Health Net 2010 Annual Report Download - page 25

We may redeem the Rights at any time until the earlier of (i) 10 days following the date that any Acquiring
Person becomes the beneficial owner of 15% or more of the outstanding common stock and (ii) the date the
Rights expire at a price of $.01 per Right. In addition, at any time after a person becomes an Acquiring Person or
is determined to be an Adverse Person and prior to such person becoming (together with such person’s affiliates
and associates) the beneficial owner of 50% or more of the outstanding Common Stock, at the election of our
Board of Directors, the outstanding Rights (other than those beneficially owned by an Acquiring Person, Adverse
Person or an affiliate or associate of an Acquiring Person or Adverse Person) may be exchanged, in whole or in
part, for shares of Common Stock, or shares of preferred stock of the Company having essentially the same value
or economic rights as such shares.
Potential Acquisitions and Divestitures
We continue to evaluate the profitability realized or likely to be realized by our existing businesses and
operations. From time to time we review, from a strategic standpoint, potential acquisitions and divestitures in
light of our core businesses and growth strategies. See “Item 1A. Risk Factors—Acquisitions, divestitures and
other significant transactions may adversely affect our business.”
Item 1A. Risk Factors
Cautionary Statements
The following discussion, as well as other portions of this Annual Report on Form 10-K, contain “forward-
looking statements” within the meaning of Section 21E of the Exchange Act, and Section 27A of the Securities
Act of 1933, as amended, regarding our business, financial condition and results of operations. We intend such
forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of
complying with these safe harbor provisions. These forward-looking statements involve a number of risks and
uncertainties. All statements, other than statements of historical information provided or incorporated by
reference herein, may be deemed to be forward-looking statements. Without limiting the foregoing, the words
“believes,” “anticipates,” “plans,” “expects,” “may,” “should,” “could,” “estimate” and “intend” and other
similar expressions are intended to identify forward-looking statements. Actual results could differ materially due
to, among other things, health care reform, including the ultimate impact of the ACA, which could materially
adversely affect our financial condition, results of operations and cash flows through, among other things,
reduced revenues, new taxes, expanded liability, and increased costs (including medical, administrative,
technology or other costs), or require changes to the ways in which we do business; rising health care costs;
continued slow economic growth or a further decline in the economy; negative prior period claims reserve
developments; trends in medical care ratios; membership declines; unexpected utilization patterns or
unexpectedly severe or widespread illnesses; rate cuts affecting our Medicare or Medicaid businesses; costs, fees
and expenses related to the post-closing administrative services provided under the administrative services
agreements entered into in connection with the sale of our Northeast business; potential termination of the
administrative services agreements by the service recipients should we breach such agreements or fail to perform
all or a material part of the services required thereunder; any liabilities of the Northeast business that were
incurred prior to the closing of its sale as well as those liabilities incurred through the winding-up and
running-out period of the Northeast business; litigation costs; regulatory issues with agencies such as the
California Department of Managed Health Care, CMS and state departments of insurance, including the
continued suspension of the marketing of and enrollment into our Medicare products for a significant period of
time, which could have a material adverse impact on our Medicare business; operational issues; noncompliance
by us or our business associates with any privacy laws or any security breach involving the misappropriation,
loss or other unauthorized use or disclosure of confidential information; investment portfolio impairment
charges; volatility in the financial markets; and general business and market conditions. Additional factors that
could cause our actual results to differ materially from those reflected in forward-looking statements include, but
are not limited to, the factors set forth below and the risks discussed in our other filings from time to time with
the SEC.
23