Molina Medicaid Solutions - DHHR

e10vkExcluding the Including theEffect of the Effect of the Effect of theAccounting Accounting AccountingStandard Standard Standard(In thousands)Operating income $ 58,786 $ (1,393) $ 57,393Interest expense (9,344) (4,433) (13,777)Income before income taxes 49,442 (5,826) 43,616Provision for income taxes 14,961 (2,213) 12,748Net income $ 34,481 $ (3,613) $ 30,868Net income per share:Basic $ 1.33 $ (0.14) $ 1.19Diluted $ 1.33 $ (0.14) $ 1.19Year Ended December 31, 2008Excluding the Including theEffect of the Effect of the Effect of theAccounting Accounting AccountingStandard Standard Standard(In thousands)Operating income $ 112,605 $ — $ 112,605Interest expense (8,714) (4,517) (13,231)Income before income taxes 103,891 (4,517) 99,374Provision for income taxes 41,493 (1,717) 39,776Net income $ 62,398 $ (2,800) $ 59,598Net income per share:Basic $ 2.25 $ (0.10) $ 2.15Diluted $ 2.25 $ (0.10) $ 2.1567Table of ContentsMOLINA HEALTHCARE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Year Ended December 31, 2007Excluding the Including theEffect of the Effect of the Effect of theAccounting Accounting AccountingStandard Standard Standard(In thousands)Operating income $ 98,327 $ — $ 98,327Interest expense (4,631) (974) (5,605)Income before income taxes 93,696 (974) 92,722Provision for income taxes 35,366 (370) 34,996Net income $ 58,330 $ (604) $ 57,726Net income per share:Basic $ 2.06 $ (0.02) $ 2.04Diluted $ 2.05 $ (0.02) $ 2.03The following tables illustrate the impact of adopting this standard on our consolidated balance sheets.December 31, 2009Excluding the Including theEffect of the Effect of the Effect of theAccounting Accounting AccountingStandard Standard Standard(In thousands)Noncurrent assets:Other assets $ 20,651 $ (663) $ 19,988Noncurrent liabilities:Long-term debt 187,000 (28,100) 158,900Deferred income taxes 3,352 9,154 12,506Stockholders’ equity:Additional paid-in capital 104,603 25,299 129,902Retained earnings 421,639 (7,017) 414,622December 31, 2008Excluding the Including theEffect of the Effect of the Effect of theAccounting Accounting AccountingStandard Standard Standard(In thousands)Noncurrent assets:Other assets $ 34,321 $ (1,098) $ 33,223Deferred income taxes 20 (20) —Noncurrent liabilities:Long-term debt 200,000 (35,127) 164,873Deferred income taxes — 12,911 12,911Stockholders’ equity:Additional paid-in capital 146,179 24,502 170,681Retained earnings 387,158 (3,404) 383,754There was no impact resulting from this accounting change on our cash flows from operating activities, investing activities, or financing activities as reflected in theconsolidated statements of cash flows.68Table of ContentsMOLINA HEALTHCARE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)2. Significant Accounting PoliciesPremium RevenuePremium revenue is fixed in advance of the periods covered and, except as described below, is not generally subject to significant accounting estimates. For the yearended December 31, 2009, we received approximately 92% of our premium revenue as a fixed amount per member per month, or PMPM, pursuant to our contracts with stateMedicaid agencies, Medicare and other managed care organizations for which we operate as a subcontractor. These premium revenues are recognized in the month thatmembers are entitled to receive health care services. The state Medicaid programs and the federal Medicare program periodically adjust premium rates.The following table summarizes premium revenue by health plan for the periods indicated:Year Ended December 31,2009 2008 2007(In thousands)http://sec.gov/Archives/edgar/data/1179929/000095012310025132/a55407e10vk.htm[1/6/2012 11:12:35 AM]