately pay with respect to claims that we have incurred as of the balance sheet date. We estimate our IBNP monthly using actuarial methods based on a number of factors. For further information, see Note 11 , " Medical Claims and Benefits Payable ." We report reinsurance premiums as a reduction to premium revenue, while related reinsurance recoveries are reported as a reduction to medical care costs. We limit our risk of catastrophic losses by maintaining high deductible reinsurance coverage. Such reinsurance coverage does not relieve us of our primary obligation to our policyholders. We do not consider this coverage to be material because the cost is not significant and the likelihood that coverage will apply is low. Taxes Based on Premiums Health Insurer Fee. The federal government under the ACA imposes an annual fee, or excise tax, on health insurers for each calendar year. The HIF is based on a company's share of the industry's net premiums written during the preceding calendar year, and is non-deductible for income tax purposes. We recognize expense for the HIF over the year on a straight-line basis. Because we primarily serve individuals in government-sponsored programs, we must secure additional reimbursement from our state partners for this added cost. We recognize the related revenue when we have obtained a contractual commitment or payment from a state to reimburse us for the HIF; such HIF revenue is recognized ratably throughout the year. Premium and Use Tax. Certain of our health plans are assessed a tax based on premium revenue collected. The premium revenues we receive from these states include the premium tax assessment. We have reported these taxes on a gross basis, as premium tax revenue and as premium tax expense in the consolidated statements of income. Premium Deficiency Reserves on Loss Contracts We assess the profitability of our contracts for providing medical care services to our members and identify those contracts where current operating results or forecasts indicate probable future losses. Anticipated future premiums are compared to anticipated medical care costs, including the cost of processing claims. If the anticipated future costs exceed the premiums, a loss contract accrual is recognized. No such accrual was recorded as of December 31, 2015 or 2014 . Service Revenue and Cost of Service Revenue — Molina Medicaid Solutions The payments received by our Molina Medicaid Solutions segment under its state contracts are based on the performance of multiple services. The first of these is the design, development and implementation (DDI) of a Medicaid management information system (MMIS). An additional service, following completion of DDI, is the operation of the MMIS under a business process outsourcing (BPO) arrangement. When providing BPO services (which include claims payment and eligibility processing) we also provide the state with other services including both hosting and support, and maintenance. We have evaluated our Molina Medicaid Solutions contracts to determine if such arrangements include a software element. Based on this evaluation, we have concluded that these arrangements do not include a software element, and are therefore multiple-element service arrangements. Additionally, we evaluate each required deliverable under our multiple-element service arrangements to determine whether it qualifies as a separate unit of accounting. Such evaluation is generally based on whether the deliverable has standalone value to the customer. If the deliverable has standalone value, the arrangement’s consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent. We have concluded that the various service elements in our Molina Medicaid Solutions contracts represent a single unit of accounting due to the fact that DDI, which is the only service performed in advance of the other services (all other services are performed over an identical period), does not have standalone value because our DDI services are not sold separately by any vendor and the customer could not resell our DDI services. Further, we have no objective and reliable evidence of fair value for any of the individual elements in these contracts, and at no point in the contract will we have objective and reliable evidence of fair value for the undelivered elements in the contracts. We lack objective and reliable evidence of the fair value of the individual elements of our Molina Medicaid Solutions contracts for the following reasons: • Each contract calls for the provision of its own specific set of services. While all contracts support the system of record for state MMIS, the actual services we provide vary significantly between contracts; and • The nature of the MMIS installed varies significantly between our older contracts (proprietary mainframe systems) and our new contracts (commercial off-the-shelf technology solutions). Because we have determined the services provided under our Molina Medicaid Solutions contracts represent a single unit of accounting, and because we are unable to determine a pattern of performance of services during the contract period, we recognize all revenue (both the DDI and BPO elements) associated with such contracts on a straight-line basis over the period during which BPO, hosting, and support and maintenance services are delivered. Therefore, absent any contingencies as discussed in the following paragraph, or contract extensions, we would recognize all revenue associated with those contracts over the initial contract period. When a contract is extended, we generally consider the extension to be a continuation of the single unit of accounting; therefore, the deferred revenue as of the extension date is recognized prospectively over the new remaining term of the contract. In cases where there is no DDI element associated with our contracts, BPO revenue is recognized on a monthly basis as specified in the applicable contract or contract extension. Provisions specific to each contract may, however, lead us to modify this general principle. In those circumstances, the right of the state to refuse acceptance of services, as well as the related obligation to compensate us, may require us to delay recognition of all or part of our |
Net Income per Share
Net Income per Share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Net Income per Share | Net Income per Share The following table sets forth the calculation of basic and diluted net income per share: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions, except net income per share) Numerator: Net income $ 33 $ 39 $ 57 $ 67 Denominator: Shares outstanding at the beginning of the period 55 49 55 49 Weighted-average number of shares: Issued in common stock offering — 1 — 1 Denominator for basic net income per share 55 50 55 50 Effect of dilutive securities: Convertible senior notes (1) — 1 — — 1.125% Warrants (1) — 3 1 2 Denominator for diluted net income per share 55 54 56 52 Net income per share (2): Basic $ 0.58 $ 0.78 $ 1.02 $ 1.36 Diluted $ 0.58 $ 0.72 $ 1.01 $ 1.29 ______________________________ (1) For more information regarding the convertible senior notes, refer to Note 10 , " Debt ." For more information regarding the 1.125% Warrants, refer to Note 11 , " Derivatives ." (2) Source data for calculations in thousands. | Net Income per Share The following table sets forth the calculation of the denominators used to compute basic and diluted net income per share: December 31, 2015 2014 2013 (In millions) Shares outstanding at the beginning of the period 49 46 47 Weighted-average number of shares: Issued: Common stock offering 3 — — Convertible senior notes — 1 — Repurchased — — (1 ) Denominator for basic net income per share 52 47 46 Effect of dilutive securities: Share-based compensation 1 — 1 Convertible senior notes (1) 1 1 — 1.125% Warrants (1) 2 — — Denominator for diluted net income per share 56 48 47 Potentially dilutive common shares excluded from calculations (2): 1.125% Warrants — 13 12 _______________________________ (1) For more information regarding the convertible senior notes, including the 1.625% Notes, 3.75% Notes, and 3.75% Exchange, refer to Note 12 , " Debt ." For more information regarding the 1.125% Warrants, refer to Note 13 , " Derivatives ." (2) The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the years ended December 31, 2014 and 2013 , the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock. |
Business Combinations
Business Combinations | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
Business Combinations | Business Combinations In the first quarter of 2016, we closed on several business combinations in the Health Plans segment. For all of these transactions, we applied the acquisition method of accounting, where the total purchase price was allocated, or preliminarily allocated, to tangible and intangible assets acquired, and liabilities assumed based on their respective fair values. For the Health Plans acquisitions, described below, only intangible assets were acquired. All of these acquisitions were funded using available cash and acquisition-related costs were insignificant. Health Plans Consistent with our strategy to grow in our existing markets, we closed the following Health Plans acquisitions in the first quarter of 2016: Illinois. On January 1, 2016, our Illinois health plan closed on its acquisition of the Medicaid membership, and certain assets related to the Medicaid business of, Accountable Care Chicago, LLC, also known as MyCare Chicago . The initial purchase price was approximately $35 million , and the Illinois health plan added approximately 58,000 Medicaid members as a result of this transaction. On January 1, 2016, our Illinois health plan closed on its acquisition of the Medicaid membership, and certain assets related to the Medicaid business, of Loyola Physician Partners, LLC. The final purchase price was approximately $12 million , and the Illinois health plan added approximately 18,000 Medicaid members as a result of this transaction. On March 1, 2016, our Illinois health plan closed on its acquisition of the Medicaid membership, and certain assets related to the Medicaid business, of Better Health Network, LLC. The initial purchase price was approximately $18 million , and the Illinois health plan added approximately 34,000 Medicaid members as a result of this transaction. Michigan. On January 1, 2016, our Michigan health plan closed on its acquisition of the Medicaid and MIChild membership, and certain Medicaid and MIChild assets, of HAP Midwest Health Plan, Inc. The final purchase price was approximately $31 million , and the Michigan health plan added approximately 68,000 Medicaid and MIChild members as a result of this transaction. Washington. On January 1, 2016, our Washington health plan closed on its acquisition of the Medicaid contracts, and certain assets related to the operation of the Medicaid business, of Columbia United Providers, Inc. The final purchase price was approximately $28 million , and the Washington health plan added approximately 57,000 Medicaid members as a result of this transaction. For these acquisitions, we recorded goodwill to the Health Plans segment amounting to $90 million in the aggregate, which relates to future economic benefits arising from expected synergies to be achieved. Such synergies include use of our existing infrastructure to support the added membership. The amount recorded as goodwill is deductible for income tax purposes. The following table presents the intangible assets identified in the transactions described above. The weighted-average amortization period, in the aggregate, is 5.9 years . For these acquisitions in the aggregate, we expect to record amortization of approximately $6 million per year in the years 2016 through 2020 and $1 million in 2021. Fair Value Life (In millions) (Years) Intangible asset type: Contract rights - member list $ 28 5 Provider network 6 10 $ 34 | Business Combinations During 2015, we closed on business combinations in both the Health Plans and Other segments. For all of these transactions we applied the acquisition method of accounting, where the total purchase price was allocated, or preliminarily allocated, to tangible and intangible assets acquired, and liabilities assumed based on their respective fair values. For Health Plans acquisitions, in general, only intangible assets are acquired. All of the 2015 acquisitions were funded using available cash. Health Plans Consistent with our strategy to grow in our existing markets, we closed the following Health Plans acquisitions in 2015: Florida. On November 1, 2015, our Florida health plan closed on its acquisition of the Medicaid contracts, and certain assets related to operation of the Medicaid business, of Integral Health Plan, Inc. The final purchase price was $67 million , and the Florida health plan added approximately 101,000 members in the Northwest and Southwest regions of Florida as a result of this transaction. On the closing date, we withheld 10% , or approximately $7 million , of the purchase price to establish an indemnification amount held as security for the seller's indemnification obligations under the purchase agreement. We have recorded the indemnification amount to restricted assets, which will be settled in November 2016. If we do not have any claims against the seller on or before the settlement date, we will pay the full withhold amount to the seller. As of December 31, 2015, we had not made any claims against the withhold amount. On August 1, 2015, our Florida health plan closed on its acquisition of the Medicaid contracts, and certain assets related to the operation of the Medicaid business, of Preferred Medical Plan, Inc. The final purchase price was $8 million , and the Florida health plan added approximately 23,000 members as a result of this transaction. Michigan. On September 1, 2015, our Michigan health plan closed on its acquisition of the Medicaid and MIChild contracts, and certain provider agreements, of HealthPlus of Michigan and its subsidiary, HealthPlus Partners, Inc. The purchase price was $47 million , and the Michigan health plan added approximately 68,000 members as a result of this transaction. For the Health Plans acquisitions closed in 2015, we recorded goodwill amounting to $90 million in the aggregate, which relates to future economic benefits arising from expected synergies to be achieved. Such synergies include use of our existing infrastructure to support the added membership. The amount recorded as goodwill represents intangible assets that do not qualify for separate recognition as identifiable intangible assets. The entire amount recorded as goodwill is deductible for income tax purposes. Refer to the table below for a summary of the intangible assets identified, and their economic lives. Announced Acquisitions. As described in Note 1 , " Basis of Presentation ," we announced several Health Plans acquisitions in 2015 that did not close until January 1, 2016. Because the closing dates for these acquisitions fell on January 1, 2016, a holiday, approximately $101 million was recorded to prepaid expenses and other assets as of December 31, 2015, for purchase price amounts funded in December 2015. Such amounts are reported in investing activities in the accompanying consolidated statements of cash flows. The total aggregate purchase price for these acquisitions amounted to approximately $115 million , which will be allocated among goodwill and intangible assets. The initial accounting for these transactions is incomplete. Transaction costs associated with the Health Plans acquisitions were insignificant. Other Pathways. Consistent with our strategy to acquire and develop new products and capabilities, on November 1, 2015, we acquired all of the outstanding ownership interests in Pathways Health and Community Support LLC (Pathways), formerly known as Providence Human Services, LLC. Pathways is one of the largest national providers of accessible, outcome-based behavioral/mental health and social services with operations in 23 states and the District of Columbia. The following table summarizes the preliminary values of the assets acquired and liabilities assumed at the date of acquisition. November 1, 2015 (In millions) Assets: Cash and cash equivalents $ 20 Receivables 52 Prepaid expenses and other current assets 4 Property and equipment 14 Intangible assets 19 Goodwill 155 Other assets 1 Liabilities: Medical claims and benefits payable (2 ) Accounts payable and accrued liabilities (23 ) Deferred revenue (2 ) Other long-term liabilities (7 ) Total purchase price $ 231 As of December 31, 2015, the purchase price allocation for the acquisition was preliminary and subject to completion. Adjustments to the current fair value estimates in the above table may occur as the process conducted for various valuations and assessments is finalized, including tax assets and liabilities. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized, including expected medical cost synergies to be achieved, and the workforce acquired. Such synergies include the achievement of better outcomes for our members through more effective care coordination and integration, and our retention of the net profit margin captured by the mental health provider. The workforce acquired is a significant component of goodwill because it represents primarily the patient-facing employees, now employed by us, who provide the behavioral/mental health and social services. Approximately 10% of the goodwill recorded at December 31, 2015, is deductible for income tax purposes. This percentage may increase if certain tax elections are completed in 2016. The gross contractual amount of receivables, at the acquisition date, was approximately $61 million . At the acquisition date, the best estimate of contractual cash flows not expected to be collected was approximately $9 million . In connection with this acquisition, we incurred approximately $3 million in transaction costs, which are recorded in general and administrative expenses. The following table presents the intangible assets identified, by segment. The weighted-average amortization period for the Health Plans identified intangible assets, in the aggregate, is 6.4 years . The weighted-average amortization period for the Other identified intangible assets, in the aggregate, is 4.2 years . Fair Value Useful Life (In millions) (years) Intangible asset type Health Plans: Contract rights - member list $ 23 5 Provider network 9 10 Other: Contract licenses 5 2 Contract rights - member list 14 5 $ 51 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Measurements | Fair Value Measurements We consider the carrying amounts of cash and cash equivalents and other current assets and current liabilities (not including current portion of long-term debt) to approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment. For our financial instruments measured at fair value on a recurring basis, we prioritize the inputs used in measuring fair value according to a three-tier fair value hierarchy as follows: Level 1 — Observable Inputs. Level 1 financial instruments are actively traded and therefore the fair value for these securities is based on quoted market prices on one or more securities exchanges. Level 2 — Directly or Indirectly Observable Inputs. Level 2 financial instruments are traded frequently though not necessarily daily. Fair value for these investments is determined using a market approach based on quoted prices for similar securities in active markets or quoted prices for identical securities in inactive markets. Level 3 — Unobservable Inputs. Level 3 financial instruments are valued using unobservable inputs that represent management's best estimate of what market participants would use in pricing the financial instrument at the measurement date. Our Level 3 financial instruments include derivative financial instruments. Derivative financial instruments include the 1.125% Call Option derivative asset and the 1.125% Conversion Option derivative liability. These derivatives are not actively traded and are valued based on an option pricing model that uses observable and unobservable market data for inputs. Significant market data inputs used to determine fair value as of June 30, 2016 included the price of our common stock, the time to maturity of the derivative instruments, the risk-free interest rate, and the implied volatility of our common stock. As described further in Note 11 , “ Derivatives ,” the 1.125% Call Option asset and the 1.125% Conversion Option liability were designed such that changes in their fair values would offset, with minimal impact to the consolidated statements of income. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments is mitigated. The changes in fair value of Level 3 financial instruments were insignificant to our results of operations for the six months ended June 30, 2016 . Our financial instruments measured at fair value on a recurring basis at June 30, 2016 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,345 $ — $ 1,345 $ — Government-sponsored enterprise securities (GSEs) 196 196 — — Municipal securities 180 — 180 — U.S. treasury notes 108 108 — — Asset-backed securities 71 — 71 — Certificates of deposit 68 — 68 — Subtotal - current investments 1,968 304 1,664 — 1.125% Call Option derivative asset 226 — — 226 Total assets measured at fair value on a recurring basis $ 2,194 $ 304 $ 1,664 $ 226 1.125% Conversion Option derivative liability $ 226 $ — $ — $ 226 Total liabilities measured at fair value on a recurring basis $ 226 $ — $ — $ 226 Our financial instruments measured at fair value on a recurring basis at December 31, 2015 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,184 $ — $ 1,184 $ — GSEs 211 211 — — Municipal securities 185 — 185 — U.S. treasury notes 78 78 — — Asset-backed securities 63 — 63 — Certificates of deposit 80 — 80 — Subtotal - current investments 1,801 289 1,512 — 1.125% Call Option derivative asset 374 — — 374 Total assets measured at fair value on a recurring basis $ 2,175 $ 289 $ 1,512 $ 374 1.125% Conversion Option derivative liability $ 374 $ — $ — $ 374 Total liabilities measured at fair value on a recurring basis $ 374 $ — $ — $ 374 Fair Value Measurements – Disclosure Only The carrying amounts and estimated fair values of our senior notes, which are classified as Level 2 financial instruments, are indicated in the following table. June 30, 2016 December 31, 2015 Carrying Value Fair Value Carrying Value Fair Value (In millions) 5.375% Notes $ 690 $ 702 $ 689 $ 700 1.125% Convertible Notes 460 742 448 865 1.625% Convertible Notes 278 329 273 365 $ 1,428 $ 1,773 $ 1,410 $ 1,930 | Fair Value Measurements We consider the carrying amounts of cash and cash equivalents and other current assets and current liabilities (not including derivatives and current portion of long-term debt) to approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment. For our financial instruments measured at fair value on a recurring basis, we prioritize the inputs used in measuring fair value according to a three-tier fair value hierarchy as follows: Level 1 — Observable Inputs Level 1 financial instruments are actively traded and therefore the fair value for these securities is based on quoted market prices on one or more securities exchanges. Level 2 — Directly or Indirectly Observable Inputs Level 2 financial instruments are traded frequently though not necessarily daily. Fair value for these investments is determined using a market approach based on quoted prices for similar securities in active markets or quoted prices for identical securities in inactive markets. Level 3 — Unobservable Inputs Level 3 financial instruments are valued using unobservable inputs that represent management's best estimate of what market participants would use in pricing the financial instrument at the measurement date. Our Level 3 financial instruments include the following: Derivative financial instruments . Derivative financial instruments include the 1.125% Call Option derivative asset and the 1.125% Conversion Option derivative liability. These derivatives are not actively traded and are valued based on an option pricing model that uses observable and unobservable market data for inputs. Significant market data inputs used to determine fair value as of December 31, 2015 included the price of our common stock, the time to maturity of the derivative instruments, the risk-free interest rate, and the implied volatility of our common stock. As described further in Note 13 , " Derivatives ," the 1.125% Call Option asset and the 1.125% Conversion Option liability were designed such that changes in their fair values would offset, with minimal impact to the consolidated statements of income. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments is mitigated. The changes in Level 3 instruments for the year ended December 31, 2015 were insignificant. Our financial instruments measured at fair value on a recurring basis at December 31, 2015 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,184 $ — $ 1,184 $ — Government-sponsored enterprise securities (GSEs) 211 211 — — Municipal securities 185 — 185 — Certificates of deposit 80 — 80 — U.S. treasury notes 78 78 — — Asset-backed securities 63 — 63 — Subtotal - current investments 1,801 289 1,512 — 1.125% Call Option derivative asset 374 — — 374 Total assets measured at fair value on a recurring basis $ 2,175 $ 289 $ 1,512 $ 374 1.125% Conversion Option derivative liability $ 374 $ — $ — $ 374 Total liabilities measured at fair value on a recurring basis $ 374 $ — $ — $ 374 Our financial instruments measured at fair value on a recurring basis at December 31, 2014 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 641 $ — $ 641 $ — GSEs 122 122 — — Municipal securities 127 — 127 — Certificates of deposit 69 — 69 — U.S. treasury notes 60 60 — — Subtotal - current investments 1,019 182 837 — 1.125% Call Option derivative asset 329 — — 329 Total assets measured at fair value on a recurring basis $ 1,348 $ 182 $ 837 $ 329 1.125% Conversion Option derivative liability $ 329 $ — $ — $ 329 Total liabilities measured at fair value on a recurring basis $ 329 $ — $ — $ 329 Fair Value Measurements – Disclosure Only The carrying amounts and estimated fair values of our senior notes, which are classified as Level 2 financial instruments, are indicated in the following table. Fair value for these securities is determined using a market approach based on quoted prices for similar securities in active markets or quoted prices for identical securities in inactive markets. As described in Note 2 , " Significant Accounting Policies ," the carrying amount of debt has been reduced by deferred issuance costs for all periods presented. December 31, 2015 December 31, 2014 Carrying Total Fair Value Carrying Total Fair Value Amount Amount (In millions) 5.375% Notes $ 689 $ 700 $ — $ — 1.125% Convertible Notes 448 865 426 767 1.625% Convertible Notes 273 365 264 337 $ 1,410 $ 1,930 $ 690 $ 1,104 |
Investments
Investments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||
Investments | Investments The following tables summarize our investments as of the dates indicated: June 30, 2016 Amortized Gross Unrealized Estimated Fair Cost Gains Losses Value (In millions) Corporate debt securities $ 1,340 $ 5 $ — $ 1,345 GSEs 196 — — 196 Municipal securities 178 2 — 180 U.S. treasury notes 108 — — 108 Asset-backed securities 71 — — 71 Certificates of deposit 68 — — 68 $ 1,961 $ 7 $ — $ 1,968 December 31, 2015 Amortized Gross Unrealized Estimated Fair Cost Gains Losses Value (In millions) Corporate debt securities $ 1,189 $ — $ 5 $ 1,184 GSEs 212 — 1 211 Municipal securities 186 — 1 185 U.S. treasury notes 78 — — 78 Asset-backed securities 63 — — 63 Certificates of deposit 80 — — 80 $ 1,808 $ — $ 7 $ 1,801 The contractual maturities of our investments as of June 30, 2016 are summarized below: Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 1,084 $ 1,084 Due after one year through five years 844 850 Due after five years through ten years 33 34 $ 1,961 $ 1,968 Gross realized gains and losses from sales of available-for-sale securities are calculated under the specific identification method and are included in investment income. Gross realized investment gains and losses for the three and six months ended June 30, 2016 and 2015 were insignificant. We have determined that unrealized gains and losses at June 30, 2016 and December 31, 2015 , are temporary in nature, because the change in market value for these securities has resulted from fluctuating interest rates, rather than a deterioration of the creditworthiness of the issuers. So long as we maintain the intent and ability to hold these securities to maturity, we are unlikely to experience gains or losses. In the event that we dispose of these securities before maturity, we expect that realized gains or losses, if any, will be immaterial. There were no available-for-sale investments in a material continuous loss position as of June 30, 2016 . The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a loss position for 12 months or more as of December 31, 2015 : In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 825 $ 4 588 $ 119 $ 1 87 GSEs 182 1 77 — — — Municipal securities 128 1 181 — — — $ 1,135 $ 6 846 $ 119 $ 1 87 | |
Investments | Investments The following tables summarize our investments as of the dates indicated: December 31, 2015 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value (In millions) Corporate debt securities $ 1,189 $ — $ 5 $ 1,184 GSEs 212 — 1 211 Municipal securities 186 — 1 185 Certificates of deposit 80 — — 80 U.S. treasury notes 78 — — 78 Asset-backed securities 63 — — 63 $ 1,808 $ — $ 7 $ 1,801 December 31, 2014 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value (In millions) Corporate debt securities $ 643 $ — $ 2 $ 641 GSEs 122 — — 122 Municipal securities 127 — — 127 Certificates of deposit 69 — — 69 U.S. treasury notes 60 — — 60 $ 1,021 $ — $ 2 $ 1,019 The contractual maturities of our investments as of December 31, 2015 are summarized below: Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 830 $ 829 Due after one year through five years 967 962 Due after five years through ten years 11 10 $ 1,808 $ 1,801 Gross realized gains and losses from sales of available-for-sale securities are calculated under the specific identification method and are included in investment income. Gross realized investment gains and losses for the years ended December 31, 2015 , 2014 and 2013 were insignificant. We have determined that unrealized gains and losses at December 31, 2015 and 2014 are temporary in nature, because the change in market value for these securities has resulted from fluctuating interest rates, rather than a deterioration of the credit worthiness of the issuers. So long as we hold these securities to maturity, we are unlikely to experience gains or losses. In the event that we dispose of these securities before maturity, we expect that realized gains or losses, if any, will be immaterial. The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a loss position for 12 months or more as of December 31, 2015 . In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 825 $ 4 588 $ 119 $ 1 87 GSEs 182 1 77 — — — Municipal securities 128 1 181 5 — 12 Certificates of deposit 53 — 218 — — — U.S. treasury notes 53 — 32 — — — Asset-backed securities 55 — 47 — — — $ 1,296 $ 6 1,143 $ 124 $ 1 99 The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a loss position for 12 months or more as of December 31, 2014 . In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 379 $ 1 265 $ 29 $ 1 10 GSEs 75 — 22 3 — 3 Municipal securities 54 — 64 11 — 13 Certificates of deposit 13 — 52 — — — U.S. treasury notes 19 — 13 — — — $ 540 $ 1 416 $ 43 $ 1 26 |
Receivables
Receivables | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | ||
Receivables | Receivables Receivables consist primarily of amounts due from government Medicaid agencies, which may be subject to potential retroactive adjustments. Because all of our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for doubtful accounts is immaterial. The information below is presented by segment. June 30, December 31, (In millions) California $ 180 $ 104 Florida 103 22 Illinois 106 35 Michigan 62 39 New Mexico 64 51 Ohio 112 66 Puerto Rico 50 33 South Carolina 11 6 Texas 60 56 Utah 38 18 Washington 81 53 Wisconsin 46 22 Direct delivery and other 5 6 Total Health Plans segment 918 511 Molina Medicaid Solutions segment 41 37 Other segment 53 49 $ 1,012 $ 597 | Receivables Receivables consist primarily of amounts due from government Medicaid agencies, which may be subject to potential retroactive adjustments. Because all of our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for doubtful accounts is immaterial. The information below is presented by segment. December 31, 2015 2014 (In millions) California $ 104 $ 311 Florida 22 2 Illinois 35 32 Michigan 39 20 New Mexico 51 50 Ohio 66 45 Puerto Rico 33 — South Carolina 6 4 Texas 56 29 Utah 18 6 Washington 53 43 Wisconsin 22 8 Direct delivery and other 6 11 Total Health Plans segment 511 561 Molina Medicaid Solutions segment 37 35 Other segment 49 — $ 597 $ 596 |
Restricted Investments
Restricted Investments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||
Restricted Investments | Restricted Investments Pursuant to the regulations governing our Health Plans segment subsidiaries, we maintain statutory deposits and deposits required by government authorities in certificates of deposit and U.S. treasury securities. We also maintain restricted investments as protection against the insolvency of certain capitated providers. The following table presents the balances of restricted investments: June 30, December 31, (In millions) Florida $ 28 $ 34 Illinois 3 — Michigan 1 1 New Mexico 43 43 Ohio 12 12 Puerto Rico 10 10 Texas 4 4 Utah 4 4 Wisconsin 1 1 Other 1 — Total Health Plans segment $ 107 $ 109 The contractual maturities of our held-to-maturity restricted investments as of June 30, 2016 are summarized below: Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 106 $ 106 Due after one year through five years 1 1 $ 107 $ 107 | |
Restricted Investments | Restricted Investments Pursuant to the regulations governing our Health Plans segment subsidiaries, we maintain statutory deposits and deposits required by government authorities in certificates of deposit and U.S. treasury securities. We also maintain restricted investments as protection against the insolvency of certain capitated providers. In connection with a Molina Medicaid Solutions segment state contract, we maintained restricted investments as collateral for a letter of credit as of December 31, 2014. The following table presents the balances of restricted investments: December 31, 2015 2014 (In millions) Florida $ 34 $ 29 Michigan 1 1 New Mexico 43 35 Ohio 12 13 Puerto Rico 10 5 South Carolina — 6 Texas 4 3 Utah 4 4 Wisconsin 1 — Other — 1 Total Health Plans segment 109 97 Molina Medicaid Solutions segment — 5 $ 109 $ 102 The contractual maturities of our held-to-maturity restricted investments as of December 31, 2015 are summarized below. Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 100 $ 100 Due one year through five years 9 9 $ 109 $ 109 |
Medical Claims and Benefits Pay
Medical Claims and Benefits Payable | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | ||
Medical Claims and Benefits Payable | Medical Claims and Benefits Payable The following table provides the details of our medical claims and benefits payable (including amounts payable for the provision of long-term services and supports, or LTSS) as of the dates indicated. June 30, December 31, (In millions) Fee-for-service claims incurred but not paid (IBNP) $ 1,292 $ 1,191 Pharmacy payable 103 88 Capitation payable 37 140 Other 334 266 $ 1,766 $ 1,685 "Other" medical claims and benefits payable include amounts payable to certain providers for which we act as an intermediary on behalf of various government agencies without assuming financial risk. Such receipts and payments do not impact our consolidated statements of income. Non-risk provider payables amounted to $191 million and $167 million as of June 30, 2016 and December 31, 2015 , respectively. The following table presents the components of the change in our medical claims and benefits payable for the periods indicated. The amounts presented for “Components of medical care costs related to: Prior periods” represent the amount by which our original estimate of medical 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. Six Months Ended June 30, 2016 Year Ended (Dollars in millions) Medical claims and benefits payable, beginning balance $ 1,685 $ 1,201 Components of medical care costs related to: Current period 7,371 11,935 Prior periods (189 ) (141 ) Total medical care costs 7,182 11,794 Change in non-risk provider payables 24 48 Payments for medical care costs related to: Current period 5,885 10,448 Prior periods 1,240 910 Total paid 7,125 11,358 Medical claims and benefits payable, ending balance $ 1,766 $ 1,685 Benefit from prior period as a percentage of: Balance at beginning of period 11.3 % 11.8 % Premium revenue, trailing twelve months 1.3 % 1.1 % Medical care costs, trailing twelve months 1.4 % 1.2 % The portion of our total medical claims and benefits payable liability that is most subject to variability in the estimate is fee-for-service claims incurred but not paid (IBNP). Our IBNP, included in medical claims and benefits payable, represents our best estimate of the total amount of claims we will ultimately pay with respect to claims that we have incurred as of the balance sheet date. We estimate our IBNP monthly using actuarial methods based on a number of factors. Assuming that our initial estimate of IBNP is accurate, we believe that amounts ultimately paid would generally be between 8% and 10% less than the IBNP liability recorded at the end of the period as a result of the inclusion in that liability of the provision for adverse claims deviation and the accrued cost of settling those claims. Because the amount of our initial liability is merely an estimate (and therefore not perfectly accurate), we will always experience variability in that estimate as new information becomes available with the passage of time. Therefore, there can be no assurance that amounts ultimately paid out will fall within the range of 8% to 10% lower than the liability that was initially recorded. Furthermore, because our initial estimate of IBNP is derived from many factors, some of which are qualitative in nature rather than quantitative, we are seldom able to assign specific values to the reasons for a change in estimate – we only know when the circumstances for any one or more factors are out of the ordinary. The use of a consistent methodology in estimating our liability for medical claims and benefits payable minimizes the degree to which the under– or overestimation of that liability at the close of one period may affect consolidated results of operations in subsequent periods. In particular, the use of a consistent methodology should result in the replenishment of reserves during any given period in a manner that generally offsets the benefit of favorable prior period development in that period. Facts and circumstances unique to the estimation process at any single date, however, may still lead to a material impact on consolidated results of operations in subsequent periods. Any absence of adverse claims development (as well as the expensing through general and administrative expense of the costs to settle claims held at the start of the period) will lead to the recognition of a benefit from prior period claims development in the period subsequent to the date of the original estimate. As indicated above, the amounts ultimately paid out on our medical claims and benefits payable liabilities in fiscal years 2016 and 2015 were less than what we had expected when we had established those liabilities. The differences between our original estimates and the amounts ultimately paid out (or now expected to be ultimately paid out) for the most part related to IBNP. While many related factors working in conjunction with one another serve to determine the accuracy of our estimates, we are seldom able to quantify the impact that any single factor has on a change in estimate. In addition, given the variability inherent in the reserving process, we will only be able to identify specific factors if they represent a significant departure from expectations. As a result, we do not expect to be able to fully quantify the impact of individual factors on changes in estimates. We believe that the most significant uncertainties surrounding our IBNP estimates at June 30, 2016 are as follows: • In the first half of 2016, our Marketplace enrollment across all health plans increased by approximately 392,000 members. Some of the states with significant increases included: ◦ California: 57,000 ◦ Florida: 94,000 ◦ Texas: 110,000 ◦ Utah: 48,000 ◦ Wisconsin: 38,000 Because these new Marketplace members may have different utilization patterns than our legacy members, our estimates of the liability we have incurred for services provided to these members are subject to more than the usual amount of uncertainty. • Our Illinois health plan added over 100,000 new members under acquisitions of three Medicaid contracts during the first half of 2016. Because these new members may have different utilization patterns than our legacy members, our estimates of the liability we have incurred for services provided to these members are subject to more than the usual amount of uncertainty. • At our New Mexico, Puerto Rico and Washington health plans, we overpaid certain inpatient and outpatient facility claims. We adjusted our claims payment history to reflect the claims payment pattern that would have occurred without these overpayments. For this reason, our liability estimates at these health plans are subject to more than the usual amount of uncertainty. • At our Washington health plan, the covered benefits in two counties were expanded to include behavioral health benefits under the state's new fully integrated managed care program, which impacted about 80,000 members. Because these are new benefits, our liability estimate at this health plan is subject to more than the usual amount of uncertainty. We recognized favorable prior period claims development in the amount of $189 million for the six months ended June 30, 2016 . This amount represents our estimate as of June 30, 2016 , of the extent to which our initial estimate of medical claims and benefits payable at December 31, 2015 was more than the amount that will ultimately be paid out in satisfaction of that liability. We believe the overestimation was due primarily to the following factors: • A new version of diagnostic codes was required for all claims with dates of service on October 1, 2015, and later. As a result, payment was delayed or denied for a significant number of claims due to provider submission of claims with diagnostic codes that were no longer valid. Once providers were able to submit claims with the correct diagnostic codes, our actual costs were ultimately less than expected. • At our New Mexico health plan, we overestimated the impact of several pending high-dollar claims, and our actual costs were ultimately less than expected. • At our Washington health plan, we overpaid certain outpatient facility claims in 2015 when the state converted to a new payment methodology. We did not include an estimate in the reserves for this potential recovery as of December 31, 2015. • At our California health plan, approximately 55,000 new members were added to our Medicaid Expansion product in 2015. For these new members, our actual costs were ultimately less than expected. | Medical Claims and Benefits Payable The following table provides the details of our medical claims and benefits payable (including amounts payable for the provision of long-term services and supports, or LTSS) as of the dates indicated. December 31, 2015 2014 2013 (In millions) Fee-for-service claims incurred but not paid (IBNP) $ 1,191 $ 871 $ 424 Pharmacy payable 88 71 45 Capitation payable 140 28 20 Other 266 231 181 $ 1,685 $ 1,201 $ 670 "Other" medical claims and benefits payable include amounts payable to certain providers for which we act as an intermediary on behalf of various government agencies without assuming financial risk. Such receipts and payments do not impact our consolidated statements of income. Non-risk provider payables amounted to $167 million , $119 million and $151 million , as of December 31, 2015 , 2014 and 2013 , respectively. The following table presents the components of the change in our medical claims and benefits payable from continuing and discontinued operations combined for the periods indicated. The amounts presented for "Components of medical care costs related to: Prior periods" represent the amount by which our original estimate of medical 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. Year Ended December 31, 2015 2014 2013 (Dollars in millions) Balances at beginning of period $ 1,201 $ 670 $ 495 Components of medical care costs related to: Current period 11,935 8,123 5,434 Prior periods (141 ) (46 ) (53 ) Total medical care costs 11,794 8,077 5,381 Change in non-risk provider payables 48 (32 ) 111 Payments for medical care costs related to: Current period 10,448 7,064 4,932 Prior periods 910 450 385 Total paid 11,358 7,514 5,317 Balances at end of period $ 1,685 $ 1,201 $ 670 That portion of our total medical claims and benefits payable liability that is most subject to variability in the estimate is fee-for-service claims incurred but not paid (IBNP). Our IBNP, as included in medical claims and benefits payable, represents our best estimate of the total amount of claims we will ultimately pay with respect to claims that we have incurred as of the balance sheet date. We estimate our IBNP monthly using actuarial methods based on a number of factors. Assuming that our initial estimate of IBNP is accurate, we believe that amounts ultimately paid would generally be between 8% and 10% less than the IBNP liability recorded at the end of the period as a result of the inclusion in that liability of the provision for adverse claims deviation and the accrued cost of settling those claims. Because the amount of our initial liability is merely an estimate (and therefore not perfectly accurate), we will always experience variability in that estimate as new information becomes available with the passage of time. Therefore, there can be no assurance that amounts ultimately paid out will fall within the range of 8% to 10% lower than the liability that was initially recorded. Furthermore, because our initial estimate of IBNP is derived from many factors, some of which are qualitative in nature rather than quantitative, we are seldom able to assign specific values to the reasons for a change in estimate—we only know when the circumstances for any one or more factors are out of the ordinary. The use of a consistent methodology in estimating our liability for medical claims and benefits payable minimizes the degree to which the under– or overestimation of that liability at the close of one period may affect consolidated results of operations in subsequent periods. In particular, the use of a consistent methodology should result in the replenishment of reserves during any given period in a manner that generally offsets the benefit of favorable prior period development in that period. Facts and circumstances unique to the estimation process at any single date, however, may still lead to a material impact on consolidated results of operations in subsequent periods. Any absence of adverse claims development (as well as the expensing through general and administrative expense of the costs to settle claims held at the start of the period) will lead to the recognition of a benefit from prior period claims development in the period subsequent to the date of the original estimate. As indicated above, the amounts ultimately paid out on our medical claims and benefits payable liabilities in fiscal years 2015 , 2014 , and 2013 were less than what we had expected when we had established those liabilities. The differences between our original estimates and the amounts ultimately paid out (or now expected to be ultimately paid out) for the most part related to IBNP. While many related factors working in conjunction with one another determine the accuracy of our estimates, we are seldom able to quantify the impact that any single factor has on a change in estimate. In addition, given the variability inherent in the reserving process, we will only be able to identify specific factors if they represent a significant departure from expectations. As a result, we do not expect to be able to fully quantify the impact of individual factors on changes in estimates. 2015 We believe that the most significant factors that will determine the accuracy of our IBNP estimates at December 31, 2015 are: • A new version of diagnosis codes was required for all claims with dates of service October 1, 2015 and later. As a result, payment was delayed for a significant number of claims due to the use of diagnosis codes that were no longer valid. Due to the resulting variability in the ratio of paid to billed amounts, the reserves are subject to more than the usual amount of uncertainty. • At our Illinois, Puerto Rico and Wisconsin health plans, we overpaid certain provider and outpatient facility claims due to a system configuration error. For this reason, the reserves are subject to more than the usual amount of uncertainty. • Our Michigan health plan added approximately 68,000 new members under an acquisition in the third quarter of 2015. Because these new members may have different utilization patterns than our legacy members, the reserves are subject to more than the usual amount of uncertainty. • Our Puerto Rico health plan started operations on April 1, 2015. Because we lack sufficient historical claims data, our reserves as of December 31, 2015 are based on a combination of claims payment experience and the expected claims in the pricing assumptions. For this reason, the reserves are subject to more than the usual amount of uncertainty. We recognized favorable prior period claims development in the amount of $141 million for the year ended December 31, 2015 . This amount represents our estimate as of December 31, 2015 , of the extent to which our initial estimate of medical claims and benefits payable at December 31, 2014 was more than the amount that will ultimately be paid out in satisfaction of that liability. We believe the overestimation was due primarily to the following factors: • At our Ohio and California health plans, approximately 61,000 and 100,000 members, respectively, were enrolled in the new Medicaid expansion program during 2014. Also in Ohio, approximately 17,000 members were enrolled in the new MMP program in 2014. Because we lacked sufficient historical claims data, we initially estimated the reserves for these new members based upon a number of factors that included pricing assumptions provided by the state; our expectations regarding pent up demand; our beliefs about the speed at which new members would utilize health care services; and other factors. Our actual costs were ultimately less than expected. • At our New Mexico health plan, the state implemented a retroactive increase to the provider fee schedules in mid-2014. As a result, many claims that were previously settled were reopened, and subject to, additional payment. Because our reserving methodology is most accurate when claims payment patterns are consistent and predictable, the payment of additional amounts on claims that in some cases had been settled more than six months before added a substantial degree of complexity to our liability estimation process. Due to the difficulties in addressing that added complexity, liabilities recorded as of December 31, 2014, were in excess of amounts ultimately paid. • At our Washington health plan, in 2015 we collected amounts related to certain claims paid in 2013. Such collections were not anticipated in our reserves as of December 31, 2014. 2014 We recognized favorable prior period claims development in the amount of $46 million for the year ended December 31, 2014. This amount represented our estimate as of December 31, 2014, of the extent to which our initial estimate of medical claims and benefits payable at December 31, 2013 was more than the amount that was ultimately paid out in satisfaction of that liability. We believe the overestimation was due primarily to the following factors: • At our Ohio health plan, we entered new regions in the state, and a new product, ABD Kids, in July 2013. Because we lacked sufficient historical claims data, we initially estimated the reserves for these new members based upon a number of factors that included pricing assumptions provided by the state; our expectations regarding pent up demand; our beliefs about the speed at which new members would utilize health care services; and other factors. Our actual costs were ultimately less than expected. • At our Michigan health plan, we overestimated the impact of certain unpaid potentially high-dollar claims. In addition, we overestimated the impact of the flu season on the outpatient claims for November and December 2013, which caused an overestimation in our outpatient reserve liability as of December 31, 2013. 2013 We recognized favorable prior period claims development in the amount of $53 million for the year ended December 31, 2013. This amount represented our estimate as of December 31, 2013, of the extent to which our initial estimate of medical claims and benefits payable at December 31, 2012 was more than the amount that was ultimately paid out in satisfaction of that liability. We believe the overestimation was due primarily to the following factors: • At our Washington health plan certain high-cost newborns, as well as other high-cost disabled members, were covered by the health plan effective July 1, 2012. Because we lacked sufficient historical claims data, we initially estimated the reserves for these new members based upon a number of factors. Our actual costs were ultimately less than expected. • At our New Mexico health plan, we overestimated the impact of certain high-dollar outstanding claim payments as of December 31, 2012. • At our Ohio health plan, we overestimated the impact of several potential high-dollar claims relating to our ABD members. |
Debt
Debt | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | ||
Debt | Debt As of June 30, 2016 , contractual maturities of debt for the years ending December 31 are as follows: Total 2016 2017 2018 2019 2020 Thereafter (In millions) 5.375% Notes $ 700 $ — $ — $ — $ — $ — $ 700 1.125% Convertible Notes 550 — — — — 550 — 1.625% Convertible Notes (1) 302 — — — — — 302 $ 1,552 $ — $ — $ — $ — $ 550 $ 1,002 (1) The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes. Substantially all of our debt is held at the parent, which is reported in the Other segment. The principal amounts, unamortized discount (net of premium related to the 1.625% Notes), unamortized issuance costs, and net carrying amounts of debt were as follows: Principal Balance Unamortized Discount Unamortized Issuance Costs Net Carrying Amount (In millions) June 30, 2016: 5.375% Notes $ 700 $ — $ 10 $ 690 1.125% Convertible Notes 550 84 6 460 1.625% Convertible Notes 302 20 4 278 $ 1,552 $ 104 $ 20 $ 1,428 December 31, 2015: 5.375% Notes $ 700 $ — $ 11 $ 689 1.125% Convertible Notes 550 95 7 448 1.625% Convertible Notes 302 25 4 273 Other 1 — — 1 $ 1,553 $ 120 $ 22 $ 1,411 Interest cost recognized relating to our convertible senior notes for the periods presented was as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions) Contractual interest coupon rate $ 3 $ 3 $ 6 $ 6 Amortization of the discount 8 7 15 14 $ 11 $ 10 $ 21 $ 20 5.375% Senior Notes due 2022. On November 10, 2015, we completed the private offering of $700 million aggregate principal amount of senior notes ( 5.375% Notes) due November 15, 2022, unless earlier redeemed. Interest is payable semiannually in arrears on May 15 and November 15. The 5.375% Notes are not convertible into our common stock or any other securities. The 5.375% Notes are guaranteed by certain of our wholly owned subsidiaries. The 5.375% Notes and the guarantees are effectively subordinated to all existing and future secured debt of us and our guarantors to the extent of the assets securing such debt. In addition, the 5.375% Notes and the guarantees are structurally subordinated to all indebtedness and other liabilities and preferred stock of our subsidiaries that do not guarantee the 5.375% Notes. We may redeem some or all of the 5.375% Notes at any time, and prior to August 15, 2022, at a price equal to 100% of the principal amount redeemed plus accrued and unpaid interest thereon, plus a "make-whole" premium. Thereafter, we may redeem some or all of the 5.375% Notes at a price equal to 100% of the principal amount redeemed plus accrued and unpaid interest thereon. The 5.375% Notes contain customary non-financial covenants and change of control provisions. In connection with the issuance and sale of the 5.375% Notes, we entered into a registration rights agreement. Under this agreement, we will use commercially reasonable efforts to register substantially identical notes (the Exchange Notes) with the SEC in 2016. We will then offer such freely tradable Exchange Notes in exchange for the 5.375% Notes. We will pay additional interest on the 5.375% Notes if the Exchange Notes offering is not completed timely. Credit Facility. In June 2015, we entered into an unsecured $250 million revolving credit facility (Credit Facility). The Credit Facility has a term of five years and all amounts outstanding will be due and payable on June 12, 2020. Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, we may increase the Credit Facility to up to $350 million . As of June 30, 2016 , outstanding letters of credit amounting to $6 million reduced the borrowing capacity to $244 million , and no amounts were outstanding under the Credit Facility. Borrowings under the Credit Facility bear interest based, at our election, on a base rate or an adjusted London Interbank Offered Rate (LIBOR), plus in each case the applicable margin. In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Credit Facility, we are required to pay a quarterly commitment fee. Although the Credit Facility is not secured by any of our assets, certain of our wholly owned subsidiaries have jointly and severally guaranteed our obligations under the Credit Facility. The Credit Facility contains customary non-financial and financial covenants, including a minimum fixed charge coverage ratio, a maximum debt-to-EBITDA ratio and minimum statutory net worth. At June 30, 2016 , we were in compliance with all financial covenants under the Credit Facility. 1.125% Cash Convertible Senior Notes due 2020. In February 2013, we issued $550 million aggregate principal amount of 1.125% cash convertible senior notes (1.125% Notes) due January 15, 2020, unless earlier repurchased or converted. Interest is payable semiannually in arrears on January 15 and July 15. The 1.125% Notes are senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 1.125% Notes; equal in right of payment to any of our unsecured indebtedness that is not subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of our subsidiaries. The 1.125% Notes are convertible only into cash, and not into shares of our common stock or any other securities. The initial conversion rate for the 1.125% Notes is 24.5277 shares of our common stock per $1,000 principal amount of the 1.125% Notes. This represents an initial conversion price of approximately $40.77 per share of our common stock. Upon conversion, in lieu of receiving shares of our common stock, a holder will receive an amount in cash, per $1,000 principal amount of 1.125% Notes, equal to the settlement amount, determined in the manner set forth in the indenture. We may not redeem the 1.125% Notes prior to the maturity date. Holders may convert their 1.125% Notes only under the following circumstances: • during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period immediately after any five consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of 1.125% Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; • upon the occurrence of specified corporate events; or • at any time on or after July 15, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date. The 1.125% Notes did not meet the stock price trigger in the quarter ended June 30, 2016 ; therefore the $460 million carrying amount was reclassified to long-term debt as of June 30, 2016 . The 1.125% Notes contain an embedded cash conversion option (the 1.125% Conversion Option), which was separated from the 1.125% Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income until the 1.125% Conversion Option settles or expires. The initial fair value liability of the 1.125% Conversion Option simultaneously reduced the carrying value of the 1.125% Notes (effectively an original issuance discount). This discount is amortized to the 1.125% Notes' principal amount through the recognition of non-cash interest expense over the expected life of the debt. This has resulted in our recognition of interest expense on the 1.125% Notes at an effective rate of approximately 6% . As of June 30, 2016 , the 1.125% Notes have a remaining amortization period of 3.5 years. The 1.125% Notes' if-converted value exceeded their principal amount by approximately $180 million and $332 million as of June 30, 2016 and December 31, 2015 , respectively. 1.625% Convertible Senior Notes due 2044. In September 2014, we issued $125 million principal amount of 1.625% convertible senior notes ( 1.625% Notes) due August 15, 2044, unless earlier repurchased, redeemed or converted. Combined with the 1.625% Notes issued in an exchange transaction in 2014, the aggregate principal amount of 1.625% Notes issued was $ 302 million . Interest is payable semiannually in arrears on February 15 and August 15. In addition, beginning with the semiannual interest period commencing immediately following the interest payment date on August 15, 2018, contingent interest will accrue on the 1.625% Notes during any semiannual interest period in which certain conditions or events occur, or under certain events of default. For example, additional interest of 0.25 % per year will be payable on the 1.625% Notes for any semiannual interest period for which the principal amount of 1.625% Notes outstanding is less than $ 100 million . The 1.625% Notes are senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 1.625% Notes; equal in right of payment to any of our unsecured indebtedness that is not subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of our subsidiaries. The initial conversion rate for the 1.625% Notes is 17.2157 shares of our common stock per $1,000 principal amount of the 1.625% Notes. This represents an initial conversion price of approximately $ 58.09 per share of our common stock. Upon conversion, we will pay cash and, if applicable, deliver shares of our common stock to the converting holder in an amount per $1,000 principal amount of 1.625% Notes equal to the settlement amount (as defined in the related indenture). Holders may convert their 1.625% Notes only under the following circumstances: • during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of 1.625% Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; • upon the occurrence of specified corporate events; • if we call any 1.625% Notes for redemption, at any time until the close of business on the business day immediately preceding the redemption date; • during the period from, and including, May 15, 2018 to the close of business on the business day immediately preceding August 19, 2018; or • at any time on or after February 15, 2044 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 1.625% Notes, in integral multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. As of June 30, 2016 , the 1.625% Notes were not convertible. We may not redeem the 1.625% Notes prior to August 19, 2018 . On or after August 19, 2018, we may redeem all or part of the 1.625% Notes for cash, except for the 1.625% Notes we are required to repurchase in connection with a fundamental change or on any specified repurchase date. The redemption price for the 1.625% Notes will equal 100% of the principal amount of the 1.625% Notes being redeemed, plus accrued and unpaid interest. In addition, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes for cash on August 19, 2018 , August 19, 2024 , August 19, 2029 , August 19, 2034 and August 19, 2039 , in each case, at a specified price equal to 100% of the principal amount of the 1.625% Notes to be repurchased, plus accrued and unpaid interest. Because the 1.625% Notes are net share settled and have cash settlement features, we have allocated the principal amount between a liability component and an equity component. The reduced carrying value on the 1.625% Notes resulted in a debt discount that is amortized back to the 1.625% Notes' principal amount through the recognition of non-cash interest expense over the expected life of the debt. The expected life of the debt is approximately four years, beginning on the issuance date and ending on the first date we may redeem the 1.625% Notes in August 2018. As of June 30, 2016 , the 1.625% Notes have a remaining amortization period of 2.1 years. This has resulted in our recognition of interest expense on the 1.625% Notes at an effective rate approximating what we would have incurred had nonconvertible debt with otherwise similar terms been issued, or approximately 5% . The outstanding 1.625% Notes’ if-converted value did not exceed their principal amount at June 30, 2016 and exceeded their principal amount at December 31, 2015 by approximately $10 million . At June 30, 2016 and December 31, 2015 , the equity component of the 1.625% Notes, including the impact of deferred taxes, was $ 23 million . | Debt As of December 31, 2015 , contractual maturities of debt for the years ending December 31 are as follows (in millions): Total 2016 2017 2018 2019 2020 Thereafter 5.375% Notes $ 700 $ — $ — $ — $ — $ — $ 700 1.125% Convertible Notes 550 — — — — 550 — 1.625% Convertible Notes (1) 302 — — — — — 302 Other 1 1 — — — — — $ 1,553 $ 1 $ — $ — $ — $ 550 $ 1,002 (1) The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes. Substantially all of our debt is held at the parent, which is reported in the Other segment. The principal amounts, unamortized discount (net of premium related to 1.625% Notes), unamortized issuance costs, and net carrying amounts of debt were as follows: Principal Balance Unamortized Discount Unamortized Issuance Costs Net Carrying Amount (In millions) December 31, 2015: 5.375% Notes $ 700 $ — $ 11 $ 689 1.125% Convertible Notes 550 95 7 448 1.625% Convertible Notes 302 25 4 273 Other 1 — — 1 $ 1,553 $ 120 $ 22 $ 1,411 December 31, 2014: 1.125% Convertible Notes $ 550 $ 115 $ 9 $ 426 1.625% Convertible Notes 302 33 5 264 $ 852 $ 148 $ 14 $ 690 Years Ended December 31, 2015 2014 2013 (In millions) Interest cost recognized for the period relating to: Contractual interest coupon rate $ 17 $ 13 $ 13 Amortization of the discount 29 26 22 $ 46 $ 39 $ 35 5.375% Senior Notes due 2022. On November 10, 2015, we completed the private offering of $700 million aggregate principal amount of senior notes ( 5.375% Notes) due November 15, 2022, unless earlier redeemed. Interest is payable semiannually in arrears on May 15 and November 15, beginning on May 15, 2016. The 5.375% Notes are not convertible into our common stock or any other securities. The 5.375% Notes are guaranteed by certain of our wholly owned subsidiaries. The 5.375% Notes and the guarantees are effectively subordinated to all existing and future secured debt of us and our guarantors to the extent of the assets securing such debt. In addition, the 5.375% Notes and the guarantees are structurally subordinated to all indebtedness and other liabilities and preferred stock of our subsidiaries that do not guarantee the 5.375% Notes. We may redeem some or all of the 5.375% Notes at any time, and prior to August 15, 2022, at a price equal to 100% of the principal amount redeemed plus accrued and unpaid interest thereon, plus a "make-whole" premium. Thereafter, we may redeem some or all of the 5.375% Notes at a price equal to 100% of the principal amount redeemed plus accrued and unpaid interest thereon. The 5.375% Notes contain customary non-financial covenants and change of control provisions. In connection with the issuance and sale of the 5.375% Notes, we entered into a registration rights agreement. Under this agreement, we will use commercially reasonable efforts to register substantially identical notes (the Exchange Notes) with the SEC in 2016. We will then offer such freely tradable Exchange Notes in exchange for the 5.375% Notes. We will pay additional interest on the 5.375% Notes if the Exchange Notes offering is not completed timely. Credit Facility. In June 2015, we entered into an unsecured $250 million revolving credit facility (Credit Facility). The Credit Facility has a term of five years and all amounts outstanding will be due and payable on June 12, 2020. Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, we may increase the Credit Facility to up to $350 million . As of December 31, 2015 , outstanding letters of credit amounting to $6 million reduced the borrowing capacity to $244 million , and no amounts were outstanding under the Credit Facility. Borrowings under the Credit Facility bear interest based, at our election, on a base rate or an adjusted London Interbank Offered Rate (LIBOR), plus in each case the applicable margin. In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Credit Facility, we are required to pay a quarterly commitment fee. Although the Credit Facility is not secured by any of our assets, certain of our wholly owned subsidiaries have jointly and severally guaranteed our obligations under the Credit Facility. The Credit Facility contains customary non-financial and financial covenants, including a minimum fixed charge coverage ratio, a maximum debt-to-EBITDA ratio and minimum statutory net worth. At December 31, 2015 , we were in compliance with all financial covenants under the Credit Facility. 1.125% Cash Convertible Senior Notes due 2020. In February 2013, we issued $550 million aggregate principal amount of 1.125% cash convertible senior notes (1.125% Notes) due January 15, 2020, unless earlier repurchased or converted. Interest is payable semiannually in arrears on January 15 and July 15. The 1.125% Notes are senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 1.125% Notes; equal in right of payment to any of our unsecured indebtedness that is not subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of our subsidiaries. The 1.125% Notes are convertible only into cash, and not into shares of our common stock or any other securities. The initial conversion rate for the 1.125% Notes is 24.5277 shares of our common stock per $1,000 principal amount of the 1.125% Notes. This represents an initial conversion price of approximately $40.77 per share of our common stock. Upon conversion, in lieu of receiving shares of our common stock, a holder will receive an amount in cash, per $1,000 principal amount of 1.125% Notes, equal to the settlement amount, determined in the manner set forth in the indenture. We may not redeem the 1.125% Notes prior to the maturity date. Holders may convert their 1.125% Notes only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on June 30, 2013 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period immediately after any five consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of 1.125% Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; • upon the occurrence of specified corporate events; or • at any time on or after July 15, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date. The 1.125% Notes met the stock price trigger in the quarter ended December 31, 2015, and are convertible into cash through at least March 31, 2016. Because the 1.125% Notes may be converted to cash within 12 months, the $448 million carrying amount is reported in current portion of long-term debt as of December 31, 2015. The 1.125% Notes contain an embedded cash conversion option (the 1.125% Conversion Option), which was separated from the 1.125% Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income until the 1.125% Conversion Option settles or expires. The initial fair value liability of the 1.125% Conversion Option simultaneously reduced the carrying value of the 1.125% Notes (effectively an original issuance discount). This discount is amortized to the 1.125% Notes' principal amount through the recognition of non-cash interest expense over the expected life of the debt. This has resulted in our recognition of interest expense on the 1.125% Notes at an effective rate of approximately 6% . As of December 31, 2015 , the 1.125% Notes have a remaining amortization period of 4.0 years. The 1.125% Notes' if-converted value exceeded their principal amount by approximately $332 million and $93 million as of December 31, 2015 and December 31, 2014 , respectively. 1.625% Convertible Senior Notes due 2044. In September 2014, we issued $125 million principal amount of 1.625% convertible senior notes (1.625% Notes) due August 15, 2044, unless earlier repurchased, redeemed or converted. Combined with the 1.625% Notes issued in connection with the 3.75% Exchange described below, the aggregate principal amount issued under the 1.625% Notes was $302 million . Interest is payable semiannually in arrears on February 15 and August 15. In addition, beginning with the semiannual interest period commencing immediately following the interest payment date on August 15, 2018, contingent interest will accrue on the 1.625% Notes during any semiannual interest period in which certain conditions or events occur, or under certain events of default. For example, additional interest of 0.25 % per year will be payable on the 1.625% Notes for any semiannual interest period for which the principal amount of 1.625% Notes outstanding is less than $ 100 million . The 1.625% Notes are senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 1.625% Notes; equal in right of payment to any of our unsecured indebtedness that is not subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of our subsidiaries. The initial conversion rate for the 1.625% Notes is 17.2157 shares of our common stock per $1,000 principal amount of the 1.625% Notes. This represents an initial conversion price of approximately $ 58.09 per share of our common stock. Upon conversion, we will pay cash and, if applicable, deliver shares of our common stock to the converting holder in an amount per $1,000 principal amount of 1.625% Notes equal to the settlement amount (as defined in the related indenture). Holders may convert their 1.625% Notes only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of 1.625% Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; • upon the occurrence of specified corporate events; • if we call any 1.625% Notes for redemption, at any time until the close of business on the business day immediately preceding the redemption date; • during the period from, and including, May 15, 2018 to the close of business on the business day immediately preceding August 19, 2018; or • at any time on or after February 15, 2044 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 1.625% Notes, in integral multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. As of December 31, 2015 , the 1.625% Notes were not convertible. We may not redeem the 1.625% Notes prior to August 19, 2018 . On or after August 19, 2018, we may redeem for cash all or part of the 1.625% Notes, except for the 1.625% Notes we are required to repurchase in connection with a fundamental change or on any specified repurchase date. The redemption price for the 1.625% Notes will equal 100% of the principal amount of the 1.625% Notes being redeemed, plus accrued and unpaid interest. In addition, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes for cash on August 19, 2018 , August 19, 2024 , August 19, 2029 , August 19, 2034 and August 19, 2039 , in each case, at a specified price equal to 100% of the principal amount of the 1.625% Notes to be repurchased, plus accrued and unpaid interest. Because the 1.625% Notes are net share settled and have cash settlement features, we have allocated the principal amount between a liability component and an equity component. The reduced carrying value on the 1.625% Notes resulted in a debt discount that is amortized back to the 1.625% Notes' principal amount through the recognition of non-cash interest expense over the expected life of the debt. The expected life of the debt is approximately four years, beginning on the issuance date and ending on the first date we may redeem the notes in August 2018. As of December 31, 2015 , the 1.625% Notes have a remaining amortization period of 2.6 years. This has resulted in our recognition of interest expense on the 1.625% Notes at an effective rate approximating what we would have incurred had nonconvertible debt with otherwise similar terms been issued, or approximately 5% . The outstanding 1.625% Notes’ if-converted value exceeded their principal amount by approximately $10 million as of December 31, 2015 , and did not exceed their principal amount as of December 31, 2014 . At December 31, 2015 and December 31, 2014 , the equity component of the 1.625% Notes, including the impact of deferred taxes, was $ 23 million . 3.75% Exchange. In August 2014, we entered into separate, privately negotiated, exchange agreements (the 3.75% Exchange) with certain holders of our outstanding 3.75% convertible senior notes due 2014 (the 3.75% Notes). In this transaction, we exchanged $ 177 million aggregate principal amount of the 3.75% Notes for $ 177 million principal amount of 1.625% convertible senior notes due 2044, approximately 2 million shares of our common stock, and payment of accrued interest on the exchanged 3.75% Notes; additionally, we issued approximately 81,000 shares of common stock for services rendered in connection with the 3.75% Exchange. We did not receive any proceeds from the 3.75% Exchange. 3.75% Notes. As described above, we entered into the 3.75% Exchange transaction in August 2014, under which we exchanged $177 million of the outstanding principal amount of the 3.75% Notes for the 1.625% Notes. The remaining $10 million principal amount was repaid in full in October 2014. Lease Financing Obligations. In 2013, we entered into a sale-leaseback transaction for the Molina Center located in Long Beach, California, and our Ohio health plan office building located in Columbus, Ohio. Due to our continuing involvement with these leased properties, the sale did not qualify for sales recognition and we remain the "accounting owner" of the properties. These assets continue to be included in our consolidated balance sheets, and also continue to be depreciated over their remaining useful lives. The lease financing obligation is amortized over the 25 -year lease term such that there will be no gain or loss recorded if the lease is not extended at the end of its term. Rent will increase 3% per year through the initial term. Payments under the lease adjust the lease financing obligation, and the imputed interest is recorded to interest expense in our consolidated statements of income. Such interest amounted to $13 million for both years ended December 31, 2015 and 2014 . As described and defined in further detail in Note 17 , " Related Party Transactions ," we entered into a lease for office space in February 2013 consisting of two office buildings. We have concluded that we are the accounting owner of the buildings due to our continuing involvement with the properties. We have recorded $36 million to property, equipment and capitalized software, net, in the accompanying consolidated balance sheet as of December 31, 2015 , which represents the total cost incurred by the Landlord for the construction of the buildings, net of accumulated depreciation. As of December 31, 2015 and December 31, 2014 , the aggregate amount recorded to lease financing obligations, including the current portion, amounted to $40 million and $41 million , respectively. Payments under the lease adjust the lease financing obligation, and the imputed interest is recorded to interest expense in our consolidated statements of income. Such interest expense was $4 million and $3 million for the year ended December 31, 2015 and 2014 , respectively. In addition to the capitalization of the costs incurred by the Landlord, we impute and record rent expense relating to the ground leases for the property sites. Such rent expense is computed based on the fair value of the land and our incremental borrowing rate, and was $1 million for both years ended December 31, 2015 and 2014 . For information regarding the future minimum lease obligation, refer to Note 19 , " Commitments and Contingencies ." |
Derivatives
Derivatives | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivatives | Derivatives The following table summarizes the fair values and the presentation of our derivative financial instruments (defined and discussed individually below) in the consolidated balance sheets: Balance Sheet Location June 30, December 31, (In millions) Derivative asset: 1.125% Call Option Current assets: Derivative asset $ — $ 374 Non-current assets: Derivative asset $ 226 $ — Derivative liability: 1.125% Conversion Option Current liabilities: Derivative liability $ — $ 374 Non-current liabilities: Derivative liability $ 226 $ — Our derivative financial instruments do not qualify for hedge treatment; therefore the change in fair value of these instruments is recognized immediately in our consolidated statements of income, and reported in other expense, net. Gains and losses for our derivative financial instruments are presented individually in the consolidated statements of cash flows, supplemental cash flow information. 1.125% Notes Call Spread Overlay. Concurrent with the issuance of the 1.125% Notes in 2013, we entered into privately negotiated hedge transactions (collectively, the 1.125% Call Option) and warrant transactions (collectively, the 1.125% Warrants), with certain of the initial purchasers of the 1.125% Notes (the Counterparties). We refer to these transactions collectively as the Call Spread Overlay. Under the Call Spread Overlay, the cost of the 1.125% Call Option we purchased to cover the cash outlay upon conversion of the 1.125% Notes was reduced by proceeds from the sale of the 1.125% Warrants. Assuming full performance by the Counterparties (and 1.125% Warrants strike prices in excess of the conversion price of the 1.125% Notes), these transactions are intended to offset cash payments in excess of the principal amount of the 1.125% Notes due upon any conversion of the 1.125% Notes. 1.125% Call Option. The 1.125% Call Option, which is indexed to our common stock, is a derivative asset that requires mark-to-market accounting treatment due to cash settlement features until the 1.125% Call Option settles or expires. For further discussion of the inputs used to determine the fair value of the 1.125% Call Option, refer to Note 5 , " Fair Value Measurements ." 1.125% Conversion Option. The embedded cash conversion option within the 1.125% Notes is accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income until the cash conversion option settles or expires. For further discussion of the inputs used to determine the fair value of the 1.125% Conversion Option, refer to Note 5 , " Fair Value Measurements ." As of June 30, 2016 , the 1.125% Call Option and the 1.125% Conversion Option were classified as a non-current asset and non-current liability, respectively, because the 1.125% Notes may not be converted within 12 months of June 30, 2016 , as described in Note 10 , " Debt ." | Derivatives The following table summarizes the fair values and the presentation of our derivative financial instruments (defined and discussed individually below) in the consolidated balance sheets: December 31, Balance Sheet Location 2015 2014 (In millions) Derivative asset: 1.125% Call Option Current assets: Derivative asset $ 374 $ — Non-current assets: Derivative asset $ — $ 329 Derivative liability: 1.125% Conversion Option Current liabilities: Derivative liability $ 374 $ — Non-current liabilities: Derivative liability $ — $ 329 Our derivative financial instruments do not qualify for hedge treatment, therefore the change in fair value of these instruments is recognized immediately in our consolidated statements of income, and reported in other expense, net. Gains and losses for our derivative financial instruments are presented individually in the consolidated statements of cash flows, supplemental cash flow information. 1.125% Notes Call Spread Overlay. Concurrent with the issuance of the 1.125% Notes in 2013, we entered into privately negotiated hedge transactions (collectively, the 1.125% Call Option) and warrant transactions (collectively, the 1.125% Warrants), with certain of the initial purchasers of the 1.125% Notes (the Counterparties). We refer to these transactions collectively as the Call Spread Overlay. Under the Call Spread Overlay, the cost of the 1.125% Call Option we purchased to cover the cash outlay upon conversion of the 1.125% Notes was reduced by proceeds from the sale of the 1.125% Warrants. Assuming full performance by the Counterparties (and 1.125% Warrants strike prices in excess of the conversion price of the 1.125% Notes), these transactions are intended to offset cash payments in excess of the principal amount of the notes due upon any conversion of the 1.125% Notes. 1.125% Call Option. The 1.125% Call Option, which is indexed to our common stock, is a derivative asset that requires mark-to-market accounting treatment due to cash settlement features until the 1.125% Call Option settles or expires. For further discussion of the inputs used to determine the fair value of the 1.125% Call Option, refer to Note 5 , " Fair Value Measurements ." 1.125% Conversion Option. The embedded cash conversion option within the 1.125% Notes is accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of income until the cash conversion option settles or expires. For further discussion of the inputs used to determine the fair value of the 1.125% Conversion Option, refer to Note 5 , " Fair Value Measurements ." As of December 31, 2015 , the 1.125% Call Option and the 1.125% Conversion Option were classified as a current asset and current liability, respectively, because the 1.125% Notes may be converted within 12 months of December 31, 2015 , as described in Note 12 , " Debt ." |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | ||
Stockholders' Equity | Stockholders' Equity Stockholders' equity increased $84 million during the six months ended June 30, 2016 compared with stockholders' equity at December 31, 2015 . The increase was primarily due to net income of $57 million , $8 million of other comprehensive income and $19 million related to employee stock transactions. 1.125% Warrants. In connection with the Call Spread Overlay transaction described in Note 11 , " Derivatives ," in 2013, we issued 13,490,236 warrants with a strike price of $53.8475 per share. The number of warrants and the strike price are subject to adjustment under certain circumstances. If the market value per share of our common stock exceeds the strike price of the 1.125% Warrants on any trading day during the 160 trading day measurement period (beginning on April 15, 2020) under the 1.125% Warrants, we will be obligated to issue to the Counterparties a number of shares equal in value to the product of the amount by which such market value exceeds such strike price and 1/160th of the aggregate number of shares of our common stock underlying the 1.125% Warrants, subject to a share delivery cap. The 1.125% Warrants could separately have a dilutive effect to the extent that the market value per share of our common stock exceeds the applicable strike price of the 1.125% Warrants. Refer to Note 3 , " Net Income per Share ," for dilution information for the periods presented. We will not receive any additional proceeds if the 1.125% Warrants are exercised. Securities Repurchase Program. Effective as of December 16, 2015, our board of directors authorized the repurchase of up to $50 million in aggregate of our common stock or senior notes. This repurchase program extends through December 31, 2016. Stock Incentive Plans. In connection with our equity incentive plans and employee stock purchase plan, approximately 446,000 shares of common stock vested, net of shares used to settle employees’ income tax obligations, during the six months ended June 30, 2016 . Charged to general and administrative expenses, total share-based compensation expense was as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions) Restricted stock and performance awards $ 8 $ 2 $ 13 $ 7 Employee stock purchase plan and stock options 1 1 3 2 $ 9 $ 3 $ 16 $ 9 As of June 30, 2016 , there was $45 million of total unrecognized compensation expense related to unvested restricted share awards, including those with performance conditions, which we expect to recognize over a remaining weighted-average period of 1.8 years . This unrecognized compensation cost assumes an estimated forfeiture rate of 4.3% for non-executive employees as of June 30, 2016 . Restricted stock. Restricted and performance stock activity for the six months ended June 30, 2016 is summarized below: Shares Weighted Average Grant Date Fair Value (In thousands) Unvested balance as of December 31, 2015 1,035 $ 46.68 Granted 505 64.22 Vested (329 ) 41.45 Forfeited (19 ) 52.01 Unvested balance as of June 30, 2016 1,192 55.47 The total fair value of restricted and performance awards granted during the six months ended June 30, 2016 and 2015 was $32 million and $27 million , respectively. The total fair value of restricted awards, including those with performance and market conditions, which vested during the six months ended June 30, 2016 and 2015 was $21 million and $24 million , respectively. As of June 30, 2016 , there were approximately 603,000 unvested restricted shares outstanding which contained one or more performance measures. In the event the vesting conditions are not achieved, the awards will lapse. Based on our assessment as of June 30, 2016 , we expect the performance conditions for approximately 425,000 of these outstanding restricted share awards to be met in full. | Stockholders' Equity Stockholders' equity increased $547 million during the year ended December 31, 2015 . The increase was primarily due to the common stock offering described below, net income of $143 million , and $34 million related to share-based compensation transactions. Common Stock Offering. In June 2015, we completed an underwritten public offering of 5,750,000 shares of our common stock, including the over-allotment option. Net of issuance costs, proceeds from the offering amounted to $373 million , or $64.90 per share, resulting in an increase to additional paid-in capital. We are using the proceeds to finance working capital needs, acquisitions, capital expenditures, and other general corporate activities. 1.125% Warrants. In connection with the 1.125% Notes Call Spread Overlay transaction described in Note 13 , " Derivatives ," in 2013, we issued 13,490,236 warrants with a strike price of $53.8475 per share. The number of warrants and the strike price are subject to adjustment under certain circumstances. If the market value per share of our common stock exceeds the strike price of the 1.125% Warrants on any trading day during the 160 trading day measurement period (beginning on April 15, 2020) under the 1.125% Warrants, we will be obligated to issue to the Counterparties a number of shares equal in value to the product of the amount by which such market value exceeds such strike price and 1/160th of the aggregate number of shares of our common stock underlying the 1.125% Warrants, subject to a share delivery cap. The 1.125% Warrants could separately have a dilutive effect to the extent that the market value per share of our common stock exceeds the applicable strike price of the 1.125% Warrants. Refer to Note 3 , " Net Income per Share ," for dilution information for the periods presented. We will not receive any additional proceeds if the 1.125% Warrants are exercised. Securities Repurchase Programs. Effective as of December 16, 2015, our board of directors authorized the repurchase of up to $50 million in aggregate of our common stock or senior notes. This newly authorized repurchase program extends through December 31, 2016. In February 2015, our board of directors authorized the repurchase of up to $50 million in aggregate of our common stock. We did not repurchase any shares under this program, which expired December 31, 2015. Stock Incentive Plans. At December 31, 2015 , we had employee equity incentives outstanding under two plans: (1) the 2011 Equity Incentive Plan (2011 Plan); and (2) the 2002 Equity Incentive Plan (from which equity incentives are no longer awarded). The 2011 Plan provides for the award of restricted shares and units, performance shares and units, stock options and stock bonuses to the company’s officers, employees, directors, consultants, advisers, and other service providers. The 2011 Plan provides for the issuance of up to 4.5 million shares of common stock. Restricted share awards are granted with a fair value equal to the market price of our common stock on the date of grant, and generally vest in equal annual installments over periods up to four years from the date of grant. Stock option awards have an exercise price equal to the fair market value of our common stock on the date of grant, generally vest in equal annual installments over periods up to four years from the date of grant, and have a maximum term of ten years from the date of grant. In connection with our stock plans, we issued approximately 830,000 shares of common stock, net of shares used to settle employees’ income tax obligations, in the year ended December 31, 2015 . The following table illustrates the components of our share-based compensation expense that are reported in general and administrative expenses in the consolidated statements of income: Year Ended December 31, 2015 2014 2013 (In millions) Pretax Charges Net-of-Tax Amount Pretax Charges Net-of-Tax Amount Pretax Charges Net-of-Tax Amount Restricted stock and performance awards $ 19 $ 13 $ 19 $ 12 $ 26 $ 23 Employee stock purchase plan and stock options 4 3 3 2 3 2 $ 23 $ 16 $ 22 $ 14 $ 29 $ 25 As of December 31, 2015 , there was $25 million of total unrecognized compensation expense related to unvested restricted share awards, including those with performance conditions, which we expect to recognize over a remaining weighted-average period of 1.6 years . This unrecognized compensation cost assumes an estimated forfeiture rate of 6.5% for non-executive employees as of December 31, 2015 . As of December 31, 2015 , the unrecognized compensation expense related to unvested stock options was insignificant. Restricted stock. Restricted and performance stock activity for the year ended December 31, 2015 is summarized below: Shares Weighted Average Grant Date Fair Value Unvested balance as of December 31, 2014 1,282,072 $ 33.55 Granted - restricted shares 273,710 64.56 Granted - performance shares 162,827 63.90 Vested - restricted shares (371,489 ) 34.58 Vested - performance shares (264,604 ) 30.80 Forfeited (47,759 ) 37.51 Unvested balance as of December 31, 2015 1,034,757 46.68 The total fair value of restricted and performance share awards granted during the years ended December 31, 2015 , 2014 , and 2013 was $28 million , $25 million , and $33 million , respectively. The total fair value of restricted share awards, including those with performance or market conditions which vested during the years ended December 31, 2015 , 2014 , and 2013 was $39 million , $24 million , and $22 million , respectively. In 2015, our named executive officers were granted approximately 163,000 restricted shares with performance and market conditions. The grant date fair value for the awards with market conditions were determined based on a Monte Carlo Simulation which projected Total Stockholder Return (TSR) over the performance period using correlations and volatilities of our ISS peer groups. The weighted-average grant date fair value per share of the 2015 performance awards based on three-year TSR was $49.43 , determined using additional inputs as follows: risk-free interest rate of 0.8% , dividend yield of 0% , and expected life of 2.8 years. As of December 31, 2015 , there were approximately 377,000 unvested restricted shares outstanding which contained one or more performance measures. In the event the vesting conditions are not achieved, the awards will lapse. Based on our assessment as of December 31, 2015 , we expect the performance conditions relating to approximately 199,000 of these outstanding restricted share awards to be met in full. In 2015, we reversed approximately $3 million in share-based compensation expense recognized from grant date through March 31, 2015, related to 178,000 of the awards granted in 2014, due to management's determination in the second quarter of 2015 that the achievement of the underlying performance conditions was not probable. In December 2015, approximately 229,000 restricted stock awards with performance conditions, granted in 2013, vested due to achievement of the total revenue metric as defined in the terms of the grant. Employee Stock Purchase Plan. Under our employee stock purchase plan (ESPP), eligible employees may purchase common shares at 85% of the lower of the fair market value of our common stock on either the first or last trading day of each six-month offering period. Each participant is limited to a maximum purchase of $25,000 (as measured by the fair value of the stock acquired) per year through payroll deductions. We estimate the fair value of the stock issued using the Black-Scholes option pricing model. For the years ended December 31, 2015 , 2014 , and 2013 , the inputs to this model were as follows: risk-free interest rates of approximately 0.1% ; expected volatilities ranging from approximately 30% to 50% , dividend yields of 0% , and an average expected life of 0.5 years. We issued approximately 301,900 , 327,200 and 299,600 shares of our common stock under the ESPP during the years ended December 31, 2015 , 2014 , and 2013 , respectively. The 2011 ESPP provides for the issuance of up to three million shares of common stock. Stock Options. No stock options were granted in 2015 and 2014 , and stock options outstanding as of December 31, 2015 were insignificant. The grant date fair value per share of the stock options awarded to the new members of our board of directors during 2013 was $14.67 . We estimated the fair value of each stock option award using the Black-Scholes option pricing model, with the following inputs: risk-free interest rate of 1.4% , expected volatility of 41.3% , dividend yield of 0% , and expected life of 7 years. The total intrinsic value of options exercised during the years ended December 31, 2015 , 2014 , and 2013 was $6 million , $2 million , and $1 million , respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | Related Party Transactions Our California health plan has entered into a provider agreement with Pacific Healthcare IPA (Pacific), which is 50% owned by the brother-in-law of Dr. J. Mario Molina, our Chief Executive Officer, and John C. Molina, our Chief Financial Officer. Under the terms of this provider agreement, the California health plan pays Pacific for medical care Pacific provides to health plan members. For the three and six months ended June 30, 2016 and 2015 , the amounts paid to Pacific were insignificant. Refer to Note 16 , " Variable Interest Entities (VIEs) ," for a discussion of the Joseph M. Molina, M.D. Professional Corporations. | Related Party Transactions Prior to December 22, 2015, we were the lessee under a lease with 6 th & Pine Development, LLC (the Landlord) for two office buildings. The principal members of the Landlord were John C. Molina, our chief financial officer and a director of Molina Healthcare, Inc., and his wife. In addition, in connection with the development of the buildings being leased, John C. Molina pledged certain of his common stock holdings in Molina Healthcare, Inc. Dr. J. Mario Molina, our chief executive officer, president and chairman of the board of directors, holds a partial interest in such shares as trust beneficiary. On December 22, 2015, the Landlord assigned the lease to an unrelated third party. There were no significant changes to the lease other than the assignment to the new owner. As a result of the assignment, as of December 31, 2015, amounts previously reported as lease financing obligations - related party were reported in lease financing obligations on the accompanying consolidated balance sheets. For information regarding the lease financing obligation associated with this lease, refer to Note 12 , " Debt ." Our California health plan has entered into a provider agreement with Pacific Healthcare IPA (Pacific), which is 50% owned by the brother-in-law of Dr. J. Mario Molina and John C. Molina. Under the terms of this provider agreement, the California health plan paid Pacific approximately $1 million in each of 2015 and 2014 for medical care provided to health plan members. Payments in 2013 were insignificant. Refer to Note 18 , " Variable Interest Entities (VIEs) ," for a discussion of the Joseph M. Molina, M.D. Professional Corporations. |
Property, Equipment, and Capita
Property, Equipment, and Capitalized Software | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment, and Capitalized Software | Property, Equipment, and Capitalized Software A summary of property, equipment, and capitalized software is as follows: December 31, 2015 2014 (In millions) Land $ 16 $ 15 Building and improvements 153 195 Furniture and equipment 250 141 Capitalized software 336 267 755 618 Less: accumulated depreciation and amortization on building and improvements, furniture and equipment (167 ) (129 ) Less: accumulated amortization for capitalized software (195 ) (148 ) (362 ) (277 ) Property, equipment, and capitalized software, net $ 393 $ 341 Depreciation recognized for building and improvements, and furniture and equipment was $49 million , $35 million , and $27 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Amortization of capitalized software was $52 million , $59 million , and $46 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Molina Center. We acquired the Molina Center in December 2011. Subsequently, in June 2013 we entered into a sale-leaseback transaction for the Molina Center. Due to our continuing involvement with the leased property, the sale did not qualify for sales recognition and we remain the "accounting owner" of the property. See Note 12 , " Debt ." Future minimum rental income on noncancelable leases from third party tenants of the Molina Center is sublease rental income, and is reported in other revenue in our consolidated statements of income. The future minimum rental income is as follows: 2016 2017 2018 2019 2020 Thereafter Total (In millions) Future minimum rentals $ 4 4 4 2 2 1 $ 17 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table provides the details of identified intangible assets, by major class, for the periods indicated: Cost Accumulated Amortization Net Balance (In millions) Intangible assets: Contract rights and licenses $ 224 $ 120 $ 104 Customer relationships 25 23 2 Contract backlog 24 24 — Provider networks 27 11 16 Balance at December 31, 2015 $ 300 $ 178 $ 122 Intangible assets: Contract rights and licenses $ 182 $ 105 $ 77 Customer relationships 25 23 2 Contract backlog 24 23 1 Provider networks 18 9 9 Balance at December 31, 2014 $ 249 $ 160 $ 89 Based on the balances of our identifiable intangible assets as of December 31, 2015 , we estimate that our intangible asset amortization will be $25 million in 2016 , $25 million in 2017 , $22 million in 2018 , $18 million in 2019 , and $13 million in 2020 . For a presentation of our goodwill and intangible assets by reportable segment, refer to Note 20 , " Segment Information ." The following table presents the balances of goodwill as of December 31, 2015 and 2014 : December 31, 2014 Acquisitions by Segment December 31, 2015 Health Plans Other (In millions) Goodwill, gross $ 330 $ 90 $ 157 $ 577 Accumulated impairment losses (58 ) — — (58 ) Goodwill, net $ 272 $ 90 $ 157 $ 519 The changes in the carrying amounts of goodwill and intangible assets, at cost, in 2015 were due to the acquisitions described in Note 4 , " Business Combinations ." |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2015 | |
Postemployment Benefits [Abstract] | |
Employee Benefits | Employee Benefits We sponsor defined contribution 401(k) plans that cover substantially all full-time salaried and hourly employees of our company and its subsidiaries. Eligible employees are permitted to contribute up to the maximum amount allowed by law. We match up to the first 4% of compensation contributed by employees. Expense recognized in connection with our contributions to the 401(k) plans totaled $27 million , $21 million and $13 million in the years ended December 31, 2015 , 2014 , and 2013 , respectively. We also have a nonqualified deferred compensation plan for certain key employees. Under this plan, eligible participants may defer up to 100% of their base salary and 100% of their bonus to provide tax-deferred growth for retirement. The funds deferred are invested in corporate-owned life insurance, under a rabbi trust. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings. The health care and business process outsourcing industries are subject to numerous laws and regulations of federal, state, and local governments. Compliance with these laws and regulations can be subject to government review and interpretation, as well as regulatory actions unknown and unasserted at this time. Penalties associated with violations of these laws and regulations include significant fines and penalties, exclusion from participating in publicly funded programs, and the repayment of previously billed and collected revenues. We are involved in legal actions in the ordinary course of business, some of which seek monetary damages, including claims for punitive damages, which are not covered by insurance. We have accrued liabilities for certain matters for which we deem the loss to be both probable and estimable. Although we believe that our estimates of such losses are reasonable, these estimates could change as a result of further developments of these matters. The outcome of legal actions is inherently uncertain and such pending matters for which accruals have not been established have not progressed sufficiently through discovery and/or development of important factual information and legal issues to enable us to estimate a range of possible loss, if any. While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these pending matters could have a material adverse effect on our consolidated financial position, results of operations, or cash flows. State of Louisiana. On June 26, 2014, the state of Louisiana filed a Petition for Damages against Molina Medicaid Solutions, Molina Healthcare, Inc., Unisys Corporation, and Paramax Systems Corporation, a subsidiary of Unisys, in the Parish of Baton Rouge, 19th Judicial District, versus number 631612. The Petition alleges that between 1989 and 2012, the defendants utilized an incorrect reimbursement formula for the payment of pharmaceutical claims. We believe we have several meritorious defenses to the claims of the state, and any liability for the alleged claims is not currently probable and is not reasonably estimable. United States of America, ex rel., Anita Silingo v. Mobile Medical Examination Services, Inc., et al. On or around October 14, 2014, Molina Healthcare of California, Molina Healthcare of California Partner Plan, Inc., Mobile Medical Examination Services, Inc. (MedXM), and other health plan defendants were served with a Complaint previously filed under seal in the Central District Court of California by Relator, Anita Silingo, Case No. SACV13-1348-FMO(SHx). The Complaint alleges that MedXM improperly modified medical records and otherwise took inappropriate steps to increase members’ risk adjustment scores, and that the defendants, including Molina Healthcare of California and Molina Healthcare of California Partner Plan, Inc., purportedly turned a “blind eye” to these unlawful practices. On October 22, 2015, the Relator filed a third amended complaint. On July 11, 2016, the District Court dismissed with prejudice the third amended complaint, without leave to amend, thereby concluding this litigation. Rodriguez v. Providence Community Corrections. On October 1, 2015, seven individuals, on behalf of themselves and all others similarly situated, filed a complaint in the District Court for the Middle District of Tennessee, Nashville Division, Case No. 3:15-cv-01048 (the "Rodriquez Litigation"), against Providence Community Corrections, Inc. (now known as Pathways Community Corrections, Inc., or "PCC"). Rutherford County, Tennessee formerly contracted with PCC for the administration of misdemeanor probation, which involved the collection of court costs and fees from probationers. The complaint alleges, among other things, that PCC illegally assessed fees and surcharges against probationers and made improper threats of arrest and probation revocation if the probationers did not pay such amounts. The plaintiffs in the Rodriguez Litigation seek alleged compensatory, treble, and punitive damages, plus attorneys’ fees, for alleged federal and state constitutional violations, as well as alleged violations of the Racketeer Influenced and Corrupt Organization Act. PCC’s agreement with Rutherford County terminated effective December 29, 2015. On November 1, 2015, one month after the Rodriguez Litigation had been commenced, we acquired PCC from The Providence Service Corporation ("Providence") pursuant to a membership interest purchase agreement. We have notified Providence that, for its failure to disclose the Rodriguez Litigation, we intend to seek indemnification from Providence under the membership interest purchase agreement for any liability arising from the Rodriguez Litigation. Provider Claims. Many of our medical contracts are complex in nature and may be subject to differing interpretations regarding amounts due for the provision of various services. Such differing interpretations have led certain medical providers to pursue us for additional compensation. The claims made by providers in such circumstances often involve issues of contract compliance, interpretation, payment methodology, and intent. These claims often extend to services provided by the providers over a number of years. Various providers have contacted us seeking additional compensation for claims that we believe to have been settled. These matters, when finally concluded and determined, will not, in our opinion, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. States' Budgets. From time to time, the states in which our health plans operate may experience financial difficulties, which could lead to delays in premium payments. It has been our practice in the past to continue to serve our members and pay health care providers for services rendered in circumstances where state (or Commonwealth) governments are temporarily unable to pay us, so long as we continue to believe that such state (or Commonwealth) governments will ultimately pay us. Regulatory Capital and Dividend Restrictions. Our health plans, which are operated by our respective wholly owned subsidiaries in those states, are subject to state laws and regulations that, among other things, require the maintenance of minimum levels of statutory capital, as defined by each state. Regulators in some states may also attempt to enforce capital requirements upon us that require the retention of net worth in excess of amounts formally required by statute or regulation. Such statutes, regulations and informal capital requirements also restrict the timing, payment, and amount of dividends and other distributions that may be paid to us as the sole stockholder. To the extent our subsidiaries must comply with these regulations, they may not have the financial flexibility to transfer funds to us. Based on current statutes and regulations, the net assets in these subsidiaries (after intercompany eliminations) which may not be transferable to us in the form of loans, advances, or cash dividends was approximately $1,299 million at June 30, 2016 , and $1,229 million at December 31, 2015 . Because of the statutory restrictions that inhibit the ability of our health plans to transfer net assets to us, the amount of retained earnings readily available to pay dividends to our stockholders is generally limited to cash, cash equivalents and investments held by the parent company – Molina Healthcare, Inc. Such cash, cash equivalents and investments amounted to $466 million and $612 million as of June 30, 2016 and December 31, 2015 , respectively. The National Association of Insurance Commissioners (NAIC) adopted rules effective December 31, 1998, which, if implemented by the states, set minimum capitalization requirements for insurance companies, HMOs, and other entities bearing risk for health care coverage. The requirements take the form of risk-based capital (RBC) rules which may vary from state to state. As of June 30, 2016 , our health plans had aggregate statutory capital and surplus of approximately $1,384 million compared with the required minimum aggregate statutory capital and surplus of approximately $854 million . All of our health plans were in compliance with the minimum capital requirements at June 30, 2016 . We have the ability and commitment to provide additional capital to each of our health plans when necessary to ensure that statutory capital and surplus continue to meet regulatory requirements. | Commitments and Contingencies Certain Leasing Transactions. As described in Note 12 , " Debt ," we entered into certain leasing transactions that have been classified as lease financing obligations. Such leases have initial terms that range from 16.5 years to 25 years . Additionally, the leases provide for renewal options ranging from 10 years to 25 years in aggregate. Operating Leases. We lease administrative and clinic facilities and certain equipment under non-cancelable operating leases expiring at various dates through 2025. Facility lease terms generally range from five to 10 years with one to two renewal options for extended terms. In most cases, we are required to make additional payments under facility operating leases for taxes, insurance and other operating expenses incurred during the lease period. Certain of our leases contain rent escalation clauses or lease incentives, including rent abatements and tenant improvement allowances. Rent escalation clauses and lease incentives are taken into account in determining total rent expense to be recognized during the lease term. Future minimum lease payments by year and in the aggregate under all operating leases and lease financing obligations consist of the following approximate amounts: Lease Financing Obligations Operating Leases Total (In millions) 2016 $ 15 $ 49 $ 64 2017 16 47 63 2018 16 41 57 2019 16 32 48 2020 17 24 41 Thereafter 323 39 362 $ 403 $ 232 $ 635 Rental expense related to operating leases amounted to $44 million , $32 million , and $25 million for the years ended December 31, 2015 , 2014 , and 2013 , respectively. The amounts reported in "Lease Financing Obligations" above represent our contractual lease commitments for the properties described in Note 12 , " Debt " under the subheading "Lease Financing Obligations." Payments under these leases adjust the lease financing obligation, and the imputed interest is recorded to interest expense in our consolidated statements of income. Employment Agreements. I n 2002 we entered into employment agreements with our Chief Executive Officer and Chief Financial Officer, which were amended and restated in 2009. These employment agreements had initial terms of one to three years and are subject to automatic one -year extensions thereafter. Should the executives be terminated without cause or resign for good reason before a change of control, as defined, we will pay one year’s base salary and termination bonus, as defined, in addition to full vesting of equity compensation, and a cash payment for health and welfare benefits. In 2013 we entered into employment agreements with our Chief Operating Officer, Chief Accounting Officer, and Chief Legal Officer. These agreements continue until terminated by us, or the executive resigns. If the executive’s employment is terminated by us without cause or the executive resigns for good reason, the executive will be entitled to receive one year’s base salary and termination bonus, as defined, full vesting of time-based equity compensation, and a cash payment for health and welfare benefits. Payment of the severance benefits described above is contingent upon the executive’s signing a release agreement waiving claims against us. If the executives are terminated for cause, no further payments are due under the contracts. Legal Proceedings. The health care and business process outsourcing industries are subject to numerous laws and regulations of federal, state, and local governments. Compliance with these laws and regulations can be subject to government review and interpretation, as well as regulatory actions unknown and unasserted at this time. Penalties associated with violations of these laws and regulations include significant fines and penalties, exclusion from participating in publicly funded programs, and the repayment of previously billed and collected revenues. We are involved in legal actions in the ordinary course of business, some of which seek monetary damages, including claims for punitive damages, which are not covered by insurance. We have accrued liabilities for certain matters for which we deem the loss to be both probable and estimable. Although we believe that our estimates of such losses are reasonable, these estimates could change as a result of further developments of these matters. The outcome of legal actions is inherently uncertain and such pending matters for which accruals have not been established have not progressed sufficiently through discovery and/or development of important factual information and legal issues to enable us to estimate a range of possible loss, if any. While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these pending matters could have a material adverse effect on our consolidated financial position, results of operations, or cash flows. State of Louisiana. On June 26, 2014, the state of Louisiana filed a Petition for Damages against Molina Medicaid Solutions, Molina Healthcare, Inc., Unisys Corporation, and Paramax Systems Corporation, a subsidiary of Unisys, in the Parish of Baton Rouge, 19th Judicial District, versus number 631612. The Petition alleges that between 1989 and 2012, the defendants utilized an incorrect reimbursement formula for the payment of pharmaceutical claims. We believe we have several meritorious defenses to the claims of the state, and any liability for the alleged claims is not currently probable or reasonably estimable. United States of America, ex rel., Anita Silingo v. Mobile Medical Examination Services, Inc., et al. On or around October 14, 2014, Molina Healthcare of California, Molina Healthcare of California Partner Plan, Inc., Mobile Medical Examination Services, Inc. (MedXM), and other health plan defendants were served with a Complaint previously filed under seal in the Central District Court of California by Relator, Anita Silingo, Case No. SACV13-1348-FMO(SHx). The Complaint alleges that MedXM improperly modified medical records and otherwise took inappropriate steps to increase members’ risk adjustment scores, and that the defendants, including Molina Healthcare of California and Molina Healthcare of California Partner Plan, Inc., purportedly turned a “blind eye” to these unlawful practices. The Department of Justice has declined to intervene. The District Court dismissed this action as to Molina without leave to amend as to some allegations and with leave to amend as to other allegations. On October 22, 2015, the Relator filed a third amended complaint. We believe that we have several meritorious defenses to the claims of the Relator, and any liability for the alleged claims is not currently probable or reasonably estimable. Hospital Management Contract. During the fourth quarter of 2015, we recorded a contract settlement charge of approximately $15 million as a result of our termination of a hospital management agreement. Professional Liability Insurance. We carry medical professional liability insurance for health care services rendered in the primary care institutions that we manage. In addition, we also carry errors and omissions insurance for all Molina entities. Provider Claims. Many of our medical contracts are complex in nature and may be subject to differing interpretations regarding amounts due for the provision of various services. Such differing interpretations have led certain medical providers to pursue us for additional compensation. The claims made by providers in such circumstances often involve issues of contract compliance, interpretation, payment methodology, and intent. These claims often extend to services provided by the providers over a number of years. Various providers have contacted us seeking additional compensation for claims that we believe to have been settled. These matters, when finally concluded and determined, will not, in our opinion, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. States' Budgets. From time to time the states in which our health plans operate may delay premium payments. For example, the state of Illinois is currently operating without a budget for its fiscal year ending June 30, 2016. As of December 31, 2015 , our Illinois health plan served approximately 98,000 members, and recognized premium revenue of approximately $397 million for the year ended December 31, 2015 . As of February 23, 2016 , Illinois is current with its premium payments. In another example, the Commonwealth of Puerto Rico has reported that it may lack sufficient resources to fund all necessary governmental programs including health care-related programs, as well as meet its debt obligations for its fiscal year ending June 30, 2016. Our Puerto Rico health plan became operational on April 1, 2015. As of December 31, 2015 , the plan served approximately 348,000 members and recognized premium revenue of approximately $192 million in the fourth quarter of 2015, or approximately $64 million per month. As of February 23, 2016 , the Commonwealth continues to pay us weekly for current membership. It is the practice of the Commonwealth to pay us for eligible members only after those members have been assigned to us, and our plan has sent electronic confirmation of the receipt of eligibility. Particularly in the early stages of our contract with Puerto Rico, the plan's confirmation of eligibility of certain members was not accepted by the Commonwealth as a result of various technical issues. The plan has continued to pay for medical services for all members in question, but the Commonwealth is withholding payment of approximately $12 million of premium revenue related to those members. We believe we have a valid claim to all of the premiums withheld and we are in discussions with the Commonwealth regarding this matter. It has been our practice in the past, and will remain so in the future, to continue to serve our members and pay health care providers for services rendered in circumstances where state (or Commonwealth) governments are temporarily unable to pay us, so long as we continue to believe that such state (or Commonwealth) governments will ultimately pay us. Regulatory Capital and Dividend Restrictions. Our health plans, which are operated by our respective wholly owned subsidiaries in those states, are subject to state laws and regulations that, among other things, require the maintenance of minimum levels of statutory capital, as defined by each state. Regulators in some states may also attempt to enforce capital requirements upon us that require the retention of net worth in excess of amounts formally required by statute or regulation. Such statutes, regulations and informal capital requirements also restrict the timing, payment, and amount of dividends and other distributions that may be paid to us as the sole stockholder. To the extent our subsidiaries must comply with these regulations, they may not have the financial flexibility to transfer funds to us. Based upon current statutes and regulations, the net assets in these subsidiaries (after intercompany eliminations) which may not be transferable to us in the form of loans, advances, or cash dividends was approximately $1,229 million at December 31, 2015 , and $859 million at December 31, 2014 . Because of the statutory restrictions that inhibit the ability of our health plans to transfer net assets to us, the amount of retained earnings readily available to pay dividends to our stockholders is generally limited to cash, cash equivalents and investments held by the parent company – Molina Healthcare, Inc. Such cash, cash equivalents and investments amounted to $612 million and $203 million as of December 31, 2015 , and 2014 , respectively. The National Association of Insurance Commissioners (NAIC), adopted rules effective December 31, 1998, which, if implemented by the states, set minimum capitalization requirements for insurance companies, HMOs, and other entities bearing risk for health care coverage. The requirements take the form of risk-based capital (RBC) rules which may vary from state to state. All of the states in which our health plans operate, except California and Florida, have adopted these rules. California and Florida have not adopted NAIC risk-based capital requirements for HMOs, and have not formally given notice of their intention to do so. Such requirements, if adopted by California and Florida, may increase the minimum capital required for those states. As of December 31, 2015 , our health plans had aggregate statutory capital and surplus of approximately $1,350 million compared with the required minimum aggregate statutory capital and surplus of approximately $776 million . All of our health plans were in compliance with the minimum capital requirements at December 31, 2015 . We have the ability and commitment to provide additional capital to each of our health plans when necessary to ensure that statutory capital and surplus continue to meet regulatory requirements. |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Variable Interest Entities [Abstract] | ||
Variable Interest Entities (VIEs) | Variable Interest Entities (VIEs) Joseph M. Molina M.D., Professional Corporations The Joseph M. Molina, M.D. Professional Corporations (JMMPC) were created to further advance our direct delivery business. JMMPC's primary shareholder is Dr. J. Mario Molina, our chief executive officer, president, and chairman of the board of directors. Dr. Molina is paid no salary and receives no dividends in connection with his work for, or ownership of, JMMPC. JMMPC provides primary care medical services through its employed physicians and other medical professionals. JMMPC also provides certain specialty referral services to our California health plan members through a contracted provider network. Substantially all of the individuals served by JMMPC are members of our health plans. JMMPC does not have agreements to provide professional medical services with any other entities. Our wholly owned subsidiary, Molina Medical Management, Inc. (MMM), has entered into services agreements with JMMPC to provide clinic facilities, clinic administrative support staff, patient scheduling services and medical supplies to JMMPC. The services agreements were designed such that JMMPC will operate at break even, ensuring the availability of quality care and access for our health plan members. The services agreements provide that the administrative fees charged to JMMPC by MMM are reviewed annually to assure the achievement of this goal. Separately, our California, Florida, New Mexico, Utah and Washington health plans have entered into primary care services agreements with JMMPC. These agreements direct our health plans to perform a monthly reconciliation, to either fund JMMPC's operating deficits, or receive JMMPC's operating surpluses, such that JMMPC will derive no profit or loss. Because the MMM services agreements described above mitigate the likelihood of significant operating deficits or surpluses, such monthly reconciliation amounts are generally insignificant. For the three months ended June 30, 2016 and 2015, our health plans paid $31 million and $27 million , respectively, to JMMPC for health care services provided by JMMPC to the health plans' members. For the six months ended June 30, 2016 and 2015 , our health plans paid $61 million and $52 million , respectively, to JMMPC for health care services provided by JMMPC to the health plans' members. We have determined that JMMPC is a VIE, and that we are its primary beneficiary. We have reached this conclusion under the power and benefits criterion model according to GAAP. Specifically, we have the power to direct the activities that most significantly affect JMMPC's economic performance, and the obligation to absorb losses or right to receive benefits that are potentially significant to the VIE, under the agreements described above. Because we are its primary beneficiary, we have consolidated JMMPC. JMMPC's assets may be used to settle only JMMPC's obligations, and JMMPC's creditors have no recourse to the general credit of Molina Healthcare, Inc. As of June 30, 2016 , JMMPC had total assets of $13 million , and total liabilities of $13 million . As of December 31, 2015 , JMMPC had total assets of $17 million , and total liabilities of $17 million . Our maximum exposure to loss as a result of our involvement with JMMPC is generally limited to the amounts needed to fund JMMPC's ongoing payroll, employee benefits and medical care costs associated with JMMPC's specialty referral activities. We believe that such loss exposures will be immaterial to our consolidated operating results and cash flows for the foreseeable future. | Variable Interest Entities (VIEs) Joseph M. Molina M.D., Professional Corporations The Joseph M. Molina, M.D. Professional Corporations (JMMPC) were created in 2012 to further advance our direct delivery business. JMMPC's primary shareholder is Dr. J. Mario Molina, our chief executive officer, president, and chairman of the board of directors. Dr. Molina is paid no salary and receives no dividends in connection with his work for, or ownership of, JMMPC. JMMPC provides primary care medical services through its employed physicians and other medical professionals. Beginning in 2014, JMMPC also provided certain specialty referral services to our California health plan members through a contracted provider network. Substantially all of the individuals served by JMMPC are members of our health plans. JMMPC does not have agreements to provide professional medical services with any other entities. Our wholly owned subsidiary, Molina Medical Management, Inc. (MMM), has entered into services agreements with JMMPC to provide clinic facilities, clinic administrative support staff, patient scheduling services and medical supplies to JMMPC. The services agreements were designed such that JMMPC will operate at break even, ensuring the availability of quality care and access for our health plan members. The services agreements provide that the administrative fees charged to JMMPC by MMM are reviewed annually to assure the achievement of this goal. Separately, our California, Florida, New Mexico, Utah and Washington health plans have entered into primary care services agreements with JMMPC. These agreements direct our health plans to perform a monthly reconciliation, to either fund JMMPC's operating deficits, or receive JMMPC's operating surpluses, such that JMMPC will derive no profit or loss. Because the MMM services agreements described above mitigate the likelihood of significant operating deficits or surpluses, such monthly reconciliation amounts are generally insignificant. We have determined that JMMPC is a VIE, and that we are its primary beneficiary. We have reached this conclusion under the power and benefits criterion model according to GAAP. Specifically, we have the power to direct the activities that most significantly affect JMMPC's economic performance, and the obligation to absorb losses or right to receive benefits that are potentially significant to the VIE, under the agreements described above. Because we are its primary beneficiary, we have consolidated JMMPC. JMMPC's assets may be used to settle only JMMPC's obligations, and JMMPC's creditors have no recourse to the general credit of Molina Healthcare, Inc. As of December 31, 2015 , JMMPC had total assets of $17 million , and total liabilities of $17 million . As of December 31, 2014 , JMMPC had total assets of $31 million , and total liabilities of $31 million . Our maximum exposure to loss as a result of our involvement with JMMPC is generally limited to the amounts needed to fund JMMPC's ongoing payroll, employee benefits and medical care costs associated with JMMPC's specialty referral activities. We believe that such loss exposures will be immaterial to our consolidated operating results and cash flows for the foreseeable future. New Markets Tax Credit In 2011, our New Mexico data center subsidiary entered into a financing transaction with Wells Fargo Community Investment Holdings, LLC (Wells Fargo), its wholly owned subsidiary New Mexico Healthcare Data Center Investment Fund, LLC (Investment Fund), and certain of Wells Fargo's affiliated Community Development Entities (CDEs), in connection with our participation in the federal government's New Markets Tax Credit Program (NMTC). The NMTC was established by Congress to facilitate new or increased investments in businesses and real estate projects in low-income communities. The NMTC attracts investment capital to low-income communities by permitting investors to receive a tax credit against their federal income tax return in exchange for equity investments in specialized financial institutions, called CDEs, which provide financing to qualified active businesses operating in low-income communities. The credit amounts to 39% of the original investment amount and is claimed over a period of seven years ( five percent for each of the first three years, and six percent for each of the remaining four years). The investment in the CDE cannot be redeemed before the end of the seven -year period. In 2011, as a result of a series of simultaneous financing transactions, Wells Fargo contributed capital of $6 million to the Investment Fund, and Molina Healthcare, Inc. loaned the principal amount of $ 16 million to the Investment Fund. The Investment Fund then contributed the proceeds to certain CDEs, which, in turn, loaned the proceeds of $21 million to our New Mexico data center subsidiary. Wells Fargo will be entitled to claim the NMTC while we effectively received net loan proceeds equal to Wells Fargo's contribution to the Investment Fund, or approximately $6 million . Additionally, financing costs incurred in structuring the arrangement amounting to $1 million were deferred and will be recognized as expense over the term of the loans. This transaction also includes a put/call feature that becomes enforceable at the end of the seven-year compliance period. Wells Fargo may exercise its put option or we can exercise the call, both of which will serve to transfer the debt obligation to us. Incremental costs to maintain the structure during the compliance period will be recognized as incurred. We have determined that the financing arrangement with Investment Fund and CDEs is a VIE, and that we are the primary beneficiary of the VIE. We reached this conclusion based on the following: • The ongoing activities of the VIE—collecting and remitting interest and fees and NMTC compliance—were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the VIE; • Contractual arrangements obligate us to comply with NMTC rules and regulations and provide various other guarantees to Investment Fund and CDEs; • Wells Fargo lacks a material interest in the underling economics of the project; and • We are obligated to absorb losses of the VIE. Because we are the primary beneficiary of the VIE, we have included it in our consolidated financial statements. Wells Fargo's contribution of $6 million is included in cash at December 31, 2015 and December 31, 2014 and the offsetting Wells Fargo's interest in the financing arrangement is included in other liabilities in the accompanying consolidated balance sheets. As described above, this transaction also includes a put/call provision whereby we may be obligated or entitled to repurchase Wells Fargo's interest in the Investment Fund. The value attributed to the put/call is nominal. The NMTC is subject to 100% recapture for a period of seven years as provided in the Internal Revenue Code and applicable U.S. Treasury regulations. We are required to be in compliance with various regulations and contractual provisions that apply to the NMTC arrangement. Non-compliance with applicable requirements could result in Wells Fargo's projected tax benefits not being realized and, therefore, require us to indemnify Wells Fargo for any loss or recapture of NMTCs related to the financing until such time as the recapture provisions have expired under the applicable statute of limitations. We do not anticipate any credit recaptures will be required in connection with this arrangement. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for continuing operations consisted of the following: Year Ended December 31, 2015 2014 2013 (In millions) Current: Federal $ 172 $ 72 $ 67 State 8 3 — Foreign 6 — — Total current 186 75 67 Deferred: Federal (10 ) — (25 ) State 4 (2 ) (6 ) Foreign (1 ) — — Total deferred (7 ) (2 ) (31 ) $ 179 $ 73 $ 36 A reconciliation of the U.S. federal statutory income tax rate to the combined effective income tax rate for continuing operations is as follows: Year Ended December 31, 2015 2014 2013 Statutory federal tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 2.4 0.4 (0.5 ) Change in unrecognized tax benefits 0.9 (0.1 ) (3.7 ) Nondeductible health insurer fee (HIF) 17.0 22.9 — Nondeductible compensation 0.6 (4.1 ) 9.6 Nondeductible fair value of 1.125% Warrants — — 2.4 Other (0.4 ) (0.3 ) 2.0 Effective tax rate 55.5 % 53.8 % 44.8 % Our effective tax rate is based on expected income, statutory tax rates, and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant management estimates and judgments are required in determining our effective tax rate. We are routinely under audit by federal, state, or local authorities regarding the timing and amount of deductions, nexus of income among various tax jurisdictions, and compliance with federal, state, foreign, and local tax laws. During 2014, the Internal Revenue Service (IRS) issued final regulations related to compensation deduction limitations applicable to certain health insurance issuers. Pursuant to these final regulations, we reversed amounts treated as nondeductible in 2013 and recognized a tax benefit during 2014. During 2015 , 2014 , and 2013 , excess tax benefits from share-based compensation amounted to $8 million , $3 million , and $2 million , respectively. These amounts were recorded as a decrease to income taxes payable and an increase to additional paid-in capital. Deferred tax assets and liabilities are classified as non-current. Significant components of our deferred tax assets and liabilities as of December 31, 2015 and 2014 were as follows: December 31, 2015 2014 (In millions) Accrued expenses $ 37 $ 13 Reserve liabilities 14 4 Other accrued medical costs 5 4 Net operating losses 7 3 Unrealized losses 2 1 Unearned premiums 21 22 Lease financing obligation 35 34 Deferred compensation 8 10 Tax credit carryover 8 8 Valuation allowance (9 ) (6 ) Total deferred income tax assets, net of valuation allowance 128 93 Prepaid expenses (9 ) (6 ) Depreciation and amortization (83 ) (57 ) Basis in debt (18 ) (15 ) Total deferred income tax liabilities (110 ) (78 ) Net deferred income tax asset - long term $ 18 $ 15 At December 31, 2015 , we had state net operating loss carryforwards of $180 million , which begin expiring in 2016. At December 31, 2015 , we had California enterprise zone tax credit carryovers of $11 million , which will begin to expire in 2024, and foreign tax credit carryovers of $1 million , which expire in 2025. We evaluate the need for a valuation allowance taking into consideration the ability to carry back and carry forward tax credits and losses, available tax planning strategies and future income, including reversal of temporary differences. We have determined that as of December 31, 2015 , $9 million of deferred tax assets did not satisfy the recognition criteria due to uncertainty regarding the realization of some of our state tax operating loss and foreign tax credit carryforwards. Therefore, we increased our valuation allowance by $3 million , from $6 million at December 31, 2014 , to $9 million as of December 31, 2015 . We recognize tax benefits only if the tax position is more likely than not to be sustained. We are subject to income taxes in the United States, Puerto Rico, and numerous state jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The roll forward of our unrecognized tax benefits is as follows: Year Ended December 31, 2015 2014 2013 (In millions) Gross unrecognized tax benefits at beginning of period $ (3 ) $ (8 ) $ (11 ) Increases in tax positions for current year (1 ) — — Increases in tax positions for prior years (5 ) (1 ) (2 ) Decreases in tax positions for prior years — — 5 Settlements — 6 — Gross unrecognized tax benefits at end of period $ (9 ) $ (3 ) $ (8 ) The total amount of unrecognized tax benefits at December 31, 2015 , 2014 and 2013 that, if recognized, would affect the effective tax rates is $7 million , $2 million and $6 million , respectively. We expect that during the next 12 months it is reasonably possible that unrecognized tax benefit liabilities may decrease by as much as $1 million due to the normal expiration of statutes of limitation. Our continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits in income tax expense. Amounts accrued for the payment of interest and penalties as of December 31, 2015 , and 2014 were insignificant. We are under examination by the IRS for calendar year 2011 and may be subject to examination for calendar years 2012 through 2014. We are under examination, or may be subject to examination, in Puerto Rico and certain state and local jurisdictions, with the major state jurisdictions being California, Utah, and Michigan, for the years 2010 through 2014. |
Segment Information
Segment Information | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | ||
Segment Information | Segment Information We have three reportable segments. These segments include our Health Plans and Molina Medicaid Solutions segments, which comprise the vast majority of our operations, and our Other segment. As of December 31, 2015, we changed our reporting structure as a result of the Pathways acquisition in November 2015, which is reported in Other. Our reportable segments are consistent with how we currently manage the business and view the markets we serve. The Health Plans segment consists of our health plans and our direct delivery business. Our health plans are operating segments that have been aggregated for reporting purposes because they share similar economic characteristics. The Molina Medicaid Solutions segment provides Medicaid management information system (MMIS) design, development, and implementation; business process outsourcing solutions; hosting services; and information technology support services to state Medicaid agencies. Our Other segment includes other businesses, such as our Pathways behavioral health and social services provider, that do not meet the quantitative thresholds for a reportable segment as defined by GAAP, as well as corporate amounts not allocated to other reportable segments. Gross margin is the appropriate earnings measure for our reportable segments, based on how our chief operating decision maker currently reviews results, assesses performance, and allocates resources. Gross margin for our Health Plans segment is referred to as "Medical margin," and for our Molina Medicaid Solutions and Other segments, as "Service margin." Medical margin represents the amount earned by the Health Plans segment after medical costs are deducted from premium revenue. The medical care ratio represents the amount of medical care costs as a percentage of premium revenue, and is one of the key metrics used to assess the performance of the Health Plans segment. Therefore, the underlying medical margin is the most important measure of earnings reviewed by the chief operating decision maker. The service margin is equal to service revenue minus cost of service revenue. Health Plans Molina Medicaid Solutions Other Consolidated (In millions) Three Months Ended June 30, 2016 Total revenue (1) $ 4,223 $ 46 $ 90 $ 4,359 Gross margin 435 5 14 454 Six Months Ended June 30, 2016 Total revenue (1) $ 8,424 $ 98 $ 180 $ 8,702 Gross margin 842 11 21 874 Three Months Ended June 30, 2015 Total revenue (1) $ 3,477 $ 47 $ 1 $ 3,525 Gross margin 375 14 — 389 Six Months Ended June 30, 2015 Total revenue (1) $ 6,593 $ 99 $ 4 $ 6,696 Gross margin 710 30 — 740 Total Assets June 30, 2016 $ 5,521 $ 252 $ 1,429 $ 7,202 December 31, 2015 4,707 213 1,656 6,576 ______________________ (1) Total revenue consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. The following table reconciles gross margin by segment to consolidated income before income tax expense: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions) Gross margin: Health Plans $ 435 $ 375 $ 842 $ 710 Molina Medicaid Solutions 5 14 11 30 Other 14 — 21 — Total gross margin 454 389 874 740 Add: other operating revenues (1) 195 174 403 322 Less: other operating expenses (2) (544 ) (447 ) (1,083 ) (864 ) Operating income 105 116 194 198 Other expenses, net (25 ) (15 ) (50 ) (30 ) Income before income tax expense $ 80 $ 101 $ 144 $ 168 ______________________ (1) Other operating revenues include premium tax revenue, health insurer fee revenue, investment income and other revenue. (2) Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fee expenses and depreciation and amortization. | Segment Information We have three reportable segments. These segments include our Health Plans and Molina Medicaid Solutions segments, which comprise the vast majority of our operations, and our Other segment. As of December 31, 2015, we changed our reporting structure as a result of the Pathways acquisition in November 2015, which is reported in Other. Our reportable segments are consistent with how we currently manage the business and view the markets we serve. The Health Plans segment consists of our health plans and our direct delivery business. Our health plans represent operating segments that have been aggregated for reporting purposes because they share similar economic characteristics. The Molina Medicaid Solutions segment provides MMIS design, development, implementation; business process outsourcing solutions; hosting services; and information technology support services to state Medicaid agencies. Our Other segment includes other businesses, such as our Pathways behavioral health and social services provider, that do not meet the quantitative thresholds for a reportable segment as defined by U.S. generally accepted accounting principles (GAAP), as well as corporate amounts not allocated to other reportable segments. The following table presents gross margin as the appropriate earnings measure for our reportable segments, based on how our chief operating decision maker currently reviews results, assesses performance, and allocates resources. Gross margin for our Health Plans segment is referred to as "Medical margin," and for our Molina Medicaid Solutions and Other segments, as "Service margin." Medical margin represents the actual dollars earned by the Health Plans segment after medical costs are deducted from premium revenue. The medical care ratio represents the amount of medical care costs as a percentage of premium revenue. One of the key metrics used to assess the performance of the Health Plans segment is the medical care ratio; therefore, the underlying medical margin is the most important measure of earnings reviewed by the chief operating decision maker. The service margin is equal to service revenue minus cost of service revenue. We previously reported our segment results to the operating income level, where we reported the cost of all centralized services within our most significant segment, the Health Plans segment. The accounting policies of the segments are the same as those described in Note 2 , " Significant Accounting Policies ." Health Plans Molina Medicaid Solutions Other Consolidated (In millions) 2015 Total revenue (1) $ 13,917 $ 195 $ 66 $ 14,178 Gross margin 1,447 55 5 1,507 Depreciation and amortization (2) 95 25 6 126 Goodwill, and intangible assets, net 393 73 175 641 Total assets 4,707 213 1,656 6,576 2014 Total revenue (1) 9,449 210 8 9,667 Gross margin 947 53 — 1,000 Depreciation and amortization (2) 83 46 5 134 Goodwill, and intangible assets, net 286 75 — 361 Total assets 3,355 185 895 4,435 2013 Total revenue (1) 6,376 205 8 6,589 Gross margin 799 44 — 843 Depreciation and amortization (2) 60 28 6 94 Goodwill, and intangible assets, net 249 81 — 330 Total assets 1,921 176 891 2,988 ______________________ (1) Total revenues consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. (2) Depreciation and amortization reported in accompanying consolidated statements of cash flows. The following table reconciles gross margin by segment to consolidated income from continuing operations before income tax expense: Year Ended December 31, 2015 2014 2013 (In millions) Gross margin: Health Plans $ 1,447 $ 947 $ 799 Molina Medicaid Solutions 55 53 44 Other 5 — — Other operating revenues (1) 684 434 205 Other operating expenses (2) 1,804 1,241 911 Operating income 387 193 137 Other expenses, net 65 58 56 Income from continuing operations before income tax expense $ 322 $ 135 $ 81 ______________________ (1) Other operating revenues include premium tax revenue, health insurer fee revenue, investment income and other revenue. (2) Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fee expenses and depreciation and amortization. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | Quarterly Results of Operations (Unaudited) The following table summarizes quarterly unaudited results of operations for the years ended December 31, 2015 and 2014 . For The Quarter Ended March 31, June 30, September 30, 2015 December 31, (In millions, except per-share data) Premium revenue $ 2,971 $ 3,304 $ 3,377 $ 3,589 Service revenue 52 47 47 107 Operating income 82 116 113 76 Income from continuing operations 28 39 46 30 Net income 28 39 46 30 Net income per share (1): Basic $ 0.58 $ 0.78 $ 0.84 $ 0.54 Diluted $ 0.56 $ 0.72 $ 0.77 $ 0.52 For The Quarter Ended March 31, June 30, September 30, 2014 December 31, (In millions, except per-share data) Premium revenue $ 1,940 $ 2,167 $ 2,317 $ 2,599 Service revenue 54 50 52 54 Operating income 24 32 40 97 Income from continuing operations 4 8 16 34 Net income 4 8 16 34 Net income per share (1): Basic $ 0.10 $ 0.17 $ 0.34 $ 0.70 Diluted $ 0.09 $ 0.16 $ 0.33 $ 0.69 _______________________________ (1) The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the year ended December 31, 2014 , the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock. |
Condensed Financial Information
Condensed Financial Information of Registrant | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||
Condensed Financial Information of Registrant | Supplemental Condensed Consolidating Financial Information The 5.375% Notes are guaranteed by certain of our wholly owned subsidiaries. The 5.375% Notes and the guarantees are effectively subordinated to all existing and future secured debt of us and our guarantors to the extent of the assets securing such debt. In addition, the 5.375% Notes and the guarantees are structurally subordinated to all indebtedness and other liabilities and preferred stock of our subsidiaries that do not guarantee the 5.375% Notes. The 5.375% Notes are fully and unconditionally guaranteed on a joint and several basis, with exceptions considered customary for such guarantees, limited to the release of the guarantee when a subsidiary guarantor's capital stock is sold, or a sale of all of the subsidiary guarantor's assets used in its operations. The following condensed consolidating financial statements present Molina Healthcare, Inc. (as parent guarantor), the subsidiary guarantors, the subsidiary non-guarantors and eliminations. These condensed consolidating financial statements have been prepared and presented in accordance with SEC Regulation S-X Rule 3-10, "Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered." MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (in millions) ASSETS Current assets: Cash and cash equivalents $ 214 $ 29 $ 2,102 $ — $ 2,345 Investments 252 — 1,716 — 1,968 Receivables 3 87 922 — 1,012 Income tax refundable 37 3 (17 ) — 23 Due from (to) affiliates 99 (9 ) (90 ) — — Prepaid expenses and other current assets 50 13 134 — 197 Total current assets 655 123 4,767 — 5,545 Property, equipment, and capitalized software, net 305 67 76 — 448 Deferred contract costs — 80 — — 80 Intangible assets, net 8 23 115 — 146 Goodwill 51 228 332 — 611 Restricted investments — — 107 — 107 Investment in subsidiaries 2,346 1 — (2,347 ) — Derivative asset 226 — — — 226 Other assets 47 3 5 (16 ) 39 $ 3,638 $ 525 $ 5,402 $ (2,363 ) $ 7,202 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ — $ 1,766 $ — $ 1,766 Amounts due government agencies — — 1,238 — 1,238 Accounts payable and accrued liabilities 128 31 378 — 537 Deferred revenue — 38 66 — 104 Current portion of long-term debt 1 — — — 1 Total current liabilities 129 69 3,448 — 3,646 Long-term debt 1,626 — 16 (16 ) 1,626 Deferred income taxes (3 ) 40 (12 ) — 25 Derivative liability 226 — — — 226 Other long-term liabilities 19 2 17 — 38 Total liabilities 1,997 111 3,469 (16 ) 5,561 Total stockholders’ equity 1,641 414 1,933 (2,347 ) 1,641 $ 3,638 $ 525 $ 5,402 $ (2,363 ) $ 7,202 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (in millions) ASSETS Current assets: Cash and cash equivalents $ 360 $ 42 $ 1,927 $ — $ 2,329 Investments 252 — 1,549 — 1,801 Receivables — 79 518 — 597 Income tax refundable 7 3 3 — 13 Intercompany 86 (4 ) (82 ) — — Prepaid expenses and other current assets 46 11 136 (1 ) 192 Derivative asset 374 — — — 374 Total current assets 1,125 131 4,051 (1 ) 5,306 Property, equipment, and capitalized software, net 267 52 74 — 393 Deferred contract costs — 81 — — 81 Goodwill and intangible assets, net 61 246 334 — 641 Restricted investments — — 109 — 109 Investment in subsidiaries, net 2,205 1 — (2,206 ) — Deferred income taxes 23 (35 ) 30 — 18 Other assets 36 2 6 (16 ) 28 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ 3 $ 1,682 $ — $ 1,685 Amounts due government agencies — 1 728 — 729 Accounts payable and accrued liabilities 157 35 170 — 362 Deferred revenue — 34 189 — 223 Current portion of long-term debt 449 — — — 449 Derivative liability 374 — — — 374 Total current liabilities 980 73 2,769 — 3,822 Long-term debt 1,160 — 16 (16 ) 1,160 Other long-term liabilities 20 2 16 (1 ) 37 Total liabilities 2,160 75 2,801 (17 ) 5,019 Total stockholders’ equity 1,557 403 1,803 (2,206 ) 1,557 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 512 $ 277 $ 8,450 $ (537 ) $ 8,702 Expenses: Medical care costs 31 22 7,157 (28 ) 7,182 Cost of service revenue — 221 22 — 243 General and administrative expenses 436 23 741 (509 ) 691 Premium tax expenses — — 218 — 218 Health insurer fee expenses — — 108 — 108 Depreciation and amortization 45 6 15 — 66 Total expenses 512 272 8,261 (537 ) 8,508 Operating income — 5 189 — 194 Interest expense 50 — — — 50 (Loss) income before income taxes (50 ) 5 189 — 144 Income tax (benefit) expense (28 ) 2 113 — 87 Net (loss) income before equity in earnings of subsidiaries (22 ) 3 76 — 57 Equity in net earnings of subsidiaries 79 — — (79 ) — Net income $ 57 $ 3 $ 76 $ (79 ) $ 57 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 443 $ 123 $ 6,596 $ (466 ) $ 6,696 Expenses: Medical care costs 26 17 5,547 (25 ) 5,565 Cost of service revenue — 69 — — 69 General and administrative expenses 377 15 592 (441 ) 543 Premium tax expenses — — 190 — 190 Health insurer fee expenses — — 81 — 81 Depreciation and amortization 41 1 8 — 50 Total expenses 444 102 6,418 (466 ) 6,498 Operating (loss) income (1 ) 21 178 — 198 Interest expense 30 — — — 30 (Loss) income before income taxes (31 ) 21 178 — 168 Income tax (benefit) expense (7 ) 8 100 — 101 Net (loss) income before equity in earnings of subsidiaries (24 ) 13 78 — 67 Equity in net earnings of subsidiaries 91 — — (91 ) — Net income $ 67 $ 13 $ 78 $ (91 ) $ 67 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME Three Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 33 $ 1 $ 45 $ (46 ) $ 33 Other comprehensive income (loss), net of tax 2 — 2 (2 ) 2 Comprehensive income $ 35 $ 1 $ 47 $ (48 ) $ 35 Three Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 39 $ 6 $ 37 $ (43 ) $ 39 Other comprehensive (loss) income, net of tax (2 ) — (2 ) 2 (2 ) Comprehensive income $ 37 $ 6 $ 35 $ (41 ) $ 37 Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 57 $ 3 $ 76 $ (79 ) $ 57 Other comprehensive income (loss), net of tax 8 — 7 (7 ) 8 Comprehensive income $ 65 $ 3 $ 83 $ (86 ) $ 65 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 67 $ 13 $ 78 $ (91 ) $ 67 Other comprehensive (loss) income, net of tax (1 ) — (1 ) 1 (1 ) Comprehensive income $ 66 $ 13 $ 77 $ (90 ) $ 66 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash (used in) provided by operating activities $ (21 ) 16 283 — $ 278 Investing activities: Purchases of investments (67 ) — (907 ) — (974 ) Proceeds from sales and maturities of investments 67 — 745 — 812 Purchases of property, equipment and capitalized software (73 ) (22 ) (7 ) — (102 ) Decrease in restricted investments — — 5 — 5 Net cash paid in business combinations — (7 ) (1 ) — (8 ) Capital contributions to subsidiaries (106 ) 8 98 — — Dividends received from subsidiaries 50 — (50 ) — — Change in amounts due to/from affiliates (13 ) 5 8 — — Other, net 5 (12 ) 1 — (6 ) Net cash used in investing activities (137 ) (28 ) (108 ) — (273 ) Financing activities: Proceeds from employee stock plans 10 — — — 10 Other, net 2 (1 ) — — 1 Net cash provided by (used in) financing activities 12 (1 ) — — 11 Net (decrease) increase in cash and cash equivalents (146 ) (13 ) 175 — 16 Cash and cash equivalents at beginning of period 360 42 1,927 — 2,329 Cash and cash equivalents at end of period $ 214 $ 29 $ 2,102 $ — $ 2,345 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 48 51 549 — $ 648 Investing activities: Purchases of investments (10 ) — (983 ) — (993 ) Proceeds from sales and maturities of investments 65 — 476 — 541 Purchases of property, equipment and capitalized software (46 ) (9 ) (11 ) — (66 ) Decrease in restricted investments — — (14 ) — (14 ) Net cash paid in business combinations — — (8 ) — (8 ) Capital contributions to subsidiaries (77 ) 4 73 — — Dividends received from subsidiaries 42 (17 ) (25 ) — — Change in amounts due to/from affiliates (15 ) 3 12 — — Other, net (1 ) (16 ) — — (17 ) Net cash used in investing activities (42 ) (35 ) (480 ) — (557 ) Financing activities: Proceeds from commons stock offering, net of issuance costs 373 — — — 373 Proceeds from employee stock plans 8 — — — 8 Other, net 3 — — — 3 Net cash provided by financing activities 384 — — — 384 Net increase in cash and cash equivalents 390 16 69 — 475 Cash and cash equivalents at beginning of period 75 15 1,449 — 1,539 Cash and cash equivalents at end of period $ 465 $ 31 $ 1,518 $ — $ 2,014 | Condensed Financial Information of Registrant The condensed balance sheets as of December 31, 2015 and 2014 , and the related condensed statements of income, comprehensive income and cash flows for each of the three years in the period ended December 31, 2015 for our parent company Molina Healthcare, Inc. (the Registrant), are presented below. Condensed Balance Sheets December 31, 2015 2014 (Amounts in millions, except per-share data) ASSETS Current assets: Cash and cash equivalents $ 360 $ 75 Investments 252 126 Income taxes refundable 7 13 Due from affiliates 86 18 Prepaid expenses and other current assets 46 33 Derivative asset 374 — Total current assets 1,125 265 Property, equipment, and capitalized software, net 267 265 Goodwill and intangible assets, net 61 65 Investments in subsidiaries 2,205 1,377 Deferred income taxes 23 11 Derivative asset — 329 Advances to related parties and other assets 36 43 $ 3,717 $ 2,355 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 157 $ 107 Current portion of long-term debt 449 — Derivative liability 374 — Total current liabilities 980 107 Senior notes 962 690 Lease financing obligations 198 157 Lease financing obligations - related party — 40 Derivative liability — 329 Other long-term liabilities 20 22 Total liabilities 2,160 1,345 Stockholders' equity: Common stock, $0.001 par value; 150 shares authorized; outstanding: 56 shares at December 31, 2015 and 50 shares at December 31, 2014 — — Preferred stock, $0.001 par value; 20 shares authorized, no shares issued and outstanding — — Additional paid-in capital 803 396 Accumulated other comprehensive loss (4 ) (1 ) Retained earnings 758 615 Total stockholders' equity 1,557 1,010 $ 3,717 $ 2,355 Condensed Statements of Income Year Ended December 31, 2015 2014 2013 (In millions) Revenue: Management fees and other operating revenue $ 928 $ 704 $ 599 Investment income 3 2 3 Total revenue 931 706 602 Expenses: Medical care costs 55 46 38 General and administrative expenses 797 583 504 Depreciation and amortization 82 73 51 Total operating expenses 934 702 593 Operating (loss) income (3 ) 4 9 Interest expense 66 57 51 Other expense — 1 4 Loss before income taxes and equity in net income of subsidiaries (69 ) (54 ) (46 ) Income tax benefit (21 ) (27 ) (16 ) Net loss before equity in net income of subsidiaries (48 ) (27 ) (30 ) Equity in net income of subsidiaries 191 89 83 Net income $ 143 $ 62 $ 53 Condensed Statements of Comprehensive Income Year Ended December 31, 2015 2014 2013 (In millions) Net income $ 143 $ 62 $ 53 Other comprehensive income (loss): Unrealized investment loss (5 ) — (1 ) Effect of income tax benefit 2 — — Other comprehensive loss, net of tax (3 ) — (1 ) Comprehensive income $ 140 $ 62 $ 52 Condensed Statements of Cash Flows Year Ended December 31, 2015 2014 2013 (In millions) Operating activities: Net cash provided by operating activities $ 113 $ 74 $ 63 Investing activities: Capital contributions to subsidiaries (770 ) (292 ) (166 ) Dividends received from subsidiaries 142 — 24 Purchases of investments (244 ) (129 ) (363 ) Proceeds from sales and maturities of investments 118 263 98 Purchases of equipment (91 ) (94 ) (77 ) Change in amounts due to/from affiliates (68 ) 16 (6 ) Other, net — 8 (6 ) Net cash used in investing activities (913 ) (228 ) (496 ) Financing activities: Proceeds from senior notes offerings, net of issuance costs 689 123 538 Proceeds from common stock offering, net of issuance costs 373 — — Proceeds from sale-leaseback transactions — — 159 Purchase of call option — — (149 ) Proceeds from issuance of warrants — — 75 Treasury stock repurchases — — (53 ) Principal payment on term loan of subsidiary — — (47 ) Repayment of amount borrowed under credit facility — — (40 ) Proceeds from employee stock plans 18 14 9 Principal payments on convertible senior notes — (10 ) — Other, net 5 2 2 Net cash provided by financing activities 1,085 129 494 Net increase (decrease) in cash and cash equivalents 285 (25 ) 61 Cash and cash equivalents at beginning of year 75 100 39 Cash and cash equivalents at end of year $ 360 $ 75 $ 100 Notes to Condensed Financial Information of Registrant Note A - Basis of Presentation The Registrant was incorporated in 2002. Prior to that date, Molina Healthcare of California (formerly known as Molina Medical Centers) operated as a California health plan and as the parent company for three other state health plans. In June 2003, the employees and operations of the corporate entity were transferred from Molina Healthcare of California to the Registrant. The Registrant's investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The accompanying condensed financial information of the Registrant should be read in conjunction with the consolidated financial statements and accompanying notes. Note B - Transactions with Subsidiaries The Registrant provides certain centralized medical and administrative services to its subsidiaries pursuant to administrative services agreements, including medical affairs and quality management, health education, credentialing, management, financial, legal, information systems and human resources services. Fees are based on the fair market value of services rendered and are recorded as operating revenue. Payment is subordinated to the subsidiaries' ability to comply with minimum capital and other restrictive financial requirements of the states in which they operate. Charges in 2015 , 2014 , and 2013 for these services amounted to $914 million , $692 million , and $592 million , respectively, and are included in operating revenue. During 2013, the Registrant used a portion of the proceeds from the sale of the Molina Center, described in Note 12 , " Debt ," to repay the remaining principal balance of the related term loan, on behalf of a subsidiary of the Registrant. The Registrant and its subsidiaries are included in the consolidated federal and state income tax returns filed by the Registrant. Income taxes are allocated to each subsidiary in accordance with an intercompany tax allocation agreement. The agreement allocates income taxes in an amount generally equivalent to the amount which would be expensed by the subsidiary if it filed a separate tax return. Net operating loss benefits are paid to the subsidiary by the Registrant to the extent such losses are utilized in the consolidated tax returns. Note C - Dividends and Capital Contributions When the Registrant receives dividends from its subsidiaries, such amounts are recorded as a reduction to the investments in the respective subsidiaries. For all periods presented, the Registrant made capital contributions to certain subsidiaries primarily to comply with minimum net worth requirements and to fund contract acquisitions. Such amounts have been recorded as an increase in investment in the respective subsidiaries, net of insignificant returns of capital. Note D - Related Party Transactions The Registrant's related party transactions are described in Note 17 , " Related Party Transactions ." Supplemental Condensed Consolidating Financial Information The 5.375% Notes are guaranteed by certain of our wholly owned subsidiaries. The 5.375% Notes and the guarantees are effectively subordinated to all existing and future secured debt of us and our guarantors to the extent of the assets securing such debt. In addition, the 5.375% Notes and the guarantees are structurally subordinated to all indebtedness and other liabilities and preferred stock of our subsidiaries that do not guarantee the 5.375% Notes. The 5.375% Notes are fully and unconditionally guaranteed on a joint and several basis, with exceptions considered customary for such guarantees, limited to the release of the guarantee when a subsidiary guarantor's capital stock is sold, or a sale of all of the subsidiary guarantor's assets used in its operations. The following condensed consolidating financial statements present Molina Healthcare, Inc. (as parent guarantor), the subsidiary guarantors, the subsidiary non-guarantors and eliminations. These condensed consolidating financial statements have been prepared and presented in accordance with SEC Regulation S-X Rule 3-10, "Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered." MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 75 $ 15 $ 1,449 $ — $ 1,539 Investments 126 — 893 — 1,019 Receivables — 35 561 — 596 Due from (to) affiliates 18 (1 ) (17 ) — — Prepaid expenses and other current assets 33 25 11 (20 ) 49 Total current assets 252 74 2,897 (20 ) 3,203 Property, equipment, and capitalized software, net 265 25 51 — 341 Deferred contract costs — 54 — — 54 Goodwill and intangible assets, net 65 75 221 — 361 Restricted investments — 5 97 — 102 Investment in subsidiaries 1,377 — — (1,377 ) — Derivative asset 11 — — — 329 Deferred income taxes 329 (17 ) 21 — 15 Other assets 43 — 5 (18 ) 30 $ 2,342 $ 216 $ 3,292 $ (1,415 ) $ 4,435 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ — $ 1,201 $ — $ 1,201 Amounts due government agencies — 2 525 — 527 Accounts payable and accrued liabilities 107 12 143 (20 ) 242 Deferred revenue — 31 165 — 196 Income taxes (refundable) payable (13 ) 7 15 — 9 Total current liabilities 94 52 2,049 (20 ) 2,175 Long-term debt 887 — 16 (16 ) 887 Derivative liability 329 — — — 329 Other long-term liabilities 22 1 13 (2 ) 34 Total liabilities 1,332 53 2,078 (38 ) 3,425 Total stockholders’ equity 1,010 163 1,214 (1,377 ) 1,010 $ 2,342 $ 216 $ 3,292 $ (1,415 ) $ 4,435 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 931 $ 293 $ 13,931 $ (977 ) $ 14,178 Expenses: Medical care costs 55 36 11,753 (50 ) 11,794 Cost of service revenue — 184 9 — 193 General and administrative expenses 797 41 1,235 (927 ) 1,146 Premium tax expenses — — 397 — 397 Health insurer fee expenses — — 157 — 157 Depreciation and amortization 82 4 18 — 104 Total expenses 934 265 13,569 (977 ) 13,791 Operating (loss) income (3 ) 28 362 — 387 Total other expenses (income), net 66 — (1 ) — 65 (Loss) income before income taxes (69 ) 28 363 — 322 Income tax (benefit) expense (21 ) 9 191 — 179 Net (loss) income before equity in earnings of subsidiaries (48 ) 19 172 — 143 Equity in net earnings of subsidiaries 191 (1 ) — (190 ) — Net income (loss) $ 143 $ 18 $ 172 $ (190 ) $ 143 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 706 $ 240 $ 9,454 $ (733 ) $ 9,667 Expenses: Medical care costs 46 27 8,034 (31 ) 8,076 Cost of service revenue — 157 — — 157 General and administrative expenses 583 29 855 (702 ) 765 Premium tax expenses — — 294 — 294 Health insurer fee expenses — — 89 — 89 Depreciation and amortization 73 5 15 — 93 Total expenses 702 218 9,287 (733 ) 9,474 Operating income 4 22 167 — 193 Total other expenses, net 58 — — — 58 (Loss) income before income taxes (54 ) 22 167 — 135 Income tax (benefit) expense (27 ) 8 92 — 73 Net (loss) income before equity in earnings of subsidiaries (27 ) 14 75 — 62 Equity in net earnings of subsidiaries 89 — — (89 ) — Net income (loss) $ 62 $ 14 $ 75 $ (89 ) $ 62 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 602 $ 211 $ 6,385 $ (609 ) $ 6,589 Expenses: Medical care costs 38 21 5,328 (7 ) 5,380 Cost of service revenue — 161 — — 161 General and administrative expenses 504 26 738 (602 ) 666 Premium tax expenses — — 172 — 172 Depreciation and amortization 51 7 15 — 73 Total expenses 593 215 6,253 (609 ) 6,452 Operating income (loss) 9 (4 ) 132 — 137 Total other expenses, net 55 — 1 — 56 (Loss) income before income taxes (46 ) (4 ) 131 — 81 Income tax (benefit) expense (16 ) (1 ) 53 — 36 Net (loss) income before equity in earnings of subsidiaries (30 ) (3 ) 78 — 45 Equity in net earnings of subsidiaries 83 — — (83 ) — Income (loss) from continuing operations 53 (3 ) 78 (83 ) 45 Income from discontinued operations, net of tax — — 8 — 8 Net income (loss) $ 53 $ (3 ) $ 86 $ (83 ) $ 53 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 143 $ 18 $ 172 $ (190 ) $ 143 Other comprehensive (loss) income, net of tax (3 ) — (3 ) 3 (3 ) Comprehensive income $ 140 $ 18 $ 169 $ (187 ) $ 140 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 62 $ 14 $ 75 $ (89 ) $ 62 Other comprehensive income, net of tax — — — — — Comprehensive income $ 62 $ 14 $ 75 $ (89 ) $ 62 Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income (loss) $ 53 $ (3 ) $ 86 $ (83 ) $ 53 Other comprehensive loss, net of tax (1 ) — — — (1 ) Comprehensive income (loss) $ 52 $ (3 ) $ 86 $ (83 ) $ 52 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 113 $ 58 $ 954 $ — $ 1,125 Investing activities: Purchases of investments (244 ) — (1,679 ) — (1,923 ) Proceeds from sales and maturities of investments 118 — 1,008 — 1,126 Purchases of equipment (91 ) (23 ) (18 ) — (132 ) Decrease (increase) in restricted investments — 5 (11 ) — (6 ) Net cash paid in business combinations — (214 ) (236 ) — (450 ) Capital contributions to subsidiaries (770 ) 238 532 — — Dividends received from subsidiaries 142 (17 ) (125 ) — — Change in amounts due to/from affiliates (68 ) 15 53 — — Other, net — (35 ) — — (35 ) Net cash used in investing activities (913 ) (31 ) (476 ) — (1,420 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 689 — — — 689 Proceeds from common stock offering, net of issuance costs 373 — — — 373 Proceeds from employee stock plans 18 — — — 18 Other, net 5 — — — 5 Net cash provided by financing activities 1,085 — — — 1,085 Net increase in cash and cash equivalents 285 27 478 — 790 Cash and cash equivalents at beginning of period 75 15 1,449 — 1,539 Cash and cash equivalents at end of period $ 360 $ 42 $ 1,927 $ — $ 2,329 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 74 $ 29 $ 957 $ — $ 1,060 Investing activities: Purchases of investments (129 ) — (824 ) — (953 ) Proceeds from sales and maturities of investments 263 — 370 — 633 Purchases of equipment (94 ) (12 ) (9 ) — (115 ) (Increase) decrease in restricted investments — 5 (39 ) — (34 ) Net cash paid in business combinations — — (44 ) — (44 ) Capital contributions to subsidiaries (292 ) 14 278 — — Change in amounts due to/from affiliates 16 (1 ) (15 ) — — Other, net 8 (29 ) (2 ) — (23 ) Net cash used in investing activities (228 ) (23 ) (285 ) — (536 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 123 — — — 123 Contingent consideration liabilities settled — — (50 ) — (50 ) Principal payments on convertible senior notes (10 ) — — — (10 ) Proceeds from employee stock plans 14 — — — 14 Other, net 2 — — — 2 Net cash provided by (used in) financing activities 129 — (50 ) — 79 Net (decrease) increase in cash and cash equivalents (25 ) 6 622 — 603 Cash and cash equivalents at beginning of period 100 9 827 — 936 Cash and cash equivalents at end of period $ 75 $ 15 $ 1,449 $ — $ 1,539 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash (used in) provided by operating activities $ 63 $ (29 ) $ 156 $ — $ 190 Investing activities: Purchases of investments (363 ) — (407 ) — (770 ) Proceeds from sales and maturities of investments 98 — 302 — 400 Purchases of equipment (77 ) (8 ) (13 ) — (98 ) Increase in restricted investments — (10 ) (9 ) — (19 ) Net cash paid in business combinations — — (62 ) — (62 ) Capital contributions to subsidiaries (166 ) 10 156 — — Dividends received from subsidiaries 24 — (24 ) — Change in amounts due to/from affiliates (6 ) (4 ) 10 — — Other, net (6 ) 13 (1 ) — 6 Net cash (used in) provided by investing activities (496 ) 1 (48 ) — (543 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 538 — — — 538 Proceeds from sale-leaseback transactions 159 — — — 159 Purchase of call option (149 ) — — — (149 ) Proceeds from issuance of warrants 75 — — — 75 Treasury stock purchases (53 ) — — — (53 ) Principal payments on term loan (47 ) — (1 ) — (48 ) Repayment of amount borrowed under credit facility (40 ) — — — (40 ) Proceeds from employee stock plans 9 — — — 9 Other, net 2 — — — 2 Net cash provided by (used in) financing activities 494 — (1 ) — 493 Net increase (decrease) in cash and cash equivalents 61 (28 ) 107 — 140 Cash and cash equivalents at beginning of period 39 37 720 — 796 Cash and cash equivalents at end of period $ 100 $ 9 $ 827 $ — $ 936 |
Supplemental Condensed Consolid
Supplemental Condensed Consolidating Financial Information (Notes) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||
Supplemental Condensed Consolidating Financial Information | Supplemental Condensed Consolidating Financial Information The 5.375% Notes are guaranteed by certain of our wholly owned subsidiaries. The 5.375% Notes and the guarantees are effectively subordinated to all existing and future secured debt of us and our guarantors to the extent of the assets securing such debt. In addition, the 5.375% Notes and the guarantees are structurally subordinated to all indebtedness and other liabilities and preferred stock of our subsidiaries that do not guarantee the 5.375% Notes. The 5.375% Notes are fully and unconditionally guaranteed on a joint and several basis, with exceptions considered customary for such guarantees, limited to the release of the guarantee when a subsidiary guarantor's capital stock is sold, or a sale of all of the subsidiary guarantor's assets used in its operations. The following condensed consolidating financial statements present Molina Healthcare, Inc. (as parent guarantor), the subsidiary guarantors, the subsidiary non-guarantors and eliminations. These condensed consolidating financial statements have been prepared and presented in accordance with SEC Regulation S-X Rule 3-10, "Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered." MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (in millions) ASSETS Current assets: Cash and cash equivalents $ 214 $ 29 $ 2,102 $ — $ 2,345 Investments 252 — 1,716 — 1,968 Receivables 3 87 922 — 1,012 Income tax refundable 37 3 (17 ) — 23 Due from (to) affiliates 99 (9 ) (90 ) — — Prepaid expenses and other current assets 50 13 134 — 197 Total current assets 655 123 4,767 — 5,545 Property, equipment, and capitalized software, net 305 67 76 — 448 Deferred contract costs — 80 — — 80 Intangible assets, net 8 23 115 — 146 Goodwill 51 228 332 — 611 Restricted investments — — 107 — 107 Investment in subsidiaries 2,346 1 — (2,347 ) — Derivative asset 226 — — — 226 Other assets 47 3 5 (16 ) 39 $ 3,638 $ 525 $ 5,402 $ (2,363 ) $ 7,202 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ — $ 1,766 $ — $ 1,766 Amounts due government agencies — — 1,238 — 1,238 Accounts payable and accrued liabilities 128 31 378 — 537 Deferred revenue — 38 66 — 104 Current portion of long-term debt 1 — — — 1 Total current liabilities 129 69 3,448 — 3,646 Long-term debt 1,626 — 16 (16 ) 1,626 Deferred income taxes (3 ) 40 (12 ) — 25 Derivative liability 226 — — — 226 Other long-term liabilities 19 2 17 — 38 Total liabilities 1,997 111 3,469 (16 ) 5,561 Total stockholders’ equity 1,641 414 1,933 (2,347 ) 1,641 $ 3,638 $ 525 $ 5,402 $ (2,363 ) $ 7,202 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (in millions) ASSETS Current assets: Cash and cash equivalents $ 360 $ 42 $ 1,927 $ — $ 2,329 Investments 252 — 1,549 — 1,801 Receivables — 79 518 — 597 Income tax refundable 7 3 3 — 13 Intercompany 86 (4 ) (82 ) — — Prepaid expenses and other current assets 46 11 136 (1 ) 192 Derivative asset 374 — — — 374 Total current assets 1,125 131 4,051 (1 ) 5,306 Property, equipment, and capitalized software, net 267 52 74 — 393 Deferred contract costs — 81 — — 81 Goodwill and intangible assets, net 61 246 334 — 641 Restricted investments — — 109 — 109 Investment in subsidiaries, net 2,205 1 — (2,206 ) — Deferred income taxes 23 (35 ) 30 — 18 Other assets 36 2 6 (16 ) 28 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ 3 $ 1,682 $ — $ 1,685 Amounts due government agencies — 1 728 — 729 Accounts payable and accrued liabilities 157 35 170 — 362 Deferred revenue — 34 189 — 223 Current portion of long-term debt 449 — — — 449 Derivative liability 374 — — — 374 Total current liabilities 980 73 2,769 — 3,822 Long-term debt 1,160 — 16 (16 ) 1,160 Other long-term liabilities 20 2 16 (1 ) 37 Total liabilities 2,160 75 2,801 (17 ) 5,019 Total stockholders’ equity 1,557 403 1,803 (2,206 ) 1,557 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 512 $ 277 $ 8,450 $ (537 ) $ 8,702 Expenses: Medical care costs 31 22 7,157 (28 ) 7,182 Cost of service revenue — 221 22 — 243 General and administrative expenses 436 23 741 (509 ) 691 Premium tax expenses — — 218 — 218 Health insurer fee expenses — — 108 — 108 Depreciation and amortization 45 6 15 — 66 Total expenses 512 272 8,261 (537 ) 8,508 Operating income — 5 189 — 194 Interest expense 50 — — — 50 (Loss) income before income taxes (50 ) 5 189 — 144 Income tax (benefit) expense (28 ) 2 113 — 87 Net (loss) income before equity in earnings of subsidiaries (22 ) 3 76 — 57 Equity in net earnings of subsidiaries 79 — — (79 ) — Net income $ 57 $ 3 $ 76 $ (79 ) $ 57 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 443 $ 123 $ 6,596 $ (466 ) $ 6,696 Expenses: Medical care costs 26 17 5,547 (25 ) 5,565 Cost of service revenue — 69 — — 69 General and administrative expenses 377 15 592 (441 ) 543 Premium tax expenses — — 190 — 190 Health insurer fee expenses — — 81 — 81 Depreciation and amortization 41 1 8 — 50 Total expenses 444 102 6,418 (466 ) 6,498 Operating (loss) income (1 ) 21 178 — 198 Interest expense 30 — — — 30 (Loss) income before income taxes (31 ) 21 178 — 168 Income tax (benefit) expense (7 ) 8 100 — 101 Net (loss) income before equity in earnings of subsidiaries (24 ) 13 78 — 67 Equity in net earnings of subsidiaries 91 — — (91 ) — Net income $ 67 $ 13 $ 78 $ (91 ) $ 67 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME Three Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 33 $ 1 $ 45 $ (46 ) $ 33 Other comprehensive income (loss), net of tax 2 — 2 (2 ) 2 Comprehensive income $ 35 $ 1 $ 47 $ (48 ) $ 35 Three Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 39 $ 6 $ 37 $ (43 ) $ 39 Other comprehensive (loss) income, net of tax (2 ) — (2 ) 2 (2 ) Comprehensive income $ 37 $ 6 $ 35 $ (41 ) $ 37 Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 57 $ 3 $ 76 $ (79 ) $ 57 Other comprehensive income (loss), net of tax 8 — 7 (7 ) 8 Comprehensive income $ 65 $ 3 $ 83 $ (86 ) $ 65 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 67 $ 13 $ 78 $ (91 ) $ 67 Other comprehensive (loss) income, net of tax (1 ) — (1 ) 1 (1 ) Comprehensive income $ 66 $ 13 $ 77 $ (90 ) $ 66 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash (used in) provided by operating activities $ (21 ) 16 283 — $ 278 Investing activities: Purchases of investments (67 ) — (907 ) — (974 ) Proceeds from sales and maturities of investments 67 — 745 — 812 Purchases of property, equipment and capitalized software (73 ) (22 ) (7 ) — (102 ) Decrease in restricted investments — — 5 — 5 Net cash paid in business combinations — (7 ) (1 ) — (8 ) Capital contributions to subsidiaries (106 ) 8 98 — — Dividends received from subsidiaries 50 — (50 ) — — Change in amounts due to/from affiliates (13 ) 5 8 — — Other, net 5 (12 ) 1 — (6 ) Net cash used in investing activities (137 ) (28 ) (108 ) — (273 ) Financing activities: Proceeds from employee stock plans 10 — — — 10 Other, net 2 (1 ) — — 1 Net cash provided by (used in) financing activities 12 (1 ) — — 11 Net (decrease) increase in cash and cash equivalents (146 ) (13 ) 175 — 16 Cash and cash equivalents at beginning of period 360 42 1,927 — 2,329 Cash and cash equivalents at end of period $ 214 $ 29 $ 2,102 $ — $ 2,345 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 48 51 549 — $ 648 Investing activities: Purchases of investments (10 ) — (983 ) — (993 ) Proceeds from sales and maturities of investments 65 — 476 — 541 Purchases of property, equipment and capitalized software (46 ) (9 ) (11 ) — (66 ) Decrease in restricted investments — — (14 ) — (14 ) Net cash paid in business combinations — — (8 ) — (8 ) Capital contributions to subsidiaries (77 ) 4 73 — — Dividends received from subsidiaries 42 (17 ) (25 ) — — Change in amounts due to/from affiliates (15 ) 3 12 — — Other, net (1 ) (16 ) — — (17 ) Net cash used in investing activities (42 ) (35 ) (480 ) — (557 ) Financing activities: Proceeds from commons stock offering, net of issuance costs 373 — — — 373 Proceeds from employee stock plans 8 — — — 8 Other, net 3 — — — 3 Net cash provided by financing activities 384 — — — 384 Net increase in cash and cash equivalents 390 16 69 — 475 Cash and cash equivalents at beginning of period 75 15 1,449 — 1,539 Cash and cash equivalents at end of period $ 465 $ 31 $ 1,518 $ — $ 2,014 | Condensed Financial Information of Registrant The condensed balance sheets as of December 31, 2015 and 2014 , and the related condensed statements of income, comprehensive income and cash flows for each of the three years in the period ended December 31, 2015 for our parent company Molina Healthcare, Inc. (the Registrant), are presented below. Condensed Balance Sheets December 31, 2015 2014 (Amounts in millions, except per-share data) ASSETS Current assets: Cash and cash equivalents $ 360 $ 75 Investments 252 126 Income taxes refundable 7 13 Due from affiliates 86 18 Prepaid expenses and other current assets 46 33 Derivative asset 374 — Total current assets 1,125 265 Property, equipment, and capitalized software, net 267 265 Goodwill and intangible assets, net 61 65 Investments in subsidiaries 2,205 1,377 Deferred income taxes 23 11 Derivative asset — 329 Advances to related parties and other assets 36 43 $ 3,717 $ 2,355 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 157 $ 107 Current portion of long-term debt 449 — Derivative liability 374 — Total current liabilities 980 107 Senior notes 962 690 Lease financing obligations 198 157 Lease financing obligations - related party — 40 Derivative liability — 329 Other long-term liabilities 20 22 Total liabilities 2,160 1,345 Stockholders' equity: Common stock, $0.001 par value; 150 shares authorized; outstanding: 56 shares at December 31, 2015 and 50 shares at December 31, 2014 — — Preferred stock, $0.001 par value; 20 shares authorized, no shares issued and outstanding — — Additional paid-in capital 803 396 Accumulated other comprehensive loss (4 ) (1 ) Retained earnings 758 615 Total stockholders' equity 1,557 1,010 $ 3,717 $ 2,355 Condensed Statements of Income Year Ended December 31, 2015 2014 2013 (In millions) Revenue: Management fees and other operating revenue $ 928 $ 704 $ 599 Investment income 3 2 3 Total revenue 931 706 602 Expenses: Medical care costs 55 46 38 General and administrative expenses 797 583 504 Depreciation and amortization 82 73 51 Total operating expenses 934 702 593 Operating (loss) income (3 ) 4 9 Interest expense 66 57 51 Other expense — 1 4 Loss before income taxes and equity in net income of subsidiaries (69 ) (54 ) (46 ) Income tax benefit (21 ) (27 ) (16 ) Net loss before equity in net income of subsidiaries (48 ) (27 ) (30 ) Equity in net income of subsidiaries 191 89 83 Net income $ 143 $ 62 $ 53 Condensed Statements of Comprehensive Income Year Ended December 31, 2015 2014 2013 (In millions) Net income $ 143 $ 62 $ 53 Other comprehensive income (loss): Unrealized investment loss (5 ) — (1 ) Effect of income tax benefit 2 — — Other comprehensive loss, net of tax (3 ) — (1 ) Comprehensive income $ 140 $ 62 $ 52 Condensed Statements of Cash Flows Year Ended December 31, 2015 2014 2013 (In millions) Operating activities: Net cash provided by operating activities $ 113 $ 74 $ 63 Investing activities: Capital contributions to subsidiaries (770 ) (292 ) (166 ) Dividends received from subsidiaries 142 — 24 Purchases of investments (244 ) (129 ) (363 ) Proceeds from sales and maturities of investments 118 263 98 Purchases of equipment (91 ) (94 ) (77 ) Change in amounts due to/from affiliates (68 ) 16 (6 ) Other, net — 8 (6 ) Net cash used in investing activities (913 ) (228 ) (496 ) Financing activities: Proceeds from senior notes offerings, net of issuance costs 689 123 538 Proceeds from common stock offering, net of issuance costs 373 — — Proceeds from sale-leaseback transactions — — 159 Purchase of call option — — (149 ) Proceeds from issuance of warrants — — 75 Treasury stock repurchases — — (53 ) Principal payment on term loan of subsidiary — — (47 ) Repayment of amount borrowed under credit facility — — (40 ) Proceeds from employee stock plans 18 14 9 Principal payments on convertible senior notes — (10 ) — Other, net 5 2 2 Net cash provided by financing activities 1,085 129 494 Net increase (decrease) in cash and cash equivalents 285 (25 ) 61 Cash and cash equivalents at beginning of year 75 100 39 Cash and cash equivalents at end of year $ 360 $ 75 $ 100 Notes to Condensed Financial Information of Registrant Note A - Basis of Presentation The Registrant was incorporated in 2002. Prior to that date, Molina Healthcare of California (formerly known as Molina Medical Centers) operated as a California health plan and as the parent company for three other state health plans. In June 2003, the employees and operations of the corporate entity were transferred from Molina Healthcare of California to the Registrant. The Registrant's investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The accompanying condensed financial information of the Registrant should be read in conjunction with the consolidated financial statements and accompanying notes. Note B - Transactions with Subsidiaries The Registrant provides certain centralized medical and administrative services to its subsidiaries pursuant to administrative services agreements, including medical affairs and quality management, health education, credentialing, management, financial, legal, information systems and human resources services. Fees are based on the fair market value of services rendered and are recorded as operating revenue. Payment is subordinated to the subsidiaries' ability to comply with minimum capital and other restrictive financial requirements of the states in which they operate. Charges in 2015 , 2014 , and 2013 for these services amounted to $914 million , $692 million , and $592 million , respectively, and are included in operating revenue. During 2013, the Registrant used a portion of the proceeds from the sale of the Molina Center, described in Note 12 , " Debt ," to repay the remaining principal balance of the related term loan, on behalf of a subsidiary of the Registrant. The Registrant and its subsidiaries are included in the consolidated federal and state income tax returns filed by the Registrant. Income taxes are allocated to each subsidiary in accordance with an intercompany tax allocation agreement. The agreement allocates income taxes in an amount generally equivalent to the amount which would be expensed by the subsidiary if it filed a separate tax return. Net operating loss benefits are paid to the subsidiary by the Registrant to the extent such losses are utilized in the consolidated tax returns. Note C - Dividends and Capital Contributions When the Registrant receives dividends from its subsidiaries, such amounts are recorded as a reduction to the investments in the respective subsidiaries. For all periods presented, the Registrant made capital contributions to certain subsidiaries primarily to comply with minimum net worth requirements and to fund contract acquisitions. Such amounts have been recorded as an increase in investment in the respective subsidiaries, net of insignificant returns of capital. Note D - Related Party Transactions The Registrant's related party transactions are described in Note 17 , " Related Party Transactions ." Supplemental Condensed Consolidating Financial Information The 5.375% Notes are guaranteed by certain of our wholly owned subsidiaries. The 5.375% Notes and the guarantees are effectively subordinated to all existing and future secured debt of us and our guarantors to the extent of the assets securing such debt. In addition, the 5.375% Notes and the guarantees are structurally subordinated to all indebtedness and other liabilities and preferred stock of our subsidiaries that do not guarantee the 5.375% Notes. The 5.375% Notes are fully and unconditionally guaranteed on a joint and several basis, with exceptions considered customary for such guarantees, limited to the release of the guarantee when a subsidiary guarantor's capital stock is sold, or a sale of all of the subsidiary guarantor's assets used in its operations. The following condensed consolidating financial statements present Molina Healthcare, Inc. (as parent guarantor), the subsidiary guarantors, the subsidiary non-guarantors and eliminations. These condensed consolidating financial statements have been prepared and presented in accordance with SEC Regulation S-X Rule 3-10, "Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered." MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 75 $ 15 $ 1,449 $ — $ 1,539 Investments 126 — 893 — 1,019 Receivables — 35 561 — 596 Due from (to) affiliates 18 (1 ) (17 ) — — Prepaid expenses and other current assets 33 25 11 (20 ) 49 Total current assets 252 74 2,897 (20 ) 3,203 Property, equipment, and capitalized software, net 265 25 51 — 341 Deferred contract costs — 54 — — 54 Goodwill and intangible assets, net 65 75 221 — 361 Restricted investments — 5 97 — 102 Investment in subsidiaries 1,377 — — (1,377 ) — Derivative asset 11 — — — 329 Deferred income taxes 329 (17 ) 21 — 15 Other assets 43 — 5 (18 ) 30 $ 2,342 $ 216 $ 3,292 $ (1,415 ) $ 4,435 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ — $ 1,201 $ — $ 1,201 Amounts due government agencies — 2 525 — 527 Accounts payable and accrued liabilities 107 12 143 (20 ) 242 Deferred revenue — 31 165 — 196 Income taxes (refundable) payable (13 ) 7 15 — 9 Total current liabilities 94 52 2,049 (20 ) 2,175 Long-term debt 887 — 16 (16 ) 887 Derivative liability 329 — — — 329 Other long-term liabilities 22 1 13 (2 ) 34 Total liabilities 1,332 53 2,078 (38 ) 3,425 Total stockholders’ equity 1,010 163 1,214 (1,377 ) 1,010 $ 2,342 $ 216 $ 3,292 $ (1,415 ) $ 4,435 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 931 $ 293 $ 13,931 $ (977 ) $ 14,178 Expenses: Medical care costs 55 36 11,753 (50 ) 11,794 Cost of service revenue — 184 9 — 193 General and administrative expenses 797 41 1,235 (927 ) 1,146 Premium tax expenses — — 397 — 397 Health insurer fee expenses — — 157 — 157 Depreciation and amortization 82 4 18 — 104 Total expenses 934 265 13,569 (977 ) 13,791 Operating (loss) income (3 ) 28 362 — 387 Total other expenses (income), net 66 — (1 ) — 65 (Loss) income before income taxes (69 ) 28 363 — 322 Income tax (benefit) expense (21 ) 9 191 — 179 Net (loss) income before equity in earnings of subsidiaries (48 ) 19 172 — 143 Equity in net earnings of subsidiaries 191 (1 ) — (190 ) — Net income (loss) $ 143 $ 18 $ 172 $ (190 ) $ 143 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 706 $ 240 $ 9,454 $ (733 ) $ 9,667 Expenses: Medical care costs 46 27 8,034 (31 ) 8,076 Cost of service revenue — 157 — — 157 General and administrative expenses 583 29 855 (702 ) 765 Premium tax expenses — — 294 — 294 Health insurer fee expenses — — 89 — 89 Depreciation and amortization 73 5 15 — 93 Total expenses 702 218 9,287 (733 ) 9,474 Operating income 4 22 167 — 193 Total other expenses, net 58 — — — 58 (Loss) income before income taxes (54 ) 22 167 — 135 Income tax (benefit) expense (27 ) 8 92 — 73 Net (loss) income before equity in earnings of subsidiaries (27 ) 14 75 — 62 Equity in net earnings of subsidiaries 89 — — (89 ) — Net income (loss) $ 62 $ 14 $ 75 $ (89 ) $ 62 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 602 $ 211 $ 6,385 $ (609 ) $ 6,589 Expenses: Medical care costs 38 21 5,328 (7 ) 5,380 Cost of service revenue — 161 — — 161 General and administrative expenses 504 26 738 (602 ) 666 Premium tax expenses — — 172 — 172 Depreciation and amortization 51 7 15 — 73 Total expenses 593 215 6,253 (609 ) 6,452 Operating income (loss) 9 (4 ) 132 — 137 Total other expenses, net 55 — 1 — 56 (Loss) income before income taxes (46 ) (4 ) 131 — 81 Income tax (benefit) expense (16 ) (1 ) 53 — 36 Net (loss) income before equity in earnings of subsidiaries (30 ) (3 ) 78 — 45 Equity in net earnings of subsidiaries 83 — — (83 ) — Income (loss) from continuing operations 53 (3 ) 78 (83 ) 45 Income from discontinued operations, net of tax — — 8 — 8 Net income (loss) $ 53 $ (3 ) $ 86 $ (83 ) $ 53 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 143 $ 18 $ 172 $ (190 ) $ 143 Other comprehensive (loss) income, net of tax (3 ) — (3 ) 3 (3 ) Comprehensive income $ 140 $ 18 $ 169 $ (187 ) $ 140 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 62 $ 14 $ 75 $ (89 ) $ 62 Other comprehensive income, net of tax — — — — — Comprehensive income $ 62 $ 14 $ 75 $ (89 ) $ 62 Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income (loss) $ 53 $ (3 ) $ 86 $ (83 ) $ 53 Other comprehensive loss, net of tax (1 ) — — — (1 ) Comprehensive income (loss) $ 52 $ (3 ) $ 86 $ (83 ) $ 52 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 113 $ 58 $ 954 $ — $ 1,125 Investing activities: Purchases of investments (244 ) — (1,679 ) — (1,923 ) Proceeds from sales and maturities of investments 118 — 1,008 — 1,126 Purchases of equipment (91 ) (23 ) (18 ) — (132 ) Decrease (increase) in restricted investments — 5 (11 ) — (6 ) Net cash paid in business combinations — (214 ) (236 ) — (450 ) Capital contributions to subsidiaries (770 ) 238 532 — — Dividends received from subsidiaries 142 (17 ) (125 ) — — Change in amounts due to/from affiliates (68 ) 15 53 — — Other, net — (35 ) — — (35 ) Net cash used in investing activities (913 ) (31 ) (476 ) — (1,420 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 689 — — — 689 Proceeds from common stock offering, net of issuance costs 373 — — — 373 Proceeds from employee stock plans 18 — — — 18 Other, net 5 — — — 5 Net cash provided by financing activities 1,085 — — — 1,085 Net increase in cash and cash equivalents 285 27 478 — 790 Cash and cash equivalents at beginning of period 75 15 1,449 — 1,539 Cash and cash equivalents at end of period $ 360 $ 42 $ 1,927 $ — $ 2,329 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 74 $ 29 $ 957 $ — $ 1,060 Investing activities: Purchases of investments (129 ) — (824 ) — (953 ) Proceeds from sales and maturities of investments 263 — 370 — 633 Purchases of equipment (94 ) (12 ) (9 ) — (115 ) (Increase) decrease in restricted investments — 5 (39 ) — (34 ) Net cash paid in business combinations — — (44 ) — (44 ) Capital contributions to subsidiaries (292 ) 14 278 — — Change in amounts due to/from affiliates 16 (1 ) (15 ) — — Other, net 8 (29 ) (2 ) — (23 ) Net cash used in investing activities (228 ) (23 ) (285 ) — (536 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 123 — — — 123 Contingent consideration liabilities settled — — (50 ) — (50 ) Principal payments on convertible senior notes (10 ) — — — (10 ) Proceeds from employee stock plans 14 — — — 14 Other, net 2 — — — 2 Net cash provided by (used in) financing activities 129 — (50 ) — 79 Net (decrease) increase in cash and cash equivalents (25 ) 6 622 — 603 Cash and cash equivalents at beginning of period 100 9 827 — 936 Cash and cash equivalents at end of period $ 75 $ 15 $ 1,449 $ — $ 1,539 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash (used in) provided by operating activities $ 63 $ (29 ) $ 156 $ — $ 190 Investing activities: Purchases of investments (363 ) — (407 ) — (770 ) Proceeds from sales and maturities of investments 98 — 302 — 400 Purchases of equipment (77 ) (8 ) (13 ) — (98 ) Increase in restricted investments — (10 ) (9 ) — (19 ) Net cash paid in business combinations — — (62 ) — (62 ) Capital contributions to subsidiaries (166 ) 10 156 — — Dividends received from subsidiaries 24 — (24 ) — Change in amounts due to/from affiliates (6 ) (4 ) 10 — — Other, net (6 ) 13 (1 ) — 6 Net cash (used in) provided by investing activities (496 ) 1 (48 ) — (543 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 538 — — — 538 Proceeds from sale-leaseback transactions 159 — — — 159 Purchase of call option (149 ) — — — (149 ) Proceeds from issuance of warrants 75 — — — 75 Treasury stock purchases (53 ) — — — (53 ) Principal payments on term loan (47 ) — (1 ) — (48 ) Repayment of amount borrowed under credit facility (40 ) — — — (40 ) Proceeds from employee stock plans 9 — — — 9 Other, net 2 — — — 2 Net cash provided by (used in) financing activities 494 — (1 ) — 493 Net increase (decrease) in cash and cash equivalents 61 (28 ) 107 — 140 Cash and cash equivalents at beginning of period 39 37 720 — 796 Cash and cash equivalents at end of period $ 100 $ 9 $ 827 $ — $ 936 |
Significant Accounting Polici32
Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Consolidation and Interim Financial Information | Consolidation and Interim Financial Information The consolidated financial statements include the accounts of Molina Healthcare, Inc., its subsidiaries, and variable interest entities (VIEs) in which Molina Healthcare, Inc. is considered to be the primary beneficiary. Such VIEs are insignificant to our consolidated financial position and results of operations. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the interim periods presented have been included; such adjustments consist of normal recurring adjustments. All significant intercompany balances and transactions have been eliminated. The consolidated results of operations for the current interim period are not necessarily indicative of the results for the entire year ending December 31, 2016 . The unaudited consolidated interim financial statements have been prepared under the assumption that users of the interim financial data have either read or have access to our audited consolidated financial statements for the fiscal year ended December 31, 2015 . Accordingly, certain disclosures that would substantially duplicate the disclosures contained in the December 31, 2015 audited consolidated financial statements have been omitted. These unaudited consolidated interim financial statements should be read in conjunction with our December 31, 2015 audited consolidated financial statements. | |
Consolidation | Consolidation The consolidated financial statements include the accounts of Molina Healthcare, Inc., its subsidiaries, and variable interest entities in which Molina Healthcare, Inc. is considered to be the primary beneficiary. See Note 18 , " Variable Interest Entities (VIEs) ," for more information regarding these variable interest entities. In the opinion of management, all adjustments considered necessary for a fair presentation of the results as of the date and for the periods presented have been included; such adjustments consist of normal recurring adjustments. All significant inter-company balances and transactions have been eliminated in consolidation. Financial information related to subsidiaries acquired during any year is included only for periods subsequent to their acquisition. | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Principal areas requiring the use of estimates include: • The determination of medical claims and benefits payable of our Health Plans segment; • Health plan contractual provisions that may limit revenue recognition based upon the costs incurred or the profits realized under a specific contract; • Health plan quality incentives that allow us to recognize incremental revenue if certain quality standards are met; • Molina Medicaid Solutions segment revenue and cost recognition; • Settlements under risk or savings sharing programs; • The assessment of deferred contract costs, deferred revenue, long-lived and intangible assets, and goodwill for impairment; • The determination of professional and general liability claims, and reserves for potential absorption of claims unpaid by insolvent providers; • The determination of reserves for the outcome of litigation; • The determination of valuation allowances for deferred tax assets; and • The determination of unrecognized tax benefits. | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments that are both readily convertible into known amounts of cash and have a maturity of three months or less on the date of purchase. | |
Investments | Investments Our investments are principally held in debt securities, which are grouped into two separate categories for accounting and reporting purposes: available-for-sale securities, and held-to-maturity securities. Available-for-sale securities are recorded at fair value and unrealized gains and losses, if any, are recorded in stockholders’ equity as other comprehensive income, net of applicable income taxes. Held-to-maturity securities are recorded at amortized cost, which approximates fair value, and unrealized holding gains or losses are not generally recognized. Realized gains and losses and unrealized losses judged to be other than temporary with respect to available-for-sale and held-to-maturity securities are included in the determination of net income. The cost of securities sold is determined using the specific-identification method. Our investment policy requires that all of our investments have final maturities of 10 years or less (excluding variable rate securities where interest rates may be periodically reset), and that the average maturity be three years or less. Investments and restricted investments are subject to interest rate risk and will decrease in value if market rates increase. Declines in interest rates over time will reduce our investment income. In general, our available-for-sale securities are classified as current assets without regard to the securities’ contractual maturity dates because they may be readily liquidated. We monitor our investments for other-than-temporary impairment. | |
Receivables | Receivables Receivables are readily determinable and because our creditors are primarily state governments, our allowance for doubtful accounts is immaterial. Any amounts determined to be uncollectible are charged to expense when such determination is made. | |
Property, Equipment, and Capitalized Software | Property, Equipment, and Capitalized Software Property and equipment are stated at historical cost. Replacements and major improvements are capitalized, and repairs and maintenance are charged to expense as incurred. Furniture and equipment are generally depreciated using the straight-line method over estimated useful lives ranging from three to seven years. Software developed for internal use is capitalized. Software is generally amortized over its estimated useful life of three years. Leasehold improvements are amortized over the term of the lease, or over their useful lives from five to 10 years, whichever is shorter. Buildings are depreciated over their estimated useful lives of 31.5 to 40 years. See Note 8 , " Property, Equipment, and Capitalized Software ." As discussed below, the costs associated with certain of our Molina Medicaid Solutions segment equipment and software are capitalized and recorded as deferred contract costs. Such costs are amortized on a straight-line basis over the shorter of the useful life or the contract period. | |
Depreciation and Amortization | Depreciation and Amortization Depreciation and amortization related to our Health Plans segment is all recorded in "Depreciation and amortization" in the consolidated statements of income. Depreciation and amortization related to our Molina Medicaid Solutions segment is recorded within three different headings in the consolidated statements of income as follows: • Amortization of purchased intangibles relating to customer relationships is reported as amortization within the heading "Depreciation and amortization;" • Amortization of purchased intangibles relating to contract backlog is recorded as a reduction of "Service revenue;" and • Amortization of capitalized software is recorded within the heading "Cost of service revenue." | |
Long-Lived Assets, including Intangible Assets | Long-Lived Assets, including Intangible Assets Long-lived assets consist primarily of property, equipment, capitalized software and intangible assets. Finite-lived, separately-identified intangible assets acquired in business combinations are assets that represent future expected benefits but lack physical substance (such as purchased contract rights and provider contracts). Intangible assets are initially recorded at fair value and are then amortized on a straight-line basis over their expected useful lives, generally between two and 15 years. Our intangible assets are subject to impairment tests when events or circumstances indicate that a finite-lived intangible asset’s (or asset group’s) carrying value may not be recoverable. Consideration is given to a number of potential impairment indicators. For example, our health plan subsidiaries have generally been successful in obtaining the renewal by amendment of their contracts in each state prior to the actual expiration of their contracts. However, there can be no assurance that these contracts will continue to be renewed. Following the identification of any potential impairment indicators, to determine whether an impairment exists, we would compare the carrying amount of a finite-lived intangible asset with the undiscounted cash flows that are expected to result from the use of the asset or related group of assets. If it is determined that the carrying amount of the asset is not recoverable, the amount by which the carrying value exceeds the estimated fair value is recorded as an impairment. | |
Goodwill | Goodwill Goodwill represents the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses. Goodwill is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. To determine whether goodwill is impaired, we measure the fair values of our reporting units and compare them to the carrying values of the respective units, including goodwill. If the fair value is less than the carrying value of the reporting unit, then the implied value of goodwill would be calculated and compared with the carrying amount of goodwill to determine whether goodwill is impaired. We estimate the fair values of our reporting units using discounted cash flows. To determine fair values, we must make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations, capital requirements and income taxes), long-term growth rates for determining terminal value, and discount rates. | |
Business Combinations | Business Combinations Accounting for acquisitions requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income. | |
Restricted Investments | Restricted Investments Restricted investments, which consist of certificates of deposit and U.S. treasury securities, are designated as held-to-maturity and are carried at amortized cost, which approximates fair value. The use of these funds is limited to specific purposes as required by regulation in the various states in which we operate, or as protection against the insolvency of capitated providers. We have the ability to hold our restricted investments until maturity and, as a result, we would not expect the value of these investments to decline significantly due to a sudden change in market interest rates. | |
Delegated Provider Insolvency | Delegated Provider Insolvency Circumstances may arise where providers to whom we have delegated risk are unable to pay claims they have incurred with third parties in connection with referral services (including hospital inpatient services) provided to our members. The inability of delegated providers to pay referral claims presents us with both immediate financial risk and potential disruption to member care. Depending on states’ laws, we may be held liable for such unpaid referral claims even though the delegated provider has contractually assumed such risk. Additionally, competitive pressures may force us to pay such claims even when we have no legal obligation to do so. To reduce the risk that delegated providers are unable to pay referral claims, we monitor the operational and financial performance of such providers. We also maintain contingency plans that include transferring members to other providers in response to potential network instability. In certain instances, we have required providers to place funds on deposit with us as protection against their potential insolvency. These reserves are frequently in the form of segregated funds received from the provider and held by us or placed in a third-party financial institution. These funds may be used to pay claims that are the financial responsibility of the provider in the event the provider is unable to meet these obligations. Additionally, we have recorded liabilities for estimated losses arising from provider instability or insolvency in excess of provider funds on deposit with us. | |
Premium Revenue - Health Plans | Revenue Recognition – Health Plans Segment Premium revenue is fixed in advance of the periods covered and except as described below, is not generally subject to significant accounting estimates. Premium revenues are recognized in the month that members are entitled to receive health care services, and premiums collected in advance are deferred. Certain components of premium revenue are subject to accounting estimates and fall into the following categories: Contractual Provisions That May Adjust or Limit Revenue or Profit Medicaid Medical Cost Floors (Minimums), Medical Cost Corridors, and Administrative Cost Ceilings (Maximums): A portion of our premium revenue may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded a liability under the terms of such contract provisions of $326 million and $214 million at June 30, 2016 and December 31, 2015 , respectively, to amounts due government agencies. Approximately $297 million and $208 million of the liability accrued at June 30, 2016 and December 31, 2015 , respectively, relates to our participation in Medicaid Expansion programs. In certain circumstances, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. We recorded receivables of $1 million and $3 million at June 30, 2016 and December 31, 2015 , respectively, relating to such provisions. Profit Sharing and Profit Ceiling: Our contracts with certain states contain profit-sharing or profit ceiling provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. Under these provisions, we recorded a liability of $1 million and $10 million at June 30, 2016 and December 31, 2015 , respectively, for profit in excess of the amount we are allowed to retain. Retroactive Premium Adjustments: The state Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we must adjust our premium revenue in the period in which we learn of the adjustment, rather than in the months of service to which the retroactive adjustment applies. In the first quarter of 2016 our Florida health plan recorded a retroactive increase to Medicaid premium revenue of approximately $18 million , relating to dates of service prior to 2016. Cost Plus Retroactive Premium Adjustments: In New Mexico, when members are retroactively enrolled into our health plan, we earn revenue only to the extent of the actual medical costs incurred by us for services provided during those retroactive periods, plus a small percentage of that medical cost for administration and profit. This arrangement first became effective July 1, 2014 (retroactive to January 1, 2014). We are paid normal monthly capitation rates for the retroactive eligibility periods, and the difference between those capitation rates and the amounts due to us on a cost plus basis are periodically settled with the state. To date, no such settlement has been made. During the years ended December 31, 2014 and 2015, our New Mexico contract was not specific as to the definition of retroactive membership, and the amount we owe the state (or that the state owes us) for the difference between capitation received and amounts due to us under the cost plus arrangement during those periods varies widely depending upon the definition of retroactive membership. Although we believe that the amount we have recorded as a liability for this matter is consistent with the state’s expectations, we cannot be certain that the state will not seek to recover an amount in excess of our recorded liability. Medicare Risk Adjustment: Our Medicare premiums are subject to retroactive increase or decrease based on the health status of our Medicare members (as measured by member risk score). We estimate our members' risk scores and the related amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health status, risk scores and federal Centers for Medicare and Medicaid Services (CMS) practices. Based on our estimates, we have recorded a net receivable of $19 million and a net payable of $4 million for anticipated Medicare risk adjustment premiums at June 30, 2016 and December 31, 2015 , respectively. Marketplace Premium Stabilization Programs: The Affordable Care Act (ACA) established Marketplace premium stabilization programs effective January 1, 2014. These programs, commonly referred to as the "3R's," include a permanent risk adjustment program, a transitional reinsurance program, and a temporary risk corridor program. We record receivables or payables related to the 3R programs and the Minimum MLR when the amounts are reasonably estimable as described below, and, for receivables, collection is reasonably assured. | Premium Revenue - Health Plans Premium revenue is generated primarily from our Medicaid, Medicare and Marketplace contracts, including agreements with other managed care organizations for which we operate as a subcontractor. Premium revenue is generally received based on per member per month (PMPM) rates established in advance of the periods covered. These premium revenues are recognized in the month that members are entitled to receive health care services, and premiums collected in advance are deferred. The state Medicaid programs and the federal Medicare program periodically adjust premium. Additionally, many of our contracts contain provisions that may adjust or limit revenue or profit, as described below. Consequently, we recognize premium revenue as it is earned under such provisions. The following table summarizes premium revenue from continuing operations for the periods indicated: Year Ended December 31, 2015 2014 2013 Amount % of Total Amount % of Total Amount % of Total (Dollars in millions) California $ 2,200 16.6 % $ 1,523 16.9 % $ 750 12.1 % Florida 1,199 9.0 439 4.9 265 4.3 Illinois 397 3.0 153 1.7 8 0.1 Michigan 1,067 8.1 781 8.7 676 11.0 New Mexico 1,237 9.3 1,076 11.9 447 7.2 Ohio 2,034 15.4 1,553 17.2 1,099 17.8 Puerto Rico 567 4.3 — — — — South Carolina 348 2.6 381 4.2 — — Texas 1,961 14.8 1,318 14.6 1,291 20.9 Utah 331 2.5 310 3.4 311 5.0 Washington 1,602 12.1 1,305 14.5 1,168 18.9 Wisconsin 261 2.0 156 1.7 143 2.3 Direct delivery 37 0.3 28 0.3 21 0.4 $ 13,241 100.0 % $ 9,023 100.0 % $ 6,179 100.0 % Certain components of premium revenue are subject to accounting estimates and fall into the following categories: Contractual Provisions That May Adjust or Limit Revenue or Profit Medicaid Medical Cost Floors (Minimums), Medical Cost Corridors, and Administrative Cost Ceilings (Maximums): A portion of certain premiums received by our health plans may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded a liability under the terms of such contract provisions of $224 million and $392 million at December 31, 2015 and December 31, 2014 , respectively, to amounts due government agencies. Approximately $208 million of the liability accrued at December 31, 2015 relates to our participation in Medicaid expansion programs. In certain circumstances, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. We had $3 million recorded at December 31, 2015 relating to such provisions. No such receivables were recorded at December 31, 2014 . Profit Sharing and Profit Ceiling: Our contracts with certain states contain profit-sharing or profit ceiling provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage, in some cases in accordance with a tiered rebate schedule. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. As a result of profits in excess of the amount we are allowed to retain, we recorded a liability of $10 million at December 31, 2015 . The amount recorded at December 31, 2014 was insignificant. Retroactive Premium Adjustments: In New Mexico, when members are retroactively enrolled into our health plan we earn revenue only to the extent of the actual medical costs incurred by us for services provided during those retroactive periods, plus a small percentage of that medical cost for administration and profit. This cost plus arrangement for members retroactively enrolled in our health plan first became effective July 1, 2014 (retroactive to January 1, 2014). We are paid normal monthly capitation rates for the retroactive eligibility periods, and the difference between those capitation rates and the amounts due us on a cost plus basis are periodically settled with the state. To date, no such settlement has been made with the state. Our New Mexico contract is not specific as to the definition of retroactive membership, and the amount we owe the state (or that the state owes us) for the difference between capitation received and amounts due us under the cost plus arrangement varies widely depending upon the definition of retroactive membership. In August 2015 the state provided us with a request for payment under the terms of this contract provision for the period January 1, 2014 through December 31, 2014. That request was based upon definitions of retroactive membership that were at odds with our interpretations of that term. The New Mexico health plan reduced revenue by approximately $24 million in 2015 as a result of aligning more closely our definition of retroactive membership with the state's definition. Using the state's definition of retroactive membership, however, we estimate that the state will ultimately seek repayment of an amount that ranges from $15 million to $20 million higher than what we have accrued. We do not believe that any reasonable definition of retroactive membership supports the state's position, and expect to resolve this matter with payment of the amount we have accrued at December 31, 2015. We are currently engaged in discussions with the state regarding the appropriate amount, if any, owed to the state under this contract term. Medicare Risk Adjustment: Based on member encounter data that we submit to the Centers for Medicare and Medicaid Services (CMS), our Medicare premiums are subject to retroactive increase or decrease based upon member medical conditions for up to two years after the original year of service. We estimate the amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health care utilization patterns and CMS practices. Based on our knowledge of member health care utilization patterns and expenses, we have recorded a net payable of $4 million and a net receivable of $8 million for anticipated Medicare risk adjustment premiums at December 31, 2015 and December 31, 2014 , respectively. Marketplace Premium Stabilization Programs: The Affordable Care Act (ACA) established Marketplace premium stabilization programs effective January 1, 2014. These programs, commonly referred to as the "3R's," include a permanent risk adjustment program, a transitional reinsurance program, and a temporary risk corridor program. • Permanent risk adjustment program: Under this permanent program, our health plans' risk scores are compared to the overall average risk score for the relevant state and market pool. Generally, our health plans will pay into the pool if their risk scores are below the average risk score, and will receive funds from the pool if their risk scores are above the average risk score. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income. • Transitional reinsurance program: This program is designed to provide reimbursement to insurers for high cost members. Our health plans pay an annual contribution on a per-member basis, and are eligible for recoveries if claims for individual members exceed a specified threshold, up to a maximum amount. This three-year program will end on December 31, 2016. We recognize the assessments to fund the transitional reinsurance program as a reduction to premium revenue in our consolidated statements of income. We recognize recoveries under the reinsurance program as a reduction to medical care costs in our consolidated statements of income. • Temporary risk corridor program: This program is intended to limit gains and losses of insurers by comparing allowable costs to a target amount as defined by the U.S. Department of Health and Human Services (HHS). Variances from the target amount exceeding certain thresholds may result in amounts due to or receivables due from HHS. This three-year program will end on December 31, 2016. Due to uncertainties as to the amount of federal funding available to support the risk corridor program, we do not recognize amounts receivable under this program. All liabilities are recognized as incurred. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk corridor program as an adjustment to premium revenue in our consolidated statements of income. Additionally, the ACA established a minimum annual medical loss ratio (Minimum MLR) of 80% for the Marketplace. The medical loss ratio represents medical costs as a percentage of premium revenue. What constitutes medical costs and premium revenue are specifically defined by federal regulations. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. Each of the 3R programs is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. We record receivables or payables related to the 3R programs and the Minimum MLR when the amounts are reasonably estimable as described above, and, for receivables, collection is reasonably assured. Our receivables (payables) for each of these programs, as of the dates indicated, were as follows (in millions): December 31, 2015 December 31, 2014 Risk adjustment $ (214 ) $ (5 ) Reinsurance 36 5 Risk corridor (10 ) — Minimum MLR (3 ) — Quality Incentives At several of our health plans, revenue ranging from approximately 1% to 4% of certain health plan premiums is earned if certain performance measures are met. |
Medical Care Costs - Health Plans | Medical Care Costs - Health Plans Expenses related to medical care services are captured in the following categories: • Fee-for-service expenses: Nearly all hospital services and the majority of our primary care and physician specialist services and LTSS costs are paid on a fee-for-service basis. Under fee-for-service arrangements, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of services. Such expenses are recorded in the period in which the related services are dispensed. The costs of drugs administered in a physician or hospital setting that are not billed through our pharmacy benefit manager are included in fee-for-service costs. • Pharmacy expenses: All drug, injectibles, and immunization costs paid through our pharmacy benefit manager are classified as pharmacy expenses. As noted above, drugs and injectibles not paid through our pharmacy benefit manager are included in fee-for-service costs, except in those limited instances where we capitate drug and injectible costs. • Capitation expenses: Many of our primary care physicians and a small portion of our specialists and hospitals are paid on a capitated basis. Under capitation arrangements, we pay a fixed amount PMPM to the provider without regard to the frequency, extent, or nature of the medical services actually furnished. Under capitated arrangements, we remain liable for the provision of certain health care services. Capitation payments are fixed in advance of the periods covered and are not subject to significant accounting estimates. These payments are expensed in the period the providers are obligated to provide services. The financial risk for pharmacy services for a small portion of our membership is delegated to capitated providers. • Direct delivery expenses: All costs associated with our direct delivery of medical care are separately identified. • Other medical expenses: All medically related administrative costs, certain provider incentive costs, and other health care expenses are classified as other medical expenses. Medically related administrative costs include, for example, expenses relating to health education, quality assurance, case management, care coordination, disease management, and 24-hour on-call nurses. Salary and benefit costs are a substantial portion of these expenses. For the years ended December 31, 2015 , 2014 , and 2013 , medically related administrative costs were $398 million , $263 million , and $153 million , respectively. The following table provides the details of our consolidated medical care costs from continuing operations for the periods indicated (dollars in millions, except PMPM amounts): Year Ended December 31, 2015 2014 2013 Amount PMPM % of Total Amount PMPM % of Total Amount PMPM % of Total Fee-for-service $ 8,572 $ 218.35 72.7 % $ 5,673 $ 202.87 70.2 % $ 3,612 $ 160.43 67.1 % Pharmacy 1,610 41.01 13.7 1,273 45.54 15.8 935 41.54 17.4 Capitation 982 25.02 8.3 748 26.77 9.3 604 26.83 11.2 Direct delivery 128 3.26 1.1 96 3.44 1.2 48 2.14 0.9 Other 502 12.79 4.2 286 10.22 3.5 181 8.05 3.4 Total $ 11,794 $ 300.43 100.0 % $ 8,076 $ 288.84 100.0 % $ 5,380 $ 238.99 100.0 % Our medical care costs include amounts that have been paid by us through the reporting date, as well as estimated liabilities for medical care costs incurred but not paid by us as of the reporting date. Such medical care cost liabilities include, among other items, unpaid fee-for-service claims, capitation payments owed providers, unpaid pharmacy invoices, and various medically related administrative costs that have been incurred but not paid. We use judgment to determine the appropriate assumptions for determining the required estimates. The most important element in estimating our medical care costs is our estimate for fee-for-service claims which have been incurred but not paid by us. These fee-for-service costs that have been incurred but have not been paid at the reporting date are collectively referred to as medical costs that are incurred but not paid (IBNP). Our IBNP claims reserve, as reported in our balance sheet, represents our best estimate of the total amount of claims we will ultimately pay with respect to claims that we have incurred as of the balance sheet date. We estimate our IBNP monthly using actuarial methods based on a number of factors. For further information, see Note 11 , " Medical Claims and Benefits Payable ." We report reinsurance premiums as a reduction to premium revenue, while related reinsurance recoveries are reported as a reduction to medical care costs. We limit our risk of catastrophic losses by maintaining high deductible reinsurance coverage. Such reinsurance coverage does not relieve us of our primary obligation to our policyholders. We do not consider this coverage to be material because the cost is not significant and the likelihood that coverage will apply is low. | |
Taxes Based on Premiums | Taxes Based on Premiums Health Insurer Fee. The federal government under the ACA imposes an annual fee, or excise tax, on health insurers for each calendar year. The HIF is based on a company's share of the industry's net premiums written during the preceding calendar year, and is non-deductible for income tax purposes. We recognize expense for the HIF over the year on a straight-line basis. Because we primarily serve individuals in government-sponsored programs, we must secure additional reimbursement from our state partners for this added cost. We recognize the related revenue when we have obtained a contractual commitment or payment from a state to reimburse us for the HIF; such HIF revenue is recognized ratably throughout the year. Premium and Use Tax. Certain of our health plans are assessed a tax based on premium revenue collected. The premium revenues we receive from these states include the premium tax assessment. We have reported these taxes on a gross basis, as premium tax revenue and as premium tax expense in the consolidated statements of income. | |
Premium Deficiency Reserves on Loss Contracts | Premium Deficiency Reserves on Loss Contracts We assess the profitability of our contracts for providing medical care services to our members and identify those contracts where current operating results or forecasts indicate probable future losses. Anticipated future premiums are compared to anticipated medical care costs, including the cost of processing claims. If the anticipated future costs exceed the premiums, a loss contract accrual is recognized. | |
Service Revenue and Cost of Service Revenue - Molina Medicaid Solutions | Service Revenue and Cost of Service Revenue — Molina Medicaid Solutions The payments received by our Molina Medicaid Solutions segment under its state contracts are based on the performance of multiple services. The first of these is the design, development and implementation (DDI) of a Medicaid management information system (MMIS). An additional service, following completion of DDI, is the operation of the MMIS under a business process outsourcing (BPO) arrangement. When providing BPO services (which include claims payment and eligibility processing) we also provide the state with other services including both hosting and support, and maintenance. We have evaluated our Molina Medicaid Solutions contracts to determine if such arrangements include a software element. Based on this evaluation, we have concluded that these arrangements do not include a software element, and are therefore multiple-element service arrangements. Additionally, we evaluate each required deliverable under our multiple-element service arrangements to determine whether it qualifies as a separate unit of accounting. Such evaluation is generally based on whether the deliverable has standalone value to the customer. If the deliverable has standalone value, the arrangement’s consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent. We have concluded that the various service elements in our Molina Medicaid Solutions contracts represent a single unit of accounting due to the fact that DDI, which is the only service performed in advance of the other services (all other services are performed over an identical period), does not have standalone value because our DDI services are not sold separately by any vendor and the customer could not resell our DDI services. Further, we have no objective and reliable evidence of fair value for any of the individual elements in these contracts, and at no point in the contract will we have objective and reliable evidence of fair value for the undelivered elements in the contracts. We lack objective and reliable evidence of the fair value of the individual elements of our Molina Medicaid Solutions contracts for the following reasons: • Each contract calls for the provision of its own specific set of services. While all contracts support the system of record for state MMIS, the actual services we provide vary significantly between contracts; and • The nature of the MMIS installed varies significantly between our older contracts (proprietary mainframe systems) and our new contracts (commercial off-the-shelf technology solutions). Because we have determined the services provided under our Molina Medicaid Solutions contracts represent a single unit of accounting, and because we are unable to determine a pattern of performance of services during the contract period, we recognize all revenue (both the DDI and BPO elements) associated with such contracts on a straight-line basis over the period during which BPO, hosting, and support and maintenance services are delivered. Therefore, absent any contingencies as discussed in the following paragraph, or contract extensions, we would recognize all revenue associated with those contracts over the initial contract period. When a contract is extended, we generally consider the extension to be a continuation of the single unit of accounting; therefore, the deferred revenue as of the extension date is recognized prospectively over the new remaining term of the contract. In cases where there is no DDI element associated with our contracts, BPO revenue is recognized on a monthly basis as specified in the applicable contract or contract extension. Provisions specific to each contract may, however, lead us to modify this general principle. In those circumstances, the right of the state to refuse acceptance of services, as well as the related obligation to compensate us, may require us to delay recognition of all or part of our revenue until that contingency (the right of the state to refuse acceptance) has been removed. In those circumstances, we defer recognition of any contingent revenue (whether DDI, BPO services, hosting, and support and maintenance services) until the contingency has been removed. These types of contingency features are present in our Maine and Idaho contracts, for example. In those states, we deferred recognition of revenue until the contingencies were removed. Costs associated with our Molina Medicaid Solutions contracts include software related costs and other costs. With respect to software related costs, we apply the guidance for internal-use software and capitalize external direct costs of materials and services consumed in developing or obtaining the software, and payroll and payroll-related costs associated with employees who are directly associated with and who devote time to the computer software project. With respect to all other direct costs, such costs are expensed as incurred, unless corresponding revenue is being deferred. If revenue is being deferred, direct costs relating to delivered service elements are deferred as well and are recognized on a straight-line basis over the period of revenue recognition, in a manner consistent with our recognition of revenue that has been deferred. Such direct costs can include: • Transaction processing costs; • Employee costs incurred in performing transaction services; • Vendor costs incurred in performing transaction services; • Costs incurred in performing required monitoring of and reporting on contract performance; • Costs incurred in maintaining and processing member and provider eligibility; and • Costs incurred in communicating with members and providers. The recoverability of deferred contract costs associated with a particular contract is analyzed on a periodic basis using the undiscounted estimated cash flows of the whole contract over its remaining contract term. If such undiscounted cash flows are insufficient to recover the long-lived assets and deferred contract costs, the deferred contract costs are written down by the amount of the cash flow deficiency. If a cash flow deficiency remains after reducing the balance of the deferred contract costs to zero, any remaining long-lived assets are evaluated for impairment. Any such impairment recognized would equal the amount by which the carrying value of the long-lived assets exceeds the fair value of those assets. | |
Income Taxes | Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate, which is generally greater than the U.S. federal statutory rate primarily because of state taxes, nondeductible expenses such as the Health Insurer Fee (HIF), certain compensation, and other general and administrative expenses. The effective tax rate may be subject to fluctuations during the year, particularly as a result of the level of pretax earnings, and also as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers. | Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate, which is generally greater than the U.S. federal statutory rate primarily because of state and Puerto Rico taxes, nondeductible expenses under the Affordable Care Act Health Insurer Fee (HIF), nondeductible compensation and other general and administrative expenses. The effective tax rate may be subject to fluctuations during the year, particularly as a result of the level of pretax earnings, and also as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments, receivables, and restricted investments. We invest a substantial portion of our cash in the PFM Funds Prime Series — Institutional Class, and the PFM Funds Government Series. These funds represent a portfolio of highly liquid money market securities that are managed by PFM Asset Management LLC (PFM), a Virginia business trust registered as an open-end management investment fund. As of December 31, 2015 and 2014 , our investments with PFM amounted to approximately $605 million and $321 million , respectively. Our investments and a portion of our cash equivalents are managed by professional portfolio managers operating under documented investment guidelines. Our portfolio managers must obtain our prior approval before selling investments where the loss position of those investments exceeds certain levels. Our investments consist primarily of investment-grade debt securities with a maximum maturity of 10 years and an average duration of three years or less. Restricted investments are invested principally in certificates of deposit and U.S. treasury securities. Concentration of credit risk with respect to accounts receivable is limited because our payors consist principally of the governments of each state in which our health plan subsidiaries operate. | |
Risks and Uncertainties | Risks and Uncertainties Our profitability depends in large part on our ability to accurately predict and effectively manage medical care costs. We continually review our medical costs in light of our underlying claims experience and revised actuarial data. However, several factors could adversely affect medical care costs. These factors, which include changes in health care practices, inflation, new technologies, major epidemics, natural disasters, and malpractice litigation, are beyond our control and may have an adverse effect on our ability to accurately predict and effectively control medical care costs. Costs in excess of those anticipated could have a material adverse effect on our financial condition, results of operations, or cash flows. We operate health plans primarily as a direct contractor with the states (or Commonwealth), and in Los Angeles County, California, as a subcontractor to another health plan holding a direct contract with the state. We are therefore dependent upon a small number of contracts to support our revenue. The loss of any one of those contracts could have a material adverse effect on our financial position, results of operations, or cash flows. Our ability to arrange for the provision of medical services to our members is dependent upon our ability to develop and maintain adequate provider networks. Our inability to develop or maintain such networks might, in certain circumstances, have a material adverse effect on our financial position, results of operations, or cash flows. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue Recognition. In May 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-12, Revenue from Contracts with Customers (Topic 606). The amendments, which address transition, collectibility, non-cash consideration and the presentation of sales and other similar taxes, do not change the core principles of ASU 2014-09, but rather address implementation issues and are intended to result in more consistent application. We intend to adopt this standard on January 1, 2018. We are evaluating the potential effects of the adoption to our financial statements. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing , which amends certain aspects of ASC 606, Revenue from Contracts with Customers . ASU 2016-10 amends step two of the new revenue standard’s five-step model to include guidance on immaterial promised goods or services, shipping and handling activities and identifying when promises represent performance obligations. ASU 2016-10 also provides guidance related to licensing such as, but not limited to, sales-based and usage-based royalties and renewals of license that provide a right to use intellectual property. We intend to adopt this standard on January 1, 2018. We are evaluating the potential effects of the adoption to our financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers - Principal vs. Agent Considerations , which amends the principal–versus–agent implementation guidance in ASC 606. ASU 2016-08 clarifies that an entity should evaluate whether it is the principal or agent for each specified good or service promised in a contract with a customer as defined in ASC 606. The entity must first identify each specified good or service to be provided to the customer and then assess whether it controls each specified good or service. The ASU also removed two of the five indicators used in evaluating control under the old guidance and reframes the remaining three indicators. We intend to adopt this standard on January 1, 2018. We are evaluating the potential effects of the adoption to our financial statements. Credit Losses. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments , which changes how companies measure credit losses on most financial instruments measured at amortized cost, such as loans, receivables and held-to-maturity debt securities. Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. ASU 2016-13 is effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. We are evaluating the potential effects of the adoption to our financial statements. Stock Compensation. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation , which simplifies several aspects of accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax and classification in the statement of cash flows. ASU 2016-09 is effective for fiscal periods beginning after December 15, 2016 and must be adopted using the modified retrospective approach except for classification in the statement of cash flows, which must be adopted using either the prospective or retrospective approach. Early adoption is permitted. We are evaluating the potential effects of the adoption to our financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (SEC) did not have, or are not believed by management to have, a material impact on our present or future consolidated financial statements. | Recent Accounting Pronouncements Not Yet Adopted Leases. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) ASU 2016-02, Leases . ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The ASU is effective for us beginning in the first quarter of 2019, and requires a modified retrospective transition approach. Early adoption is permitted; we are currently evaluating the potential effects of the adoption to our financial statements. Financial Instruments. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which will require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Also, entities will have to assess the realizability of a deferred tax asset related to an available for sale debt security in combination with the entity’s other deferred tax assets. Effective for us in the first quarter of 2018, ASU 2016-01 is applied prospectively with a cumulative-effect adjustment to beginning retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Early adoption is permitted in regards to certain provisions of the standard; we are evaluating the potential effects of the adoption to our financial statements. Revenue Recognition. In July 2015, the FASB affirmed its proposal to defer the effective date of ASU 2014-09, Revenue from Contracts with Customers, for all entities by one year. As a result, public business entities will apply the new revenue standard to annual reporting periods beginning after December 15, 2017, and for interim reporting periods within annual reporting periods beginning after December 15, 2017. We intend to adopt this standard on January 1, 2018. We are currently evaluating our plan for adoption and its impact to our revenue recognition policies, procedures and control framework, and the resulting impact to our consolidated financial position, results of operations and cash flows. Short-Duration Contracts. In May 2015, the FASB issued ASU 2015-09, Disclosures about Short-Duration Contracts , which will require additional disclosure on the liability for unpaid claims and claim adjustment expenses. We intend to adopt this standard effective for our annual report for the year ending December 31, 2016, and for interim periods thereafter. It requires additional disclosure only and will not have a significant impact to our consolidated financial statements. Software Licenses. In April 2015, the FASB issued ASU 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement , which will require customers to determine whether a cloud computing arrangement includes the license of software by applying the same guidance cloud service providers use to make this determination. The ASU also eliminates the existing requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. This ASU will be effective for us in the first quarter of 2016, and is applied either prospectively or retrospectively. We are evaluating the potential effects of adoption to our financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not have, or are not believed by management to have, a material impact on our present or future consolidated financial statements. Recent Accounting Pronouncements Adopted Income Taxes. In the fourth quarter of 2015, we early adopted ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which requires deferred tax assets and liabilities to be classified as non-current, in a classified statement of financial position. We have applied the guidance retrospectively to all periods presented. Such retrospective adoption had an insignificant impact to our consolidated balance sheets, and had no impact to our consolidated statements of income, stockholders’ equity, and cash flows. Business Combinations. In the fourth quarter of 2015, we early adopted ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments , which requires acquirers to recognize adjustments to provisional amounts identified during the measurement period (a reasonable time period after the acquisition date) in the reporting period in which such adjustment amounts are determined. For the year ended December 31, 2015, there was no impact to our consolidated financial statements. Debt Issuance Costs. In the fourth quarter of 2015, we early adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of such debt liability, consistent with debt discounts. In a subsequent Staff Announcement, the SEC announced that it would not object to the deferral and presentation of debt issuance costs relating to line-of-credit arrangements as an asset. We have applied the guidance retrospectively to all periods presented. Such retrospective adoption had an insignificant impact to our consolidated balance sheets, and had no impact to our consolidated statements of income, stockholders’ equity, and cash flows. |
Significant Accounting Polici33
Significant Accounting Policies (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Depreciation and amortization | The following table presents all depreciation and amortization recorded in our consolidated statements of income, regardless of whether the item appears as depreciation and amortization, a reduction of revenue, or as cost of service revenue. Year Ended December 31, 2015 2014 2013 (In millions) Depreciation, and amortization of capitalized software, continuing operations $ 87 $ 75 $ 55 Amortization of intangible assets, continuing operations 17 18 18 Depreciation and amortization, continuing operations 104 93 73 Amortization recorded as reduction of service revenue 1 3 3 Amortization of capitalized software recorded as cost of service revenue 21 38 18 Depreciation and amortization reported in the statement of cash flows $ 126 $ 134 $ 94 | |
Summarized premium revenue | The following table summarizes premium revenue from continuing operations for the periods indicated: Year Ended December 31, 2015 2014 2013 Amount % of Total Amount % of Total Amount % of Total (Dollars in millions) California $ 2,200 16.6 % $ 1,523 16.9 % $ 750 12.1 % Florida 1,199 9.0 439 4.9 265 4.3 Illinois 397 3.0 153 1.7 8 0.1 Michigan 1,067 8.1 781 8.7 676 11.0 New Mexico 1,237 9.3 1,076 11.9 447 7.2 Ohio 2,034 15.4 1,553 17.2 1,099 17.8 Puerto Rico 567 4.3 — — — — South Carolina 348 2.6 381 4.2 — — Texas 1,961 14.8 1,318 14.6 1,291 20.9 Utah 331 2.5 310 3.4 311 5.0 Washington 1,602 12.1 1,305 14.5 1,168 18.9 Wisconsin 261 2.0 156 1.7 143 2.3 Direct delivery 37 0.3 28 0.3 21 0.4 $ 13,241 100.0 % $ 9,023 100.0 % $ 6,179 100.0 % | |
Receivables (payables) for 3R programs | Our receivables (payables) for each of these programs, as of the dates indicated, were as follows: June 30, 2016 December 31, Current Benefit Year Prior Benefit Years Total (In millions) Risk adjustment $ (220 ) $ (254 ) $ (474 ) $ (214 ) Reinsurance 57 24 81 36 Risk corridor (9 ) (3 ) (12 ) (10 ) Minimum MLR (17 ) (2 ) (19 ) (3 ) | Our receivables (payables) for each of these programs, as of the dates indicated, were as follows (in millions): December 31, 2015 December 31, 2014 Risk adjustment $ (214 ) $ (5 ) Reinsurance 36 5 Risk corridor (10 ) — Minimum MLR (3 ) — |
Quality incentive premium revenue recognized | The following table quantifies the quality incentive premium revenue recognized for the periods presented, including the amounts earned in the periods presented and prior periods. Although the reasonably possible effects of a change in estimate related to quality incentive premium revenue as of June 30, 2016 are not known, we have no reason to believe that the adjustments to prior years noted below are not indicative of the potential future changes in our estimates as of June 30, 2016 , other than the Texas quality revenue recognized in the second quarter of 2016 described above. Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions) Maximum available quality incentive premium - current period $ 41 $ 28 $ 81 $ 58 Amount of quality incentive premium revenue recognized in current period: Earned current period $ 36 $ 11 $ 54 $ 21 Earned prior periods 49 11 54 11 Total $ 85 $ 22 $ 108 32 Quality incentive premium revenue recognized as a percentage of total premium revenue 2.1 % 0.7 % 1.3 % 0.5 % | The following table quantifies the quality incentive premium revenue recognized for the periods presented, including the amounts earned in the period presented and prior periods. Although the reasonably possible effects of a change in estimate related to quality incentive premium revenue as of December 31, 2015 are not known, we have no reason to believe that the adjustments to prior years noted below are not indicative of the potential future changes in our estimates as of December 31, 2015 . Year Ended December 31, 2015 2014 2013 (In millions) Maximum available quality incentive premium - current period $ 118 $ 90 $ 63 Amount of quality incentive premium revenue recognized in current period: Earned current period $ 66 $ 40 $ 46 Earned prior periods 13 4 9 Total $ 79 $ 44 $ 55 Total premium revenue recognized for state health plans with quality incentive premiums $ 11,107 $ 7,084 $ 2,980 |
Consolidated medical care costs | The following table provides the details of our consolidated medical care costs from continuing operations for the periods indicated (dollars in millions, except PMPM amounts): Year Ended December 31, 2015 2014 2013 Amount PMPM % of Total Amount PMPM % of Total Amount PMPM % of Total Fee-for-service $ 8,572 $ 218.35 72.7 % $ 5,673 $ 202.87 70.2 % $ 3,612 $ 160.43 67.1 % Pharmacy 1,610 41.01 13.7 1,273 45.54 15.8 935 41.54 17.4 Capitation 982 25.02 8.3 748 26.77 9.3 604 26.83 11.2 Direct delivery 128 3.26 1.1 96 3.44 1.2 48 2.14 0.9 Other 502 12.79 4.2 286 10.22 3.5 181 8.05 3.4 Total $ 11,794 $ 300.43 100.0 % $ 8,076 $ 288.84 100.0 % $ 5,380 $ 238.99 100.0 % |
Net Income per Share (Table)
Net Income per Share (Table) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Summary of denominators for the computation of basic and diluted net income (loss) per share | The following table sets forth the calculation of basic and diluted net income per share: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions, except net income per share) Numerator: Net income $ 33 $ 39 $ 57 $ 67 Denominator: Shares outstanding at the beginning of the period 55 49 55 49 Weighted-average number of shares: Issued in common stock offering — 1 — 1 Denominator for basic net income per share 55 50 55 50 Effect of dilutive securities: Convertible senior notes (1) — 1 — — 1.125% Warrants (1) — 3 1 2 Denominator for diluted net income per share 55 54 56 52 Net income per share (2): Basic $ 0.58 $ 0.78 $ 1.02 $ 1.36 Diluted $ 0.58 $ 0.72 $ 1.01 $ 1.29 ______________________________ (1) For more information regarding the convertible senior notes, refer to Note 10 , " Debt ." For more information regarding the 1.125% Warrants, refer to Note 11 , " Derivatives ." (2) Source data for calculations in thousands. | The following table sets forth the calculation of the denominators used to compute basic and diluted net income per share: December 31, 2015 2014 2013 (In millions) Shares outstanding at the beginning of the period 49 46 47 Weighted-average number of shares: Issued: Common stock offering 3 — — Convertible senior notes — 1 — Repurchased — — (1 ) Denominator for basic net income per share 52 47 46 Effect of dilutive securities: Share-based compensation 1 — 1 Convertible senior notes (1) 1 1 — 1.125% Warrants (1) 2 — — Denominator for diluted net income per share 56 48 47 Potentially dilutive common shares excluded from calculations (2): 1.125% Warrants — 13 12 _______________________________ (1) For more information regarding the convertible senior notes, including the 1.625% Notes, 3.75% Notes, and 3.75% Exchange, refer to Note 12 , " Debt ." For more information regarding the 1.125% Warrants, refer to Note 13 , " Derivatives ." (2) The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the years ended December 31, 2014 and 2013 , the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock. |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
Preliminary Values of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary values of the assets acquired and liabilities assumed at the date of acquisition. November 1, 2015 (In millions) Assets: Cash and cash equivalents $ 20 Receivables 52 Prepaid expenses and other current assets 4 Property and equipment 14 Intangible assets 19 Goodwill 155 Other assets 1 Liabilities: Medical claims and benefits payable (2 ) Accounts payable and accrued liabilities (23 ) Deferred revenue (2 ) Other long-term liabilities (7 ) Total purchase price $ 231 | |
Schedule of Intangible Assets Identified | The following table presents the intangible assets identified in the transactions described above. The weighted-average amortization period, in the aggregate, is 5.9 years . For these acquisitions in the aggregate, we expect to record amortization of approximately $6 million per year in the years 2016 through 2020 and $1 million in 2021. Fair Value Life (In millions) (Years) Intangible asset type: Contract rights - member list $ 28 5 Provider network 6 10 $ 34 | The following table presents the intangible assets identified, by segment. The weighted-average amortization period for the Health Plans identified intangible assets, in the aggregate, is 6.4 years . The weighted-average amortization period for the Other identified intangible assets, in the aggregate, is 4.2 years . Fair Value Useful Life (In millions) (years) Intangible asset type Health Plans: Contract rights - member list $ 23 5 Provider network 9 10 Other: Contract licenses 5 2 Contract rights - member list 14 5 $ 51 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
Fair value of assets measured on recurring basis | Our financial instruments measured at fair value on a recurring basis at June 30, 2016 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,345 $ — $ 1,345 $ — Government-sponsored enterprise securities (GSEs) 196 196 — — Municipal securities 180 — 180 — U.S. treasury notes 108 108 — — Asset-backed securities 71 — 71 — Certificates of deposit 68 — 68 — Subtotal - current investments 1,968 304 1,664 — 1.125% Call Option derivative asset 226 — — 226 Total assets measured at fair value on a recurring basis $ 2,194 $ 304 $ 1,664 $ 226 1.125% Conversion Option derivative liability $ 226 $ — $ — $ 226 Total liabilities measured at fair value on a recurring basis $ 226 $ — $ — $ 226 Our financial instruments measured at fair value on a recurring basis at December 31, 2015 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,184 $ — $ 1,184 $ — GSEs 211 211 — — Municipal securities 185 — 185 — U.S. treasury notes 78 78 — — Asset-backed securities 63 — 63 — Certificates of deposit 80 — 80 — Subtotal - current investments 1,801 289 1,512 — 1.125% Call Option derivative asset 374 — — 374 Total assets measured at fair value on a recurring basis $ 2,175 $ 289 $ 1,512 $ 374 1.125% Conversion Option derivative liability $ 374 $ — $ — $ 374 Total liabilities measured at fair value on a recurring basis $ 374 $ — $ — $ 374 | Our financial instruments measured at fair value on a recurring basis at December 31, 2015 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 1,184 $ — $ 1,184 $ — Government-sponsored enterprise securities (GSEs) 211 211 — — Municipal securities 185 — 185 — Certificates of deposit 80 — 80 — U.S. treasury notes 78 78 — — Asset-backed securities 63 — 63 — Subtotal - current investments 1,801 289 1,512 — 1.125% Call Option derivative asset 374 — — 374 Total assets measured at fair value on a recurring basis $ 2,175 $ 289 $ 1,512 $ 374 1.125% Conversion Option derivative liability $ 374 $ — $ — $ 374 Total liabilities measured at fair value on a recurring basis $ 374 $ — $ — $ 374 Our financial instruments measured at fair value on a recurring basis at December 31, 2014 , were as follows: Total Level 1 Level 2 Level 3 (In millions) Corporate debt securities $ 641 $ — $ 641 $ — GSEs 122 122 — — Municipal securities 127 — 127 — Certificates of deposit 69 — 69 — U.S. treasury notes 60 60 — — Subtotal - current investments 1,019 182 837 — 1.125% Call Option derivative asset 329 — — 329 Total assets measured at fair value on a recurring basis $ 1,348 $ 182 $ 837 $ 329 1.125% Conversion Option derivative liability $ 329 $ — $ — $ 329 Total liabilities measured at fair value on a recurring basis $ 329 $ — $ — $ 329 |
Schedule of fair value, asset and liabilities measured on recurring basis - disclosure only | The carrying amounts and estimated fair values of our senior notes, which are classified as Level 2 financial instruments, are indicated in the following table. June 30, 2016 December 31, 2015 Carrying Value Fair Value Carrying Value Fair Value (In millions) 5.375% Notes $ 690 $ 702 $ 689 $ 700 1.125% Convertible Notes 460 742 448 865 1.625% Convertible Notes 278 329 273 365 $ 1,428 $ 1,773 $ 1,410 $ 1,930 | |
Fair value measurements of senior notes | The carrying amounts and estimated fair values of our senior notes, which are classified as Level 2 financial instruments, are indicated in the following table. Fair value for these securities is determined using a market approach based on quoted prices for similar securities in active markets or quoted prices for identical securities in inactive markets. As described in Note 2 , " Significant Accounting Policies ," the carrying amount of debt has been reduced by deferred issuance costs for all periods presented. December 31, 2015 December 31, 2014 Carrying Total Fair Value Carrying Total Fair Value Amount Amount (In millions) 5.375% Notes $ 689 $ 700 $ — $ — 1.125% Convertible Notes 448 865 426 767 1.625% Convertible Notes 273 365 264 337 $ 1,410 $ 1,930 $ 690 $ 1,104 |
Investments (Tables)
Investments (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||
Investments | The following tables summarize our investments as of the dates indicated: June 30, 2016 Amortized Gross Unrealized Estimated Fair Cost Gains Losses Value (In millions) Corporate debt securities $ 1,340 $ 5 $ — $ 1,345 GSEs 196 — — 196 Municipal securities 178 2 — 180 U.S. treasury notes 108 — — 108 Asset-backed securities 71 — — 71 Certificates of deposit 68 — — 68 $ 1,961 $ 7 $ — $ 1,968 December 31, 2015 Amortized Gross Unrealized Estimated Fair Cost Gains Losses Value (In millions) Corporate debt securities $ 1,189 $ — $ 5 $ 1,184 GSEs 212 — 1 211 Municipal securities 186 — 1 185 U.S. treasury notes 78 — — 78 Asset-backed securities 63 — — 63 Certificates of deposit 80 — — 80 $ 1,808 $ — $ 7 $ 1,801 | The following tables summarize our investments as of the dates indicated: December 31, 2015 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value (In millions) Corporate debt securities $ 1,189 $ — $ 5 $ 1,184 GSEs 212 — 1 211 Municipal securities 186 — 1 185 Certificates of deposit 80 — — 80 U.S. treasury notes 78 — — 78 Asset-backed securities 63 — — 63 $ 1,808 $ — $ 7 $ 1,801 December 31, 2014 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value (In millions) Corporate debt securities $ 643 $ — $ 2 $ 641 GSEs 122 — — 122 Municipal securities 127 — — 127 Certificates of deposit 69 — — 69 U.S. treasury notes 60 — — 60 $ 1,021 $ — $ 2 $ 1,019 |
Contractual maturities of investments | The contractual maturities of our investments as of June 30, 2016 are summarized below: Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 1,084 $ 1,084 Due after one year through five years 844 850 Due after five years through ten years 33 34 $ 1,961 $ 1,968 | The contractual maturities of our investments as of December 31, 2015 are summarized below: Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 830 $ 829 Due after one year through five years 967 962 Due after five years through ten years 11 10 $ 1,808 $ 1,801 |
Schedule of available for sale securities continuous unrealized loss position | The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a loss position for 12 months or more as of December 31, 2015 : In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 825 $ 4 588 $ 119 $ 1 87 GSEs 182 1 77 — — — Municipal securities 128 1 181 — — — $ 1,135 $ 6 846 $ 119 $ 1 87 | |
Available-for-sale investments | The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a loss position for 12 months or more as of December 31, 2015 . In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 825 $ 4 588 $ 119 $ 1 87 GSEs 182 1 77 — — — Municipal securities 128 1 181 5 — 12 Certificates of deposit 53 — 218 — — — U.S. treasury notes 53 — 32 — — — Asset-backed securities 55 — 47 — — — $ 1,296 $ 6 1,143 $ 124 $ 1 99 The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a loss position for 12 months or more as of December 31, 2014 . In a Continuous Loss Position for Less than 12 Months In a Continuous Loss Position for 12 Months or More Estimated Fair Value Unrealized Losses Total Number of Positions Estimated Fair Value Unrealized Losses Total Number of Positions (Dollars in millions) Corporate debt securities $ 379 $ 1 265 $ 29 $ 1 10 GSEs 75 — 22 3 — 3 Municipal securities 54 — 64 11 — 13 Certificates of deposit 13 — 52 — — — U.S. treasury notes 19 — 13 — — — $ 540 $ 1 416 $ 43 $ 1 26 |
Receivables (Tables)
Receivables (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | ||
Summary of Accounts Receivable | The information below is presented by segment. June 30, December 31, (In millions) California $ 180 $ 104 Florida 103 22 Illinois 106 35 Michigan 62 39 New Mexico 64 51 Ohio 112 66 Puerto Rico 50 33 South Carolina 11 6 Texas 60 56 Utah 38 18 Washington 81 53 Wisconsin 46 22 Direct delivery and other 5 6 Total Health Plans segment 918 511 Molina Medicaid Solutions segment 41 37 Other segment 53 49 $ 1,012 $ 597 | The information below is presented by segment. December 31, 2015 2014 (In millions) California $ 104 $ 311 Florida 22 2 Illinois 35 32 Michigan 39 20 New Mexico 51 50 Ohio 66 45 Puerto Rico 33 — South Carolina 6 4 Texas 56 29 Utah 18 6 Washington 53 43 Wisconsin 22 8 Direct delivery and other 6 11 Total Health Plans segment 511 561 Molina Medicaid Solutions segment 37 35 Other segment 49 — $ 597 $ 596 |
Restricted Investments (Tables)
Restricted Investments (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||
Summary of restricted investments by health plan | The following table presents the balances of restricted investments: June 30, December 31, (In millions) Florida $ 28 $ 34 Illinois 3 — Michigan 1 1 New Mexico 43 43 Ohio 12 12 Puerto Rico 10 10 Texas 4 4 Utah 4 4 Wisconsin 1 1 Other 1 — Total Health Plans segment $ 107 $ 109 | The following table presents the balances of restricted investments: December 31, 2015 2014 (In millions) Florida $ 34 $ 29 Michigan 1 1 New Mexico 43 35 Ohio 12 13 Puerto Rico 10 5 South Carolina — 6 Texas 4 3 Utah 4 4 Wisconsin 1 — Other — 1 Total Health Plans segment 109 97 Molina Medicaid Solutions segment — 5 $ 109 $ 102 |
Contractual maturities of our held-to-maturity restricted investments | The contractual maturities of our held-to-maturity restricted investments as of June 30, 2016 are summarized below: Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 106 $ 106 Due after one year through five years 1 1 $ 107 $ 107 | The contractual maturities of our held-to-maturity restricted investments as of December 31, 2015 are summarized below. Amortized Cost Estimated Fair Value (In millions) Due in one year or less $ 100 $ 100 Due one year through five years 9 9 $ 109 $ 109 |
Medical Claims and Benefits P40
Medical Claims and Benefits Payable (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | ||
Schedule of liability for unpaid claims and claims adjustment expense | The following table provides the details of our medical claims and benefits payable (including amounts payable for the provision of long-term services and supports, or LTSS) as of the dates indicated. June 30, December 31, (In millions) Fee-for-service claims incurred but not paid (IBNP) $ 1,292 $ 1,191 Pharmacy payable 103 88 Capitation payable 37 140 Other 334 266 $ 1,766 $ 1,685 | The following table provides the details of our medical claims and benefits payable (including amounts payable for the provision of long-term services and supports, or LTSS) as of the dates indicated. December 31, 2015 2014 2013 (In millions) Fee-for-service claims incurred but not paid (IBNP) $ 1,191 $ 871 $ 424 Pharmacy payable 88 71 45 Capitation payable 140 28 20 Other 266 231 181 $ 1,685 $ 1,201 $ 670 |
Components of change in medical claims and benefits payable | The following table presents the components of the change in our medical claims and benefits payable for the periods indicated. The amounts presented for “Components of medical care costs related to: Prior periods” represent the amount by which our original estimate of medical 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. Six Months Ended June 30, 2016 Year Ended (Dollars in millions) Medical claims and benefits payable, beginning balance $ 1,685 $ 1,201 Components of medical care costs related to: Current period 7,371 11,935 Prior periods (189 ) (141 ) Total medical care costs 7,182 11,794 Change in non-risk provider payables 24 48 Payments for medical care costs related to: Current period 5,885 10,448 Prior periods 1,240 910 Total paid 7,125 11,358 Medical claims and benefits payable, ending balance $ 1,766 $ 1,685 Benefit from prior period as a percentage of: Balance at beginning of period 11.3 % 11.8 % Premium revenue, trailing twelve months 1.3 % 1.1 % Medical care costs, trailing twelve months 1.4 % 1.2 % | The following table presents the components of the change in our medical claims and benefits payable from continuing and discontinued operations combined for the periods indicated. The amounts presented for "Components of medical care costs related to: Prior periods" represent the amount by which our original estimate of medical 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. Year Ended December 31, 2015 2014 2013 (Dollars in millions) Balances at beginning of period $ 1,201 $ 670 $ 495 Components of medical care costs related to: Current period 11,935 8,123 5,434 Prior periods (141 ) (46 ) (53 ) Total medical care costs 11,794 8,077 5,381 Change in non-risk provider payables 48 (32 ) 111 Payments for medical care costs related to: Current period 10,448 7,064 4,932 Prior periods 910 450 385 Total paid 11,358 7,514 5,317 Balances at end of period $ 1,685 $ 1,201 $ 670 |
Debt (Tables)
Debt (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | ||
Schedule of maturities of long-term debt | As of June 30, 2016 , contractual maturities of debt for the years ending December 31 are as follows: Total 2016 2017 2018 2019 2020 Thereafter (In millions) 5.375% Notes $ 700 $ — $ — $ — $ — $ — $ 700 1.125% Convertible Notes 550 — — — — 550 — 1.625% Convertible Notes (1) 302 — — — — — 302 $ 1,552 $ — $ — $ — $ — $ 550 $ 1,002 (1) The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes. | As of December 31, 2015 , contractual maturities of debt for the years ending December 31 are as follows (in millions): Total 2016 2017 2018 2019 2020 Thereafter 5.375% Notes $ 700 $ — $ — $ — $ — $ — $ 700 1.125% Convertible Notes 550 — — — — 550 — 1.625% Convertible Notes (1) 302 — — — — — 302 Other 1 1 — — — — — $ 1,553 $ 1 $ — $ — $ — $ 550 $ 1,002 (1) The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes. |
Long term debt | Substantially all of our debt is held at the parent, which is reported in the Other segment. The principal amounts, unamortized discount (net of premium related to the 1.625% Notes), unamortized issuance costs, and net carrying amounts of debt were as follows: Principal Balance Unamortized Discount Unamortized Issuance Costs Net Carrying Amount (In millions) June 30, 2016: 5.375% Notes $ 700 $ — $ 10 $ 690 1.125% Convertible Notes 550 84 6 460 1.625% Convertible Notes 302 20 4 278 $ 1,552 $ 104 $ 20 $ 1,428 December 31, 2015: 5.375% Notes $ 700 $ — $ 11 $ 689 1.125% Convertible Notes 550 95 7 448 1.625% Convertible Notes 302 25 4 273 Other 1 — — 1 $ 1,553 $ 120 $ 22 $ 1,411 | The principal amounts, unamortized discount (net of premium related to 1.625% Notes), unamortized issuance costs, and net carrying amounts of debt were as follows: Principal Balance Unamortized Discount Unamortized Issuance Costs Net Carrying Amount (In millions) December 31, 2015: 5.375% Notes $ 700 $ — $ 11 $ 689 1.125% Convertible Notes 550 95 7 448 1.625% Convertible Notes 302 25 4 273 Other 1 — — 1 $ 1,553 $ 120 $ 22 $ 1,411 December 31, 2014: 1.125% Convertible Notes $ 550 $ 115 $ 9 $ 426 1.625% Convertible Notes 302 33 5 264 $ 852 $ 148 $ 14 $ 690 |
Debt instruments interest cost recognized | Interest cost recognized relating to our convertible senior notes for the periods presented was as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions) Contractual interest coupon rate $ 3 $ 3 $ 6 $ 6 Amortization of the discount 8 7 15 14 $ 11 $ 10 $ 21 $ 20 | Years Ended December 31, 2015 2014 2013 (In millions) Interest cost recognized for the period relating to: Contractual interest coupon rate $ 17 $ 13 $ 13 Amortization of the discount 29 26 22 $ 46 $ 39 $ 35 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Fair Values of Derivative Financial Instruments | The following table summarizes the fair values and the presentation of our derivative financial instruments (defined and discussed individually below) in the consolidated balance sheets: Balance Sheet Location June 30, December 31, (In millions) Derivative asset: 1.125% Call Option Current assets: Derivative asset $ — $ 374 Non-current assets: Derivative asset $ 226 $ — Derivative liability: 1.125% Conversion Option Current liabilities: Derivative liability $ — $ 374 Non-current liabilities: Derivative liability $ 226 $ — | The following table summarizes the fair values and the presentation of our derivative financial instruments (defined and discussed individually below) in the consolidated balance sheets: December 31, Balance Sheet Location 2015 2014 (In millions) Derivative asset: 1.125% Call Option Current assets: Derivative asset $ 374 $ — Non-current assets: Derivative asset $ — $ 329 Derivative liability: 1.125% Conversion Option Current liabilities: Derivative liability $ 374 $ — Non-current liabilities: Derivative liability $ — $ 329 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | ||
Stock based compensation expense | Charged to general and administrative expenses, total share-based compensation expense was as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions) Restricted stock and performance awards $ 8 $ 2 $ 13 $ 7 Employee stock purchase plan and stock options 1 1 3 2 $ 9 $ 3 $ 16 $ 9 | |
Restricted share activity | Restricted stock. Restricted and performance stock activity for the six months ended June 30, 2016 is summarized below: Shares Weighted Average Grant Date Fair Value (In thousands) Unvested balance as of December 31, 2015 1,035 $ 46.68 Granted 505 64.22 Vested (329 ) 41.45 Forfeited (19 ) 52.01 Unvested balance as of June 30, 2016 1,192 55.47 | |
Stock based compensation expense | The following table illustrates the components of our share-based compensation expense that are reported in general and administrative expenses in the consolidated statements of income: Year Ended December 31, 2015 2014 2013 (In millions) Pretax Charges Net-of-Tax Amount Pretax Charges Net-of-Tax Amount Pretax Charges Net-of-Tax Amount Restricted stock and performance awards $ 19 $ 13 $ 19 $ 12 $ 26 $ 23 Employee stock purchase plan and stock options 4 3 3 2 3 2 $ 23 $ 16 $ 22 $ 14 $ 29 $ 25 | |
Restricted and performance stock activity | Restricted stock. Restricted and performance stock activity for the year ended December 31, 2015 is summarized below: Shares Weighted Average Grant Date Fair Value Unvested balance as of December 31, 2014 1,282,072 $ 33.55 Granted - restricted shares 273,710 64.56 Granted - performance shares 162,827 63.90 Vested - restricted shares (371,489 ) 34.58 Vested - performance shares (264,604 ) 30.80 Forfeited (47,759 ) 37.51 Unvested balance as of December 31, 2015 1,034,757 46.68 |
Property, Equipment, and Capi44
Property, Equipment, and Capitalized Software (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | A summary of property, equipment, and capitalized software is as follows: December 31, 2015 2014 (In millions) Land $ 16 $ 15 Building and improvements 153 195 Furniture and equipment 250 141 Capitalized software 336 267 755 618 Less: accumulated depreciation and amortization on building and improvements, furniture and equipment (167 ) (129 ) Less: accumulated amortization for capitalized software (195 ) (148 ) (362 ) (277 ) Property, equipment, and capitalized software, net $ 393 $ 341 |
Summary of future minimum rentals on noncancelable leases | The future minimum rental income is as follows: 2016 2017 2018 2019 2020 Thereafter Total (In millions) Future minimum rentals $ 4 4 4 2 2 1 $ 17 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of identified intangible assets, by major class | The following table provides the details of identified intangible assets, by major class, for the periods indicated: Cost Accumulated Amortization Net Balance (In millions) Intangible assets: Contract rights and licenses $ 224 $ 120 $ 104 Customer relationships 25 23 2 Contract backlog 24 24 — Provider networks 27 11 16 Balance at December 31, 2015 $ 300 $ 178 $ 122 Intangible assets: Contract rights and licenses $ 182 $ 105 $ 77 Customer relationships 25 23 2 Contract backlog 24 23 1 Provider networks 18 9 9 Balance at December 31, 2014 $ 249 $ 160 $ 89 |
Changes in the carrying amount of goodwill | The following table presents the balances of goodwill as of December 31, 2015 and 2014 : December 31, 2014 Acquisitions by Segment December 31, 2015 Health Plans Other (In millions) Goodwill, gross $ 330 $ 90 $ 157 $ 577 Accumulated impairment losses (58 ) — — (58 ) Goodwill, net $ 272 $ 90 $ 157 $ 519 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of future minimum lease payments | Future minimum lease payments by year and in the aggregate under all operating leases and lease financing obligations consist of the following approximate amounts: Lease Financing Obligations Operating Leases Total (In millions) 2016 $ 15 $ 49 $ 64 2017 16 47 63 2018 16 41 57 2019 16 32 48 2020 17 24 41 Thereafter 323 39 362 $ 403 $ 232 $ 635 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | The provision for income taxes for continuing operations consisted of the following: Year Ended December 31, 2015 2014 2013 (In millions) Current: Federal $ 172 $ 72 $ 67 State 8 3 — Foreign 6 — — Total current 186 75 67 Deferred: Federal (10 ) — (25 ) State 4 (2 ) (6 ) Foreign (1 ) — — Total deferred (7 ) (2 ) (31 ) $ 179 $ 73 $ 36 |
Effective income tax rate reconciliation to the statutory federal income tax rate | A reconciliation of the U.S. federal statutory income tax rate to the combined effective income tax rate for continuing operations is as follows: Year Ended December 31, 2015 2014 2013 Statutory federal tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 2.4 0.4 (0.5 ) Change in unrecognized tax benefits 0.9 (0.1 ) (3.7 ) Nondeductible health insurer fee (HIF) 17.0 22.9 — Nondeductible compensation 0.6 (4.1 ) 9.6 Nondeductible fair value of 1.125% Warrants — — 2.4 Other (0.4 ) (0.3 ) 2.0 Effective tax rate 55.5 % 53.8 % 44.8 % |
Significant components of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities as of December 31, 2015 and 2014 were as follows: December 31, 2015 2014 (In millions) Accrued expenses $ 37 $ 13 Reserve liabilities 14 4 Other accrued medical costs 5 4 Net operating losses 7 3 Unrealized losses 2 1 Unearned premiums 21 22 Lease financing obligation 35 34 Deferred compensation 8 10 Tax credit carryover 8 8 Valuation allowance (9 ) (6 ) Total deferred income tax assets, net of valuation allowance 128 93 Prepaid expenses (9 ) (6 ) Depreciation and amortization (83 ) (57 ) Basis in debt (18 ) (15 ) Total deferred income tax liabilities (110 ) (78 ) Net deferred income tax asset - long term $ 18 $ 15 |
Unrecognized tax benefits roll forward | The roll forward of our unrecognized tax benefits is as follows: Year Ended December 31, 2015 2014 2013 (In millions) Gross unrecognized tax benefits at beginning of period $ (3 ) $ (8 ) $ (11 ) Increases in tax positions for current year (1 ) — — Increases in tax positions for prior years (5 ) (1 ) (2 ) Decreases in tax positions for prior years — — 5 Settlements — 6 — Gross unrecognized tax benefits at end of period $ (9 ) $ (3 ) $ (8 ) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | ||
Operating segment information | Health Plans Molina Medicaid Solutions Other Consolidated (In millions) Three Months Ended June 30, 2016 Total revenue (1) $ 4,223 $ 46 $ 90 $ 4,359 Gross margin 435 5 14 454 Six Months Ended June 30, 2016 Total revenue (1) $ 8,424 $ 98 $ 180 $ 8,702 Gross margin 842 11 21 874 Three Months Ended June 30, 2015 Total revenue (1) $ 3,477 $ 47 $ 1 $ 3,525 Gross margin 375 14 — 389 Six Months Ended June 30, 2015 Total revenue (1) $ 6,593 $ 99 $ 4 $ 6,696 Gross margin 710 30 — 740 Total Assets June 30, 2016 $ 5,521 $ 252 $ 1,429 $ 7,202 December 31, 2015 4,707 213 1,656 6,576 ______________________ (1) Total revenue consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. The following table reconciles gross margin by segment to consolidated income before income tax expense: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In millions) Gross margin: Health Plans $ 435 $ 375 $ 842 $ 710 Molina Medicaid Solutions 5 14 11 30 Other 14 — 21 — Total gross margin 454 389 874 740 Add: other operating revenues (1) 195 174 403 322 Less: other operating expenses (2) (544 ) (447 ) (1,083 ) (864 ) Operating income 105 116 194 198 Other expenses, net (25 ) (15 ) (50 ) (30 ) Income before income tax expense $ 80 $ 101 $ 144 $ 168 ______________________ (1) Other operating revenues include premium tax revenue, health insurer fee revenue, investment income and other revenue. (2) Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fee expenses and depreciation and amortization. | Health Plans Molina Medicaid Solutions Other Consolidated (In millions) 2015 Total revenue (1) $ 13,917 $ 195 $ 66 $ 14,178 Gross margin 1,447 55 5 1,507 Depreciation and amortization (2) 95 25 6 126 Goodwill, and intangible assets, net 393 73 175 641 Total assets 4,707 213 1,656 6,576 2014 Total revenue (1) 9,449 210 8 9,667 Gross margin 947 53 — 1,000 Depreciation and amortization (2) 83 46 5 134 Goodwill, and intangible assets, net 286 75 — 361 Total assets 3,355 185 895 4,435 2013 Total revenue (1) 6,376 205 8 6,589 Gross margin 799 44 — 843 Depreciation and amortization (2) 60 28 6 94 Goodwill, and intangible assets, net 249 81 — 330 Total assets 1,921 176 891 2,988 ______________________ (1) Total revenues consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. (2) Depreciation and amortization reported in accompanying consolidated statements of cash flows. The following table reconciles gross margin by segment to consolidated income from continuing operations before income tax expense: Year Ended December 31, 2015 2014 2013 (In millions) Gross margin: Health Plans $ 1,447 $ 947 $ 799 Molina Medicaid Solutions 55 53 44 Other 5 — — Other operating revenues (1) 684 434 205 Other operating expenses (2) 1,804 1,241 911 Operating income 387 193 137 Other expenses, net 65 58 56 Income from continuing operations before income tax expense $ 322 $ 135 $ 81 ______________________ (1) Other operating revenues include premium tax revenue, health insurer fee revenue, investment income and other revenue. (2) Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fee expenses and depreciation and amortization. |
Quarterly Results of Operatio49
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of quarterly results of operations | The following table summarizes quarterly unaudited results of operations for the years ended December 31, 2015 and 2014 . For The Quarter Ended March 31, June 30, September 30, 2015 December 31, (In millions, except per-share data) Premium revenue $ 2,971 $ 3,304 $ 3,377 $ 3,589 Service revenue 52 47 47 107 Operating income 82 116 113 76 Income from continuing operations 28 39 46 30 Net income 28 39 46 30 Net income per share (1): Basic $ 0.58 $ 0.78 $ 0.84 $ 0.54 Diluted $ 0.56 $ 0.72 $ 0.77 $ 0.52 For The Quarter Ended March 31, June 30, September 30, 2014 December 31, (In millions, except per-share data) Premium revenue $ 1,940 $ 2,167 $ 2,317 $ 2,599 Service revenue 54 50 52 54 Operating income 24 32 40 97 Income from continuing operations 4 8 16 34 Net income 4 8 16 34 Net income per share (1): Basic $ 0.10 $ 0.17 $ 0.34 $ 0.70 Diluted $ 0.09 $ 0.16 $ 0.33 $ 0.69 _______________________________ (1) The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the year ended December 31, 2014 , the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock. |
Condensed Financial Informati50
Condensed Financial Information of Registrant (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||
Condensed Balance Sheets | MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (in millions) ASSETS Current assets: Cash and cash equivalents $ 214 $ 29 $ 2,102 $ — $ 2,345 Investments 252 — 1,716 — 1,968 Receivables 3 87 922 — 1,012 Income tax refundable 37 3 (17 ) — 23 Due from (to) affiliates 99 (9 ) (90 ) — — Prepaid expenses and other current assets 50 13 134 — 197 Total current assets 655 123 4,767 — 5,545 Property, equipment, and capitalized software, net 305 67 76 — 448 Deferred contract costs — 80 — — 80 Intangible assets, net 8 23 115 — 146 Goodwill 51 228 332 — 611 Restricted investments — — 107 — 107 Investment in subsidiaries 2,346 1 — (2,347 ) — Derivative asset 226 — — — 226 Other assets 47 3 5 (16 ) 39 $ 3,638 $ 525 $ 5,402 $ (2,363 ) $ 7,202 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ — $ 1,766 $ — $ 1,766 Amounts due government agencies — — 1,238 — 1,238 Accounts payable and accrued liabilities 128 31 378 — 537 Deferred revenue — 38 66 — 104 Current portion of long-term debt 1 — — — 1 Total current liabilities 129 69 3,448 — 3,646 Long-term debt 1,626 — 16 (16 ) 1,626 Deferred income taxes (3 ) 40 (12 ) — 25 Derivative liability 226 — — — 226 Other long-term liabilities 19 2 17 — 38 Total liabilities 1,997 111 3,469 (16 ) 5,561 Total stockholders’ equity 1,641 414 1,933 (2,347 ) 1,641 $ 3,638 $ 525 $ 5,402 $ (2,363 ) $ 7,202 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (in millions) ASSETS Current assets: Cash and cash equivalents $ 360 $ 42 $ 1,927 $ — $ 2,329 Investments 252 — 1,549 — 1,801 Receivables — 79 518 — 597 Income tax refundable 7 3 3 — 13 Intercompany 86 (4 ) (82 ) — — Prepaid expenses and other current assets 46 11 136 (1 ) 192 Derivative asset 374 — — — 374 Total current assets 1,125 131 4,051 (1 ) 5,306 Property, equipment, and capitalized software, net 267 52 74 — 393 Deferred contract costs — 81 — — 81 Goodwill and intangible assets, net 61 246 334 — 641 Restricted investments — — 109 — 109 Investment in subsidiaries, net 2,205 1 — (2,206 ) — Deferred income taxes 23 (35 ) 30 — 18 Other assets 36 2 6 (16 ) 28 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ 3 $ 1,682 $ — $ 1,685 Amounts due government agencies — 1 728 — 729 Accounts payable and accrued liabilities 157 35 170 — 362 Deferred revenue — 34 189 — 223 Current portion of long-term debt 449 — — — 449 Derivative liability 374 — — — 374 Total current liabilities 980 73 2,769 — 3,822 Long-term debt 1,160 — 16 (16 ) 1,160 Other long-term liabilities 20 2 16 (1 ) 37 Total liabilities 2,160 75 2,801 (17 ) 5,019 Total stockholders’ equity 1,557 403 1,803 (2,206 ) 1,557 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 | Condensed Balance Sheets December 31, 2015 2014 (Amounts in millions, except per-share data) ASSETS Current assets: Cash and cash equivalents $ 360 $ 75 Investments 252 126 Income taxes refundable 7 13 Due from affiliates 86 18 Prepaid expenses and other current assets 46 33 Derivative asset 374 — Total current assets 1,125 265 Property, equipment, and capitalized software, net 267 265 Goodwill and intangible assets, net 61 65 Investments in subsidiaries 2,205 1,377 Deferred income taxes 23 11 Derivative asset — 329 Advances to related parties and other assets 36 43 $ 3,717 $ 2,355 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 157 $ 107 Current portion of long-term debt 449 — Derivative liability 374 — Total current liabilities 980 107 Senior notes 962 690 Lease financing obligations 198 157 Lease financing obligations - related party — 40 Derivative liability — 329 Other long-term liabilities 20 22 Total liabilities 2,160 1,345 Stockholders' equity: Common stock, $0.001 par value; 150 shares authorized; outstanding: 56 shares at December 31, 2015 and 50 shares at December 31, 2014 — — Preferred stock, $0.001 par value; 20 shares authorized, no shares issued and outstanding — — Additional paid-in capital 803 396 Accumulated other comprehensive loss (4 ) (1 ) Retained earnings 758 615 Total stockholders' equity 1,557 1,010 $ 3,717 $ 2,355 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 360 $ 42 $ 1,927 $ — $ 2,329 Investments 252 — 1,549 — 1,801 Receivables — 79 518 — 597 Income taxes refundable 7 3 3 — 13 Due from (to) affiliates 86 (4 ) (82 ) — — Prepaid expenses and other current assets 46 11 136 (1 ) 192 Derivative asset 374 — — — 374 Total current assets 1,125 131 4,051 (1 ) 5,306 Property, equipment, and capitalized software, net 267 52 74 — 393 Deferred contract costs — 81 — — 81 Goodwill and intangible assets, net 61 246 334 — 641 Restricted investments — — 109 — 109 Investment in subsidiaries 2,205 1 — (2,206 ) — Deferred income taxes 23 (35 ) 30 — 18 Other assets 36 2 6 (16 ) 28 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ 3 $ 1,682 $ — $ 1,685 Amounts due government agencies — 1 728 — 729 Accounts payable and accrued liabilities 157 35 170 — 362 Deferred revenue — 34 189 — 223 Current portion of long-term debt 449 — — — 449 Derivative liability 374 — — — 374 Total current liabilities 980 73 2,769 — 3,822 Long-term debt 1,160 — 16 (16 ) 1,160 Other long-term liabilities 20 2 16 (1 ) 37 Total liabilities 2,160 75 2,801 (17 ) 5,019 Total stockholders’ equity 1,557 403 1,803 (2,206 ) 1,557 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 75 $ 15 $ 1,449 $ — $ 1,539 Investments 126 — 893 — 1,019 Receivables — 35 561 — 596 Due from (to) affiliates 18 (1 ) (17 ) — — Prepaid expenses and other current assets 33 25 11 (20 ) 49 Total current assets 252 74 2,897 (20 ) 3,203 Property, equipment, and capitalized software, net 265 25 51 — 341 Deferred contract costs — 54 — — 54 Goodwill and intangible assets, net 65 75 221 — 361 Restricted investments — 5 97 — 102 Investment in subsidiaries 1,377 — — (1,377 ) — Derivative asset 11 — — — 329 Deferred income taxes 329 (17 ) 21 — 15 Other assets 43 — 5 (18 ) 30 $ 2,342 $ 216 $ 3,292 $ (1,415 ) $ 4,435 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ — $ 1,201 $ — $ 1,201 Amounts due government agencies — 2 525 — 527 Accounts payable and accrued liabilities 107 12 143 (20 ) 242 Deferred revenue — 31 165 — 196 Income taxes (refundable) payable (13 ) 7 15 — 9 Total current liabilities 94 52 2,049 (20 ) 2,175 Long-term debt 887 — 16 (16 ) 887 Derivative liability 329 — — — 329 Other long-term liabilities 22 1 13 (2 ) 34 Total liabilities 1,332 53 2,078 (38 ) 3,425 Total stockholders’ equity 1,010 163 1,214 (1,377 ) 1,010 $ 2,342 $ 216 $ 3,292 $ (1,415 ) $ 4,435 |
Condensed Statements of Income | MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 512 $ 277 $ 8,450 $ (537 ) $ 8,702 Expenses: Medical care costs 31 22 7,157 (28 ) 7,182 Cost of service revenue — 221 22 — 243 General and administrative expenses 436 23 741 (509 ) 691 Premium tax expenses — — 218 — 218 Health insurer fee expenses — — 108 — 108 Depreciation and amortization 45 6 15 — 66 Total expenses 512 272 8,261 (537 ) 8,508 Operating income — 5 189 — 194 Interest expense 50 — — — 50 (Loss) income before income taxes (50 ) 5 189 — 144 Income tax (benefit) expense (28 ) 2 113 — 87 Net (loss) income before equity in earnings of subsidiaries (22 ) 3 76 — 57 Equity in net earnings of subsidiaries 79 — — (79 ) — Net income $ 57 $ 3 $ 76 $ (79 ) $ 57 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 443 $ 123 $ 6,596 $ (466 ) $ 6,696 Expenses: Medical care costs 26 17 5,547 (25 ) 5,565 Cost of service revenue — 69 — — 69 General and administrative expenses 377 15 592 (441 ) 543 Premium tax expenses — — 190 — 190 Health insurer fee expenses — — 81 — 81 Depreciation and amortization 41 1 8 — 50 Total expenses 444 102 6,418 (466 ) 6,498 Operating (loss) income (1 ) 21 178 — 198 Interest expense 30 — — — 30 (Loss) income before income taxes (31 ) 21 178 — 168 Income tax (benefit) expense (7 ) 8 100 — 101 Net (loss) income before equity in earnings of subsidiaries (24 ) 13 78 — 67 Equity in net earnings of subsidiaries 91 — — (91 ) — Net income $ 67 $ 13 $ 78 $ (91 ) $ 67 | Condensed Statements of Income Year Ended December 31, 2015 2014 2013 (In millions) Revenue: Management fees and other operating revenue $ 928 $ 704 $ 599 Investment income 3 2 3 Total revenue 931 706 602 Expenses: Medical care costs 55 46 38 General and administrative expenses 797 583 504 Depreciation and amortization 82 73 51 Total operating expenses 934 702 593 Operating (loss) income (3 ) 4 9 Interest expense 66 57 51 Other expense — 1 4 Loss before income taxes and equity in net income of subsidiaries (69 ) (54 ) (46 ) Income tax benefit (21 ) (27 ) (16 ) Net loss before equity in net income of subsidiaries (48 ) (27 ) (30 ) Equity in net income of subsidiaries 191 89 83 Net income $ 143 $ 62 $ 53 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 931 $ 293 $ 13,931 $ (977 ) $ 14,178 Expenses: Medical care costs 55 36 11,753 (50 ) 11,794 Cost of service revenue — 184 9 — 193 General and administrative expenses 797 41 1,235 (927 ) 1,146 Premium tax expenses — — 397 — 397 Health insurer fee expenses — — 157 — 157 Depreciation and amortization 82 4 18 — 104 Total expenses 934 265 13,569 (977 ) 13,791 Operating (loss) income (3 ) 28 362 — 387 Total other expenses (income), net 66 — (1 ) — 65 (Loss) income before income taxes (69 ) 28 363 — 322 Income tax (benefit) expense (21 ) 9 191 — 179 Net (loss) income before equity in earnings of subsidiaries (48 ) 19 172 — 143 Equity in net earnings of subsidiaries 191 (1 ) — (190 ) — Net income (loss) $ 143 $ 18 $ 172 $ (190 ) $ 143 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 706 $ 240 $ 9,454 $ (733 ) $ 9,667 Expenses: Medical care costs 46 27 8,034 (31 ) 8,076 Cost of service revenue — 157 — — 157 General and administrative expenses 583 29 855 (702 ) 765 Premium tax expenses — — 294 — 294 Health insurer fee expenses — — 89 — 89 Depreciation and amortization 73 5 15 — 93 Total expenses 702 218 9,287 (733 ) 9,474 Operating income 4 22 167 — 193 Total other expenses, net 58 — — — 58 (Loss) income before income taxes (54 ) 22 167 — 135 Income tax (benefit) expense (27 ) 8 92 — 73 Net (loss) income before equity in earnings of subsidiaries (27 ) 14 75 — 62 Equity in net earnings of subsidiaries 89 — — (89 ) — Net income (loss) $ 62 $ 14 $ 75 $ (89 ) $ 62 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 602 $ 211 $ 6,385 $ (609 ) $ 6,589 Expenses: Medical care costs 38 21 5,328 (7 ) 5,380 Cost of service revenue — 161 — — 161 General and administrative expenses 504 26 738 (602 ) 666 Premium tax expenses — — 172 — 172 Depreciation and amortization 51 7 15 — 73 Total expenses 593 215 6,253 (609 ) 6,452 Operating income (loss) 9 (4 ) 132 — 137 Total other expenses, net 55 — 1 — 56 (Loss) income before income taxes (46 ) (4 ) 131 — 81 Income tax (benefit) expense (16 ) (1 ) 53 — 36 Net (loss) income before equity in earnings of subsidiaries (30 ) (3 ) 78 — 45 Equity in net earnings of subsidiaries 83 — — (83 ) — Income (loss) from continuing operations 53 (3 ) 78 (83 ) 45 Income from discontinued operations, net of tax — — 8 — 8 Net income (loss) $ 53 $ (3 ) $ 86 $ (83 ) $ 53 |
Condensed Statements of Comprehensive Income | Condensed Statements of Comprehensive Income Year Ended December 31, 2015 2014 2013 (In millions) Net income $ 143 $ 62 $ 53 Other comprehensive income (loss): Unrealized investment loss (5 ) — (1 ) Effect of income tax benefit 2 — — Other comprehensive loss, net of tax (3 ) — (1 ) Comprehensive income $ 140 $ 62 $ 52 | |
Condensed Statements of Cash Flows | MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash (used in) provided by operating activities $ (21 ) 16 283 — $ 278 Investing activities: Purchases of investments (67 ) — (907 ) — (974 ) Proceeds from sales and maturities of investments 67 — 745 — 812 Purchases of property, equipment and capitalized software (73 ) (22 ) (7 ) — (102 ) Decrease in restricted investments — — 5 — 5 Net cash paid in business combinations — (7 ) (1 ) — (8 ) Capital contributions to subsidiaries (106 ) 8 98 — — Dividends received from subsidiaries 50 — (50 ) — — Change in amounts due to/from affiliates (13 ) 5 8 — — Other, net 5 (12 ) 1 — (6 ) Net cash used in investing activities (137 ) (28 ) (108 ) — (273 ) Financing activities: Proceeds from employee stock plans 10 — — — 10 Other, net 2 (1 ) — — 1 Net cash provided by (used in) financing activities 12 (1 ) — — 11 Net (decrease) increase in cash and cash equivalents (146 ) (13 ) 175 — 16 Cash and cash equivalents at beginning of period 360 42 1,927 — 2,329 Cash and cash equivalents at end of period $ 214 $ 29 $ 2,102 $ — $ 2,345 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 48 51 549 — $ 648 Investing activities: Purchases of investments (10 ) — (983 ) — (993 ) Proceeds from sales and maturities of investments 65 — 476 — 541 Purchases of property, equipment and capitalized software (46 ) (9 ) (11 ) — (66 ) Decrease in restricted investments — — (14 ) — (14 ) Net cash paid in business combinations — — (8 ) — (8 ) Capital contributions to subsidiaries (77 ) 4 73 — — Dividends received from subsidiaries 42 (17 ) (25 ) — — Change in amounts due to/from affiliates (15 ) 3 12 — — Other, net (1 ) (16 ) — — (17 ) Net cash used in investing activities (42 ) (35 ) (480 ) — (557 ) Financing activities: Proceeds from commons stock offering, net of issuance costs 373 — — — 373 Proceeds from employee stock plans 8 — — — 8 Other, net 3 — — — 3 Net cash provided by financing activities 384 — — — 384 Net increase in cash and cash equivalents 390 16 69 — 475 Cash and cash equivalents at beginning of period 75 15 1,449 — 1,539 Cash and cash equivalents at end of period $ 465 $ 31 $ 1,518 $ — $ 2,014 | Condensed Statements of Cash Flows Year Ended December 31, 2015 2014 2013 (In millions) Operating activities: Net cash provided by operating activities $ 113 $ 74 $ 63 Investing activities: Capital contributions to subsidiaries (770 ) (292 ) (166 ) Dividends received from subsidiaries 142 — 24 Purchases of investments (244 ) (129 ) (363 ) Proceeds from sales and maturities of investments 118 263 98 Purchases of equipment (91 ) (94 ) (77 ) Change in amounts due to/from affiliates (68 ) 16 (6 ) Other, net — 8 (6 ) Net cash used in investing activities (913 ) (228 ) (496 ) Financing activities: Proceeds from senior notes offerings, net of issuance costs 689 123 538 Proceeds from common stock offering, net of issuance costs 373 — — Proceeds from sale-leaseback transactions — — 159 Purchase of call option — — (149 ) Proceeds from issuance of warrants — — 75 Treasury stock repurchases — — (53 ) Principal payment on term loan of subsidiary — — (47 ) Repayment of amount borrowed under credit facility — — (40 ) Proceeds from employee stock plans 18 14 9 Principal payments on convertible senior notes — (10 ) — Other, net 5 2 2 Net cash provided by financing activities 1,085 129 494 Net increase (decrease) in cash and cash equivalents 285 (25 ) 61 Cash and cash equivalents at beginning of year 75 100 39 Cash and cash equivalents at end of year $ 360 $ 75 $ 100 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 113 $ 58 $ 954 $ — $ 1,125 Investing activities: Purchases of investments (244 ) — (1,679 ) — (1,923 ) Proceeds from sales and maturities of investments 118 — 1,008 — 1,126 Purchases of equipment (91 ) (23 ) (18 ) — (132 ) Decrease (increase) in restricted investments — 5 (11 ) — (6 ) Net cash paid in business combinations — (214 ) (236 ) — (450 ) Capital contributions to subsidiaries (770 ) 238 532 — — Dividends received from subsidiaries 142 (17 ) (125 ) — — Change in amounts due to/from affiliates (68 ) 15 53 — — Other, net — (35 ) — — (35 ) Net cash used in investing activities (913 ) (31 ) (476 ) — (1,420 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 689 — — — 689 Proceeds from common stock offering, net of issuance costs 373 — — — 373 Proceeds from employee stock plans 18 — — — 18 Other, net 5 — — — 5 Net cash provided by financing activities 1,085 — — — 1,085 Net increase in cash and cash equivalents 285 27 478 — 790 Cash and cash equivalents at beginning of period 75 15 1,449 — 1,539 Cash and cash equivalents at end of period $ 360 $ 42 $ 1,927 $ — $ 2,329 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 74 $ 29 $ 957 $ — $ 1,060 Investing activities: Purchases of investments (129 ) — (824 ) — (953 ) Proceeds from sales and maturities of investments 263 — 370 — 633 Purchases of equipment (94 ) (12 ) (9 ) — (115 ) (Increase) decrease in restricted investments — 5 (39 ) — (34 ) Net cash paid in business combinations — — (44 ) — (44 ) Capital contributions to subsidiaries (292 ) 14 278 — — Change in amounts due to/from affiliates 16 (1 ) (15 ) — — Other, net 8 (29 ) (2 ) — (23 ) Net cash used in investing activities (228 ) (23 ) (285 ) — (536 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 123 — — — 123 Contingent consideration liabilities settled — — (50 ) — (50 ) Principal payments on convertible senior notes (10 ) — — — (10 ) Proceeds from employee stock plans 14 — — — 14 Other, net 2 — — — 2 Net cash provided by (used in) financing activities 129 — (50 ) — 79 Net (decrease) increase in cash and cash equivalents (25 ) 6 622 — 603 Cash and cash equivalents at beginning of period 100 9 827 — 936 Cash and cash equivalents at end of period $ 75 $ 15 $ 1,449 $ — $ 1,539 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash (used in) provided by operating activities $ 63 $ (29 ) $ 156 $ — $ 190 Investing activities: Purchases of investments (363 ) — (407 ) — (770 ) Proceeds from sales and maturities of investments 98 — 302 — 400 Purchases of equipment (77 ) (8 ) (13 ) — (98 ) Increase in restricted investments — (10 ) (9 ) — (19 ) Net cash paid in business combinations — — (62 ) — (62 ) Capital contributions to subsidiaries (166 ) 10 156 — — Dividends received from subsidiaries 24 — (24 ) — Change in amounts due to/from affiliates (6 ) (4 ) 10 — — Other, net (6 ) 13 (1 ) — 6 Net cash (used in) provided by investing activities (496 ) 1 (48 ) — (543 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 538 — — — 538 Proceeds from sale-leaseback transactions 159 — — — 159 Purchase of call option (149 ) — — — (149 ) Proceeds from issuance of warrants 75 — — — 75 Treasury stock purchases (53 ) — — — (53 ) Principal payments on term loan (47 ) — (1 ) — (48 ) Repayment of amount borrowed under credit facility (40 ) — — — (40 ) Proceeds from employee stock plans 9 — — — 9 Other, net 2 — — — 2 Net cash provided by (used in) financing activities 494 — (1 ) — 493 Net increase (decrease) in cash and cash equivalents 61 (28 ) 107 — 140 Cash and cash equivalents at beginning of period 39 37 720 — 796 Cash and cash equivalents at end of period $ 100 $ 9 $ 827 $ — $ 936 |
Supplemental Condensed Consol51
Supplemental Condensed Consolidating Financial Information (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||
Condensed Consolidating Balance Sheet | MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (in millions) ASSETS Current assets: Cash and cash equivalents $ 214 $ 29 $ 2,102 $ — $ 2,345 Investments 252 — 1,716 — 1,968 Receivables 3 87 922 — 1,012 Income tax refundable 37 3 (17 ) — 23 Due from (to) affiliates 99 (9 ) (90 ) — — Prepaid expenses and other current assets 50 13 134 — 197 Total current assets 655 123 4,767 — 5,545 Property, equipment, and capitalized software, net 305 67 76 — 448 Deferred contract costs — 80 — — 80 Intangible assets, net 8 23 115 — 146 Goodwill 51 228 332 — 611 Restricted investments — — 107 — 107 Investment in subsidiaries 2,346 1 — (2,347 ) — Derivative asset 226 — — — 226 Other assets 47 3 5 (16 ) 39 $ 3,638 $ 525 $ 5,402 $ (2,363 ) $ 7,202 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ — $ 1,766 $ — $ 1,766 Amounts due government agencies — — 1,238 — 1,238 Accounts payable and accrued liabilities 128 31 378 — 537 Deferred revenue — 38 66 — 104 Current portion of long-term debt 1 — — — 1 Total current liabilities 129 69 3,448 — 3,646 Long-term debt 1,626 — 16 (16 ) 1,626 Deferred income taxes (3 ) 40 (12 ) — 25 Derivative liability 226 — — — 226 Other long-term liabilities 19 2 17 — 38 Total liabilities 1,997 111 3,469 (16 ) 5,561 Total stockholders’ equity 1,641 414 1,933 (2,347 ) 1,641 $ 3,638 $ 525 $ 5,402 $ (2,363 ) $ 7,202 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (in millions) ASSETS Current assets: Cash and cash equivalents $ 360 $ 42 $ 1,927 $ — $ 2,329 Investments 252 — 1,549 — 1,801 Receivables — 79 518 — 597 Income tax refundable 7 3 3 — 13 Intercompany 86 (4 ) (82 ) — — Prepaid expenses and other current assets 46 11 136 (1 ) 192 Derivative asset 374 — — — 374 Total current assets 1,125 131 4,051 (1 ) 5,306 Property, equipment, and capitalized software, net 267 52 74 — 393 Deferred contract costs — 81 — — 81 Goodwill and intangible assets, net 61 246 334 — 641 Restricted investments — — 109 — 109 Investment in subsidiaries, net 2,205 1 — (2,206 ) — Deferred income taxes 23 (35 ) 30 — 18 Other assets 36 2 6 (16 ) 28 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ 3 $ 1,682 $ — $ 1,685 Amounts due government agencies — 1 728 — 729 Accounts payable and accrued liabilities 157 35 170 — 362 Deferred revenue — 34 189 — 223 Current portion of long-term debt 449 — — — 449 Derivative liability 374 — — — 374 Total current liabilities 980 73 2,769 — 3,822 Long-term debt 1,160 — 16 (16 ) 1,160 Other long-term liabilities 20 2 16 (1 ) 37 Total liabilities 2,160 75 2,801 (17 ) 5,019 Total stockholders’ equity 1,557 403 1,803 (2,206 ) 1,557 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 | Condensed Balance Sheets December 31, 2015 2014 (Amounts in millions, except per-share data) ASSETS Current assets: Cash and cash equivalents $ 360 $ 75 Investments 252 126 Income taxes refundable 7 13 Due from affiliates 86 18 Prepaid expenses and other current assets 46 33 Derivative asset 374 — Total current assets 1,125 265 Property, equipment, and capitalized software, net 267 265 Goodwill and intangible assets, net 61 65 Investments in subsidiaries 2,205 1,377 Deferred income taxes 23 11 Derivative asset — 329 Advances to related parties and other assets 36 43 $ 3,717 $ 2,355 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 157 $ 107 Current portion of long-term debt 449 — Derivative liability 374 — Total current liabilities 980 107 Senior notes 962 690 Lease financing obligations 198 157 Lease financing obligations - related party — 40 Derivative liability — 329 Other long-term liabilities 20 22 Total liabilities 2,160 1,345 Stockholders' equity: Common stock, $0.001 par value; 150 shares authorized; outstanding: 56 shares at December 31, 2015 and 50 shares at December 31, 2014 — — Preferred stock, $0.001 par value; 20 shares authorized, no shares issued and outstanding — — Additional paid-in capital 803 396 Accumulated other comprehensive loss (4 ) (1 ) Retained earnings 758 615 Total stockholders' equity 1,557 1,010 $ 3,717 $ 2,355 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 360 $ 42 $ 1,927 $ — $ 2,329 Investments 252 — 1,549 — 1,801 Receivables — 79 518 — 597 Income taxes refundable 7 3 3 — 13 Due from (to) affiliates 86 (4 ) (82 ) — — Prepaid expenses and other current assets 46 11 136 (1 ) 192 Derivative asset 374 — — — 374 Total current assets 1,125 131 4,051 (1 ) 5,306 Property, equipment, and capitalized software, net 267 52 74 — 393 Deferred contract costs — 81 — — 81 Goodwill and intangible assets, net 61 246 334 — 641 Restricted investments — — 109 — 109 Investment in subsidiaries 2,205 1 — (2,206 ) — Deferred income taxes 23 (35 ) 30 — 18 Other assets 36 2 6 (16 ) 28 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ 3 $ 1,682 $ — $ 1,685 Amounts due government agencies — 1 728 — 729 Accounts payable and accrued liabilities 157 35 170 — 362 Deferred revenue — 34 189 — 223 Current portion of long-term debt 449 — — — 449 Derivative liability 374 — — — 374 Total current liabilities 980 73 2,769 — 3,822 Long-term debt 1,160 — 16 (16 ) 1,160 Other long-term liabilities 20 2 16 (1 ) 37 Total liabilities 2,160 75 2,801 (17 ) 5,019 Total stockholders’ equity 1,557 403 1,803 (2,206 ) 1,557 $ 3,717 $ 478 $ 4,604 $ (2,223 ) $ 6,576 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) ASSETS Current assets: Cash and cash equivalents $ 75 $ 15 $ 1,449 $ — $ 1,539 Investments 126 — 893 — 1,019 Receivables — 35 561 — 596 Due from (to) affiliates 18 (1 ) (17 ) — — Prepaid expenses and other current assets 33 25 11 (20 ) 49 Total current assets 252 74 2,897 (20 ) 3,203 Property, equipment, and capitalized software, net 265 25 51 — 341 Deferred contract costs — 54 — — 54 Goodwill and intangible assets, net 65 75 221 — 361 Restricted investments — 5 97 — 102 Investment in subsidiaries 1,377 — — (1,377 ) — Derivative asset 11 — — — 329 Deferred income taxes 329 (17 ) 21 — 15 Other assets 43 — 5 (18 ) 30 $ 2,342 $ 216 $ 3,292 $ (1,415 ) $ 4,435 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims and benefits payable $ — $ — $ 1,201 $ — $ 1,201 Amounts due government agencies — 2 525 — 527 Accounts payable and accrued liabilities 107 12 143 (20 ) 242 Deferred revenue — 31 165 — 196 Income taxes (refundable) payable (13 ) 7 15 — 9 Total current liabilities 94 52 2,049 (20 ) 2,175 Long-term debt 887 — 16 (16 ) 887 Derivative liability 329 — — — 329 Other long-term liabilities 22 1 13 (2 ) 34 Total liabilities 1,332 53 2,078 (38 ) 3,425 Total stockholders’ equity 1,010 163 1,214 (1,377 ) 1,010 $ 2,342 $ 216 $ 3,292 $ (1,415 ) $ 4,435 |
Condensed Consolidating Statement of Income | MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 512 $ 277 $ 8,450 $ (537 ) $ 8,702 Expenses: Medical care costs 31 22 7,157 (28 ) 7,182 Cost of service revenue — 221 22 — 243 General and administrative expenses 436 23 741 (509 ) 691 Premium tax expenses — — 218 — 218 Health insurer fee expenses — — 108 — 108 Depreciation and amortization 45 6 15 — 66 Total expenses 512 272 8,261 (537 ) 8,508 Operating income — 5 189 — 194 Interest expense 50 — — — 50 (Loss) income before income taxes (50 ) 5 189 — 144 Income tax (benefit) expense (28 ) 2 113 — 87 Net (loss) income before equity in earnings of subsidiaries (22 ) 3 76 — 57 Equity in net earnings of subsidiaries 79 — — (79 ) — Net income $ 57 $ 3 $ 76 $ (79 ) $ 57 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 443 $ 123 $ 6,596 $ (466 ) $ 6,696 Expenses: Medical care costs 26 17 5,547 (25 ) 5,565 Cost of service revenue — 69 — — 69 General and administrative expenses 377 15 592 (441 ) 543 Premium tax expenses — — 190 — 190 Health insurer fee expenses — — 81 — 81 Depreciation and amortization 41 1 8 — 50 Total expenses 444 102 6,418 (466 ) 6,498 Operating (loss) income (1 ) 21 178 — 198 Interest expense 30 — — — 30 (Loss) income before income taxes (31 ) 21 178 — 168 Income tax (benefit) expense (7 ) 8 100 — 101 Net (loss) income before equity in earnings of subsidiaries (24 ) 13 78 — 67 Equity in net earnings of subsidiaries 91 — — (91 ) — Net income $ 67 $ 13 $ 78 $ (91 ) $ 67 | Condensed Statements of Income Year Ended December 31, 2015 2014 2013 (In millions) Revenue: Management fees and other operating revenue $ 928 $ 704 $ 599 Investment income 3 2 3 Total revenue 931 706 602 Expenses: Medical care costs 55 46 38 General and administrative expenses 797 583 504 Depreciation and amortization 82 73 51 Total operating expenses 934 702 593 Operating (loss) income (3 ) 4 9 Interest expense 66 57 51 Other expense — 1 4 Loss before income taxes and equity in net income of subsidiaries (69 ) (54 ) (46 ) Income tax benefit (21 ) (27 ) (16 ) Net loss before equity in net income of subsidiaries (48 ) (27 ) (30 ) Equity in net income of subsidiaries 191 89 83 Net income $ 143 $ 62 $ 53 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 931 $ 293 $ 13,931 $ (977 ) $ 14,178 Expenses: Medical care costs 55 36 11,753 (50 ) 11,794 Cost of service revenue — 184 9 — 193 General and administrative expenses 797 41 1,235 (927 ) 1,146 Premium tax expenses — — 397 — 397 Health insurer fee expenses — — 157 — 157 Depreciation and amortization 82 4 18 — 104 Total expenses 934 265 13,569 (977 ) 13,791 Operating (loss) income (3 ) 28 362 — 387 Total other expenses (income), net 66 — (1 ) — 65 (Loss) income before income taxes (69 ) 28 363 — 322 Income tax (benefit) expense (21 ) 9 191 — 179 Net (loss) income before equity in earnings of subsidiaries (48 ) 19 172 — 143 Equity in net earnings of subsidiaries 191 (1 ) — (190 ) — Net income (loss) $ 143 $ 18 $ 172 $ (190 ) $ 143 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 706 $ 240 $ 9,454 $ (733 ) $ 9,667 Expenses: Medical care costs 46 27 8,034 (31 ) 8,076 Cost of service revenue — 157 — — 157 General and administrative expenses 583 29 855 (702 ) 765 Premium tax expenses — — 294 — 294 Health insurer fee expenses — — 89 — 89 Depreciation and amortization 73 5 15 — 93 Total expenses 702 218 9,287 (733 ) 9,474 Operating income 4 22 167 — 193 Total other expenses, net 58 — — — 58 (Loss) income before income taxes (54 ) 22 167 — 135 Income tax (benefit) expense (27 ) 8 92 — 73 Net (loss) income before equity in earnings of subsidiaries (27 ) 14 75 — 62 Equity in net earnings of subsidiaries 89 — — (89 ) — Net income (loss) $ 62 $ 14 $ 75 $ (89 ) $ 62 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Revenue: Total revenue $ 602 $ 211 $ 6,385 $ (609 ) $ 6,589 Expenses: Medical care costs 38 21 5,328 (7 ) 5,380 Cost of service revenue — 161 — — 161 General and administrative expenses 504 26 738 (602 ) 666 Premium tax expenses — — 172 — 172 Depreciation and amortization 51 7 15 — 73 Total expenses 593 215 6,253 (609 ) 6,452 Operating income (loss) 9 (4 ) 132 — 137 Total other expenses, net 55 — 1 — 56 (Loss) income before income taxes (46 ) (4 ) 131 — 81 Income tax (benefit) expense (16 ) (1 ) 53 — 36 Net (loss) income before equity in earnings of subsidiaries (30 ) (3 ) 78 — 45 Equity in net earnings of subsidiaries 83 — — (83 ) — Income (loss) from continuing operations 53 (3 ) 78 (83 ) 45 Income from discontinued operations, net of tax — — 8 — 8 Net income (loss) $ 53 $ (3 ) $ 86 $ (83 ) $ 53 |
Condensed Consolidating Statement of Comprehensive Income | MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME Three Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 33 $ 1 $ 45 $ (46 ) $ 33 Other comprehensive income (loss), net of tax 2 — 2 (2 ) 2 Comprehensive income $ 35 $ 1 $ 47 $ (48 ) $ 35 Three Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 39 $ 6 $ 37 $ (43 ) $ 39 Other comprehensive (loss) income, net of tax (2 ) — (2 ) 2 (2 ) Comprehensive income $ 37 $ 6 $ 35 $ (41 ) $ 37 Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 57 $ 3 $ 76 $ (79 ) $ 57 Other comprehensive income (loss), net of tax 8 — 7 (7 ) 8 Comprehensive income $ 65 $ 3 $ 83 $ (86 ) $ 65 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 67 $ 13 $ 78 $ (91 ) $ 67 Other comprehensive (loss) income, net of tax (1 ) — (1 ) 1 (1 ) Comprehensive income $ 66 $ 13 $ 77 $ (90 ) $ 66 | MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 143 $ 18 $ 172 $ (190 ) $ 143 Other comprehensive (loss) income, net of tax (3 ) — (3 ) 3 (3 ) Comprehensive income $ 140 $ 18 $ 169 $ (187 ) $ 140 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income $ 62 $ 14 $ 75 $ (89 ) $ 62 Other comprehensive income, net of tax — — — — — Comprehensive income $ 62 $ 14 $ 75 $ (89 ) $ 62 Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Net income (loss) $ 53 $ (3 ) $ 86 $ (83 ) $ 53 Other comprehensive loss, net of tax (1 ) — — — (1 ) Comprehensive income (loss) $ 52 $ (3 ) $ 86 $ (83 ) $ 52 |
Condensed Consolidating Statement of Cash Flow | MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2016 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash (used in) provided by operating activities $ (21 ) 16 283 — $ 278 Investing activities: Purchases of investments (67 ) — (907 ) — (974 ) Proceeds from sales and maturities of investments 67 — 745 — 812 Purchases of property, equipment and capitalized software (73 ) (22 ) (7 ) — (102 ) Decrease in restricted investments — — 5 — 5 Net cash paid in business combinations — (7 ) (1 ) — (8 ) Capital contributions to subsidiaries (106 ) 8 98 — — Dividends received from subsidiaries 50 — (50 ) — — Change in amounts due to/from affiliates (13 ) 5 8 — — Other, net 5 (12 ) 1 — (6 ) Net cash used in investing activities (137 ) (28 ) (108 ) — (273 ) Financing activities: Proceeds from employee stock plans 10 — — — 10 Other, net 2 (1 ) — — 1 Net cash provided by (used in) financing activities 12 (1 ) — — 11 Net (decrease) increase in cash and cash equivalents (146 ) (13 ) 175 — 16 Cash and cash equivalents at beginning of period 360 42 1,927 — 2,329 Cash and cash equivalents at end of period $ 214 $ 29 $ 2,102 $ — $ 2,345 Six Months Ended June 30, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 48 51 549 — $ 648 Investing activities: Purchases of investments (10 ) — (983 ) — (993 ) Proceeds from sales and maturities of investments 65 — 476 — 541 Purchases of property, equipment and capitalized software (46 ) (9 ) (11 ) — (66 ) Decrease in restricted investments — — (14 ) — (14 ) Net cash paid in business combinations — — (8 ) — (8 ) Capital contributions to subsidiaries (77 ) 4 73 — — Dividends received from subsidiaries 42 (17 ) (25 ) — — Change in amounts due to/from affiliates (15 ) 3 12 — — Other, net (1 ) (16 ) — — (17 ) Net cash used in investing activities (42 ) (35 ) (480 ) — (557 ) Financing activities: Proceeds from commons stock offering, net of issuance costs 373 — — — 373 Proceeds from employee stock plans 8 — — — 8 Other, net 3 — — — 3 Net cash provided by financing activities 384 — — — 384 Net increase in cash and cash equivalents 390 16 69 — 475 Cash and cash equivalents at beginning of period 75 15 1,449 — 1,539 Cash and cash equivalents at end of period $ 465 $ 31 $ 1,518 $ — $ 2,014 | Condensed Statements of Cash Flows Year Ended December 31, 2015 2014 2013 (In millions) Operating activities: Net cash provided by operating activities $ 113 $ 74 $ 63 Investing activities: Capital contributions to subsidiaries (770 ) (292 ) (166 ) Dividends received from subsidiaries 142 — 24 Purchases of investments (244 ) (129 ) (363 ) Proceeds from sales and maturities of investments 118 263 98 Purchases of equipment (91 ) (94 ) (77 ) Change in amounts due to/from affiliates (68 ) 16 (6 ) Other, net — 8 (6 ) Net cash used in investing activities (913 ) (228 ) (496 ) Financing activities: Proceeds from senior notes offerings, net of issuance costs 689 123 538 Proceeds from common stock offering, net of issuance costs 373 — — Proceeds from sale-leaseback transactions — — 159 Purchase of call option — — (149 ) Proceeds from issuance of warrants — — 75 Treasury stock repurchases — — (53 ) Principal payment on term loan of subsidiary — — (47 ) Repayment of amount borrowed under credit facility — — (40 ) Proceeds from employee stock plans 18 14 9 Principal payments on convertible senior notes — (10 ) — Other, net 5 2 2 Net cash provided by financing activities 1,085 129 494 Net increase (decrease) in cash and cash equivalents 285 (25 ) 61 Cash and cash equivalents at beginning of year 75 100 39 Cash and cash equivalents at end of year $ 360 $ 75 $ 100 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2015 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 113 $ 58 $ 954 $ — $ 1,125 Investing activities: Purchases of investments (244 ) — (1,679 ) — (1,923 ) Proceeds from sales and maturities of investments 118 — 1,008 — 1,126 Purchases of equipment (91 ) (23 ) (18 ) — (132 ) Decrease (increase) in restricted investments — 5 (11 ) — (6 ) Net cash paid in business combinations — (214 ) (236 ) — (450 ) Capital contributions to subsidiaries (770 ) 238 532 — — Dividends received from subsidiaries 142 (17 ) (125 ) — — Change in amounts due to/from affiliates (68 ) 15 53 — — Other, net — (35 ) — — (35 ) Net cash used in investing activities (913 ) (31 ) (476 ) — (1,420 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 689 — — — 689 Proceeds from common stock offering, net of issuance costs 373 — — — 373 Proceeds from employee stock plans 18 — — — 18 Other, net 5 — — — 5 Net cash provided by financing activities 1,085 — — — 1,085 Net increase in cash and cash equivalents 285 27 478 — 790 Cash and cash equivalents at beginning of period 75 15 1,449 — 1,539 Cash and cash equivalents at end of period $ 360 $ 42 $ 1,927 $ — $ 2,329 Year Ended December 31, 2014 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash provided by operating activities $ 74 $ 29 $ 957 $ — $ 1,060 Investing activities: Purchases of investments (129 ) — (824 ) — (953 ) Proceeds from sales and maturities of investments 263 — 370 — 633 Purchases of equipment (94 ) (12 ) (9 ) — (115 ) (Increase) decrease in restricted investments — 5 (39 ) — (34 ) Net cash paid in business combinations — — (44 ) — (44 ) Capital contributions to subsidiaries (292 ) 14 278 — — Change in amounts due to/from affiliates 16 (1 ) (15 ) — — Other, net 8 (29 ) (2 ) — (23 ) Net cash used in investing activities (228 ) (23 ) (285 ) — (536 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 123 — — — 123 Contingent consideration liabilities settled — — (50 ) — (50 ) Principal payments on convertible senior notes (10 ) — — — (10 ) Proceeds from employee stock plans 14 — — — 14 Other, net 2 — — — 2 Net cash provided by (used in) financing activities 129 — (50 ) — 79 Net (decrease) increase in cash and cash equivalents (25 ) 6 622 — 603 Cash and cash equivalents at beginning of period 100 9 827 — 936 Cash and cash equivalents at end of period $ 75 $ 15 $ 1,449 $ — $ 1,539 MOLINA HEALTHCARE, INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2013 Parent Guarantor Other Guarantors Non-Guarantors Eliminations Consolidated (In millions) Operating activities: Net cash (used in) provided by operating activities $ 63 $ (29 ) $ 156 $ — $ 190 Investing activities: Purchases of investments (363 ) — (407 ) — (770 ) Proceeds from sales and maturities of investments 98 — 302 — 400 Purchases of equipment (77 ) (8 ) (13 ) — (98 ) Increase in restricted investments — (10 ) (9 ) — (19 ) Net cash paid in business combinations — — (62 ) — (62 ) Capital contributions to subsidiaries (166 ) 10 156 — — Dividends received from subsidiaries 24 — (24 ) — Change in amounts due to/from affiliates (6 ) (4 ) 10 — — Other, net (6 ) 13 (1 ) — 6 Net cash (used in) provided by investing activities (496 ) 1 (48 ) — (543 ) Financing activities: Proceeds from senior notes offering, net of issuance costs 538 — — — 538 Proceeds from sale-leaseback transactions 159 — — — 159 Purchase of call option (149 ) — — — (149 ) Proceeds from issuance of warrants 75 — — — 75 Treasury stock purchases (53 ) — — — (53 ) Principal payments on term loan (47 ) — (1 ) — (48 ) Repayment of amount borrowed under credit facility (40 ) — — — (40 ) Proceeds from employee stock plans 9 — — — 9 Other, net 2 — — — 2 Net cash provided by (used in) financing activities 494 — (1 ) — 493 Net increase (decrease) in cash and cash equivalents 61 (28 ) 107 — 140 Cash and cash equivalents at beginning of period 39 37 720 — 796 Cash and cash equivalents at end of period $ 100 $ 9 $ 827 $ — $ 936 |
Basis of Presentation (Details)
Basis of Presentation (Details) member in Thousands, $ in Millions | Mar. 01, 2016member | Jan. 01, 2016member | May 01, 2015renewal_option | Jun. 30, 2013USD ($) | Jun. 30, 2016memberStateSegment | Dec. 31, 2015memberStateSegment | Nov. 01, 2015State |
Basis Of Presentation [Line Items] | |||||||
Number of reportable segments | Segment | 3 | 3 | |||||
Number of members added, approximately (in member) | 392 | ||||||
Pathways Health and Community Support LLC | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of states in which entity operates (in state) | State | 23 | ||||||
Health Plans | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of states in which entity operates (in state) | State | 11 | 11 | |||||
Number of members eligible for the health care programs | 4,200 | 3,500 | |||||
Minimum contract terms | 3 years | ||||||
Maximum contract terms | 4 years | ||||||
Medicare-Medicaid Plans (MMP) | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of states in which entity operates (in state) | State | 6 | ||||||
Illinois | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members added, approximately (in member) | 100 | ||||||
Number of members served, approximately (in member) | 98 | ||||||
Illinois | Medicaid | Loyola Physician Partners, LLC | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members added, approximately (in member) | 18 | ||||||
Illinois | Medicaid | Better Health Network, LLC | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members added, approximately (in member) | 34 | ||||||
Illinois | Medicaid | Accountable Care Chicago, LLC | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members added, approximately (in member) | 58 | ||||||
Michigan | HAP Midwest Health Plan, Inc. | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members served, approximately (in member) | 68 | ||||||
Michigan | Medicare-Medicaid Plans (MMP) | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members served, approximately (in member) | 51 | ||||||
Puerto Rico | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members served, approximately (in member) | 348 | ||||||
Washington | Columbia United Providers, Inc. | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members added, approximately (in member) | 57 | ||||||
New Jersey | Molina Medicaid Solutions | |||||||
Basis Of Presentation [Line Items] | |||||||
Contract terms | 10 years | ||||||
Number of renewal Option | renewal_option | 3 | ||||||
Renewal period | 1 year | ||||||
Missouri | |||||||
Basis Of Presentation [Line Items] | |||||||
Tax benefit from stock abandon | $ | $ 10 | ||||||
Forecast | Better Health Network, LLC | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members added, approximately (in member) | 40 | ||||||
Subsequent Event | Illinois | Medicaid | Loyola Physician Partners, LLC | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members added, approximately (in member) | 21 | ||||||
Subsequent Event | Illinois | Medicaid | Accountable Care Chicago, LLC | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members added, approximately (in member) | 58 | ||||||
Subsequent Event | Michigan | HAP Midwest Health Plan, Inc. | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members served, approximately (in member) | 81 | ||||||
Subsequent Event | Washington | Columbia United Providers, Inc. | |||||||
Basis Of Presentation [Line Items] | |||||||
Number of members added, approximately (in member) | 57 |
Significant Accounting Polici53
Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 24 Months Ended | ||||||||||||
Jun. 30, 2016USD ($)State | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | [1] | Jun. 30, 2016USD ($)State | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($)State | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($)State | ||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Maturity of cash and cash equivalents | three months or less | |||||||||||||||
Final maturities of investments | 10 years | |||||||||||||||
Average maturity of investments | 3 years | |||||||||||||||
Amounts due government agencies | $ 1,238,000,000 | $ 1,238,000,000 | $ 729,000,000 | $ 527,000,000 | $ 729,000,000 | |||||||||||
Premiums receivable | 1,000,000 | 1,000,000 | 3,000,000 | 0 | 3,000,000 | |||||||||||
Reduction in revenues | (4,359,000,000) | [1] | $ (3,525,000,000) | (8,702,000,000) | [1] | $ (6,696,000,000) | [1] | $ (14,178,000,000) | (9,667,000,000) | [2] | $ (6,589,000,000) | [2] | ||||
Maximum period for member risk scores and member pharmacy cost experience after original year of service | 2 years | |||||||||||||||
Anticipated Medicare risk adjustment premiums | 19,000,000 | 19,000,000 | $ (4,000,000) | 8,000,000 | (4,000,000) | |||||||||||
Payment of Medicaid Expansion medical cost floor liability | 509,000,000 | 298,000,000 | 202,000,000 | 470,000,000 | 28,000,000 | |||||||||||
Medical administrative costs | 398,000,000 | 263,000,000 | 153,000,000 | |||||||||||||
Goodwill impairment charges | 0 | 0 | 0 | |||||||||||||
Concentration of credit risk | 605,000,000 | 321,000,000 | $ 605,000,000 | |||||||||||||
Health Plans | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Reduction in revenues | $ (4,223,000,000) | [1] | $ (3,477,000,000) | $ (8,424,000,000) | [1] | $ (6,593,000,000) | [1] | $ (13,917,000,000) | (9,449,000,000) | [2] | $ (6,376,000,000) | [2] | ||||
Number of States Health Plans segments contracted with (states) | State | 11 | 11 | 11 | 11 | ||||||||||||
Medicaid Expansion | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Amounts due government agencies | $ 297,000,000 | $ 297,000,000 | $ 208,000,000 | $ 208,000,000 | ||||||||||||
Quality Incentives | Texas | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Deferred revenue recognized during period | 51,000,000 | |||||||||||||||
Deferred revenue for services provided | $ 7,000,000 | 44,000,000 | ||||||||||||||
Medical Premium Liability Due to Agency | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Medical premiums liability based on medical cost thresholds | 326,000,000 | 326,000,000 | 214,000,000 | 214,000,000 | ||||||||||||
Medical premiums liability based on medical cost thresholds and other | 224,000,000 | $ 392,000,000 | 224,000,000 | |||||||||||||
Profit sharing receivable (liability) | 1,000,000 | $ 1,000,000 | 10,000,000 | 10,000,000 | ||||||||||||
Profit sharing liability | $ 10,000,000 | $ 10,000,000 | ||||||||||||||
Restatement Adjustment | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Reduction in revenues | $ (18,000,000) | $ 24,000,000 | ||||||||||||||
Minimum | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Weighted average amortization period | 2 years | |||||||||||||||
Minimum | State health plans with quality incentive programs | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Percentage of additional incremental revenue earned | 1.00% | 1.00% | ||||||||||||||
Minimum | Insurance-related Assessments | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Loss contingency, portion not accrued | 15,000,000 | |||||||||||||||
Maximum | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Final maturities of investments | 10 years | |||||||||||||||
Average maturity of investments | 3 years | |||||||||||||||
Weighted average amortization period | 15 years | |||||||||||||||
Maximum | State health plans with quality incentive programs | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Percentage of additional incremental revenue earned | 3.00% | 4.00% | ||||||||||||||
Maximum | Insurance-related Assessments | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Loss contingency, portion not accrued | $ 20,000,000 | |||||||||||||||
Furniture and equipment | Minimum | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Useful life of property plant and equipment | 3 years | |||||||||||||||
Furniture and equipment | Maximum | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Useful life of property plant and equipment | 7 years | |||||||||||||||
Software | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Useful life of property plant and equipment | 3 years | |||||||||||||||
Leasehold Improvements | Minimum | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Useful life of property plant and equipment | 5 years | |||||||||||||||
Leasehold Improvements | Maximum | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Useful life of property plant and equipment | 10 years | |||||||||||||||
Building and improvements | Minimum | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Useful life of property plant and equipment | 31 years 6 months | |||||||||||||||
Building and improvements | Maximum | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Useful life of property plant and equipment | 40 years | |||||||||||||||
[1] | Total revenue consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. | |||||||||||||||
[2] | Total revenues consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. |
Significant Accounting Polici54
Significant Accounting Policies - 3R Program Receivables (Payables) (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | |||
Risk adjustment payable, Current Benefit Year | $ (220) | ||
Risk adjustment payable, Prior Benefit Years | (254) | ||
Risk adjustment payable, Total | (474) | $ (214) | $ (5) |
Reinsurance receivable, Current Benefit Year | 57 | ||
Reinsurance receivable, Prior Benefit Years | 24 | ||
Reinsurance receivable, Total | 81 | 36 | 5 |
Risk corridor, Current Benefit Year | (9) | ||
Risk corridor, Prior Benefit Years | (3) | ||
Risk corridor payable, Total | (12) | (10) | 0 |
Minimum MLR, Current Benefit Year | (17) | ||
Minimum MLR, Prior Benefit Years | (2) | ||
Minimum MLR payable, Total | $ (19) | $ (3) | $ 0 |
Significant Accounting Polici55
Significant Accounting Policies - Quality Incentive Premium Revenue Recognized (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||||||||||||||
Quality incentive premium revenue recognized as a percentage of total premium revenue | 2.10% | 0.70% | 1.30% | 0.50% | ||||||||||
Total premium revenue recognized for state health plans with quality incentive premiums | $ 4,029 | $ 3,589 | $ 3,377 | $ 3,304 | $ 2,971 | $ 2,599 | $ 2,317 | $ 2,167 | $ 1,940 | $ 8,024 | $ 6,275 | $ 13,241 | $ 9,023 | $ 6,179 |
Select Health Plans | ||||||||||||||
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||||||||||||||
Maximum available quality incentive premium - current period | 41 | 28 | 81 | 58 | 118 | 90 | 63 | |||||||
Amount of quality incentive premium revenue recognized in current period: Earned current period | 36 | 11 | 54 | 21 | 66 | 40 | 46 | |||||||
Amount of quality incentive premium revenue recognized in current period: Earned prior periods | 49 | 11 | 54 | 11 | 13 | 4 | 9 | |||||||
Total quality incentive premium revenue recognized | $ 85 | $ 22 | $ 108 | $ 32 | 79 | 44 | 55 | |||||||
Total premium revenue recognized for state health plans with quality incentive premiums | $ 11,107 | $ 7,084 | $ 2,980 | |||||||||||
Minimum | Select Health Plans | ||||||||||||||
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||||||||||||||
Percentage of additional incremental revenue earned | 1.00% | 1.00% | ||||||||||||
Maximum | Select Health Plans | ||||||||||||||
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||||||||||||||
Percentage of additional incremental revenue earned | 3.00% | 4.00% |
Significant Accounting Polici56
Significant Accounting Policies - Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Depreciation, and amortization of capitalized software, continuing operations | $ 87 | $ 75 | $ 55 |
Amortization of intangible assets, continuing operations | 17 | 18 | 18 |
Depreciation and amortization, continuing operations | 104 | 93 | 73 |
Amortization recorded as reduction of service revenue | 1 | 3 | 3 |
Amortization of capitalized software recorded as cost of service revenue | 21 | 38 | 18 |
Depreciation and amortization reported in the statement of cash flows | $ 126 | $ 134 | $ 94 |
Significant Accounting Polici57
Significant Accounting Policies - Schedule of Premium Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 4,029 | $ 3,589 | $ 3,377 | $ 3,304 | $ 2,971 | $ 2,599 | $ 2,317 | $ 2,167 | $ 1,940 | $ 8,024 | $ 6,275 | $ 13,241 | $ 9,023 | $ 6,179 |
California | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 2,200 | $ 1,523 | $ 750 | |||||||||||
Premium revenue percentage | 16.60% | 16.90% | 12.10% | |||||||||||
Florida | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 1,199 | $ 439 | $ 265 | |||||||||||
Premium revenue percentage | 9.00% | 4.90% | 4.30% | |||||||||||
Illinois | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 397 | $ 153 | $ 8 | |||||||||||
Premium revenue percentage | 3.00% | 1.70% | 0.10% | |||||||||||
Michigan | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 1,067 | $ 781 | $ 676 | |||||||||||
Premium revenue percentage | 8.10% | 8.70% | 11.00% | |||||||||||
New Mexico | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 1,237 | $ 1,076 | $ 447 | |||||||||||
Premium revenue percentage | 9.30% | 11.90% | 7.20% | |||||||||||
Ohio | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 2,034 | $ 1,553 | $ 1,099 | |||||||||||
Premium revenue percentage | 15.40% | 17.20% | 17.80% | |||||||||||
Puerto Rico | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 192 | $ 567 | $ 0 | $ 0 | ||||||||||
Premium revenue percentage | 4.30% | 0.00% | 0.00% | |||||||||||
South Carolina | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 348 | $ 381 | $ 0 | |||||||||||
Premium revenue percentage | 2.60% | 4.20% | 0.00% | |||||||||||
Texas | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 1,961 | $ 1,318 | $ 1,291 | |||||||||||
Premium revenue percentage | 14.80% | 14.60% | 20.90% | |||||||||||
Utah | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 331 | $ 310 | $ 311 | |||||||||||
Premium revenue percentage | 2.50% | 3.40% | 5.00% | |||||||||||
Washington | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 1,602 | $ 1,305 | $ 1,168 | |||||||||||
Premium revenue percentage | 12.10% | 14.50% | 18.90% | |||||||||||
Wisconsin | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 261 | $ 156 | $ 143 | |||||||||||
Premium revenue percentage | 2.00% | 1.70% | 2.30% | |||||||||||
Direct delivery and other | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 37 | $ 28 | $ 21 | |||||||||||
Premium revenue percentage | 0.30% | 0.30% | 0.40% | |||||||||||
Health Plans | ||||||||||||||
Summarized premium revenue | ||||||||||||||
Premium revenue | $ 13,241 | $ 9,023 | $ 6,179 | |||||||||||
Premium revenue percentage | 100.00% | 100.00% | 100.00% |
Significant Accounting Polici58
Significant Accounting Policies - Consolidated Medical Care Costs (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)member / months | Dec. 31, 2014USD ($)member / months | Dec. 31, 2013USD ($)member / months | |
Medical Care Costs | |||
Fee-for-service | $ | $ 8,572 | $ 5,673 | $ 3,612 |
Pharmacy | $ | 1,610 | 1,273 | 935 |
Capitation | $ | 982 | 748 | 604 |
Direct delivery | $ | 128 | 96 | 48 |
Other | $ | 502 | 286 | 181 |
Total | $ | $ 11,794 | $ 8,076 | $ 5,380 |
Medical Care Costs, PMPM | |||
Fee-for-service (per member per month) | member / months | 218.35 | 202.87 | 160.43 |
Pharmacy (per member per month) | member / months | 41.01 | 45.54 | 41.54 |
Capitation (per member per month) | member / months | 25.02 | 26.77 | 26.83 |
Direct delivery (per member per month) | member / months | 3.26 | 3.44 | 2.14 |
Other (per member per month) | member / months | 12.79 | 10.22 | 8.05 |
Total (per member per month) | member / months | 300.43 | 288.84 | 238.99 |
Medical Care Costs, Percentage | |||
Percentage of total in Fee for service | 72.70% | 70.20% | 67.10% |
Percentage of total in pharmacy | 13.70% | 15.80% | 17.40% |
Percentage of total in capitation | 8.30% | 9.30% | 11.20% |
Percent of total in direct delivery | 1.10% | 1.20% | 0.90% |
Percentage of total in other | 4.20% | 3.50% | 3.40% |
Percentage of total | 100.00% | 100.00% | 100.00% |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2016 | Dec. 31, 2012 | |||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||
Net income | $ 33 | $ 30 | $ 46 | $ 39 | $ 28 | $ 34 | $ 16 | $ 8 | $ 4 | $ 57 | $ 67 | $ 143 | $ 62 | $ 53 | ||||||||||||||||
Denominator: | ||||||||||||||||||||||||||||||
Shares outstanding at the beginning of the period (in shares) | 55 | 49 | 49 | 55 | 49 | 46 | 55 | 47 | ||||||||||||||||||||||
Weighted-average number of shares: Issued in common stock offering (in shares) | 0 | 1 | 0 | 1 | ||||||||||||||||||||||||||
Denominator for basic net income per share (in shares) | 55 | 50 | 55 | 50 | 52 | 47 | 46 | |||||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||||||
Convertible senior notes (in shares) | 0 | [1] | 1 | [1] | 0 | [1] | 0 | [1] | 1 | [2] | 1 | [2] | 0 | [2] | ||||||||||||||||
1.125% Warrants (in shares) | 0 | [1] | 3 | [1] | 1 | [1] | 2 | [1] | 2 | [2] | 0 | [2] | 0 | [2] | ||||||||||||||||
Denominator for diluted net income per share (in shares) | 55 | 54 | 56 | 52 | 56 | 48 | 47 | |||||||||||||||||||||||
Net income per share: | ||||||||||||||||||||||||||||||
Basic (in dollars per share) | $ 0.58 | [3] | $ 0.54 | [4] | $ 0.84 | [4] | $ 0.78 | [3],[4] | $ 0.58 | [4] | $ 0.70 | [4] | $ 0.34 | [4] | $ 0.17 | [4] | $ 0.10 | [4] | $ 1.02 | [3] | $ 1.36 | [3] | $ 2.75 | $ 1.33 | $ 1.16 | |||||
Diluted (in dollars per share) | $ 0.58 | [3] | $ 0.52 | [4] | $ 0.77 | [4] | $ 0.72 | [3],[4] | $ 0.56 | [4] | $ 0.69 | [4] | $ 0.33 | [4] | $ 0.16 | [4] | $ 0.09 | [4] | $ 1.01 | [3] | $ 1.29 | [3] | $ 2.58 | $ 1.29 | $ 1.13 | |||||
1.125% Call Option | ||||||||||||||||||||||||||||||
Potentially dilutive common shares excluded from calculations: | ||||||||||||||||||||||||||||||
Percentage of contractual interest rate | 1.125% | 1.125% | 1.125% | 1.125% | 1.125% | 1.125% | ||||||||||||||||||||||||
[1] | For more information regarding the convertible senior notes, refer to Note 10, "Debt." For more information regarding the 1.125% Warrants, refer to Note 11, "Derivatives." | |||||||||||||||||||||||||||||
[2] | For more information regarding the convertible senior notes, including the 1.625% Notes, 3.75% Notes, and 3.75% Exchange, refer to Note 12, "Debt." For more information regarding the 1.125% Warrants, refer to Note 13, "Derivatives." | |||||||||||||||||||||||||||||
[3] | Source data for calculations in thousands. | |||||||||||||||||||||||||||||
[4] | The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the year ended December 31, 2014, the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock. |
Net Income per Share - Computa
Net Income per Share - Computation of Basic and Diluted EPS (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2012 | |||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||
Shares outstanding at the beginning of the period | 55 | 49 | 46 | 55 | 49 | 47 | ||||||||||||
Weighted-average number of shares: | ||||||||||||||||||
Common stock offering | 3 | 0 | 0 | |||||||||||||||
Convertible senior notes | 0 | 1 | 0 | |||||||||||||||
Repurchased | 0 | 0 | (1) | |||||||||||||||
Denominator for basic net income per share (in shares) | 55 | 50 | 55 | 50 | 52 | 47 | 46 | |||||||||||
Effect of dilutive securities: | ||||||||||||||||||
Share-based compensation | 1 | 0 | 1 | |||||||||||||||
Convertible senior notes (in shares) | 0 | [1] | 1 | [1] | 0 | [1] | 0 | [1] | 1 | [2] | 1 | [2] | 0 | [2] | ||||
1.125% Warrants (in shares) | 0 | [1] | 3 | [1] | 1 | [1] | 2 | [1] | 2 | [2] | 0 | [2] | 0 | [2] | ||||
Denominator for diluted net income per share (in shares) | 55 | 54 | 56 | 52 | 56 | 48 | 47 | |||||||||||
1.125% Warrants | ||||||||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||||||||||||
Stated interest rate (as a percent) | 1.125% | 1.125% | 1.125% | |||||||||||||||
1.125% Warrants | ||||||||||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||||||||||||
Potentially dilutive common shares excluded from calculations | [3] | 0 | 13 | 12 | ||||||||||||||
[1] | For more information regarding the convertible senior notes, refer to Note 10, "Debt." For more information regarding the 1.125% Warrants, refer to Note 11, "Derivatives." | |||||||||||||||||
[2] | For more information regarding the convertible senior notes, including the 1.625% Notes, 3.75% Notes, and 3.75% Exchange, refer to Note 12, "Debt." For more information regarding the 1.125% Warrants, refer to Note 13, "Derivatives." | |||||||||||||||||
[3] | The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the years ended December 31, 2014 and 2013, the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock. |
Business Combinations (Details)
Business Combinations (Details) member in Thousands, $ in Millions | Mar. 01, 2016USD ($)member | Jan. 01, 2016USD ($)member | Nov. 01, 2015USD ($)memberState | Sep. 01, 2015USD ($)member | Aug. 01, 2015USD ($)member | Jan. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Jun. 30, 2016USD ($)memberState | Dec. 31, 2015USD ($)memberState | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | ||||||||||
Number of members added, approximately (in member) | member | 392 | |||||||||
Goodwill acquired during period | $ 90 | |||||||||
Consideration recorded to prepaid expense and other assets | $ 197 | $ 192 | $ 49 | |||||||
Weighted-average amortization period for intangible assets | 5 years 11 months | |||||||||
Provider network | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted-average amortization period for intangible assets | 10 years | |||||||||
Illinois | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of members added, approximately (in member) | member | 100 | |||||||||
Number of members served, approximately (in member) | member | 98 | |||||||||
Florida | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of members added, approximately (in member) | member | 94 | |||||||||
HAP Midwest Health Plan, Inc. | Michigan | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price | $ 31 | |||||||||
Number of members served, approximately (in member) | member | 68 | |||||||||
HAP Midwest Health Plan, Inc. | Michigan | Subsequent Event | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of members served, approximately (in member) | member | 81 | |||||||||
Pathways Health and Community Support LLC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of states in which entity operates (in state) | State | 23 | |||||||||
Health Plans | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill acquired during period | $ 90 | |||||||||
Number of states in which entity operates (in state) | State | 11 | 11 | ||||||||
Weighted-average amortization period for intangible assets | 6 years 5 months | |||||||||
Health Plans | Provider network | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted-average amortization period for intangible assets | 10 years | |||||||||
Other | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Weighted-average amortization period for intangible assets | 4 years 2 months | |||||||||
Accountable Care Chicago, LLC | Illinois | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price | $ 35 | |||||||||
Accountable Care Chicago, LLC | Medicaid | Illinois | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of members added, approximately (in member) | member | 58 | |||||||||
Accountable Care Chicago, LLC | Medicaid | Illinois | Subsequent Event | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of members added, approximately (in member) | member | 58 | |||||||||
Loyola Physician Partners, LLC | Illinois | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price | $ 12 | |||||||||
Loyola Physician Partners, LLC | Medicaid | Illinois | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of members added, approximately (in member) | member | 18 | |||||||||
Loyola Physician Partners, LLC | Medicaid | Illinois | Subsequent Event | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of members added, approximately (in member) | member | 21 | |||||||||
Better Health Network, LLC | Illinois | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price | $ 18 | |||||||||
Better Health Network, LLC | Medicaid | Illinois | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of members added, approximately (in member) | member | 34 | |||||||||
Columbia United Providers, Inc. | Washington | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price | $ 28 | |||||||||
Number of members added, approximately (in member) | member | 57 | |||||||||
Columbia United Providers, Inc. | Washington | Subsequent Event | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of members added, approximately (in member) | member | 57 | |||||||||
Integral Health Plan, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration withheld to establish an indemnification amount (as a percent) | 10.00% | |||||||||
Consideration withheld to establish an indemnification amount | $ 7 | |||||||||
Integral Health Plan, Inc. | Florida | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price | $ 67 | |||||||||
Number of members added, approximately (in member) | member | 101 | |||||||||
Preferred Medical Plan, Inc. | Florida | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price | $ 8 | |||||||||
Number of members added, approximately (in member) | member | 23 | |||||||||
HealthPlus of Michigan and HealthPlus Partners, Inc. | Michigan | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price | $ 47 | |||||||||
Number of members added, approximately (in member) | member | 68 | |||||||||
Business acquisitions during year excluding Pathways | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration recorded to prepaid expense and other assets | $ 101 | |||||||||
Business acquisitions during year excluding Pathways | Subsequent Event | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price | $ 115 | |||||||||
Pathways Health and Community Support LLC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Portion of goodwill acquired that is tax deductible | 10.00% | |||||||||
Gross contractual amount of receivables | $ 61 | |||||||||
Estimated contractual cash flows not expected to be collected for receivables | 9 | |||||||||
Transaction costs expensed | $ 3 |
Business Combinations - Assets
Business Combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Nov. 01, 2015 | Dec. 31, 2014 |
Assets: | ||||
Goodwill | $ 611 | $ 519 | $ 272 | |
Pathways Health and Community Support LLC | ||||
Assets: | ||||
Cash and cash equivalents | $ 20 | |||
Receivables | 52 | |||
Prepaid expenses and other current assets | 4 | |||
Property and equipment | 14 | |||
Intangible assets | 19 | |||
Goodwill | 155 | |||
Other assets | 1 | |||
Liabilities: | ||||
Medical claims and benefits payable | (2) | |||
Accounts payable and accrued liabilities | (23) | |||
Deferred revenue | (2) | |||
Other long-term liabilities | (7) | |||
Total purchase price | $ 231 |
Business Combinations - Intangi
Business Combinations - Intangible Assets Identified (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Remainder of 2016 | $ 25 | |
2,017 | 25 | |
2,018 | 22 | |
2,019 | 18 | |
2,020 | 13 | |
Fair value of intangible assets acquired | $ 34 | $ 51 |
Weighted-average amortization period for intangible assets | 5 years 11 months | |
Contract rights - member list | ||
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Fair value of intangible assets acquired | $ 28 | |
Weighted-average amortization period for intangible assets | 5 years | |
Provider network | ||
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Fair value of intangible assets acquired | $ 6 | |
Weighted-average amortization period for intangible assets | 10 years | |
Health Plans | ||
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Weighted-average amortization period for intangible assets | 6 years 5 months | |
Health Plans | Contract rights - member list | ||
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Fair value of intangible assets acquired | $ 23 | |
Weighted-average amortization period for intangible assets | 5 years | |
Health Plans | Provider network | ||
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Fair value of intangible assets acquired | $ 9 | |
Weighted-average amortization period for intangible assets | 10 years | |
Other | ||
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Weighted-average amortization period for intangible assets | 4 years 2 months | |
Other | Contract licenses | ||
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Fair value of intangible assets acquired | $ 5 | |
Weighted-average amortization period for intangible assets | 2 years | |
Other | Contract rights - member list | ||
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Fair value of intangible assets acquired | $ 14 | |
Weighted-average amortization period for intangible assets | 5 years | |
Q1 2016 Acquisitions | ||
Amortization of Intangible Assets Acquired by Fiscal Year Maturity | ||
Remainder of 2016 | $ 6 | |
2,017 | 6 | |
2,018 | 6 | |
2,019 | 6 | |
2,020 | 6 | |
2,021 | $ 1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 |
1.125% Call Option | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage of contractual interest rate on Call Option | 1.125% | 1.125% | 1.125% |
1.125% Convertible Notes | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Percentage of contractual interest rate on Notes | 1.125% | 1.125% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Financial Instruments on Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
1.125% Call Option | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Percentage of contractual interest rate on Call Option | 1.125% | 1.125% | 1.125% | |
Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | $ 2,194 | $ 2,175 | $ 1,348 | |
Total liability measured at fair value on a recurring basis | 226 | 374 | 329 | |
Fair Value, Measurements, Recurring | Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 1,345 | 1,184 | 641 | |
Fair Value, Measurements, Recurring | Government-sponsored enterprise securities (GSEs) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 196 | 211 | 122 | |
Fair Value, Measurements, Recurring | Municipal securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 180 | 185 | 127 | |
Fair Value, Measurements, Recurring | U.S. treasury notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 108 | 78 | 60 | |
Fair Value, Measurements, Recurring | Asset-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 71 | 63 | ||
Fair Value, Measurements, Recurring | Certificates of deposit | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 68 | 80 | 69 | |
Fair Value, Measurements, Recurring | Subtotal - current investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 1,968 | 1,801 | 1,019 | |
Fair Value, Measurements, Recurring | 1.125% Call Option derivative asset | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 226 | 374 | 329 | |
Fair Value, Measurements, Recurring | 1.125% Conversion Option derivative liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
1.125% Conversion Option derivative liability | 226 | 374 | 329 | |
Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 304 | 289 | 182 | |
Total liability measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Government-sponsored enterprise securities (GSEs) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 196 | 211 | 122 | |
Fair Value, Measurements, Recurring | Level 1 | Municipal securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | U.S. treasury notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 108 | 78 | 60 | |
Fair Value, Measurements, Recurring | Level 1 | Asset-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 1 | Certificates of deposit | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Subtotal - current investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 304 | 289 | 182 | |
Fair Value, Measurements, Recurring | Level 1 | 1.125% Call Option derivative asset | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 1 | 1.125% Conversion Option derivative liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
1.125% Conversion Option derivative liability | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 1,664 | 1,512 | 837 | |
Total liability measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 1,345 | 1,184 | 641 | |
Fair Value, Measurements, Recurring | Level 2 | Government-sponsored enterprise securities (GSEs) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Municipal securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 180 | 185 | 127 | |
Fair Value, Measurements, Recurring | Level 2 | U.S. treasury notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Asset-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 71 | 63 | ||
Fair Value, Measurements, Recurring | Level 2 | Certificates of deposit | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 68 | 80 | 69 | |
Fair Value, Measurements, Recurring | Level 2 | Subtotal - current investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 1,664 | 1,512 | 837 | |
Fair Value, Measurements, Recurring | Level 2 | 1.125% Call Option derivative asset | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | 1.125% Conversion Option derivative liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
1.125% Conversion Option derivative liability | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 226 | 374 | 329 | |
Total liability measured at fair value on a recurring basis | 226 | 374 | 329 | |
Fair Value, Measurements, Recurring | Level 3 | Corporate debt securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Government-sponsored enterprise securities (GSEs) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Municipal securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | U.S. treasury notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Asset-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 3 | Certificates of deposit | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Subtotal - current investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 0 | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | 1.125% Call Option derivative asset | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total assets measured at fair value on a recurring basis | 226 | 374 | 329 | |
Fair Value, Measurements, Recurring | Level 3 | 1.125% Conversion Option derivative liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
1.125% Conversion Option derivative liability | $ 226 | $ 374 | $ 329 |
Fair Value Measurements - Detai
Fair Value Measurements - Details of Long-Term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 1,410 | $ 690 | |
Total Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 1,930 | 1,104 | |
5.375% Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate on Notes | 5.375% | 5.375% | |
5.375% Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 689 | 0 | |
5.375% Notes | Total Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 700 | 0 | |
1.125% Convertible Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate on Notes | 1.125% | 1.125% | |
1.125% Convertible Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 448 | 426 | |
1.125% Convertible Notes | Total Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 865 | 767 | |
1.625% Convertible Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Percentage of contractual interest rate on Notes | 1.625% | 1.625% | |
1.625% Convertible Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 273 | 264 | |
1.625% Convertible Notes | Total Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | 365 | $ 337 | |
Level 2 | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 1,428 | 1,410 | |
Level 2 | Total Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | 1,773 | 1,930 | |
Level 2 | 5.375% Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | 690 | 689 | |
Level 2 | 5.375% Notes | Total Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | 702 | 700 | |
Level 2 | 1.125% Convertible Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | 460 | 448 | |
Level 2 | 1.125% Convertible Notes | Total Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | 742 | 865 | |
Level 2 | 1.625% Convertible Notes | Carrying Amount | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | 278 | 273 | |
Level 2 | 1.625% Convertible Notes | Total Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 329 | $ 365 |
Investments - Summary of Invest
Investments - Summary of Investments (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 1,961 | $ 1,808 | $ 1,021 |
Gross Unrealized Gains | 7 | 0 | 0 |
Gross Unrealized Losses | 0 | 7 | 2 |
Estimated Fair Value | 1,968 | 1,801 | 1,019 |
Corporate debt securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 1,340 | 1,189 | 643 |
Gross Unrealized Gains | 5 | 0 | 0 |
Gross Unrealized Losses | 0 | 5 | 2 |
Estimated Fair Value | 1,345 | 1,184 | 641 |
GSEs | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 196 | 212 | 122 |
Gross Unrealized Gains | 0 | 0 | 0 |
Gross Unrealized Losses | 0 | 1 | 0 |
Estimated Fair Value | 196 | 211 | 122 |
Municipal securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 178 | 186 | 127 |
Gross Unrealized Gains | 2 | 0 | 0 |
Gross Unrealized Losses | 0 | 1 | 0 |
Estimated Fair Value | 180 | 185 | 127 |
U.S. treasury notes | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 108 | 78 | 60 |
Gross Unrealized Gains | 0 | 0 | 0 |
Gross Unrealized Losses | 0 | 0 | 0 |
Estimated Fair Value | 108 | 78 | 60 |
Asset-backed securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 71 | 63 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Estimated Fair Value | 71 | 63 | |
Certificates of deposit | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 68 | 80 | 69 |
Gross Unrealized Gains | 0 | 0 | 0 |
Gross Unrealized Losses | 0 | 0 | 0 |
Estimated Fair Value | $ 68 | $ 80 | $ 69 |
Investments - Contractual Matur
Investments - Contractual Maturities (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Contractual maturities of investments | |||
Due in one year or less, Amortized Cost | $ 1,084 | $ 830 | |
Due after one year through five years, Amortized Cost | 844 | 967 | |
Due after five years through ten years, Amortized Cost | 33 | 11 | |
Amortized Cost | 1,961 | 1,808 | $ 1,021 |
Due in one year or less, Estimated Fair Value | 1,084 | 829 | |
Due after one year through five years, Estimated Fair Value | 850 | 962 | |
Due after five years through ten years, Estimated Fair Value | 34 | 10 | |
Total, Estimated fair value | $ 1,968 | $ 1,801 |
Investments - Available-for-Sal
Investments - Available-for-Sale Investments (Details) $ in Millions | Dec. 31, 2015USD ($)Security | Dec. 31, 2014USD ($)Security |
Schedule of Available-for-sale Securities [Line Items] | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 1,296 | $ 540 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 6 | $ 1 |
In a Continuous Loss Position for Less than 12 Months, Number of Positions (in security) | Security | 1,143 | 416 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 124 | $ 43 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 1 | $ 1 |
In a Continuous Loss Position for 12 Months or More, Number of Positions (in security) | Security | 99 | 26 |
Corporate Debt Securities, GSEs, and Municipal Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 1,135 | |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 6 | |
In a Continuous Loss Position for Less than 12 Months, Number of Positions (in security) | Security | 846 | |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 119 | |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 1 | |
In a Continuous Loss Position for 12 Months or More, Number of Positions (in security) | Security | 87 | |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 825 | $ 379 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 4 | $ 1 |
In a Continuous Loss Position for Less than 12 Months, Number of Positions (in security) | Security | 588 | 265 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 119 | $ 29 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 1 | $ 1 |
In a Continuous Loss Position for 12 Months or More, Number of Positions (in security) | Security | 87 | 10 |
GSEs | ||
Schedule of Available-for-sale Securities [Line Items] | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 182 | $ 75 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 1 | $ 0 |
In a Continuous Loss Position for Less than 12 Months, Number of Positions (in security) | Security | 77 | 22 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 0 | $ 3 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 0 | $ 0 |
In a Continuous Loss Position for 12 Months or More, Number of Positions (in security) | Security | 0 | 3 |
Municipal securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 128 | $ 54 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 1 | $ 0 |
In a Continuous Loss Position for Less than 12 Months, Number of Positions (in security) | Security | 181 | 64 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 5 | $ 11 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 0 | $ 0 |
In a Continuous Loss Position for 12 Months or More, Number of Positions (in security) | Security | 12 | 13 |
Certificates of Deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 53 | $ 13 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 0 | $ 0 |
In a Continuous Loss Position for Less than 12 Months, Number of Positions (in security) | Security | 218 | 52 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 0 | $ 0 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 0 | $ 0 |
In a Continuous Loss Position for 12 Months or More, Number of Positions (in security) | Security | 0 | 0 |
U.S. treasury notes | ||
Schedule of Available-for-sale Securities [Line Items] | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 53 | $ 19 |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 0 | $ 0 |
In a Continuous Loss Position for Less than 12 Months, Number of Positions (in security) | Security | 32 | 13 |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 0 | $ 0 |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 0 | $ 0 |
In a Continuous Loss Position for 12 Months or More, Number of Positions (in security) | Security | 0 | 0 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
In a Continuous Loss Position for Less than 12 Months, Estimated Fair Value | $ 55 | |
In a Continuous Loss Position for Less than 12 Months, Unrealized Losses | $ 0 | |
In a Continuous Loss Position for Less than 12 Months, Number of Positions (in security) | Security | 47 | |
In a Continuous Loss Position for 12 Months or More, Estimated Fair value | $ 0 | |
In a Continuous Loss Position for 12 Months or More, Unrealized Losses | $ 0 | |
In a Continuous Loss Position for 12 Months or More, Number of Positions (in security) | Security | 0 |
Receivables (Details)
Receivables (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | $ 1,012 | $ 597 | $ 596 |
Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 918 | 511 | 561 |
Medicaid Solutions Segment | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 41 | 37 | 35 |
Other segment | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 53 | 49 | 0 |
California | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 180 | 104 | 311 |
Florida | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 103 | 22 | 2 |
Illinois | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 106 | 35 | 32 |
Michigan | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 62 | 39 | 20 |
New Mexico | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 64 | 51 | 50 |
Ohio | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 112 | 66 | 45 |
Puerto Rico | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 50 | 33 | 0 |
South Carolina | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 11 | 6 | 4 |
Texas | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 60 | 56 | 29 |
Utah | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 38 | 18 | 6 |
Washington | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 81 | 53 | 43 |
Wisconsin | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | 46 | 22 | 8 |
Direct delivery and other | Health Plans | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total receivables | $ 5 | $ 6 | $ 11 |
Restricted Investments - Balan
Restricted Investments - Balances of Restricted Investments (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of restricted investments by health plan | |||
Restricted investments | $ 107 | $ 109 | $ 102 |
Health Plans | |||
Summary of restricted investments by health plan | |||
Restricted investments | 107 | 109 | 97 |
Health Plans | Florida | |||
Summary of restricted investments by health plan | |||
Restricted investments | 28 | 34 | 29 |
Health Plans | Illinois | |||
Summary of restricted investments by health plan | |||
Restricted investments | 3 | 0 | |
Health Plans | Michigan | |||
Summary of restricted investments by health plan | |||
Restricted investments | 1 | 1 | 1 |
Health Plans | New Mexico | |||
Summary of restricted investments by health plan | |||
Restricted investments | 43 | 43 | 35 |
Health Plans | Ohio | |||
Summary of restricted investments by health plan | |||
Restricted investments | 12 | 12 | 13 |
Health Plans | Puerto Rico | |||
Summary of restricted investments by health plan | |||
Restricted investments | 10 | 10 | 5 |
Health Plans | South Carolina | |||
Summary of restricted investments by health plan | |||
Restricted investments | 0 | 6 | |
Health Plans | Texas | |||
Summary of restricted investments by health plan | |||
Restricted investments | 4 | 4 | 3 |
Health Plans | Utah | |||
Summary of restricted investments by health plan | |||
Restricted investments | 4 | 4 | 4 |
Health Plans | Wisconsin | |||
Summary of restricted investments by health plan | |||
Restricted investments | 1 | 1 | 0 |
Health Plans | Other | |||
Summary of restricted investments by health plan | |||
Restricted investments | $ 1 | 0 | 1 |
Medicaid Solutions Segment | |||
Summary of restricted investments by health plan | |||
Restricted investments | $ 0 | $ 5 |
Restricted Investments - Matur
Restricted Investments - Maturities of Held-to-Maturity (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Contractual maturities of our held-to-maturity restricted investments | ||
Amortized Cost, Due in one year or less | $ 106 | $ 100 |
Amortized Cost, Due one year through five years | 1 | 9 |
Amortized Cost, Total | 107 | 109 |
Estimated Fair Value, Due in one year or less | 106 | 100 |
Estimated Fair Value, Due one year through five years | 1 | 9 |
Estimated Fair Value, Total | $ 107 | $ 109 |
Medical Claims and Benefits P73
Medical Claims and Benefits Payable (Details) member in Thousands, $ in Millions | Sep. 01, 2015member | Jun. 30, 2016USD ($)memberContract | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)member | Dec. 31, 2013USD ($) |
Insurance Claims [Line Items] | |||||
Non-risk provider payables | $ | $ 191 | $ 167 | $ 119 | $ 151 | |
Number of members added, approximately (in member) | 392 | ||||
Favorable prior period claims development | $ | $ 189 | $ 141 | $ 46 | $ 53 | |
Michigan | HealthPlus of Michigan and HealthPlus Partners, Inc. | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 68 | ||||
Ohio | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 61 | ||||
Ohio | MMP Program | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 17 | ||||
California | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 57 | 100 | |||
California | Medicaid Expansion | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 55 | ||||
Florida | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 94 | ||||
Texas | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 110 | ||||
Utah | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 48 | ||||
Wisconsin | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 38 | ||||
Illinois | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 100 | ||||
Number of contracts acquired (in contract) | Contract | 3 | ||||
Washington | Fully Integrated Managed Care | |||||
Insurance Claims [Line Items] | |||||
Number of members added, approximately (in member) | 80 | ||||
Minimum | |||||
Insurance Claims [Line Items] | |||||
Percentage of liability for unpaid claims not paid out | 8.00% | 8.00% | |||
Maximum | |||||
Insurance Claims [Line Items] | |||||
Percentage of liability for unpaid claims not paid out | 10.00% | 10.00% |
Medical Claims and Benefits P74
Medical Claims and Benefits Payable - Medical Claims and Future Benefits (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Liabilities Disclosure [Abstract] | |||||
Fee-for-service claims incurred but not paid (IBNP) | $ 1,292 | $ 1,191 | $ 871 | $ 424 | |
Pharmacy payable | 103 | 88 | 71 | 45 | |
Capitation payable | 37 | 140 | 28 | 20 | |
Other | 334 | 266 | 231 | 181 | |
Medical claims and benefits payable | $ 1,766 | $ 1,685 | $ 1,201 | $ 670 | $ 495 |
Medical Claims and Benefits P75
Medical Claims and Benefits Payable - Components of the Change (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Insurance Claims [Roll Forward] | ||||
Medical claims and benefits payable, beginning balance | $ 1,685 | $ 1,201 | $ 670 | $ 495 |
Components of medical care costs related to: | ||||
Current period | 7,371 | 11,935 | 8,123 | 5,434 |
Prior periods | (189) | (141) | (46) | (53) |
Total medical care costs | 7,182 | 11,794 | 8,077 | 5,381 |
Change in non-risk provider payables | 24 | 48 | (32) | 111 |
Payments for medical care costs related to: | ||||
Current period | 5,885 | 10,448 | 7,064 | 4,932 |
Prior periods | 1,240 | 910 | 450 | 385 |
Total paid | 7,125 | 11,358 | 7,514 | 5,317 |
Medical claims and benefits payable, ending balance | $ 1,766 | $ 1,685 | $ 1,201 | $ 670 |
Benefit from prior period as a percentage of: | ||||
Balance at beginning of period | 11.30% | 11.80% | ||
Premium revenue, trailing twelve months | 1.30% | 1.10% | ||
Medical care costs, trailing twelve months | 1.40% | 1.20% |
Debt (Details)
Debt (Details) | Nov. 10, 2015USD ($) | Jun. 12, 2015USD ($) | Sep. 30, 2014USD ($)d$ / shares | Aug. 30, 2014USD ($) | Feb. 28, 2013USD ($)d$ / shares | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($) | Jun. 30, 2015USD ($) |
5.375% Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of contractual interest rate on Notes | 5.375% | 5.375% | |||||||
1.625% Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of contractual interest rate on Notes | 1.625% | 1.625% | |||||||
1.125% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of contractual interest rate on Notes | 1.125% | 1.125% | |||||||
Convertible Debt [Abstract] | |||||||||
Senior note effective interest rate (in percent) | 6.00% | ||||||||
Senior notes amortization period | 4 years | ||||||||
Convertible debt, if-converted value in excess of principal | $ 332,000,000 | $ 93,000,000 | |||||||
Senior Notes | 5.375% Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount of debts | $ 700,000,000 | ||||||||
Percentage of contractual interest rate on Notes | 5.375% | ||||||||
Senior Notes [Abstract] | |||||||||
Debt redemption price, percentage of principal amount | 100.00% | ||||||||
Senior Notes | 1.125% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount of debts | $ 550,000,000 | ||||||||
Percentage of contractual interest rate on Notes | 1.125% | ||||||||
Convertible Debt [Abstract] | |||||||||
Initial conversation rate on Notes | 0.0245277 | ||||||||
Conversion price per share of common stock | $ / shares | $ 40.77 | ||||||||
Long-term portion of convertible debt. | $ 460,000,000 | ||||||||
Senior note effective interest rate (in percent) | 6.00% | ||||||||
Senior notes amortization period | 3 years 6 months | ||||||||
Convertible debt, if-converted value in excess of principal | $ 180,000,000 | $ 332,000,000 | |||||||
Convertible Debt | 1.625% Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount of debts | $ 301,551,000 | ||||||||
Percentage of contractual interest rate on Notes | 1.625% | ||||||||
Term of debt instrument | 4 years | ||||||||
Convertible Debt [Abstract] | |||||||||
Initial conversation rate on Notes | 0.0172157 | ||||||||
Conversion price per share of common stock | $ / shares | $ 58.09 | $ 58.09 | |||||||
Senior note effective interest rate (in percent) | 5.00% | 5.00% | |||||||
Convertible debt, if-converted value in excess of principal | $ 10,000,000 | ||||||||
Proceeds from issuance of debt | $ 125,000,000 | $ 177,000,000 | |||||||
Extinguishment of Debt Disclosures [Abstract] | |||||||||
Frequency of periodic payment | semiannually | semiannually | |||||||
Additional interest payable for any semiannual interest period with 1.625% Notes outstanding less than $100 million | 0.25% | ||||||||
Minimum 1.625% Notes outstanding balance threshold for additional interest payable | $ 100,000,000 | $ 100,000,000 | |||||||
Senior Notes [Abstract] | |||||||||
Redemption period start date | Aug. 19, 2018 | Aug. 19, 2018 | |||||||
Debt redemption price, percentage of principal amount | 100.00% | 100.00% | |||||||
Debt discount amortization period | 2 years 1 month | 2 years 7 months | |||||||
Convertible debt, carrying amount of equity component | $ 23,000,000 | $ 23,000,000 | |||||||
Redemption period, option one | Senior Notes | 1.625% Notes | |||||||||
Convertible Debt [Abstract] | |||||||||
Debt convertible threshold trading days | d | 20 | ||||||||
Debt convertible threshold consecutive trading days | 30 days | ||||||||
Debt convertible threshold percentage of stock price trigger | 130.00% | ||||||||
Redemption period, option one | Senior Notes | 1.125% Convertible Notes | |||||||||
Convertible Debt [Abstract] | |||||||||
Debt convertible threshold trading days | d | 20 | ||||||||
Debt convertible threshold consecutive trading days | 30 days | ||||||||
Debt convertible threshold percentage of stock price trigger | 130.00% | ||||||||
Redemption period, option one | Convertible Debt | 1.625% Notes | |||||||||
Convertible Debt [Abstract] | |||||||||
Debt convertible threshold trading days | d | 20 | ||||||||
Debt convertible threshold consecutive trading days | 30 days | ||||||||
Debt convertible threshold percentage of stock price trigger | 130.00% | ||||||||
Redemption period, option two | Senior Notes | 1.625% Notes | |||||||||
Convertible Debt [Abstract] | |||||||||
Debt convertible threshold trading days | d | 5 | ||||||||
Debt convertible threshold consecutive trading days | 5 days | ||||||||
Debt convertible maximum threshold percentage of stock price | 98.00% | ||||||||
Redemption period, option two | Senior Notes | 1.125% Convertible Notes | |||||||||
Convertible Debt [Abstract] | |||||||||
Debt convertible threshold trading days | d | 5 | ||||||||
Debt convertible threshold consecutive trading days | 5 days | ||||||||
Debt convertible maximum threshold percentage of stock price | 98.00% | ||||||||
Redemption period, option two | Convertible Debt | 1.625% Notes | |||||||||
Convertible Debt [Abstract] | |||||||||
Debt convertible threshold trading days | d | 5 | ||||||||
Debt convertible threshold consecutive trading days | 5 days | ||||||||
Debt convertible maximum threshold percentage of stock price | 98.00% | ||||||||
August 19, 2018 | Convertible Debt | 1.625% Notes | |||||||||
Senior Notes [Abstract] | |||||||||
Redemption period start date | Aug. 19, 2018 | Aug. 19, 2018 | |||||||
Redemption period end date | Aug. 19, 2018 | ||||||||
August 19, 2024 | Convertible Debt | 1.625% Notes | |||||||||
Senior Notes [Abstract] | |||||||||
Redemption period start date | Aug. 19, 2024 | Aug. 19, 2024 | |||||||
Redemption period end date | Aug. 19, 2024 | ||||||||
August 19, 2029 | Convertible Debt | 1.625% Notes | |||||||||
Senior Notes [Abstract] | |||||||||
Redemption period start date | Aug. 19, 2029 | Aug. 19, 2029 | |||||||
Redemption period end date | Aug. 19, 2029 | ||||||||
August 19, 2034 | Convertible Debt | 1.625% Notes | |||||||||
Senior Notes [Abstract] | |||||||||
Redemption period start date | Aug. 19, 2034 | Aug. 19, 2034 | |||||||
Redemption period end date | Aug. 19, 2034 | ||||||||
August 19, 2039 | Convertible Debt | 1.625% Notes | |||||||||
Senior Notes [Abstract] | |||||||||
Redemption period start date | Aug. 19, 2039 | Aug. 19, 2039 | |||||||
Redemption period end date | Aug. 19, 2039 | ||||||||
Revolving Credit Facility | Unsecured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 250,000,000 | ||||||||
Term of debt instrument | 5 years | ||||||||
Potential maximum borrowing capacity | $ 350,000,000 | $ 350,000,000 | |||||||
Current borrowing capacity | $ 244,000,000 | $ 244,000,000 | |||||||
Amount outstanding under the Credit Facility | $ 0 | $ 0 | |||||||
Frequency of commitment fee payment | quarterly | quarterly | |||||||
Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Amount outstanding under Letter of Credit | $ 6,000,000 | $ 6,000,000 |
Debt - Maturities (Details)
Debt - Maturities (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Maturities of Long-term Debt [Abstract] | ||||||
Total Principal Balance | $ 1,552 | $ 1,553 | $ 852 | |||
Remainder of 2016 | 0 | |||||
2,016 | 1 | |||||
2,017 | 0 | 0 | ||||
2,018 | 0 | 0 | ||||
2,019 | 0 | 0 | ||||
2,020 | 550 | 550 | ||||
Thereafter | 1,002 | 1,002 | ||||
5.375% Notes | ||||||
Maturities of Long-term Debt [Abstract] | ||||||
Total Principal Balance | 700 | 700 | ||||
Remainder of 2016 | 0 | |||||
2,016 | 0 | |||||
2,017 | 0 | 0 | ||||
2,018 | 0 | 0 | ||||
2,019 | 0 | 0 | ||||
2,020 | 0 | 0 | ||||
Thereafter | 700 | 700 | ||||
1.125% Convertible Notes | ||||||
Maturities of Long-term Debt [Abstract] | ||||||
Total Principal Balance | 550 | 550 | 550 | |||
Remainder of 2016 | 0 | |||||
2,016 | 0 | |||||
2,017 | 0 | 0 | ||||
2,018 | 0 | 0 | ||||
2,019 | 0 | 0 | ||||
2,020 | 550 | 550 | ||||
Thereafter | 0 | 0 | ||||
1.625% Convertible Notes | ||||||
Maturities of Long-term Debt [Abstract] | ||||||
Total Principal Balance | 302 | [1] | 302 | [2] | $ 302 | |
Remainder of 2016 | [1] | 0 | ||||
2,016 | [2] | 0 | ||||
2,017 | 0 | [1] | 0 | [2] | ||
2,018 | 0 | [1] | 0 | [2] | ||
2,019 | 0 | [1] | 0 | [2] | ||
2,020 | 0 | [1] | 0 | [2] | ||
Thereafter | $ 302 | [1] | 302 | [2] | ||
Other | ||||||
Maturities of Long-term Debt [Abstract] | ||||||
Total Principal Balance | 1 | |||||
2,016 | 1 | |||||
2,017 | 0 | |||||
2,018 | 0 | |||||
2,019 | 0 | |||||
2,020 | 0 | |||||
Thereafter | $ 0 | |||||
[1] | The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes. | |||||
[2] | The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes. |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Details of the liability component: | |||||
Total Principal Balance | $ 1,552 | $ 1,553 | $ 852 | ||
Unamortized Discount | 104 | 120 | 148 | ||
Unamortized Issuance Costs | 20 | 22 | 14 | ||
Net Carrying Amount | 1,428 | 1,411 | 690 | ||
5.375% Notes | |||||
Details of the liability component: | |||||
Total Principal Balance | 700 | 700 | |||
Unamortized Discount | 0 | 0 | |||
Unamortized Issuance Costs | 10 | 11 | |||
Net Carrying Amount | 690 | 689 | |||
1.125% Convertible Notes | |||||
Details of the liability component: | |||||
Total Principal Balance | 550 | 550 | 550 | ||
Unamortized Discount | 84 | 95 | 115 | ||
Unamortized Issuance Costs | 6 | 7 | 9 | ||
Net Carrying Amount | 460 | 448 | 426 | ||
1.625% Notes | |||||
Details of the liability component: | |||||
Total Principal Balance | 302 | [1] | 302 | [2] | 302 |
Unamortized Discount | 20 | 25 | 33 | ||
Unamortized Issuance Costs | 4 | 4 | 5 | ||
Net Carrying Amount | $ 278 | 273 | $ 264 | ||
Other | |||||
Details of the liability component: | |||||
Total Principal Balance | 1 | ||||
Unamortized Discount | 0 | ||||
Unamortized Issuance Costs | 0 | ||||
Net Carrying Amount | $ 1 | ||||
[1] | The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes. | ||||
[2] | The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes. |
Debt - Interest Cost Recognized
Debt - Interest Cost Recognized (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interest cost recognized for the period relating to the: | |||||||
Contractual interest coupon rate | $ 3 | $ 3 | $ 6 | $ 6 | $ 17 | $ 13 | $ 13 |
Amortization of the discount | 8 | 7 | 15 | 14 | 29 | 26 | 22 |
Total interest cost recognized | $ 11 | $ 10 | $ 21 | $ 20 | $ 46 | $ 39 | $ 35 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) $ / shares in Units, shares in Thousands | Nov. 10, 2015USD ($) | Jun. 12, 2015USD ($) | Oct. 30, 2014USD ($) | Sep. 30, 2014USD ($)d$ / shares | Aug. 30, 2014USD ($)shares | Feb. 28, 2013USD ($)d$ / shares | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)shares | Jun. 30, 2015USD ($) |
5.375% Senior Notes due 2022 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of contractual interest rate | 5.375% | 5.375% | ||||||||
1.125% Cash Convertible Senior Notes due 2020 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of contractual interest rate | 1.125% | 1.125% | ||||||||
Senior note effective interest rate (in percent) | 6.00% | |||||||||
Senior notes amortization period | 4 years | |||||||||
Convertible debt, if-converted value in excess of principal | $ 332,000,000 | $ 93,000,000 | ||||||||
3.75% Convertible Senior Notes due 2014 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of debt amount | $ 10,000,000 | |||||||||
1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of contractual interest rate | 1.625% | 1.625% | ||||||||
Senior Notes | 5.375% Senior Notes due 2022 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 700,000,000 | |||||||||
Percentage of contractual interest rate | 5.375% | |||||||||
Debt redemption price, percentage of principal amount | 100.00% | |||||||||
Senior Notes | 1.125% Cash Convertible Senior Notes due 2020 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 550,000,000 | |||||||||
Percentage of contractual interest rate | 1.125% | |||||||||
Current portion of long-term debt to be converted within 12 months | $ 448,000,000 | |||||||||
Initial conversation rate on Notes | 0.0245277 | |||||||||
Debt instrument conversion price per share | $ / shares | $ 40.77 | |||||||||
Senior note effective interest rate (in percent) | 6.00% | |||||||||
Senior notes amortization period | 3 years 6 months | |||||||||
Convertible debt, if-converted value in excess of principal | $ 180,000,000 | $ 332,000,000 | ||||||||
Senior Notes | 3.75% Convertible Senior Notes due 2014 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Initial conversation rate on Notes | 0.0172157 | |||||||||
Convertible Debt | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Term of debt instrument | 4 years | |||||||||
Principal amount | $ 301,551,000 | |||||||||
Percentage of contractual interest rate | 1.625% | |||||||||
Initial conversation rate on Notes | 0.0172157 | |||||||||
Debt instrument conversion price per share | $ / shares | $ 58.09 | $ 58.09 | ||||||||
Senior note effective interest rate (in percent) | 5.00% | 5.00% | ||||||||
Convertible debt, if-converted value in excess of principal | $ 10,000,000 | |||||||||
Proceeds from issuance of debt | $ 125,000,000 | $ 177,000,000 | ||||||||
Frequency of periodic payment | semiannually | semiannually | ||||||||
Additional interest payable for any semiannual interest period with 1.625% Notes outstanding less than $100 million | 0.25% | |||||||||
Minimum principal amount outstanding threshold for interest rate increase | $ 100,000,000 | $ 100,000,000 | ||||||||
Redemption period start date | Aug. 19, 2018 | Aug. 19, 2018 | ||||||||
Debt redemption price, percentage of principal amount | 100.00% | 100.00% | ||||||||
Debt discount amortization period | 2 years 1 month | 2 years 7 months | ||||||||
Convertible debt, carrying amount of equity component | $ 23,000,000 | $ 23,000,000 | ||||||||
Convertible Debt | 3.75% Convertible Senior Notes due 2014 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of contractual interest rate | 3.75% | |||||||||
Amount of debt extinguished | $ 177,000,000 | |||||||||
3.75% Convertible Note Exchange | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Shares issued in connection with exchange | shares | 2,000 | |||||||||
Shares issued for services render in connection with the 3.75% exchange | shares | 81 | |||||||||
Redemption period, option one | Senior Notes | 1.125% Cash Convertible Senior Notes due 2020 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt convertible threshold trading days | d | 20 | |||||||||
Debt convertible threshold consecutive trading days | 30 days | |||||||||
Debt convertible threshold percentage of stock price trigger | 130.00% | |||||||||
Redemption period, option one | Senior Notes | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt convertible threshold trading days | d | 20 | |||||||||
Debt convertible threshold consecutive trading days | 30 days | |||||||||
Debt convertible threshold percentage of stock price trigger | 130.00% | |||||||||
Redemption period, option one | Convertible Debt | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt convertible threshold trading days | d | 20 | |||||||||
Debt convertible threshold consecutive trading days | 30 days | |||||||||
Debt convertible threshold percentage of stock price trigger | 130.00% | |||||||||
Redemption period, option two | Senior Notes | 1.125% Cash Convertible Senior Notes due 2020 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt convertible threshold trading days | d | 5 | |||||||||
Debt convertible threshold consecutive trading days | 5 days | |||||||||
Debt convertible maximum threshold percentage of stock price | 98.00% | |||||||||
Redemption period, option two | Senior Notes | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt convertible threshold trading days | d | 5 | |||||||||
Debt convertible threshold consecutive trading days | 5 days | |||||||||
Debt convertible maximum threshold percentage of stock price | 98.00% | |||||||||
Redemption period, option two | Convertible Debt | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt convertible threshold trading days | d | 5 | |||||||||
Debt convertible threshold consecutive trading days | 5 days | |||||||||
Debt convertible maximum threshold percentage of stock price | 98.00% | |||||||||
August 19, 2018 | Convertible Debt | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption period start date | Aug. 19, 2018 | Aug. 19, 2018 | ||||||||
August 19, 2024 | Convertible Debt | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption period start date | Aug. 19, 2024 | Aug. 19, 2024 | ||||||||
August 19, 2029 | Convertible Debt | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption period start date | Aug. 19, 2029 | Aug. 19, 2029 | ||||||||
August 19, 2034 | Convertible Debt | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption period start date | Aug. 19, 2034 | Aug. 19, 2034 | ||||||||
August 19, 2039 | Convertible Debt | 1.625% Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption period start date | Aug. 19, 2039 | Aug. 19, 2039 | ||||||||
Revolving Credit Facility | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 250,000,000 | |||||||||
Term of debt instrument | 5 years | |||||||||
Potential maximum borrowing capacity | $ 350,000,000 | $ 350,000,000 | ||||||||
Current borrowing capacity | $ 244,000,000 | $ 244,000,000 | ||||||||
Amount outstanding under the Credit Facility | $ 0 | $ 0 | ||||||||
Frequency of commitment fee payment | quarterly | quarterly | ||||||||
Letter of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amount outstanding under Letter of Credit | $ 6,000,000 | $ 6,000,000 |
Debt - Lease Financing Obligati
Debt - Lease Financing Obligations (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($)property | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Feb. 28, 2013property | |
Debt Instrument [Line Items] | ||||||||
Interest expense related to lease financing obligations | $ 25 | $ 15 | $ 50 | $ 30 | $ 66 | $ 57 | $ 52 | |
Property, equipment, and capitalized software, net | $ 448 | $ 448 | 393 | 341 | ||||
June 2013 Transactions | ||||||||
Debt Instrument [Line Items] | ||||||||
Sale leaseback lease term | 25 years | |||||||
Annual increase in rental payment (in percent) | 3.00% | |||||||
Interest expense related to lease financing obligations | 13 | 13 | ||||||
Construction in Progress | February 2013 Transactions | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest expense related to lease financing obligations | 4 | 3 | ||||||
Property, equipment, and capitalized software, net | 36 | |||||||
Lease financing obligation related to the construction projects | 40 | 41 | ||||||
Rent expense | $ 1 | $ 1 | ||||||
Property Subject to Operating Lease | 6th & Pine Development, LLC | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of properties | property | 2 | 2 |
Derivatives (Details)
Derivatives (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
1.125% Convertible Notes | ||||
Derivative [Line Items] | ||||
Percentage of contractual interest rate on Notes | 1.125% | 1.125% | ||
1.125% Call Option | ||||
Derivative [Line Items] | ||||
Percentage of contractual interest rate on Call Option | 1.125% | 1.125% | 1.125% | |
Current assets | 1.125% Call Option | ||||
Derivative [Line Items] | ||||
Derivative assets | $ 0 | $ 374 | $ 0 | |
Non-current assets | 1.125% Call Option | ||||
Derivative [Line Items] | ||||
Derivative assets | 226 | 0 | 329 | |
Current liabilities | 1.125% Conversion Option derivative liability | ||||
Derivative [Line Items] | ||||
Derivative liabilities | 0 | 374 | 0 | |
Non-current liabilities | 1.125% Conversion Option derivative liability | ||||
Derivative [Line Items] | ||||
Derivative liabilities | $ 226 | $ 0 | $ 329 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 28, 2015 | |
Class of Stock [Line Items] | ||||||||||||||||
Increase in stockholders' equity | $ 84,000,000 | $ 547,000,000 | ||||||||||||||
Net income | $ 33,000,000 | $ 30,000,000 | $ 46,000,000 | $ 39,000,000 | $ 28,000,000 | $ 34,000,000 | $ 16,000,000 | $ 8,000,000 | $ 4,000,000 | 57,000,000 | $ 67,000,000 | 143,000,000 | $ 62,000,000 | $ 53,000,000 | ||
Other comprehensive income | $ 2,000,000 | $ (2,000,000) | 8,000,000 | (1,000,000) | (3,000,000) | 0 | (1,000,000) | |||||||||
Income tax benefit related to share-based compensation | 19,000,000 | 34,000,000 | ||||||||||||||
Proceeds from common stock offering, net of issuance costs | $ 373,000,000 | $ 0 | 373,000,000 | $ 373,000,000 | 0 | $ 0 | ||||||||||
Number of warrants issued (in shares) | 13,490,236 | 13,490,236 | ||||||||||||||
Warrant, strike price per share | $ 53.8475 | $ 53.8475 | $ 53.8475 | |||||||||||||
Trading days measurement period (in days) | 160 days | 160 days | ||||||||||||||
Stated percentage of warrants | 1.125% | 1.125% | 1.125% | 1.125% | ||||||||||||
Threshold percentage of stock price trigger (percent) | 0.625% | |||||||||||||||
Unrecognized compensation expense | $ 45,000,000 | $ 25,000,000 | $ 45,000,000 | $ 25,000,000 | ||||||||||||
Weighted average period for recognition (in years) | 1 year 9 months | 1 year 7 months | ||||||||||||||
Unrecognized compensation forfeiture rate (as a percent) | 4.30% | 6.50% | ||||||||||||||
Total fair value of restricted shares vested | $ 39,000,000 | $ 22,000,000 | ||||||||||||||
Number of nonvested shares outstanding (in shares) | 377,000 | 377,000 | ||||||||||||||
Restricted and Performance Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Fair value of restricted and performance stock awards granted | $ 32,000,000 | 27,000,000 | $ 28,000,000 | 25,000,000 | $ 33,000,000 | |||||||||||
Total fair value of restricted shares vested | $ 21,000,000 | $ 24,000,000 | $ 24,000,000 | |||||||||||||
Restricted shares | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of nonvested shares outstanding (in shares) | 603,000 | 603,000 | ||||||||||||||
Performance shares that are expected to vest (in shares) | 425,000 | 425,000 | ||||||||||||||
Common Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued in public offering (in shares) | 5,750,000 | |||||||||||||||
Offering price (USD per share) | $ 64.90 | $ 64.90 | $ 64.90 | |||||||||||||
Number of common stock issued (in shares) | 446,000 | 830,000 | ||||||||||||||
February 2015 Repurchase Program | Common Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Authorized repurchase amount | $ 50,000,000 | |||||||||||||||
December 2015 Repurchase Program | Common Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Authorized repurchase amount | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Share Activity (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Number of Shares | ||
Beginning Balance, Shares | 377,000 | |
Ending Balance, Shares | 377,000 | |
Restricted stock and performance awards | ||
Number of Shares | ||
Beginning Balance, Shares | 1,034,757 | 1,282,072 |
Granted, Shares | 505,000 | |
Vested, Shares | (329,000) | |
Forfeited, Shares | (19,000) | (47,759) |
Ending Balance, Shares | 1,192,000 | 1,034,757 |
Weighted Average Grant Date Fair Value | ||
Begining Balance (usd per share) | $ 46.68 | $ 33.55 |
Granted (usd per share) | 64.22 | |
Vested (usd per share) | 41.45 | |
Forfeited (usd per share) | 52.01 | 37.51 |
Ending Balance (usd per share) | $ 55.47 | $ 46.68 |
Restricted shares | ||
Number of Shares | ||
Granted, Shares | 273,710 | |
Vested, Shares | (371,489) | |
Ending Balance, Shares | 603,000 | |
Weighted Average Grant Date Fair Value | ||
Granted (usd per share) | $ 64.56 | |
Vested (usd per share) | $ 34.58 | |
Performance stock | ||
Number of Shares | ||
Granted, Shares | 162,827 | |
Vested, Shares | (264,604) | |
Weighted Average Grant Date Fair Value | ||
Granted (usd per share) | $ 63.90 | |
Vested (usd per share) | $ 30.80 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of Share-based Compensation Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock based compensation expense | |||||||
Stock based compensation expense, Pretax charges | $ 9 | $ 3 | $ 16 | $ 9 | $ 23 | $ 22 | $ 29 |
Stock based compensation expense, Net-of-Tax Amount | 16 | 14 | 25 | ||||
Unrecognized compensation expense | 45 | $ 45 | $ 25 | ||||
Weighted average period for recognition (in years) | 1 year 9 months | 1 year 7 months | |||||
Unrecognized compensation forfeited rate | 4.30% | 6.50% | |||||
Employee stock purchase plan and stock options | |||||||
Stock based compensation expense | |||||||
Stock based compensation expense, Pretax charges | 1 | 1 | $ 3 | 2 | |||
Restricted stock and performance awards | |||||||
Stock based compensation expense | |||||||
Stock based compensation expense, Pretax charges | $ 8 | $ 2 | $ 13 | $ 7 | |||
Restricted shares | |||||||
Stock based compensation expense | |||||||
Stock based compensation expense, Pretax charges | $ 19 | 19 | 26 | ||||
Stock based compensation expense, Net-of-Tax Amount | 13 | 12 | 23 | ||||
Employee stock purchase plan and stock options | |||||||
Stock based compensation expense | |||||||
Stock based compensation expense, Pretax charges | 4 | 3 | 3 | ||||
Stock based compensation expense, Net-of-Tax Amount | $ 3 | $ 2 | $ 2 |
Stockholders' Equity - Restri86
Stockholders' Equity - Restricted and Performance Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares vested (in shares) | $ 39 | $ 22 | ||||||
Restricted shares outstanding (in shares) | 377,000 | 377,000 | ||||||
Stock based compensation expense (reversal) | $ 9 | $ 3 | $ 16 | $ 9 | $ 23 | $ 22 | 29 | |
Restricted and Performance Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Fair value of restricted and performance stock awards granted | 32 | 27 | $ 28 | 25 | 33 | |||
Restricted shares vested (in shares) | $ 21 | $ 24 | 24 | |||||
Performance Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Weighted-average grant date fair value per share of the performance awards with vesting conditions based on TSR (in dollars per share) | $ 49.43 | $ 49.43 | ||||||
Risk-free interest rate | 0.80% | |||||||
Dividend yield (in percent) | 0.00% | |||||||
Weighted-average expected life | 2 years 10 months | |||||||
Restricted shares vested (in shares) | 229,000 | |||||||
Restricted shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted (in shares) | 273,710 | |||||||
Restricted shares outstanding (in shares) | 603,000 | 603,000 | ||||||
Restricted shares expected to vest (in shares) | 425,000 | 425,000 | ||||||
Stock based compensation expense (reversal) | $ 19 | $ 19 | $ 26 | |||||
Restricted shares vested (in shares) | 371,489 | |||||||
Executive Officer | Restricted shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted (in shares) | 163,000 | |||||||
Executive Officer | 2011 Plan | Restricted shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares expected to vest (in shares) | 199,000 | 199,000 | ||||||
Stock based compensation expense (reversal) | $ (3) | |||||||
Restricted shares forfeited (in shares) | 178,000 |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee purchase price as a percentage of stock price | 85.00% | ||
Maximum annual contribution per employee | $ 25,000 | ||
Risk-free interest rate | 0.10% | 0.10% | 0.10% |
Minimum expected volatility rate inputs for fair value measurement (in percent) | 30.00% | 30.00% | 30.00% |
Maximum expected volatility rate inputs for fair value measurement (in percent) | 50.00% | 50.00% | 50.00% |
Dividend yield (in percent) | 0.00% | 0.00% | 0.00% |
Weighted-average expected life | 6 months 4 days | 6 months 4 days | 6 months 4 days |
Common stock issued during period (in shares) | 301,900 | 327,200 | 299,600 |
Number of shares authorized (in shares) | 3,000,000 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | 0 | 0 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value of stock options granted (in dollars per share) | $ 14.67 | ||
Risk-free interest rate | 1.40% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 41.30% | ||
Dividend yield (in percent) | 0.00% | ||
Weighted-average expected life | 7 years | ||
Total intrinsic value of options exercised | $ 6 | $ 2 | $ 1 |
Stockholders' Equity - Stock In
Stockholders' Equity - Stock Incentive Plans (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016shares | Dec. 31, 2015Planshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of employee equity incentives plans | Plan | 2 | |
Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of common stock issued (in shares) | 446,000 | 830,000 |
2011 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 4,500,000 | |
2011 Plan | Restricted shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum award vesting period | 4 years | |
2011 Plan | Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum award vesting period | 4 years | |
Stock option expiration period | 10 years |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015USD ($)property | Dec. 31, 2014USD ($) | Jun. 30, 2016 | Feb. 28, 2013property | |
Pacific Healthcare IPA | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 50.00% | 50.00% | ||
Property Subject to Operating Lease | 6th & Pine Development, LLC | ||||
Related Party Transaction [Line Items] | ||||
Number of properties | property | 2 | 2 | ||
Provider Agreement with Pacific Healthcare IPA | Pacific Healthcare IPA | ||||
Related Party Transaction [Line Items] | ||||
Payments under provider agreement | $ | $ 1 | $ 1 |
Property, Equipment, and Capi91
Property, Equipment, and Capitalized Software - Summary of Property, Equipment, and Capitalized Software (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of property and equipment | |||
Property and equipment, gross | $ 755 | $ 618 | |
Less: accumulated depreciation and amortization on building and improvements, furniture and equipment | (167) | (129) | |
Less: accumulated amortization for capitalized software | (195) | (148) | |
Accumulated depreciation, Total | (362) | (277) | |
Property, equipment, and capitalized software, net | $ 448 | 393 | 341 |
Land | |||
Summary of property and equipment | |||
Property and equipment, gross | 16 | 15 | |
Building and improvements | |||
Summary of property and equipment | |||
Property and equipment, gross | 153 | 195 | |
Furniture and equipment | |||
Summary of property and equipment | |||
Property and equipment, gross | 250 | 141 | |
Capitalized software | |||
Summary of property and equipment | |||
Property and equipment, gross | $ 336 | $ 267 |
Property, Equipment, and Capi92
Property, Equipment, and Capitalized Software (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense recognized | $ 49 | $ 35 | $ 27 |
Amortization of capitalized software | $ 52 | $ 59 | $ 46 |
Property, Equipment, and Capi93
Property, Equipment, and Capitalized Software - Future Minimum Rentals (Details) $ in Millions | Dec. 31, 2015USD ($) |
Summary of future minimum rentals on non cancelable leases | |
2,016 | $ 4 |
2,017 | 4 |
2,018 | 4 |
2,019 | 2 |
2,020 | 2 |
Thereafter | 1 |
Total minimum future rentals | $ 17 |
Goodwill and Intangible Asset94
Goodwill and Intangible Assets (Details) $ in Millions | Dec. 31, 2015USD ($) |
Future Amortization Expenses | |
Future amortization expense, 2016 | $ 25 |
Future amortization expense, 2017 | 25 |
Future amortization expense, 2018 | 22 |
Future amortization expense, 2019 | 18 |
Future amortization expense, 2020 | $ 13 |
Goodwill and Intangible Asset95
Goodwill and Intangible Assets - Intangible Assets Balances (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Cost | $ 300 | $ 249 | |
Accumulated amortization | 178 | 160 | |
Net balance | $ 146 | 122 | 89 |
Contractual rights and licenses | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Cost | 224 | 182 | |
Accumulated amortization | 120 | 105 | |
Net balance | 104 | 77 | |
Customer relationships | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Cost | 25 | 25 | |
Accumulated amortization | 23 | 23 | |
Net balance | 2 | 2 | |
Contract backlog | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Cost | 24 | 24 | |
Accumulated amortization | 24 | 23 | |
Net balance | 0 | 1 | |
Provider network | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Cost | 27 | 18 | |
Accumulated amortization | 11 | 9 | |
Net balance | $ 16 | $ 9 |
Goodwill and Intangible Asset96
Goodwill and Intangible Assets - Balances of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2014 | |
Changes in the carrying amount of goodwill | |||
Goodwill, gross | $ 577 | $ 330 | |
Accumulated impairment losses | (58) | (58) | |
Goodwill, net | 519 | $ 611 | $ 272 |
Health Plans | |||
Changes in the carrying amount of goodwill | |||
Acquisitions by Segment | 90 | ||
Other | |||
Changes in the carrying amount of goodwill | |||
Acquisitions by Segment | $ 157 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Postemployment Benefits [Abstract] | |||
Maximum matching contribution by employer under defined contribution plan | 4.00% | ||
Expense recognized in connection with contributions | $ 27 | $ 21 | $ 13 |
Deferred compensation plan deferral percentage of basic salary | 100.00% | ||
Deferred compensation plan deferral percentage of bonus | 100.00% |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2011 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
New Mexico Data Center | |||||||
Variable Interest Entity [Line Items] | |||||||
Tax credit claimed as a percentage of original investment amount | 39.00% | ||||||
Tax credit claimed, term | 7 years | ||||||
Percentage of credit claimed for first three years | 5.00% | ||||||
Percentage of credit claimed for remaining four years | 6.00% | ||||||
Capital contribution by related party | $ 6 | ||||||
Principal amount of loan by party | 16 | ||||||
Proceeds from other debt | 21 | $ 6 | $ 6 | ||||
Deferred finance costs, gross | $ 1 | ||||||
Percentage recapture for period of seven years as provided in Internal Revenue Code | 100.00% | ||||||
Joseph M. Molina, M.D. Professional Corporations (JMMPC) | |||||||
Variable Interest Entity [Line Items] | |||||||
Amount paid for health care services | $ 31 | $ 27 | $ 61 | $ 52 | |||
Variable interest entity, total assets | 13 | 13 | 17 | 31 | |||
Variable interest entity, total liabilities | $ 13 | $ 13 | $ 17 | $ 31 |
Commitments and Contingencies99
Commitments and Contingencies (Details) member in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($)memberLease_Renewal_Option | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($)memberLease_Renewal_Option | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2009 | |
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Rental expense related to leases | $ 44 | $ 32 | $ 25 | ||||||||||||
Premium revenue | $ 4,029 | $ 3,589 | $ 3,377 | $ 3,304 | $ 2,971 | $ 2,599 | $ 2,317 | $ 2,167 | $ 1,940 | $ 8,024 | $ 6,275 | 13,241 | 9,023 | $ 6,179 | |
Net assets of subsidiaries subject to restrictions | 1,299 | 1,229 | 859 | 1,299 | 1,229 | 859 | |||||||||
Aggregate statutory capital and surplus | 1,384 | 1,350 | 1,384 | 1,350 | |||||||||||
Required minimum statutory capital surplus | 854 | 776 | 854 | 776 | |||||||||||
Parent Company | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Restricted cash and investments | $ 466 | $ 612 | $ 203 | $ 466 | $ 612 | 203 | |||||||||
Executive Officer | Employment Contracts | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Automatically extension term | 1 year | ||||||||||||||
Period of employment agreements | 1 year | 1 year | |||||||||||||
Minimum | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Operating lease terms | 5 years | ||||||||||||||
Operating lease renewal options | Lease_Renewal_Option | 1 | 1 | |||||||||||||
Minimum | Executive Officer | Employment Contracts | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Employment agreements terms | 1 year | ||||||||||||||
Maximum | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Operating lease terms | 10 years | ||||||||||||||
Operating lease renewal options | Lease_Renewal_Option | 2 | 2 | |||||||||||||
Maximum | Executive Officer | Employment Contracts | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Employment agreements terms | 3 years | ||||||||||||||
June 2013 Transactions | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Sale leaseback lease term | 25 years | ||||||||||||||
June 2013 Transactions | Minimum | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Sale leaseback lease term | 16 years 6 months | ||||||||||||||
Lease renewal terms | 10 years | ||||||||||||||
June 2013 Transactions | Maximum | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Sale leaseback lease term | 25 years | ||||||||||||||
Lease renewal terms | 25 years | ||||||||||||||
Termination of hospital management agreement | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Settlement charge | $ 15 | ||||||||||||||
Illinois | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Number of members served, approximately (in member) | member | 98 | 98 | |||||||||||||
Premium revenue | $ 397 | 153 | $ 8 | ||||||||||||
Puerto Rico | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Number of members served, approximately (in member) | member | 348 | 348 | |||||||||||||
Premium revenue | $ 192 | $ 567 | $ 0 | $ 0 | |||||||||||
Approximate premium revenue, monthly | 64 | ||||||||||||||
Puerto Rico | Collectibility of premium receivables | |||||||||||||||
Sale Leaseback Transaction [Line Items] | |||||||||||||||
Premium revenue being withheld by Commonwealth | $ 12 | $ 12 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Millions | Dec. 31, 2015USD ($) |
Summary of future minimum lease payments | |
2,016 | $ 64 |
2,017 | 63 |
2,018 | 57 |
2,019 | 48 |
2,020 | 41 |
Thereafter | 362 |
Total minimum lease payments | 635 |
Lease Financing Obligations | |
Summary of future minimum lease payments | |
2,016 | 15 |
2,017 | 16 |
2,018 | 16 |
2,019 | 16 |
2,020 | 17 |
Thereafter | 323 |
Total minimum lease payments | 403 |
Operating Leases | |
Summary of future minimum lease payments | |
2,016 | 49 |
2,017 | 47 |
2,018 | 41 |
2,019 | 32 |
2,020 | 24 |
Thereafter | 39 |
Total minimum lease payments | $ 232 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | |||
Excess tax benefits from share-based compensation | $ 8 | $ 3 | $ 2 |
Deferred tax assets | 9 | ||
Increase in deferred tax asset valuation allowance | (3) | ||
Valuation allowance | 9 | 6 | |
Impact on effective tax rate if tax benefits are recognized | 7 | $ 2 | $ 6 |
Liability for unrecognized tax benefits | 1 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 180 | ||
Tax credit carryovers | 11 | ||
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryovers | $ 1 |
Income Taxes - Provision for in
Income Taxes - Provision for income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||||||
Federal | $ 172 | $ 72 | $ 67 | ||||
State | 8 | 3 | 0 | ||||
Foreign | 6 | 0 | 0 | ||||
Total current | 186 | 75 | 67 | ||||
Deferred: | |||||||
Federal | (10) | 0 | (25) | ||||
State | 4 | (2) | (6) | ||||
Foreign | (1) | 0 | 0 | ||||
Total deferred | (7) | (2) | (31) | ||||
Total provision for income taxes | $ 47 | $ 62 | $ 87 | $ 101 | $ 179 | $ 73 | $ 36 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the U.S. Federal Statutory Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effective income tax rate reconciliation to the statutory federal income tax rate | |||
Statutory federal tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 2.40% | 0.40% | (0.50%) |
Change in unrecognized tax benefits | 0.90% | (0.10%) | (3.70%) |
Nondeductible health insurer fee (HIF) | 17.00% | 22.90% | 0.00% |
Nondeductible compensation | 0.60% | (4.10%) | 9.60% |
Nondeductible fair value of 1.125% Warrants | 0.00% | 0.00% | 2.40% |
Other | (0.40%) | (0.30%) | 2.00% |
Effective tax rate | 55.50% | 53.80% | 44.80% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Significant components of deferred tax assets and liabilities | ||
Accrued expenses | $ 37 | $ 13 |
Reserve liabilities | 14 | 4 |
Other accrued medical costs | 5 | 4 |
Net operating losses | 7 | 3 |
Unrealized losses | 2 | 1 |
Unearned premiums | 21 | 22 |
Lease financing obligation | 35 | 34 |
Deferred compensation | 8 | 10 |
Tax credit carryover | 8 | 8 |
Valuation allowance | (9) | (6) |
Total deferred income tax assets, net of valuation allowance | 128 | 93 |
Prepaid expenses | (9) | (6) |
Depreciation and amortization | (83) | (57) |
Basis in debt | (18) | (15) |
Total deferred income tax liabilities | (110) | (78) |
Net deferred income tax asset - long term | $ 18 | $ 15 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Unrecognized tax benefits roll forward | |||
Gross unrecognized tax benefits at beginning of period | $ (3) | $ (8) | $ (11) |
Increases in tax positions for current year | (1) | 0 | 0 |
Increases in tax positions for prior years | (5) | (1) | (2) |
Decreases in tax positions for prior years | 0 | 0 | 5 |
Settlements | 0 | 6 | 0 |
Gross unrecognized tax benefits at end of period | $ (9) | $ (3) | $ (8) |
Segment Information (Details)
Segment Information (Details) - Segment | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | ||
Number of reportable segments (in segment) | 3 | 3 |
Segment Information - Schedule
Segment Information - Schedule of Operating Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||
Gross margin | $ 454 | $ 389 | $ 874 | $ 740 | $ 1,507 | $ 1,000 | $ 843 | ||||||||||||||
Revenue | 4,359 | [1] | 3,525 | [1] | 8,702 | [1] | 6,696 | [1] | 14,178 | 9,667 | [2] | 6,589 | [2] | ||||||||
Less: other operating expenses | 4,254 | 3,409 | 8,508 | 6,498 | 13,791 | 9,474 | 6,452 | ||||||||||||||
Total Assets | 7,202 | $ 6,576 | $ 4,435 | 7,202 | 6,576 | 4,435 | 2,988 | ||||||||||||||
Income from continuing operations before income tax expense: | |||||||||||||||||||||
Operating income | 105 | 76 | $ 113 | 116 | $ 82 | 97 | $ 40 | $ 32 | $ 24 | 194 | 198 | 387 | 193 | 137 | |||||||
Other expenses, net | (25) | (15) | (50) | (30) | 65 | 58 | 56 | ||||||||||||||
Income before income tax expense | 80 | 101 | 144 | 168 | 322 | 135 | 81 | ||||||||||||||
Depreciation and amortization | 89 | 62 | 126 | 134 | [3] | 94 | [3] | ||||||||||||||
Goodwill and intangible assets, net | 641 | 361 | 641 | 361 | 330 | ||||||||||||||||
Other operating | |||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||
Revenue | 195 | [4] | 174 | [4] | 403 | [4] | 322 | [4] | 684 | [5] | 434 | [5] | 205 | [5] | |||||||
Less: other operating expenses | (544) | [6] | (447) | [6] | (1,083) | [6] | (864) | [6] | 1,804 | [7] | 1,241 | [7] | 911 | [7] | |||||||
Health Plans | |||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||
Gross margin | 435 | 375 | 842 | 710 | 1,447 | 947 | 799 | ||||||||||||||
Revenue | 4,223 | [1] | 3,477 | [1] | 8,424 | [1] | 6,593 | [1] | 13,917 | 9,449 | [2] | 6,376 | [2] | ||||||||
Total Assets | 5,521 | 4,707 | 3,355 | 5,521 | 4,707 | 3,355 | 1,921 | ||||||||||||||
Income from continuing operations before income tax expense: | |||||||||||||||||||||
Depreciation and amortization | 95 | 83 | [3] | 60 | [3] | ||||||||||||||||
Goodwill and intangible assets, net | 393 | 286 | 393 | 286 | 249 | ||||||||||||||||
Molina Medicaid Solutions | |||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||
Gross margin | 5 | 14 | 11 | 30 | 55 | 53 | 44 | ||||||||||||||
Revenue | 46 | [1] | 47 | [1] | 98 | [1] | 99 | [1] | 195 | 210 | [2] | 205 | [2] | ||||||||
Total Assets | 252 | 213 | 185 | 252 | 213 | 185 | 176 | ||||||||||||||
Income from continuing operations before income tax expense: | |||||||||||||||||||||
Depreciation and amortization | 25 | 46 | [3] | 28 | [3] | ||||||||||||||||
Goodwill and intangible assets, net | 73 | 75 | 73 | 75 | 81 | ||||||||||||||||
Other | |||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||
Gross margin | 14 | 0 | 21 | 0 | 5 | 0 | 0 | ||||||||||||||
Revenue | 90 | [1] | $ 1 | [1] | 180 | [1] | $ 4 | [1] | 66 | 8 | [2] | 8 | [2] | ||||||||
Total Assets | $ 1,429 | 1,656 | 895 | $ 1,429 | 1,656 | 895 | 891 | ||||||||||||||
Income from continuing operations before income tax expense: | |||||||||||||||||||||
Depreciation and amortization | 6 | 5 | [3] | 6 | [3] | ||||||||||||||||
Goodwill and intangible assets, net | $ 175 | $ 0 | $ 175 | $ 0 | $ 0 | ||||||||||||||||
[1] | Total revenue consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. | ||||||||||||||||||||
[2] | Total revenues consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. | ||||||||||||||||||||
[3] | Depreciation and amortization reported in accompanying consolidated statements of cash flows. | ||||||||||||||||||||
[4] | Other operating revenues include premium tax revenue, health insurer fee revenue, investment income and other revenue. | ||||||||||||||||||||
[5] | Other operating revenues include premium tax revenue, health insurer fee revenue, investment income and other revenue. | ||||||||||||||||||||
[6] | Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fee expenses and depreciation and amortization. | ||||||||||||||||||||
[7] | Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fee expenses and depreciation and amortization. |
Quarterly Results of Operati108
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||||||||||
Summary of quarterly results of operations | |||||||||||||||||||||||||
Premium revenue | $ 4,029 | $ 3,589 | $ 3,377 | $ 3,304 | $ 2,971 | $ 2,599 | $ 2,317 | $ 2,167 | $ 1,940 | $ 8,024 | $ 6,275 | $ 13,241 | $ 9,023 | $ 6,179 | |||||||||||
Service revenue | 135 | 107 | 47 | 47 | 52 | 54 | 52 | 50 | 54 | 275 | 99 | 253 | 210 | 205 | |||||||||||
Operating income | 105 | 76 | 113 | 116 | 82 | 97 | 40 | 32 | 24 | 194 | 198 | 387 | 193 | 137 | |||||||||||
Income from continuing operations | 30 | 46 | 39 | 28 | 34 | 16 | 8 | 4 | 143 | 62 | 45 | ||||||||||||||
Net income | $ 33 | $ 30 | $ 46 | $ 39 | $ 28 | $ 34 | $ 16 | $ 8 | $ 4 | $ 57 | $ 67 | $ 143 | $ 62 | $ 53 | |||||||||||
Net income per share: | |||||||||||||||||||||||||
Basic (in dollars per share) | $ 0.58 | [1] | $ 0.54 | [2] | $ 0.84 | [2] | $ 0.78 | [1],[2] | $ 0.58 | [2] | $ 0.70 | [2] | $ 0.34 | [2] | $ 0.17 | [2] | $ 0.10 | [2] | $ 1.02 | [1] | $ 1.36 | [1] | $ 2.75 | $ 1.33 | $ 1.16 |
Diluted (USD per share) | $ 0.58 | [1] | $ 0.52 | [2] | $ 0.77 | [2] | $ 0.72 | [1],[2] | $ 0.56 | [2] | $ 0.69 | [2] | $ 0.33 | [2] | $ 0.16 | [2] | $ 0.09 | [2] | $ 1.01 | [1] | $ 1.29 | [1] | $ 2.58 | $ 1.29 | $ 1.13 |
[1] | Source data for calculations in thousands. | ||||||||||||||||||||||||
[2] | The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the year ended December 31, 2014, the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock. |
Condensed Financial Informat109
Condensed Financial Information of Registrant - Condensed Balance Sheets (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ||||||
Cash and cash equivalents | $ 2,345 | $ 2,329 | $ 2,014 | $ 1,539 | $ 936 | $ 796 |
Investments | 1,968 | 1,801 | 1,019 | |||
Due from (to) affiliates | 0 | 0 | 0 | |||
Prepaid expenses and other current assets | 197 | 192 | 49 | |||
Derivative asset | 0 | 374 | 0 | |||
Total current assets | 5,545 | 5,306 | 3,203 | |||
Property, equipment, and capitalized software, net | 448 | 393 | 341 | |||
Goodwill and intangible assets, net | 641 | 361 | ||||
Investment in subsidiaries, net | 0 | 0 | 0 | |||
Deferred income taxes | 0 | 18 | 15 | |||
Derivative asset | 226 | 0 | 329 | |||
Other assets | 39 | 28 | 30 | |||
Total Assets | 7,202 | 6,576 | 4,435 | 2,988 | ||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | 537 | 362 | 242 | |||
Current portion of long-term debt | 1 | 449 | 0 | |||
Derivative liability | 0 | 374 | 0 | |||
Total current liabilities | 3,646 | 3,822 | 2,175 | |||
Senior notes | 1,428 | 1,411 | 690 | |||
Lease financing obligations | 198 | 198 | 157 | |||
Lease financing obligations - related party | 0 | 40 | ||||
Derivative liability | 226 | 0 | 329 | |||
Other long-term liabilities | 38 | 37 | 34 | |||
Total liabilities | 5,561 | 5,019 | 3,425 | |||
Stockholders’ equity: | ||||||
Common stock | 0 | 0 | 0 | |||
Preferred stock | 0 | 0 | 0 | |||
Additional paid-in capital | 822 | 803 | 396 | |||
Accumulated other comprehensive loss | 4 | (4) | (1) | |||
Retained earnings | 815 | 758 | 615 | |||
Total stockholders' equity | 1,641 | 1,557 | 1,010 | |||
Total liabilities and stockholders' equity | $ 7,202 | 6,576 | 4,435 | |||
Parent Company | ||||||
Current assets: | ||||||
Cash and cash equivalents | 360 | 75 | $ 100 | $ 39 | ||
Investments | 252 | 126 | ||||
Income tax refundable | 7 | 13 | ||||
Due from affiliates | 86 | |||||
Due from (to) affiliates | 86 | 18 | ||||
Prepaid expenses and other current assets | 46 | 33 | ||||
Derivative asset | 374 | 0 | ||||
Total current assets | 1,125 | 265 | ||||
Property, equipment, and capitalized software, net | 267 | 265 | ||||
Goodwill and intangible assets, net | 61 | 65 | ||||
Investments in subsidiaries | 2,205 | |||||
Investment in subsidiaries, net | 2,205 | 1,377 | ||||
Deferred income taxes | 23 | |||||
Deferred income taxes | 23 | 11 | ||||
Derivative asset | 0 | 329 | ||||
Advances to related parties and other assets | 36 | |||||
Other assets | 36 | 43 | ||||
Total Assets | 3,717 | 2,355 | ||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | 157 | |||||
Accounts payable and accrued liabilities | 157 | 107 | ||||
Current portion of long-term debt | 449 | 0 | ||||
Derivative liability | 374 | 0 | ||||
Total current liabilities | 980 | 107 | ||||
Senior notes | 962 | 690 | ||||
Lease financing obligations | 198 | 157 | ||||
Lease financing obligations - related party | 0 | 40 | ||||
Derivative liability | 0 | 329 | ||||
Other long-term liabilities | 20 | 22 | ||||
Total liabilities | 2,160 | 1,345 | ||||
Stockholders’ equity: | ||||||
Common stock | 0 | 0 | ||||
Preferred stock | 0 | 0 | ||||
Additional paid-in capital | 803 | 396 | ||||
Accumulated other comprehensive loss | (4) | (1) | ||||
Retained earnings | 758 | 615 | ||||
Total stockholders' equity | 1,557 | 1,010 | ||||
Total liabilities and stockholders' equity | $ 3,717 | $ 2,355 |
- Condensed Balance Sheets - Ad
- Condensed Balance Sheets - Additional Information (Details) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 |
Common stock, shares outstanding | 57,000,000 | 56,000,000 | 50,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Parent Company | |||
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 150,000,000 | 150,000,000 | |
Common stock, shares outstanding | 56,000,000 | 50,000,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Financial Informat111
Condensed Financial Information of Registrant - Condensed Statements of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||||
Revenue: | ||||||||||||||||||||
Total revenue | $ 4,359 | [1] | $ 3,525 | [1] | $ 8,702 | [1] | $ 6,696 | [1] | $ 14,178 | $ 9,667 | [2] | $ 6,589 | [2] | |||||||
Expenses: | ||||||||||||||||||||
Medical care costs | 3,594 | 2,929 | 7,182 | 5,565 | 11,794 | 8,076 | 5,380 | |||||||||||||
General and administrative expenses | 351 | 287 | 691 | 543 | 1,146 | 765 | 666 | |||||||||||||
Depreciation and amortization | 34 | 25 | 66 | 50 | 104 | 93 | 73 | |||||||||||||
Total operating expenses | 4,254 | 3,409 | 8,508 | 6,498 | 13,791 | 9,474 | 6,452 | |||||||||||||
Operating income | 105 | $ 76 | $ 113 | 116 | $ 82 | $ 97 | $ 40 | $ 32 | $ 24 | 194 | 198 | 387 | 193 | 137 | ||||||
Income tax expense | 47 | 62 | 87 | 101 | 179 | 73 | 36 | |||||||||||||
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Net income | $ 33 | $ 30 | $ 46 | $ 39 | $ 28 | $ 34 | $ 16 | $ 8 | $ 4 | $ 57 | $ 67 | 143 | 62 | 53 | ||||||
Parent Company | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Management fees and other operating revenue | 928 | 704 | 599 | |||||||||||||||||
Investment income | 3 | 2 | 3 | |||||||||||||||||
Total revenue | 931 | 706 | 602 | |||||||||||||||||
Expenses: | ||||||||||||||||||||
Medical care costs | 55 | 38 | ||||||||||||||||||
Medical care costs | 46 | |||||||||||||||||||
General and administrative expenses | 797 | 583 | 504 | |||||||||||||||||
Depreciation and amortization | 82 | 73 | 51 | |||||||||||||||||
Total operating expenses | 934 | 702 | 593 | |||||||||||||||||
Operating income | (3) | 4 | 9 | |||||||||||||||||
Interest expense | 66 | 57 | 51 | |||||||||||||||||
Other expense, net | 0 | 1 | 4 | |||||||||||||||||
Loss before income taxes and equity in net income of subsidiaries | (69) | (54) | (46) | |||||||||||||||||
Income tax expense | (21) | (27) | (16) | |||||||||||||||||
Net loss before equity in net income of subsidiaries | (48) | (27) | (30) | |||||||||||||||||
Equity in net income of subsidiaries | 191 | 83 | ||||||||||||||||||
Equity in net earnings of subsidiaries | 89 | |||||||||||||||||||
Net income | $ 143 | $ 62 | $ 53 | |||||||||||||||||
[1] | Total revenue consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. | |||||||||||||||||||
[2] | Total revenues consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. |
Condensed Financial Informat112
Condensed Financial Information of Registrant - Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Net income | $ 33 | $ 30 | $ 46 | $ 39 | $ 28 | $ 34 | $ 16 | $ 8 | $ 4 | $ 57 | $ 67 | $ 143 | $ 62 | $ 53 |
Unrealized investment gain (loss) | 4 | (3) | 13 | (1) | (5) | 0 | (1) | |||||||
Effect of income tax benefit | (2) | 1 | (5) | 0 | 2 | 0 | 0 | |||||||
Other comprehensive income (loss), net of tax | 2 | (2) | 8 | (1) | (3) | 0 | (1) | |||||||
Comprehensive income | $ 35 | $ 37 | $ 65 | $ 66 | 140 | 62 | 52 | |||||||
Parent Company | ||||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||||
Net income | 143 | 62 | 53 | |||||||||||
Unrealized investment gain (loss) | (5) | 0 | (1) | |||||||||||
Effect of income tax benefit | 2 | 0 | 0 | |||||||||||
Other comprehensive income (loss), net of tax | (3) | 0 | (1) | |||||||||||
Comprehensive income | $ 140 | $ 62 | $ 52 |
Condensed Financial Informat113
Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities: | ||||||
Net cash provided by operating activities | $ 278 | $ 648 | $ 1,125 | $ 1,060 | $ 190 | |
Investing activities: | ||||||
Dividends received from subsidiaries | 0 | 0 | 0 | 0 | ||
Payments to Acquire Marketable Securities | 974 | 993 | 1,923 | 953 | 770 | |
Proceeds from sales and maturities of investments | 812 | 541 | 1,126 | 633 | 400 | |
Payments to Acquire Machinery and Equipment | 102 | 66 | 132 | 115 | 98 | |
Net cash used in investing activities | (273) | (557) | (1,420) | (536) | (543) | |
Financing activities: | ||||||
Proceeds from senior notes offerings, net of issuance costs | 689 | 123 | 538 | |||
Proceeds from common stock offering, net of issuance costs | $ 373 | 0 | 373 | 373 | 0 | 0 |
Proceeds from sale-leaseback transactions | 0 | 0 | 159 | |||
Purchase of call option | 0 | 0 | (149) | |||
Proceeds from issuance of warrants | 0 | 0 | 75 | |||
Treasury stock purchases | 0 | 0 | (53) | |||
Principal payment on term loan of subsidiary | 0 | 0 | (48) | |||
Repayment of amount borrowed under credit facility | 0 | 0 | (40) | |||
Proceeds from employee stock plans | 10 | 8 | 18 | 14 | 9 | |
Principal payments on convertible senior notes | 0 | (10) | 0 | |||
Other, net | 1 | 3 | 5 | 2 | 2 | |
Net cash provided by financing activities | 11 | 384 | 1,085 | 79 | 493 | |
Net increase in cash and cash equivalents | 16 | 475 | 790 | 603 | 140 | |
Cash and cash equivalents at beginning of period | 2,329 | 1,539 | 1,539 | 936 | 796 | |
Cash and cash equivalents at end of period | $ 2,014 | 2,345 | 2,014 | 2,329 | 1,539 | 936 |
Parent Company | ||||||
Operating activities: | ||||||
Net cash provided by operating activities | 113 | 74 | 63 | |||
Investing activities: | ||||||
Capital contributions to subsidiaries | (770) | (292) | (166) | |||
Dividends received from subsidiaries | 142 | 0 | 24 | |||
Payments to Acquire Marketable Securities | 244 | |||||
Purchases of investments | (129) | (363) | ||||
Proceeds from sales and maturities of investments | 118 | |||||
Proceeds from sales and maturities of investments | 263 | 98 | ||||
Payments to Acquire Machinery and Equipment | 91 | |||||
Purchases of equipment | (94) | (77) | ||||
Change in amounts due to/from affiliates | (68) | 16 | (6) | |||
Other, net | 0 | 8 | (6) | |||
Net cash used in investing activities | (913) | (228) | (496) | |||
Financing activities: | ||||||
Proceeds from senior notes offerings, net of issuance costs | 689 | 123 | 538 | |||
Proceeds from common stock offering, net of issuance costs | 373 | 0 | 0 | |||
Proceeds from sale-leaseback transactions | 0 | 0 | 159 | |||
Purchase of call option | 0 | 0 | (149) | |||
Proceeds from issuance of warrants | 0 | 0 | 75 | |||
Treasury stock purchases | 0 | 0 | (53) | |||
Principal payment on term loan of subsidiary | 0 | 0 | (47) | |||
Repayment of amount borrowed under credit facility | 0 | 0 | (40) | |||
Proceeds from employee stock plans | 18 | 14 | 9 | |||
Principal payments on convertible senior notes | 0 | (10) | 0 | |||
Other, net | 5 | 2 | 2 | |||
Net cash provided by financing activities | 1,085 | 129 | 494 | |||
Net increase in cash and cash equivalents | 285 | (25) | 61 | |||
Cash and cash equivalents at beginning of period | $ 360 | $ 75 | 75 | 100 | 39 | |
Cash and cash equivalents at end of period | $ 360 | $ 75 | $ 100 |
Condensed Financial Informat114
Condensed Financial Information of Registrant - Notes to Condensed Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Parent Company | |||
Related Party Transaction [Line Items] | |||
Services revenue from subsidiaries | $ 914 | $ 692 | $ 592 |
Supplemental Condensed Conso115
Supplemental Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ||||||
Cash and cash equivalents | $ 2,345 | $ 2,329 | $ 2,014 | $ 1,539 | $ 936 | $ 796 |
Investments | 1,968 | 1,801 | 1,019 | |||
Receivables | 1,012 | 597 | 596 | |||
Income taxes refundable | 23 | 13 | 0 | |||
Due from (to) affiliates | 0 | 0 | 0 | |||
Prepaid expenses and other current assets | 197 | 192 | 49 | |||
Derivative asset | 0 | 374 | 0 | |||
Total current assets | 5,545 | 5,306 | 3,203 | |||
Property, equipment, and capitalized software, net | 448 | 393 | 341 | |||
Deferred contract costs | 80 | 81 | 54 | |||
Goodwill and intangible assets, net | 641 | 361 | ||||
Intangible assets, net | 146 | 122 | 89 | |||
Goodwill | 611 | 519 | 272 | |||
Restricted investments | 107 | 109 | 102 | |||
Investment in subsidiaries, net | 0 | 0 | 0 | |||
Derivative asset | 226 | 0 | 329 | |||
Deferred income taxes | 0 | 18 | 15 | |||
Other assets | 39 | 28 | 30 | |||
Total Assets | 7,202 | 6,576 | 4,435 | 2,988 | ||
Current liabilities: | ||||||
Medical claims and benefits payable | 1,766 | 1,685 | 1,201 | 670 | 495 | |
Amounts due government agencies | 1,238 | 729 | 527 | |||
Accounts payable and accrued liabilities | 537 | 362 | 242 | |||
Deferred revenue | 104 | 223 | 196 | |||
Income taxes payable | 0 | 9 | ||||
Current portion of long-term debt | 1 | 449 | 0 | |||
Derivative liability | 0 | 374 | 0 | |||
Total current liabilities | 3,646 | 3,822 | 2,175 | |||
Long-term debt | 1,626 | 1,160 | 887 | |||
Deferred income taxes | 25 | 0 | ||||
Other long-term liabilities | 38 | 37 | 34 | |||
Derivative liability | 226 | 0 | 329 | |||
Total liabilities | 5,561 | 5,019 | 3,425 | |||
Total stockholders' equity | 1,641 | 1,557 | 1,010 | |||
Total liabilities and stockholders' equity | 7,202 | 6,576 | 4,435 | |||
Eliminations | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | 0 | 0 |
Investments | 0 | 0 | 0 | |||
Receivables | 0 | 0 | 0 | |||
Income taxes refundable | 0 | 0 | ||||
Due from (to) affiliates | 0 | 0 | 0 | |||
Prepaid expenses and other current assets | 0 | (1) | (20) | |||
Derivative asset | 0 | |||||
Total current assets | 0 | (1) | (20) | |||
Property, equipment, and capitalized software, net | 0 | 0 | 0 | |||
Deferred contract costs | 0 | 0 | 0 | |||
Goodwill and intangible assets, net | 0 | 0 | ||||
Intangible assets, net | 0 | |||||
Goodwill | 0 | |||||
Restricted investments | 0 | 0 | 0 | |||
Investment in subsidiaries, net | (2,347) | (2,206) | (1,377) | |||
Derivative asset | 0 | 0 | ||||
Deferred income taxes | 0 | 0 | ||||
Other assets | (16) | (16) | (18) | |||
Total Assets | (2,363) | (2,223) | (1,415) | |||
Current liabilities: | ||||||
Medical claims and benefits payable | 0 | 0 | 0 | |||
Amounts due government agencies | 0 | 0 | 0 | |||
Accounts payable and accrued liabilities | 0 | 0 | (20) | |||
Deferred revenue | 0 | 0 | 0 | |||
Income taxes payable | 0 | |||||
Current portion of long-term debt | 0 | 0 | ||||
Derivative liability | 0 | |||||
Total current liabilities | 0 | 0 | (20) | |||
Long-term debt | (16) | (16) | (16) | |||
Deferred income taxes | 0 | |||||
Other long-term liabilities | 0 | (1) | (2) | |||
Derivative liability | 0 | 0 | ||||
Total liabilities | (16) | (17) | (38) | |||
Total stockholders' equity | (2,347) | (2,206) | (1,377) | |||
Total liabilities and stockholders' equity | (2,363) | (2,223) | (1,415) | |||
Parent Guarantor | ||||||
Current assets: | ||||||
Cash and cash equivalents | 360 | 75 | 100 | 39 | ||
Investments | 252 | 126 | ||||
Receivables | 0 | |||||
Income taxes refundable | 7 | |||||
Due from (to) affiliates | 86 | 18 | ||||
Prepaid expenses and other current assets | 46 | 33 | ||||
Derivative asset | 374 | 0 | ||||
Total current assets | 1,125 | 265 | ||||
Property, equipment, and capitalized software, net | 267 | 265 | ||||
Deferred contract costs | 0 | |||||
Goodwill and intangible assets, net | 61 | 65 | ||||
Restricted investments | 0 | |||||
Investment in subsidiaries, net | 2,205 | 1,377 | ||||
Derivative asset | 0 | 329 | ||||
Deferred income taxes | 23 | 11 | ||||
Other assets | 36 | 43 | ||||
Total Assets | 3,717 | 2,355 | ||||
Current liabilities: | ||||||
Medical claims and benefits payable | 0 | |||||
Amounts due government agencies | 0 | |||||
Accounts payable and accrued liabilities | 157 | 107 | ||||
Deferred revenue | 0 | |||||
Current portion of long-term debt | 449 | 0 | ||||
Derivative liability | 374 | 0 | ||||
Total current liabilities | 980 | 107 | ||||
Long-term debt | 1,160 | |||||
Other long-term liabilities | 20 | 22 | ||||
Derivative liability | 0 | 329 | ||||
Total liabilities | 2,160 | 1,345 | ||||
Total stockholders' equity | 1,557 | 1,010 | ||||
Total liabilities and stockholders' equity | 3,717 | 2,355 | ||||
Parent Guarantor | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 214 | 360 | 465 | 75 | 100 | 39 |
Investments | 252 | 252 | 126 | |||
Receivables | 3 | 0 | 0 | |||
Income taxes refundable | 37 | 7 | ||||
Due from (to) affiliates | 99 | 86 | 18 | |||
Prepaid expenses and other current assets | 50 | 46 | 33 | |||
Derivative asset | 374 | |||||
Total current assets | 655 | 1,125 | 252 | |||
Property, equipment, and capitalized software, net | 305 | 267 | 265 | |||
Deferred contract costs | 0 | 0 | 0 | |||
Goodwill and intangible assets, net | 61 | 65 | ||||
Intangible assets, net | 8 | |||||
Goodwill | 51 | |||||
Restricted investments | 0 | 0 | 0 | |||
Investment in subsidiaries, net | 2,346 | 2,205 | 1,377 | |||
Derivative asset | 226 | 11 | ||||
Deferred income taxes | 23 | 329 | ||||
Other assets | 47 | 36 | 43 | |||
Total Assets | 3,638 | 3,717 | 2,342 | |||
Current liabilities: | ||||||
Medical claims and benefits payable | 0 | 0 | 0 | |||
Amounts due government agencies | 0 | 0 | 0 | |||
Accounts payable and accrued liabilities | 128 | 157 | 107 | |||
Deferred revenue | 0 | 0 | 0 | |||
Income taxes payable | (13) | |||||
Current portion of long-term debt | 1 | 449 | ||||
Derivative liability | 374 | |||||
Total current liabilities | 129 | 980 | 94 | |||
Long-term debt | 1,626 | 1,160 | 887 | |||
Deferred income taxes | (3) | |||||
Other long-term liabilities | 19 | 20 | 22 | |||
Derivative liability | 226 | 329 | ||||
Total liabilities | 1,997 | 2,160 | 1,332 | |||
Total stockholders' equity | 1,641 | 1,557 | 1,010 | |||
Total liabilities and stockholders' equity | 3,638 | 3,717 | 2,342 | |||
Other Guarantors | ||||||
Current assets: | ||||||
Cash and cash equivalents | 42 | |||||
Investments | 0 | |||||
Receivables | 79 | |||||
Income taxes refundable | 3 | |||||
Due from (to) affiliates | (4) | |||||
Prepaid expenses and other current assets | 11 | |||||
Derivative asset | 0 | |||||
Total current assets | 131 | |||||
Property, equipment, and capitalized software, net | 52 | |||||
Deferred contract costs | 81 | |||||
Goodwill and intangible assets, net | 246 | |||||
Restricted investments | 0 | |||||
Investment in subsidiaries, net | 1 | |||||
Deferred income taxes | (35) | |||||
Other assets | 2 | |||||
Total Assets | 478 | |||||
Current liabilities: | ||||||
Medical claims and benefits payable | 3 | |||||
Amounts due government agencies | 1 | |||||
Accounts payable and accrued liabilities | 35 | |||||
Deferred revenue | 34 | |||||
Current portion of long-term debt | 0 | |||||
Derivative liability | 0 | |||||
Total current liabilities | 73 | |||||
Long-term debt | 0 | |||||
Other long-term liabilities | 2 | |||||
Total liabilities | 75 | |||||
Total stockholders' equity | 403 | |||||
Total liabilities and stockholders' equity | 478 | |||||
Other Guarantors | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 29 | 42 | 31 | 15 | 9 | 37 |
Investments | 0 | 0 | 0 | |||
Receivables | 87 | 79 | 35 | |||
Income taxes refundable | 3 | 3 | ||||
Due from (to) affiliates | (9) | (4) | (1) | |||
Prepaid expenses and other current assets | 13 | 11 | 25 | |||
Derivative asset | 0 | |||||
Total current assets | 123 | 131 | 74 | |||
Property, equipment, and capitalized software, net | 67 | 52 | 25 | |||
Deferred contract costs | 80 | 81 | 54 | |||
Goodwill and intangible assets, net | 246 | 75 | ||||
Intangible assets, net | 23 | |||||
Goodwill | 228 | |||||
Restricted investments | 0 | 0 | 5 | |||
Investment in subsidiaries, net | 1 | 1 | 0 | |||
Derivative asset | 0 | 0 | ||||
Deferred income taxes | (35) | (17) | ||||
Other assets | 3 | 2 | 0 | |||
Total Assets | 525 | 478 | 216 | |||
Current liabilities: | ||||||
Medical claims and benefits payable | 0 | 3 | 0 | |||
Amounts due government agencies | 0 | 1 | 2 | |||
Accounts payable and accrued liabilities | 31 | 35 | 12 | |||
Deferred revenue | 38 | 34 | 31 | |||
Income taxes payable | 7 | |||||
Current portion of long-term debt | 0 | 0 | ||||
Derivative liability | 0 | |||||
Total current liabilities | 69 | 73 | 52 | |||
Long-term debt | 0 | 0 | 0 | |||
Deferred income taxes | 40 | |||||
Other long-term liabilities | 2 | 2 | 1 | |||
Derivative liability | 0 | 0 | ||||
Total liabilities | 111 | 75 | 53 | |||
Total stockholders' equity | 414 | 403 | 163 | |||
Total liabilities and stockholders' equity | 525 | 478 | 216 | |||
Non-Guarantors | ||||||
Current assets: | ||||||
Cash and cash equivalents | 1,927 | |||||
Investments | 1,549 | |||||
Receivables | 518 | |||||
Income taxes refundable | 3 | |||||
Due from (to) affiliates | (82) | |||||
Prepaid expenses and other current assets | 136 | |||||
Derivative asset | 0 | |||||
Total current assets | 4,051 | |||||
Property, equipment, and capitalized software, net | 74 | |||||
Deferred contract costs | 0 | |||||
Goodwill and intangible assets, net | 334 | |||||
Restricted investments | 109 | |||||
Investment in subsidiaries, net | 0 | |||||
Deferred income taxes | 30 | |||||
Other assets | 6 | |||||
Total Assets | 4,604 | |||||
Current liabilities: | ||||||
Medical claims and benefits payable | 1,682 | |||||
Amounts due government agencies | 728 | |||||
Accounts payable and accrued liabilities | 170 | |||||
Deferred revenue | 189 | |||||
Current portion of long-term debt | 0 | |||||
Derivative liability | 0 | |||||
Total current liabilities | 2,769 | |||||
Long-term debt | 16 | |||||
Other long-term liabilities | 16 | |||||
Total liabilities | 2,801 | |||||
Total stockholders' equity | 1,803 | |||||
Total liabilities and stockholders' equity | 4,604 | |||||
Non-Guarantors | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 2,102 | 1,927 | $ 1,518 | 1,449 | $ 827 | $ 720 |
Investments | 1,716 | 1,549 | 893 | |||
Receivables | 922 | 518 | 561 | |||
Income taxes refundable | (17) | 3 | ||||
Due from (to) affiliates | (90) | (82) | (17) | |||
Prepaid expenses and other current assets | 134 | 136 | 11 | |||
Derivative asset | 0 | |||||
Total current assets | 4,767 | 4,051 | 2,897 | |||
Property, equipment, and capitalized software, net | 76 | 74 | 51 | |||
Deferred contract costs | 0 | 0 | 0 | |||
Goodwill and intangible assets, net | 334 | 221 | ||||
Intangible assets, net | 115 | |||||
Goodwill | 332 | |||||
Restricted investments | 107 | 109 | 97 | |||
Investment in subsidiaries, net | 0 | 0 | 0 | |||
Derivative asset | 0 | 0 | ||||
Deferred income taxes | 30 | 21 | ||||
Other assets | 5 | 6 | 5 | |||
Total Assets | 5,402 | 4,604 | 3,292 | |||
Current liabilities: | ||||||
Medical claims and benefits payable | 1,766 | 1,682 | 1,201 | |||
Amounts due government agencies | 1,238 | 728 | 525 | |||
Accounts payable and accrued liabilities | 378 | 170 | 143 | |||
Deferred revenue | 66 | 189 | 165 | |||
Income taxes payable | 15 | |||||
Current portion of long-term debt | 0 | 0 | ||||
Derivative liability | 0 | |||||
Total current liabilities | 3,448 | 2,769 | 2,049 | |||
Long-term debt | 16 | 16 | 16 | |||
Deferred income taxes | (12) | |||||
Other long-term liabilities | 17 | 16 | 13 | |||
Derivative liability | 0 | 0 | ||||
Total liabilities | 3,469 | 2,801 | 2,078 | |||
Total stockholders' equity | 1,933 | 1,803 | 1,214 | |||
Total liabilities and stockholders' equity | $ 5,402 | $ 4,604 | $ 3,292 |
Supplemental Condensed Conso116
Supplemental Condensed Consolidating Financial Information - Condensed Consolidating Income Statements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||||
Revenue: | ||||||||||||||||||||
Total revenue | $ 4,359 | [1] | $ 3,525 | [1] | $ 8,702 | [1] | $ 6,696 | [1] | $ 14,178 | $ 9,667 | [2] | $ 6,589 | [2] | |||||||
Operating expenses: | ||||||||||||||||||||
Medical care costs | 3,594 | 2,929 | 7,182 | 5,565 | 11,794 | 8,076 | 5,380 | |||||||||||||
Cost of service revenue | 116 | 33 | 243 | 69 | 193 | 157 | 161 | |||||||||||||
General and administrative expenses | 351 | 287 | 691 | 543 | 1,146 | 765 | 666 | |||||||||||||
Premium tax expenses | 109 | 95 | 218 | 190 | 397 | 294 | 172 | |||||||||||||
Health insurer fee expenses | 50 | 40 | 108 | 81 | 157 | 89 | 0 | |||||||||||||
Depreciation and amortization | 34 | 25 | 66 | 50 | 104 | 93 | 73 | |||||||||||||
Total operating expenses | 4,254 | 3,409 | 8,508 | 6,498 | 13,791 | 9,474 | 6,452 | |||||||||||||
Operating income | 105 | $ 76 | $ 113 | 116 | $ 82 | $ 97 | $ 40 | $ 32 | $ 24 | 194 | 198 | 387 | 193 | 137 | ||||||
Interest expense | 25 | 15 | 50 | 30 | 66 | 57 | 52 | |||||||||||||
Other expenses, net | (25) | (15) | (50) | (30) | 65 | 58 | 56 | |||||||||||||
Income before income tax expense | 80 | 101 | 144 | 168 | 322 | 135 | 81 | |||||||||||||
Income tax expense | 47 | 62 | 87 | 101 | 179 | 73 | 36 | |||||||||||||
Net (loss) income before equity in earnings of subsidiaries | 33 | 39 | 57 | 67 | 143 | 62 | 45 | |||||||||||||
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Income from continuing operations | 30 | 46 | 39 | 28 | 34 | 16 | 8 | 4 | 143 | 62 | 45 | |||||||||
Income from discontinued operations | 0 | 0 | 8 | |||||||||||||||||
Net income | 33 | $ 30 | $ 46 | 39 | $ 28 | $ 34 | $ 16 | $ 8 | $ 4 | 57 | 67 | 143 | 62 | 53 | ||||||
Eliminations | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Total revenue | (274) | (236) | (537) | (466) | (977) | (733) | (609) | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Medical care costs | (14) | (14) | (28) | (25) | (50) | (31) | (7) | |||||||||||||
Cost of service revenue | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
General and administrative expenses | (260) | (222) | (509) | (441) | (927) | (702) | (602) | |||||||||||||
Premium tax expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Health insurer fee expenses | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
Depreciation and amortization | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Total operating expenses | (274) | (236) | (537) | (466) | (977) | (733) | (609) | |||||||||||||
Operating income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Interest expense | 0 | 0 | 0 | 0 | ||||||||||||||||
Other expenses, net | 0 | 0 | 0 | |||||||||||||||||
Income before income tax expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Income tax expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Net (loss) income before equity in earnings of subsidiaries | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Equity in net earnings of subsidiaries | (46) | (43) | (79) | (91) | (190) | (89) | (83) | |||||||||||||
Income from continuing operations | (83) | |||||||||||||||||||
Income from discontinued operations | 0 | |||||||||||||||||||
Net income | (46) | (43) | (79) | (91) | (190) | (89) | (83) | |||||||||||||
Parent Guarantor | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Total revenue | 931 | 706 | 602 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Medical care costs | 46 | |||||||||||||||||||
General and administrative expenses | 797 | 583 | 504 | |||||||||||||||||
Depreciation and amortization | 82 | 73 | 51 | |||||||||||||||||
Total operating expenses | 934 | 702 | 593 | |||||||||||||||||
Operating income | (3) | 4 | 9 | |||||||||||||||||
Income tax expense | (21) | (27) | (16) | |||||||||||||||||
Equity in net earnings of subsidiaries | 89 | |||||||||||||||||||
Net income | 143 | 62 | 53 | |||||||||||||||||
Parent Guarantor | Reportable Legal Entities | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Total revenue | 261 | 224 | 512 | 443 | 931 | 706 | 602 | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Medical care costs | 19 | 14 | 31 | 26 | 55 | 46 | 38 | |||||||||||||
Cost of service revenue | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
General and administrative expenses | 219 | 190 | 436 | 377 | 797 | 583 | 504 | |||||||||||||
Premium tax expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Health insurer fee expenses | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
Depreciation and amortization | 23 | 21 | 45 | 41 | 82 | 73 | 51 | |||||||||||||
Total operating expenses | 261 | 225 | 512 | 444 | 934 | 702 | 593 | |||||||||||||
Operating income | 0 | (1) | 0 | (1) | (3) | 4 | 9 | |||||||||||||
Interest expense | 25 | 15 | 50 | 30 | ||||||||||||||||
Other expenses, net | 66 | 58 | 55 | |||||||||||||||||
Income before income tax expense | (25) | (16) | (50) | (31) | (69) | (54) | (46) | |||||||||||||
Income tax expense | (12) | (12) | (28) | (7) | (21) | (27) | (16) | |||||||||||||
Net (loss) income before equity in earnings of subsidiaries | (13) | (4) | (22) | (24) | (48) | (27) | (30) | |||||||||||||
Equity in net earnings of subsidiaries | 46 | 43 | 79 | 91 | 191 | 89 | 83 | |||||||||||||
Income from continuing operations | 53 | |||||||||||||||||||
Income from discontinued operations | 0 | |||||||||||||||||||
Net income | 33 | 39 | 57 | 67 | 143 | 62 | 53 | |||||||||||||
Other Guarantors | Reportable Legal Entities | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Total revenue | 137 | 59 | 277 | 123 | 293 | 240 | 211 | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Medical care costs | 11 | 9 | 22 | 17 | 36 | 27 | 21 | |||||||||||||
Cost of service revenue | 106 | 33 | 221 | 69 | 184 | 157 | 161 | |||||||||||||
General and administrative expenses | 16 | 7 | 23 | 15 | 41 | 29 | 26 | |||||||||||||
Premium tax expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Health insurer fee expenses | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
Depreciation and amortization | 3 | 0 | 6 | 1 | 4 | 5 | 7 | |||||||||||||
Total operating expenses | 136 | 49 | 272 | 102 | 265 | 218 | 215 | |||||||||||||
Operating income | 1 | 10 | 5 | 21 | 28 | 22 | (4) | |||||||||||||
Interest expense | 0 | 0 | 0 | 0 | ||||||||||||||||
Other expenses, net | 0 | 0 | 0 | |||||||||||||||||
Income before income tax expense | 1 | 10 | 5 | 21 | 28 | 22 | (4) | |||||||||||||
Income tax expense | 0 | 4 | 2 | 8 | 9 | 8 | (1) | |||||||||||||
Net (loss) income before equity in earnings of subsidiaries | 1 | 6 | 3 | 13 | 19 | 14 | (3) | |||||||||||||
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 | (1) | 0 | 0 | |||||||||||||
Income from continuing operations | (3) | |||||||||||||||||||
Income from discontinued operations | 0 | |||||||||||||||||||
Net income | 1 | 6 | 3 | 13 | 18 | 14 | (3) | |||||||||||||
Non-Guarantors | Reportable Legal Entities | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Total revenue | 4,235 | 3,478 | 8,450 | 6,596 | 13,931 | 9,454 | 6,385 | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Medical care costs | 3,578 | 2,920 | 7,157 | 5,547 | 11,753 | 8,034 | 5,328 | |||||||||||||
Cost of service revenue | 10 | 0 | 22 | 0 | 9 | 0 | 0 | |||||||||||||
General and administrative expenses | 376 | 312 | 741 | 592 | 1,235 | 855 | 738 | |||||||||||||
Premium tax expenses | 109 | 95 | 218 | 190 | 397 | 294 | 172 | |||||||||||||
Health insurer fee expenses | 50 | 40 | 108 | 81 | 157 | 89 | ||||||||||||||
Depreciation and amortization | 8 | 4 | 15 | 8 | 18 | 15 | 15 | |||||||||||||
Total operating expenses | 4,131 | 3,371 | 8,261 | 6,418 | 13,569 | 9,287 | 6,253 | |||||||||||||
Operating income | 104 | 107 | 189 | 178 | 362 | 167 | 132 | |||||||||||||
Interest expense | 0 | 0 | 0 | 0 | ||||||||||||||||
Other expenses, net | (1) | 0 | 1 | |||||||||||||||||
Income before income tax expense | 104 | 107 | 189 | 178 | 363 | 167 | 131 | |||||||||||||
Income tax expense | 59 | 70 | 113 | 100 | 191 | 92 | 53 | |||||||||||||
Net (loss) income before equity in earnings of subsidiaries | 45 | 37 | 76 | 78 | 172 | 75 | 78 | |||||||||||||
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Income from continuing operations | 78 | |||||||||||||||||||
Income from discontinued operations | 8 | |||||||||||||||||||
Net income | $ 45 | $ 37 | $ 76 | $ 78 | $ 172 | $ 75 | $ 86 | |||||||||||||
[1] | Total revenue consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. | |||||||||||||||||||
[2] | Total revenues consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments. |
Supplemental Condensed Conso117
Supplemental Condensed Consolidating Financial Information - Condensed Consolidating Statement of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Statement of Income Captions [Line Items] | ||||||||||||||
Net income | $ 33 | $ 30 | $ 46 | $ 39 | $ 28 | $ 34 | $ 16 | $ 8 | $ 4 | $ 57 | $ 67 | $ 143 | $ 62 | $ 53 |
Other comprehensive income, net of tax | 2 | (2) | 8 | (1) | (3) | 0 | (1) | |||||||
Comprehensive income | 35 | 37 | 65 | 66 | 140 | 62 | 52 | |||||||
Eliminations | ||||||||||||||
Condensed Statement of Income Captions [Line Items] | ||||||||||||||
Net income | (46) | (43) | (79) | (91) | (190) | (89) | (83) | |||||||
Other comprehensive income, net of tax | (2) | 2 | (7) | 1 | 3 | 0 | 0 | |||||||
Comprehensive income | (48) | (41) | (86) | (90) | (187) | (89) | (83) | |||||||
Parent Guarantor | ||||||||||||||
Condensed Statement of Income Captions [Line Items] | ||||||||||||||
Net income | 143 | 62 | 53 | |||||||||||
Other comprehensive income, net of tax | (3) | 0 | (1) | |||||||||||
Comprehensive income | 140 | 62 | 52 | |||||||||||
Parent Guarantor | Reportable Legal Entities | ||||||||||||||
Condensed Statement of Income Captions [Line Items] | ||||||||||||||
Net income | 33 | 39 | 57 | 67 | 143 | 62 | 53 | |||||||
Other comprehensive income, net of tax | 2 | (2) | 8 | (1) | (3) | 0 | (1) | |||||||
Comprehensive income | 35 | 37 | 65 | 66 | 140 | 62 | 52 | |||||||
Other Guarantors | Reportable Legal Entities | ||||||||||||||
Condensed Statement of Income Captions [Line Items] | ||||||||||||||
Net income | 1 | 6 | 3 | 13 | 18 | 14 | (3) | |||||||
Other comprehensive income, net of tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Comprehensive income | 1 | 6 | 3 | 13 | 18 | 14 | (3) | |||||||
Non-Guarantors | Reportable Legal Entities | ||||||||||||||
Condensed Statement of Income Captions [Line Items] | ||||||||||||||
Net income | 45 | 37 | 76 | 78 | 172 | 75 | 86 | |||||||
Other comprehensive income, net of tax | 2 | (2) | 7 | (1) | (3) | 0 | 0 | |||||||
Comprehensive income | $ 47 | $ 35 | $ 83 | $ 77 | $ 169 | $ 75 | $ 86 |
Supplemental Condensed Conso118
Supplemental Condensed Consolidating Financial Information - Condensed Consolidating Statement of Cash Flow (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities: | ||||||
Net cash provided by operating activities | $ 278 | $ 648 | $ 1,125 | $ 1,060 | $ 190 | |
Investing activities: | ||||||
Purchases of investments | (974) | (993) | (1,923) | (953) | (770) | |
Proceeds from sales and maturities of investments | 812 | 541 | 1,126 | 633 | 400 | |
Purchases of equipment | (102) | (66) | (132) | (115) | (98) | |
Change in restricted investments | 5 | (14) | (6) | (34) | (19) | |
Net cash paid in business combinations | (8) | (8) | (450) | (44) | (62) | |
Capital contributions to subsidiaries | 0 | 0 | 0 | 0 | 0 | |
Dividends received from subsidiaries | 0 | 0 | 0 | 0 | ||
Change in amounts due to/from affiliates | 0 | 0 | 0 | 0 | 0 | |
Other, net | (6) | (17) | (35) | (23) | 6 | |
Net cash used in investing activities | (273) | (557) | (1,420) | (536) | (543) | |
Financing activities: | ||||||
Proceeds from senior notes offerings, net of issuance costs | 689 | 123 | 538 | |||
Proceeds from common stock offering, net of issuance costs | $ 373 | 0 | 373 | 373 | 0 | 0 |
Proceeds from employee stock plans | 10 | 8 | 18 | 14 | 9 | |
Principal payments on convertible senior notes | 0 | (10) | 0 | |||
Proceeds from sale-leaseback transactions | 0 | 0 | 159 | |||
Purchase of call option | 0 | 0 | (149) | |||
Proceeds from issuance of warrants | 0 | 0 | 75 | |||
Contingent consideration liabilities settled | 0 | (50) | 0 | |||
Treasury stock purchases | 0 | 0 | (53) | |||
Principal payments on term loan | 0 | 0 | (48) | |||
Repayment of amount borrowed under credit facility | 0 | 0 | (40) | |||
Other, net | 1 | 3 | 5 | 2 | 2 | |
Net cash provided by financing activities | 11 | 384 | 1,085 | 79 | 493 | |
Net increase in cash and cash equivalents | 16 | 475 | 790 | 603 | 140 | |
Cash and cash equivalents at beginning of period | 2,329 | 1,539 | 1,539 | 936 | 796 | |
Cash and cash equivalents at end of period | 2,014 | 2,345 | 2,014 | 2,329 | 1,539 | 936 |
Eliminations | ||||||
Operating activities: | ||||||
Net cash provided by operating activities | 0 | 0 | 0 | 0 | 0 | |
Investing activities: | ||||||
Purchases of investments | 0 | 0 | 0 | 0 | 0 | |
Proceeds from sales and maturities of investments | 0 | 0 | 0 | 0 | 0 | |
Purchases of equipment | 0 | 0 | 0 | 0 | 0 | |
Change in restricted investments | 0 | 0 | 0 | 0 | 0 | |
Net cash paid in business combinations | 0 | 0 | 0 | 0 | 0 | |
Capital contributions to subsidiaries | 0 | 0 | 0 | 0 | 0 | |
Dividends received from subsidiaries | 0 | 0 | 0 | |||
Change in amounts due to/from affiliates | 0 | 0 | 0 | 0 | 0 | |
Other, net | 0 | 0 | 0 | 0 | 0 | |
Net cash used in investing activities | 0 | 0 | 0 | 0 | 0 | |
Financing activities: | ||||||
Proceeds from senior notes offerings, net of issuance costs | 0 | 0 | 0 | |||
Proceeds from common stock offering, net of issuance costs | 0 | 0 | ||||
Proceeds from employee stock plans | 0 | 0 | 0 | 0 | 0 | |
Principal payments on convertible senior notes | 0 | |||||
Proceeds from sale-leaseback transactions | 0 | |||||
Purchase of call option | 0 | |||||
Proceeds from issuance of warrants | 0 | |||||
Contingent consideration liabilities settled | 0 | |||||
Treasury stock purchases | 0 | |||||
Principal payments on term loan | 0 | |||||
Repayment of amount borrowed under credit facility | 0 | |||||
Other, net | 0 | 0 | 0 | 0 | 0 | |
Net cash provided by financing activities | 0 | 0 | 0 | 0 | 0 | |
Net increase in cash and cash equivalents | 0 | 0 | 0 | 0 | 0 | |
Cash and cash equivalents at beginning of period | 0 | 0 | 0 | 0 | 0 | |
Cash and cash equivalents at end of period | 0 | 0 | 0 | 0 | 0 | 0 |
Parent Guarantor | ||||||
Operating activities: | ||||||
Net cash provided by operating activities | 113 | 74 | 63 | |||
Investing activities: | ||||||
Purchases of investments | (244) | |||||
Proceeds from sales and maturities of investments | 118 | |||||
Purchases of equipment | (91) | |||||
Dividends received from subsidiaries | 142 | 0 | 24 | |||
Net cash used in investing activities | (913) | (228) | (496) | |||
Financing activities: | ||||||
Proceeds from senior notes offerings, net of issuance costs | 689 | 123 | 538 | |||
Proceeds from common stock offering, net of issuance costs | 373 | 0 | 0 | |||
Proceeds from employee stock plans | 18 | 14 | 9 | |||
Principal payments on convertible senior notes | 0 | (10) | 0 | |||
Proceeds from sale-leaseback transactions | 0 | 0 | 159 | |||
Purchase of call option | 0 | 0 | (149) | |||
Proceeds from issuance of warrants | 0 | 0 | 75 | |||
Treasury stock purchases | 0 | 0 | (53) | |||
Principal payments on term loan | 0 | 0 | (47) | |||
Repayment of amount borrowed under credit facility | 0 | 0 | (40) | |||
Other, net | 5 | 2 | 2 | |||
Net cash provided by financing activities | 1,085 | 129 | 494 | |||
Net increase in cash and cash equivalents | 285 | (25) | 61 | |||
Cash and cash equivalents at beginning of period | 360 | 75 | 75 | 100 | 39 | |
Cash and cash equivalents at end of period | 360 | 75 | 100 | |||
Parent Guarantor | Reportable Legal Entities | ||||||
Operating activities: | ||||||
Net cash provided by operating activities | (21) | 48 | 113 | 74 | 63 | |
Investing activities: | ||||||
Purchases of investments | (67) | (10) | (244) | (129) | (363) | |
Proceeds from sales and maturities of investments | 67 | 65 | 118 | 263 | 98 | |
Purchases of equipment | (73) | (46) | (91) | (94) | (77) | |
Change in restricted investments | 0 | 0 | 0 | 0 | 0 | |
Net cash paid in business combinations | 0 | 0 | 0 | 0 | 0 | |
Capital contributions to subsidiaries | (106) | (77) | (770) | (292) | (166) | |
Dividends received from subsidiaries | 50 | 42 | 142 | 24 | ||
Change in amounts due to/from affiliates | (13) | (15) | (68) | 16 | (6) | |
Other, net | 5 | (1) | 0 | 8 | (6) | |
Net cash used in investing activities | (137) | (42) | (913) | (228) | (496) | |
Financing activities: | ||||||
Proceeds from senior notes offerings, net of issuance costs | 689 | 123 | 538 | |||
Proceeds from common stock offering, net of issuance costs | 373 | 373 | ||||
Proceeds from employee stock plans | 10 | 8 | 18 | 14 | 9 | |
Principal payments on convertible senior notes | (10) | |||||
Proceeds from sale-leaseback transactions | 159 | |||||
Purchase of call option | (149) | |||||
Proceeds from issuance of warrants | 75 | |||||
Contingent consideration liabilities settled | 0 | |||||
Treasury stock purchases | (53) | |||||
Principal payments on term loan | (47) | |||||
Repayment of amount borrowed under credit facility | (40) | |||||
Other, net | 2 | 3 | 5 | 2 | 2 | |
Net cash provided by financing activities | 12 | 384 | 1,085 | 129 | 494 | |
Net increase in cash and cash equivalents | (146) | 390 | 285 | (25) | 61 | |
Cash and cash equivalents at beginning of period | 360 | 75 | 75 | 100 | 39 | |
Cash and cash equivalents at end of period | 465 | 214 | 465 | 360 | 75 | 100 |
Other Guarantors | ||||||
Financing activities: | ||||||
Cash and cash equivalents at beginning of period | 42 | |||||
Cash and cash equivalents at end of period | 42 | |||||
Other Guarantors | Reportable Legal Entities | ||||||
Operating activities: | ||||||
Net cash provided by operating activities | 16 | 51 | 58 | 29 | (29) | |
Investing activities: | ||||||
Purchases of investments | 0 | 0 | 0 | 0 | 0 | |
Proceeds from sales and maturities of investments | 0 | 0 | 0 | 0 | 0 | |
Purchases of equipment | (22) | (9) | (23) | (12) | (8) | |
Change in restricted investments | 0 | 0 | 5 | 5 | (10) | |
Net cash paid in business combinations | (7) | 0 | (214) | 0 | 0 | |
Capital contributions to subsidiaries | 8 | 4 | 238 | 14 | 10 | |
Dividends received from subsidiaries | 0 | (17) | (17) | 0 | ||
Change in amounts due to/from affiliates | 5 | 3 | 15 | (1) | (4) | |
Other, net | (12) | (16) | (35) | (29) | 13 | |
Net cash used in investing activities | (28) | (35) | (31) | (23) | 1 | |
Financing activities: | ||||||
Proceeds from senior notes offerings, net of issuance costs | 0 | 0 | 0 | |||
Proceeds from common stock offering, net of issuance costs | 0 | 0 | ||||
Proceeds from employee stock plans | 0 | 0 | 0 | 0 | 0 | |
Principal payments on convertible senior notes | 0 | |||||
Proceeds from sale-leaseback transactions | 0 | |||||
Purchase of call option | 0 | |||||
Proceeds from issuance of warrants | 0 | |||||
Contingent consideration liabilities settled | 0 | |||||
Treasury stock purchases | 0 | |||||
Principal payments on term loan | 0 | |||||
Repayment of amount borrowed under credit facility | 0 | |||||
Other, net | (1) | 0 | 0 | 0 | 0 | |
Net cash provided by financing activities | (1) | 0 | 0 | 0 | 0 | |
Net increase in cash and cash equivalents | (13) | 16 | 27 | 6 | (28) | |
Cash and cash equivalents at beginning of period | 42 | 15 | 15 | 9 | 37 | |
Cash and cash equivalents at end of period | 31 | 29 | 31 | 42 | 15 | 9 |
Non-Guarantors | ||||||
Financing activities: | ||||||
Cash and cash equivalents at beginning of period | 1,927 | |||||
Cash and cash equivalents at end of period | 1,927 | |||||
Non-Guarantors | Reportable Legal Entities | ||||||
Operating activities: | ||||||
Net cash provided by operating activities | 283 | 549 | 954 | 957 | 156 | |
Investing activities: | ||||||
Purchases of investments | (907) | (983) | (1,679) | (824) | (407) | |
Proceeds from sales and maturities of investments | 745 | 476 | 1,008 | 370 | 302 | |
Purchases of equipment | (7) | (11) | (18) | (9) | (13) | |
Change in restricted investments | 5 | (14) | (11) | (39) | (9) | |
Net cash paid in business combinations | (1) | (8) | (236) | (44) | (62) | |
Capital contributions to subsidiaries | 98 | 73 | 532 | 278 | 156 | |
Dividends received from subsidiaries | (50) | (25) | (125) | (24) | ||
Change in amounts due to/from affiliates | 8 | 12 | 53 | (15) | 10 | |
Other, net | 1 | 0 | 0 | (2) | (1) | |
Net cash used in investing activities | (108) | (480) | (476) | (285) | (48) | |
Financing activities: | ||||||
Proceeds from senior notes offerings, net of issuance costs | 0 | 0 | 0 | |||
Proceeds from common stock offering, net of issuance costs | 0 | 0 | ||||
Proceeds from employee stock plans | 0 | 0 | 0 | 0 | 0 | |
Principal payments on convertible senior notes | 0 | |||||
Proceeds from sale-leaseback transactions | 0 | |||||
Purchase of call option | 0 | |||||
Proceeds from issuance of warrants | 0 | |||||
Contingent consideration liabilities settled | (50) | |||||
Treasury stock purchases | 0 | |||||
Principal payments on term loan | (1) | |||||
Repayment of amount borrowed under credit facility | 0 | |||||
Other, net | 0 | 0 | 0 | 0 | 0 | |
Net cash provided by financing activities | 0 | 0 | 0 | (50) | (1) | |
Net increase in cash and cash equivalents | 175 | 69 | 478 | 622 | 107 | |
Cash and cash equivalents at beginning of period | 1,927 | 1,449 | 1,449 | 827 | 720 | |
Cash and cash equivalents at end of period | $ 1,518 | $ 2,102 | $ 1,518 | $ 1,927 | $ 1,449 | $ 827 |