Item 7.01. Regulation FD Disclosure.
Note: The information furnished herewith pursuant to Item 7.01 of this Current
Report on Form 8-K shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that section, and shall not be
incorporated by reference into any registration statement or other document
filed by Molina Healthcare, Inc. (the "Company") under the Securities Act of
1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing. The furnishing of
this report is not intended to constitute a determination by the Company that
the information is material or that dissemination of the information is required
by Regulation FD.
Uses and Definitions of Non-GAAP Financial Measures
The financial data provided to potential investors in connection with the
Offering (as defined in Item 8.01 of this report) includes non-GAAP financial
measures, including, EBITDA and Adjusted EBITDA (collectively, the "Non-GAAP
Financial Measures"). The Non-GAAP Financial Measures are supplemental measures
of the Company's performance that are not required by, or presented in
accordance with, generally accepted accounting principles in the U.S. ("GAAP").
The Company believes that the Non-GAAP Financial Measures are useful
supplemental measures to investors in comparing its performance to the
performance of other public companies in the health care industry.
The Company defines EBITDA as net (loss) income adjusted for interest, taxes,
depreciation and amortization.
The Company defines Adjusted EBITDA as EBITDA adjusted for non-cash stock-based
compensation expense and other non-cash or non-recurring charges.
EBITDA and Adjusted EBITDA have important limitations as analytical tools and
should not be considered in isolation or as substitutes for analysis of the
Company's results as reported under GAAP. With respect to EBITDA and Adjusted
EBITDA, some of these limitations are that EBITDA and Adjusted EBITDA:
• exclude certain tax payments that may represent a reduction in cash available
to the Company;
• do not reflect the Company's cash expenditures, or future requirements, for
capital expenditures or contractual commitments;
• do not reflect changes in, or cash requirements for, the Company's working
• do not reflect the significant interest expense, or the cash requirements,
necessary to service interest or principal payments on the Company's debt;
• although depreciation and amortization are non-cash charges, the assets being
depreciated and amortized will often have to be replaced in the future, and
EBITDA and Adjusted EBITDA do not reflect any cash requirements for such
• may be calculated differently than other companies in the Company's industry,
limiting their usefulness as comparative measures.
In addition to the foregoing, Adjusted EBITDA adjusts for certain exceptional
items that reflect cash payments that were made, or will be made, in the future.
Because of these limitations, the Non-GAAP Financial Measures should not be
considered as measures of discretionary cash available to the Company to invest
in the growth of the Company's business. The Company compensates for these
limitations by relying primarily on its GAAP results and using the Non-GAAP
Financial Measures only on a supplemental basis.
The following EBITDA and Adjusted EBITDA information was provided to potential
investors in connection with the Offering:
Three Months Nine Months
Ended September 30, Ended September 30,
2019 2020 2019 2020
(dollars in millions)
Net income $ 175$ 185$ 569$ 639
Depreciation, and amortization of
intangible assets and capitalized
software 21 23 68 64
Interest expense 22 27 67 72
Income tax expense 58 77 181 271
EBITDA $ 276$ 312$ 885$ 1,046
Stock-based compensation 10 15 29 43
Non-cash or non-recurring charges(a) 1 10 8 10
Adjusted EBITDA $ 287$ 337$ 922$ 1,099
(a) Represents non-cash or non-recurring charges of (i) $1 million related to
loss on debt extinguishment for the three months ended September 30, 2019,
(ii) $10 million related to the premium deficiency reserve in Puerto Rico for
the three months ended September 30, 2020, (iii) $8 million related to loss
on debt extinguishment for the nine months ended September 30, 2019 and (iv)
$10 million related to the premium deficiency reserve in Puerto Rico for the
nine months ended September 30, 2020.
Item 8.01. Other Events.
On November 2, 2020, the Company issued a press release announcing it intends to
privately offer (the "Offering"), subject to market and other conditions, $650
million aggregate principal amount of senior notes due 2030 (the "Notes"). The
Notes are to be offered and sold only to persons reasonably believed to be
"qualified institutional buyers" pursuant to Rule 144A under the Securities Act,
and to certain persons outside the United States in reliance on Regulation S
under the Securities Act. The full text of the press release is attached as
Item 9.01. Financial Statements and Exhibits.
99.1 Press release of Molina Healthcare, Inc. issued November 2, 2020
104 Cover page information from Molina Healthcare, Inc.'s Current Report on
Form 8-K filed on November 2, 2020 formatted in iXBRL (Inline Extensible
Business Reporting Language)
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