Health Net 2010 Annual Report Download - page 50

insurers regarding allegedly improper sales and marketing practices in connection with the sale of Medicare
products. While we are not aware of any unlawful practices by the Company or any of our agents or brokers in
connection with the marketing and sales of our products and services, investigations by state attorneys general,
CMS and other regulators, as well as regulatory changes initiated in several states in response to allegedly
inappropriate broker conduct and broker payment practices, could result in changes in industry practices that
could have an adverse effect on our ability to market our products.
We are dependent on our ability to manage, engage, enable and retain a very large workforce.
Our products and services and our operations require a large number of employees. As of December 31,
2010, we employed 8,010 individuals on a full-time basis and 159 individuals on a part-time or temporary basis.
Our business could be adversely affected if our retention, development, succession and other human resource
management techniques are not aligned with our strategic objectives. The impact of the external or internal
environment or other factors on employee morale, enablement and engagement could also significantly impact
the success of the Company.
Our forecasts and other forward-looking statements are based on a variety of assumptions that are subject
to significant uncertainties. Our performance may not be consistent with these forecasts and forward-looking
statements.
From time to time in press releases and otherwise, we publish forecasts or other forward-looking statements
regarding our future results, including estimated revenues, net earnings and other operating and financial metrics.
Any forecast of our future performance reflects various assumptions. These assumptions are subject to significant
uncertainties, and, as a matter of course, any number of them may prove to be incorrect.
The achievement of any forecast depends on numerous risks and other factors, including those described in
this report, many of which are beyond our control. In addition, the volatility in the financial markets, challenging
economic conditions and uncertainties associated with health care reform may make it particularly difficult to
forecast our future performance. As a result, we cannot assure that our performance will meet any management
forecasts or that the variation from such forecasts will not be material and adverse. You are cautioned not to base
your entire analysis of our business and prospects upon isolated predictions, but instead are encouraged to utilize
the entire mix of publicly available historical and forward-looking information, as well as other available
information affecting us, our services, and our industry when evaluating our forecasts and other forward-looking
statements relating to our operations and financial performance.
The market price of our common stock is volatile.
The market price of our common stock is subject to volatility. In 2010, the Morgan Stanley Healthcare
Payor Index (the “HMO Index”), an index comprised of 11 managed care organizations, including Health Net,
recorded an approximate 14.9% increase in its value, while the per-share value of our common stock increased
by 17.2%. There can be no assurance that the trading price of our common stock will vary in a manner consistent
with the variation in the HMO Index or the Standard & Poor’s 400 Mid-Cap Index of which our common stock is
also a component. The market prices of our common stock and the securities of certain other publicly-traded
companies in our industry have shown significant volatility and sensitivity in response to many factors, including
health care reform, public communications regarding managed care, legislative or regulatory actions, litigation or
threatened litigation, health care cost trends, proposed premium increases, pricing trends, competition, earnings,
receivable collections or membership reports of particular industry participants, and market speculation about or
actual acquisition activity. Additionally, adverse developments affecting any one of the companies in our sector
could cause the price of our common stock to weaken, even if those adverse developments do not otherwise
affect us. There can be no assurances regarding the level or stability of our share price at any time or the impact
of these or any other factors on our stock price.
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