Health Net 2005 Annual Report Download - page 133

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HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Severance and related benefit costs incurred in connection with the involuntary workforce reduction are as
follows:
Reportable Segments Total
Reportable
Segments
Corporate
and Other Total
Health Plan
Services
Government
Contracts
(Dollars in millions)
Total amount incurred ........................... $15.4 $ 0.2 $15.6 $ 9.2 $24.8
Cumulative amount incurred as of December 31,
2004 ....................................... $17.6 $ 0.2 $17.8 $ 7.5 $25.3
Amount incurred during the year ended December 31,
2005 ....................................... — — — 1.7 1.7
Modification to restructuring plan ................. (2.2) — (2.2) — (2.2)
Cumulative amount incurred as of December 31,
2005 ....................................... $15.4 $ 0.2 $15.6 $ 9.2 $24.8
A reconciliation of our liability balances for severance and related benefit costs incurred in connection with
the involuntary workforce reduction is as follows:
Reportable Segments Total
Reportable
Segments
Corporate
and Other Total
Health Plan
Services
Government
Contracts
(Dollars in millions)
Balance as of January 1, 2004 .................... $ — $— $ — $— $ —
Amount incurred during the year ended December 31,
2004 ...................................... 17.6 0.2 17.8 7.5 25.3
Cash payments made during the year ended
December 31, 2004 .......................... (10.0) (0.2) (10.2) (5.5) (15.7)
Balance as of December 31, 2004 ................. 7.6 — 7.6 2.0 9.6
Amount incurred during the year ended December 31,
2005 ...................................... — — — 1.7 1.7
Cash payments made during the year ended
December 31, 2005 .......................... (5.4) — (5.4) (3.7) (9.1)
Modification to restructuring plan ................. (2.2) — (2.2) — (2.2)
Balance as of December 31, 2005 ................. $ — $— $ — $— $ —
Asset Impairment Charge
During the fourth quarter ended December 31, 2004, we recognized a pretax $3.0 million impairment on
internally developed software and purchased computer hardware that were rendered obsolete as a result of
changes to our operations and systems consolidation process. We also recognized a pretax $2.9 million
impairment on investments in other companies in the fourth quarter ended December 31, 2004.
Real Estate Lease Termination Costs
We recognized a pretax $1.7 million in lease termination expenses associated with the exit of certain
properties as part of the TRICARE contract transition during the fourth quarter ended December 31, 2004.
F-45