Molina Medicaid Solutions - DHHR

e10vkOther comprehensive income, net of tax:Unrealized loss on investments — — — (380) — — (380)Total comprehensive income — — — (380) 54,970 — 54,590Common stock issued, net of issuance costs 4,350 4 111,127 — — 111,131Employee stock grants and employee stock plan purchases 352 — 11,271 — — — 11,271Tax deficiency from employee stock compensation — — (673) — — — (673)Balance at December 31, 2010 30,309 $ 30 $ 251,627 $ (2,192) $ 469,592 $ — $ 719,057See accompanying notes.71Table of ContentsMOLINA HEALTHCARE, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSYear Ended December 31,2010 2009 2008(In thousands)Operating activities:Net income $ 54,970 $ 30,868 $ 59,598Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization 60,765 38,110 33,688Unrealized (gain) loss on trading securities (4,170) (3,394) 399Loss (gain) on rights agreement 3,807 3,100 (6,907)Other-than-temporary impairment on available-for-sale securities — — 7,166Deferred income taxes (4,092) (1) (3,404)Stock-based compensation 9,531 7,485 7,811Non-cash interest on convertible senior notes 5,114 4,782 4,707Gain on purchase of convertible senior notes — (1,532) —Amortization of deferred financing costs 1,780 1,872 1,435Tax deficiency from employee stock compensation (968) (749) (335)Loss on disposal of property and equipment — — 142Changes in operating assets and liabilities, net of effects of business combinations:Receivables (7,539) (8,092) (17,025)Prepaid expenses and other current assets (9,756) 383 (2,245)Medical claims and benefits payable 34,363 22,874 (19,164)Accounts payable and accrued liabilities 40,482 (26,467) 10,830Deferred revenue (41,899) 88,181 (26,300)Income taxes 19,258 (2,049) (9,965)Net cash provided by operating activities 161,646 155,371 40,431Investing activities:Purchases of equipment (48,538) (35,870) (34,690)Purchases of investments (302,842) (186,764) (263,229)Sales and maturities of investments 225,106 204,365 246,524Net cash paid in business combinations (130,743) (11,294) (1,000)Increase in deferred contract costs (29,319) — —(Increase) decrease in restricted investments (5,566) 1,928 (9,183)Change in other noncurrent assets and liabilities 2,830 (10,078) (2,942)Net cash used in investing activities (289,072) (37,713) (64,520)Financing activities:Proceeds from common stock offering, net of issuance costs 111,131 — —Amount borrowed under credit facility 105,000 — —Repayment of amount borrowed under credit facility (105,000) — —Treasury stock purchases — (27,712) (49,940)Purchase of convertible senior notes — (9,653) —Credit facility fees paid (1,671) — —Proceeds from employee stock plans 4,056 2,015 2,084Excess tax benefits from employee stock compensation 295 31 43Net cash provided by (used in) financing activities 113,811 (35,319) (47,813)Net (decrease) increase in cash and cash equivalents (13,615) 82,339 (71,902)Cash and cash equivalents at beginning of year 469,501 387,162 459,064Cash and cash equivalents at end of year $ 455,886 $ 469,501 $ 387,16272Table of ContentsMOLINA HEALTHCARE, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)Year Ended December 31,2010 2009 2008(In thousands)Supplemental cash flow informationCash paid during the year for:Income taxes $ 18,299 $ 23,480 $ 46,088Interest $ 10,951 $ 8,205 $ 7,797Schedule of non-cash investing and financing activities:Retirement of treasury stock $ — $ 48,102 $ 49,940Details of business combinations:Fair value of assets acquired $ (159,916) $ (34,594) $ (2,262)Release of escrow and other deposits — 18,000 —Common stock issued to seller — — 1,262Less payable to seller 4,723 5,300 —Fair value of liabilities assumed 24,450 — —Net cash paid in business purchase transactions $ (130,743) $ (11,294) $ (1,000)See accompanying notes.73Table of Contents1. Basis of PresentationOrganization and OperationsMOLINA HEALTHCARE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSMolina Healthcare, Inc. provides quality and cost-effective Medicaid-related solutions to meet the health care needs of low-income families and individuals, and to assiststate agencies in their administration of the Medicaid program.http://sec.gov/Archives/edgar/data/1179929/000095012311023069/a58840e10vk.htm[1/6/2012 11:08:51 AM]