MOLINA HEALTHCARE, INC. 8-K

What Happened

• Molina Healthcare, Inc. announced on Feb. 4, 2026 that it entered into a First Amendment to its credit agreement (with Truist Bank as Administrative Agent) that modifies the company’s prior Credit Agreement dated Nov. 20, 2025. The amendment temporarily lowers the required quarterly minimum interest coverage ratio from 3.00:1.00 to stepped, lower levels through September 30, 2027.
• On Feb. 5, 2026 the company said it will record in Q1 2026 an estimated non‑cash, pre‑tax impairment charge of approximately $93 million related to certain intangible assets. The charge results from Molina’s decision to exit the Medicare Advantage Prescription Drug (PDP) product for 2027 as it shifts strategy to focus exclusively on dual‑eligible Medicare members. The impairment will be recorded outside of the company’s “adjusted net income.”

Key Details

• Credit amendment date: February 4, 2026; parties include Molina, the lenders and Truist Bank as Administrative Agent. It amends the Nov. 20, 2025 credit agreement.
• Temporary interest coverage covenant reductions: 1.75:1.00 for quarters ending Mar–Dec 31, 2026; 2.00:1.00 for Mar 31, 2027; 2.50:1.00 for Jun 30, 2027; 2.75:1.00 for Sep 30, 2027 (was 3.00:1.00).
• Impairment: ~ $93 million, non‑cash, pre‑tax, to be recorded in Q1 2026 and excluded from adjusted net income.
• Strategic change: exit of Medicare Advantage PDP product for 2027 to concentrate on dual‑eligible Medicare members.

Why It Matters

• The credit amendment eases short‑term covenant pressure by lowering the required interest coverage ratio, which can reduce the risk of covenant breach while the company executes its strategy. Investors should monitor covenant compliance and any further lender communications.
• The $93M impairment will lower GAAP net income for Q1 2026 (non‑cash) but is excluded from the company’s adjusted net income metric used for operational comparisons. Watch how management discusses underlying earnings, revenue trends, and adjusted results in upcoming quarterly reporting.
• The strategic exit from the Medicare Advantage PDP product is a material business shift that may affect future revenue mix and growth prospects in Medicare business lines; investors should follow management commentary on member counts, margins and the financial impact of focusing on dual‑eligible members.