Health Net 2005 Annual Report Download - page 64

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Our cash flows from investing activities for the years ended December 31, 2005, 2004 and 2003 are as
follows:
2005 2004 2003
(Dollars in millions)
Net cash used in investing activities ........................... $(244.0) $(14.2) $(105.5)
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004
Net cash used in investing activities increased for the year ended December 31, 2005 compared to the same
period in 2004, due primarily to an increase in available funds not required for operations that were placed in
long-term investments, offset by the proceeds received in June 2005 in connection with the sale-leaseback
transaction.
On June 30, 2005, we entered into an agreement in which we sold certain of our non-real estate fixed assets
to an independent third party for net cash proceeds of $79.0 million (the Sale-Leaseback Transaction) and
simultaneously leased such assets from an independent third party under an operating lease for an initial term of
three years (the Lease Agreement). The net proceeds from the Sale-Leaseback Transaction were used to increase
the capital level of our California health plan. Payments under the Lease Agreement are $2.8 million per quarter,
plus interest, payable in arrears. See Note 12 to the consolidated financial statements for additional information
regarding the Sale-Leaseback Transaction.
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003
Net cash used in investing activities decreased by $91.3 million for the year ended December 31, 2004
compared to the same period in 2003 due to the following:
• Net increase in maturities and sales of available for sale securities of $168.5 million,
• Net decrease in purchases of property and equipment of $17.0 million, partially offset by
• Net increase in purchases of restricted investments of $14.9 million as required under our old
TRICARE contracts in connection with the run-out claims, and
• Net decrease in cash proceeds from divestitures of $79.2 million.
Financing Activities
Our cash flows from financing activities for the year ended December 31, 2005, 2004 and 2003 are as
follows:
2005 2004 2003
(Dollars in millions)
Net cash provided by (used in) financing activities ................. $73.0 $(69.6) $(246.2)
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004
Net cash provided by financing activities increased by $142.6 million due to a decrease of $88.3 million in
repurchases of our common stock combined with an increase in cash proceeds of $54.4 million from the exercise
of stock options and employee stock purchases when compared to the prior year.
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003
Net cash used in financing activities decreased by $176.6 million for the year ended December 31, 2004
compared to the same period in 2003 due to a decrease in repurchases of our common stock. We repurchased
3,179,400 shares of our common stock for $83.7 million in 2004 under our stock repurchase program compared
to 10,129,655 shares for $288.3 million in 2003. In addition, we paid $5.0 million for 150,000 shares repurchased
in 2003 and settled in 2004. Cash proceeds from the exercise of stock options and employee stock purchases
declined by $23.2 million.
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