Health Net 2010 Annual Report Download - page 143
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HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2009
Western Region
Operations
Government
Contracts
Northeast
Operations
Corporate/Other/
Eliminations Total
(Dollars in millions)
Revenues from external sources ........ $9,850.8 $3,104.7 $2,589.8 $ 0 $15,545.3
Intersegment revenues ............... 51.2 0.4 0.3 (51.9) 0
Net investment income ............... 67.6 0 38.3 0 105.9
Administrative services fees and other
income .......................... 38.7 0 23.3 0 62.0
Interest expense .................... 41.0 0 (0.1) 0 40.9
Depreciation and amortization ......... 36.7 0 16.3 0 53.0
Share-based compensation expense ..... 9.6 1.2 0.9 0 11.7
Segment pretax income (loss) .......... 270.3 168.6 (165.6) (298.5) (25.2)
2008
Western Region
Operations
Government
Contracts
Northeast
Operations
Corporate/Other/
Eliminations Total
(Dollars in millions)
Revenues from external sources ........ $9,590.3 $2,835.3 $2,801.7 $ 0 $15,227.3
Intersegment revenues ............... 91.4 0.2 4.5 (96.1) 0
Net investment income ............... 75.9 0 29.7 (14.6) 91.0
Administrative services fees and other
income .......................... 35.9 0 15.8 (3.4) 48.3
Interest expense .................... 41.4 0 1.5 0 42.9
Depreciation and amortization ......... 34.6 0 25.3 0 59.9
Share-based compensation expense ..... 18.8 2.2 3.1 0 24.1
Segment pretax income ............... 179.1 132.7 10.4 (175.1) 147.1
Our health plan services premium revenue by line of business is as follows:
Year Ended December 31,
2010 2009 2008
(Dollars in millions)
Commercial premium revenue ..................................... $5,663.9 $ 5,721.1 $ 5,822.8
Medicare premium revenue ........................................ 3,028.5 3,060.7 2,815.7
Medicaid premium revenue ........................................ 1,233.3 1,069.0 951.8
Total Western Region Operations Health Plan Services premiums ..... $9,925.7 $ 9,850.8 $ 9,590.3
Total Northeast Operations Health Plan Services premiums .......... 71.2 2,589.8 2,801.7
Total Health Plan Services premiums ................................ $9,996.9 $12,440.6 $12,392.0
Note 15—Variable Interest Entities
Effective January 1, 2010, we adopted the new accounting rules on consolidation of variable interest entities
(VIE). In order to determine if the Company is the primary beneficiary and must consolidate the entity, we
evaluate the following:
• the structure and purpose of the entity;
• the risks and rewards created by and shared through the entity; and
• the entity’s ability to direct the activities, receive its benefits and absorb its losses.
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