Health Net 2010 Annual Report Download - page 65

RESULTS OF OPERATIONS
Consolidated Results
The table below and the discussion that follows summarize our results of operations for the years ended
December 31, 2010, 2009 and 2008.
Year Ended December 31,
2010 2009 2008
(Dollars in thousands, except per share)
Revenues
Health plan services premiums .......................... $ 9,996,888 $12,440,589 $12,392,006
Government contracts ................................. 3,344,483 3,104,700 2,835,261
Net investment income ................................ 71,181 105,930 91,042
Administrative services fees and other income .............. 21,133 62,022 48,280
Northeast administrative services fees and other ............ 186,167 0 0
Total revenues ................................... 13,619,852 15,713,241 15,366,589
Expenses
Health plan services (excluding depreciation and
amortization) ...................................... 8,609,117 10,731,951 10,762,657
Government contracts ................................. 3,168,160 2,939,722 2,702,573
General and administrative ............................. 956,264 1,361,956 1,291,059
Selling ............................................. 238,759 330,112 360,381
Depreciation and amortization .......................... 34,800 53,042 59,878
Interest ............................................. 34,880 40,887 42,909
Northeast administrative services expenses ................ 279,434 0 0
Loss (adjustment to loss) on sale of Northeast health plan
subsidiaries ....................................... (41,959) 105,931 0
Asset impairments .................................... 6,000 174,879 0
Early debt extinguishment charge ........................ 3,532 0 0
Total expenses ................................... 13,288,987 15,738,480 15,219,457
Income (loss) from operations before income taxes .............. 330,865 (25,239) 147,132
Income tax provision ...................................... 126,622 23,765 52,129
Net income (loss) ........................................ $ 204,243 $ (49,004) $ 95,003
Net income (loss) per share:
Basic .......................................... $ 2.08 $ (0.47) $ 0.89
Diluted ......................................... $ 2.06 $ (0.47) $ 0.88
Summary of Operating Results
Year Ended December 31, 2010 compared to Year Ended December 31, 2009
In the year ended December 31, 2010, we reported net income of $204.2 million or $2.06 per diluted share
as compared to a net loss of $(49.0) million or $(0.47) per share for the same period in 2009. Pretax margin was
2.4 percent for 2010 compared to (0.2) percent for 2009. Our consolidated results of operations for the years
ended December 31, 2010 and 2009 were impacted by the Northeast Sale. See Notes 1 and 3 to our consolidated
financial statements for more information on the Northeast Sale. The Northeast Operations had a combined
pretax loss of $68.7 million for the year ended December 31, 2010 compared to a pretax loss of $165.6 million
for the year ended December 31, 2009, reflecting the ongoing run-out and wind-down of the Northeast
Operations.
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