Molina Medicaid Solutions - DHHR

e10vkthese regulations, they may not have the financial flexibility to transfer funds to us. The net assets in these subsidiaries (after intercompany eliminations) which may not betransferable to us in the form of loans, advances or cash dividends was $368.7 million at December 31, 2009, and $355.0 million at December 31, 2008. The NationalAssociation of Insurance Commissioners, or NAIC, adopted rules effective December 31, 1998, which, if implemented by the states, set new minimum capitalizationrequirements for insurance companies, HMOs and other entities bearing risk for health care coverage. The requirements take the form of risk-based capital (RBC) rules.Michigan, Missouri, New Mexico, Ohio, Texas, Washington, and Utah have adopted these rules, which may vary from state to state. California and Florida have not yetadopted 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, 2009, our health plans had aggregate statutory capital and surplus of approximately $377.7 million compared with the required minimum aggregatestatutory capital and surplus of approximately $257.1 million. All of our HMOs were in compliance with the minimum capital requirements at December 31, 2009. We have theability and commitment to provide additional capital to each of our health plans when necessary to ensure that statutory capital and surplus continue to meet regulatoryrequirements.19. Quarterly Results of Operations (Unaudited)The following is a summary of the quarterly results of operations for the years ended December 31, 2009 and 2008.99Table of ContentsMOLINA HEALTHCARE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)For The Quarter EndedMarch 31, June 30, September 30, December 31,2009 2009 2009 2009(In thousands)Premium revenue $ 857,484 $ 925,507 $ 914,805 $ 962,411Operating income (loss) 24,115 20,726 16,274 (3,722)Income (loss) before income taxes 20,700 17,503 12,995 (7,582)Net income (loss) 12,211 14,565 8,564 (4,472)Net income (loss) per share(1),(2):Basic $ 0.46 $ 0.56 $ 0.34 $ (0.18)Diluted $ 0.46 $ 0.56 $ 0.33 $ (0.18)For The Quarter EndedMarch 31, June 30, September 30, December 31,2008(1) 2008(1) 2008(1) 2008(1)(In thousands)Premium revenue $ 729,638 $ 761,153 $ 791,554 $ 808,895Operating income 24,451 30,258 30,429 27,467Income before income taxes(3) 21,083 26,833 27,309 24,149Net income(3) 12,475 15,823 16,480 14,820Net income per share(1),(3):Basic $ 0.44 $ 0.57 $ 0.60 $ 0.55Diluted $ 0.44 $ 0.56 $ 0.60 $ 0.55(1) Potentially dilutive shares issuable pursuant to our 2007 offering of convertible senior notes were not included in the computation of diluted net income per share becauseto do so would have been anti-dilutive for the years ended December 31, 2009 and 2008.(2) For the quarter ended December 31, 2009, no potentially dilutive options or nonvested stock were included in the computation of our diluted loss per share because to doso would have been anti-dilutive for that period.(3) The Company’s consolidated statement of income for the year ended December 31, 2008 has been recast to reflect the adoption of ASC Subtopic 470-20, Debt withConversion and Other Options (see Note 1).100Table of ContentsMOLINA HEALTHCARE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)20. Condensed Financial Information of RegistrantFollowing are our parent company only condensed balance sheets as of December 31, 2009 and 2008, and our condensed statements of income and condensed statementsof cash flows for each of the three years in the period ended December 31, 2009.Condensed Balance SheetsDecember 31,2009 2008(1)(In thousands except per- sharedata)ASSETSCurrent assets:Cash and cash equivalents $ 26,040 $ 42,776Investments 3,002 9,745Income tax receivable — 3,119Deferred income taxes — 6,230Due from affiliates 19,121 13,247Prepaid and other current assets 11,435 10,228Total current assets 59,598 85,345Property and equipment, net 65,067 53,471Goodwill 45,943 3,721Investments 16,516 16,364Investment in subsidiaries 545,731 568,224Advances to related parties and other assets 16,742 19,379$ 749,597 $ 746,504LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilities:Accounts payable and accrued liabilities $ 24,577 $ 24,595Long-term debt 158,900 164,873Deferred income taxes 10,769 12,530Other long-term liabilities 12,613 12,744Total liabilities 206,859 214,742Stockholders’ equity:Common stock, $0.001 par value; 80,000 shares authorized, outstanding 25,607 shares at December 31, 2009 and 26,725 shares atDecember 31, 2008 26 27Preferred stock, $0.001 par value; 20,000 shares authorized, no shares issued and outstanding — —Paid-in capital 129,902 170,681Accumulated other comprehensive loss, net of tax (1,812) (2,310)Retained earnings 414,622 383,754Treasury stock, at cost; 1,201 shares at December 31, 2008 — (20,390)Total stockholders’ equity 542,738 531,762$ 749,597 $ 746,504http://sec.gov/Archives/edgar/data/1179929/000095012310025132/a55407e10vk.htm[1/6/2012 11:12:35 AM]