1179929--3/15/2006--MOLINA_HEALTHCARE

related topics

{regulation, government, change}

{acquisition, growth, future}

{debt, indebtedness, cash}

{financial, litigation, operation}

{stock, price, operating}

{product, market, service}

{cost, contract, operation}

{control, financial, internal}

{operation, international, foreign}

{condition, economic, financial}

{loss, insurance, financial}

{regulation, change, law}

{system, service, information}

{personnel, key, retain}

{operation, natural, condition}

{provision, law, control}

Our profitability will depend on our ability to accurately predict and effectively manage medical costs. A failure to accurately estimate incurred but not reported medical care costs may negatively impact our results of operations. Reductions in Medicaid and SCHIP funding could substantially reduce our profitability. If our government contracts are not renewed or are terminated, our revenues could be materially reduced. Any changes to the laws and regulations governing our business, or the interpretation and enforcement of those laws or regulations, could cause us to modify our operations and could negatively impact our operating results. Our business depends on our information systems, and our inability to effectively integrate, manage, and keep secure our information systems could disrupt our operations. Difficulties in executing our acquisition strategy could adversely affect our business. Ineffective management of our growth may negatively affect our business, financial condition, or results of operations. If we are unable to maintain good relations with the physicians, hospitals, and other providers that we contract with, our profitability could be adversely affected. Failure to attain profitability in our start-up operations could negatively affect our results of operations. We derive a majority of our premium revenues from operations in a small number of states. We are subject to competition which negatively impacts our ability to increase penetration in the markets we serve. Restrictions and covenants in our credit facility may limit our ability to make certain acquisitions. We are dependent on our executive officers and other key employees. We face claims related to litigation which, if resolved unfavorably, could result in substantial monetary damages. Negative publicity regarding the managed health care industry could adversely affect our ability to market and sell our products and services. A pandemic, such as a worldwide outbreak of a new influenza virus, could materially and adversely affect our ability to control health care costs. The results of our operations could be negatively impacted by both upturns and downturns in general economic conditions. If state regulators do not approve payments of dividends and distributions by our subsidiaries, it may negatively affect our business strategy. Unforeseen changes in regulations or pharmaceutical market conditions may impact our revenues and adversely affect our results of operations. Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our business, operating results, and stock price. Volatility of our stock price could adversely affect stockholders. Our directors and officers and members of the Molina family own a majority of our capital stock, decreasing the influence of other stockholders on stockholder decisions. It may be difficult for a third party to acquire our company, which could inhibit stockholders from realizing a premium on their stock price. Our forecasts and other forward-looking statements are based on a variety of assumptions that are subject to significant uncertainties. Our performance may not be consistent with these forecasts and forward-looking statements. SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

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1179929--3/15/2006--MOLINA_HEALTHCARE_INC