Health Net 2004 Annual Report Download - page 99

Download and view the complete annual report

Please find page 99 of the 2004 Health Net annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The intangible assets that continue to be subject to amortization using the straight-line method over their estimated lives are as
follows (amounts in millions):
Estimated annual pre-tax amortization expense for other intangible assets for each of the next five years ending December 31 is
as follows (amounts in millions):
Insurance Programs
Gross
Carrying
Amount
Accumulated
Amortization
Net
Balance
Amortization
Period (in
years)
As of December 31, 2004:
Provider networks
$40.5
$ (19.7)
$20.8
4-40
Employer groups
92.9
(91.8)
1.1
11-23
$133.4
$(111.5)
$21.9
As of December 31, 2003
Provider networks
$35.7
$ (17.6)
$18.1
14-40
Employer groups
92.9
(91.1)
1.8
11-23
$128.6
$(108.7)
$19.9
Year
Amount
2005
3.4
2006
3.0
2007
2.6
2008
2.6
2009
1.8
The Company is insured for our general and legal liability risks. The amounts in excess of the insured levels are reserved for
based on claims filed and an estimate for significant claims incurred but not reported.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents,
investments and premiums receivable. All cash equivalents and investments are managed within established guidelines which limit
the amounts which may be invested with one issuer. Concentrations of credit risk with respect to premiums receivable are limited due
to the large number of payers comprising our customer base. Our 10 largest employer group premiums receivable balances within
each of our plans accounted for 54% and 66% of our total premiums receivable as of December 31, 2004 and 2003, respectively. Our
10 largest employer group premiums within each of our plans accounted for 19%, 19% and 15% of our health plan services premiums
for the years then ended December 31, 2004, 2003 and 2002, respectively.
Earnings Per Share
Basic earnings per share excludes dilution and reflects net income divided by the weighted average shares of common stock
outstanding during the periods presented. Diluted earnings per share is based upon the weighted average shares of common stock and
dilutive common stock equivalents (stock options and restricted stock) outstanding during the periods presented.
F-13