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Molina Healthcare (MOH)
Q4 2011 Earnings Call
February 23, 2012 5:00 pm ET
Juan José Orellana -
Joseph Mario Molina - Chairman, Chief Executive Officer and President
John C. Molina - Chief Financial Officer, Executive Vice President of Financial Affairs, Treasurer, Director and Member of Compliance Committee
Joseph W. White - Principal Accounting Officer and Vice President of Accounting
Terry P. Bayer - Chief Operating Officer
Carl R. McDonald - Citigroup Inc, Research Division
Charles Andrew Boorady - Crédit Suisse AG, Research Division
Scott J. Fidel - Deutsche Bank AG, Research Division
Joshua R. Raskin - Barclays Capital, Research Division
Kenneth Lavine - UBS Investment Bank, Research Division
Sarah James - Wedbush Securities Inc., Research Division
Melissa McGinnis - Morgan Stanley, Research Division
Previous Statements by MOH
» Molina Healthcare Inc. - Analyst/Investor Day
» Molina Healthcare's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Molina Healthcare Inc. - Analyst/Investor Day
Juan José Orellana
Thank you, George. Hello, everyone, and thank you for joining us. The purpose of this call is to discuss Molina Healthcare's financial results for the fourth quarter and fiscal year ended December 31, 2011. The company's earnings release reporting its results was issued today after the market closed and is now posted for viewing on our company website.
On the call with me today are Dr. Mario Molina, our CEO; John Molina, our CFO; Terry Bayer, our COO; and Joseph White, our Chief Accounting Officer. After the completion of our prepared remarks, we will open the call to take your questions. [Operator Instructions]
Our comments today will contain forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act, including, without limitation, statements regarding our earnings per share guidance for 2012, expected 2012 rates, opportunities relating to the migration of dual eligibles into managed care, our enrollment expansion in Texas, our premium revenues in Washington and certification of our Idaho Medicaid Management Information System. All of our forward-looking statements are based on our current expectations and assumptions, which are subject to numerous risk factors that could cause our actual results to differ materially.
A description of such risk factors can be found in our earnings release and in our reports filed with the Securities and Exchange Commission, including our Form 10-K annual report, our Form 10-Q quarterly reports and our Form 8-K current reports. These reports can be accessed under the Investor Relations tab of our company website or on the SEC's website. All forward-looking statements made during today's call represent our judgment as of February 23, 2012, and we disclaim any obligation to update such statements except as required by securities laws. This call is being recorded, and a 30-day replay of the conference call will be available over the Internet through the company's website at molinahealthcare.com.
I would now like to turn the call over to Dr. Mario Molina.
Joseph Mario Molina
Thank you, Juan José. Hello, everyone, and thanks for joining our discussion today. Let me begin by saying that 2011 was an outstanding year for Molina Healthcare. Were it not for the noncash impairment charge that we took for the loss of our contract in Missouri, we would have reported record earnings for both the fourth quarter and for all of 2011. Even with the Missouri charge, our cash flow from operations in 2011 was the best we have ever reported.
I'll talk more about Missouri in a minute, but first I want to discuss what made 2011 such a good year and what that says about our company's future. The list of our accomplishments for 2011 is long: We had record cash flows from operations; we lowered our medical care ratio by 60 basis points and increased our medical margin by nearly $125 million; we secured a major position in the Texas market; we reduced our fourth quarter medical care ratio in Florida by 15% over the fourth quarter of 2010; we grew our Medicare membership by over 25%; we grew our Age, Blind and Disabled membership by over 50%; we achieved federal certification of our Medicaid Management Information System in Maine; and we positioned ourselves to participate in the dual eligible opportunity across many of our states.
Molina has submitted its notice of intent to apply to capitated fiscal alignment demonstration contracts for 2013 for the dual eligibles in the following states: California, Florida, Michigan, New Mexico, Ohio, Texas, Washington, Wisconsin, Virginia and Illinois. Currently, 3 of our largest health plans in California, Ohio and Michigan are in states with large initiatives underway to transition the dual eligibles into managed care.
In California, Molina Healthcare has submitted its response to the state's request for solutions to provide comprehensive care to dual eligible beneficiaries in the state. This program will enroll these beneficiaries into health plans beginning in 2013 and continuing through 2015. There are currently 1.2 million beneficiaries with both Medicaid and Medicare in California. 600,000 of them are in the 5 counties Molina serves: San Diego, Riverside, San Bernardino, Los Angeles and Sacramento. The state is going to begin the program in these areas, which the state is expected to identify towards the end of March. Currently, Molina Healthcare it strategically positioned to serve this population in California with an already established Special Needs Plan that serves nearly 6,500 duals in the state.
In Ohio, the state plans to release a revised draft proposal this month for its integrated care delivery system to meet the needs of the dual eligibles. A request for applications is expected in April for implementation in January of 2013.