Health Net 2009 Annual Report Download - page 74

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
Net cash from operating activities decreased by $764.5 million for the year ended December 31, 2008
compared to the same period in 2007. This decrease was primarily due to the $283 million paid in 2008 related to
operations strategy and litigation and regulatory related matters, a $218 million increase in our net CMS
catastrophic and low-income subsidies receivables, and approximately $83 million Medicare Part D payments
received in 2007 for the final settlement of the 2006 plan year.
Investing Activities
Our cash flow from investing activities is primarily impacted by the sales, maturities and purchases of our
available-for-sale investment securities and restricted investments. Our investment objective is to maintain safety
and preservation of principal by investing in high-quality, investment grade securities while maintaining liquidity
in each portfolio sufficient to meet our cash flow requirements and attaining the highest total return on invested
funds.
Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
Net cash used in investing activities increased by $67.3 million compared to the year ended December 31,
2008 primarily due to $173.4 million net cash used in the sale of the Northeast operations (including $523.4
million of cash balances given up at the subsidiaries offset by $350 million received from United), offset by a
$70.3 million decrease in cash used for the purchase of property and equipment and a $51.0 million net increase
in the sale of investments available-for-sale.
Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
Net cash used in investing activities decreased by $162.4 million compared to the year ended December 31,
2007 primarily due to the $252 million redemption from The Reserve Funds, partially offset by $97 million
decrease in net proceeds from property and equipment sale.
Financing Activities
Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
Net cash used in financing activities decreased by $14.2 million primarily due to a $229.0 million decrease
in cash used for share repurchases offset by a $208.7 million increase in net cash used in borrowings.
Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
Net cash used in financing activities increased by $38.9 million primarily due to a decrease in stock option
exercise proceeds of $66 million, decrease in excess tax benefits from share based compensation of $17 million and
a net increase in share repurchases of $11 million, partially offset by an increase in net borrowings of $55 million.
Capital Structure
Stock Repurchase Program
We have a $700 million stock repurchase program authorized by our Board of Directors. Subject to Board
approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds
and tax benefits the Company receives from the employee stock options. On November 4, 2008, we announced
that our stock repurchase program was on hold as a consequence of the uncertain financial environment and the
announcement by Health Net’s Board of Directors that Jay Gellert, our President and Chief Executive Officer,
was undertaking a review of the Company’s strategic direction. On July 20, 2009, we announced the completion
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