Health Net 2010 Annual Report Download - page 79

The majority of these charges, including the litigation reserve true-ups which was a non-cash charge, was settled
in cash and was funded by cash flow from operating activities. For additional information regarding these
charges, see “—Summary of Operating Results” above.
Our total cash and cash equivalents as of December 31, 2010 and 2009 were $350.1 million and $682.8
million, respectively. The changes in cash and cash equivalents are summarized as follows:
2010 2009 2008
(Dollars in millions)
Net cash provided by (used in) operating activities .......................... $271.4 $ 247.5 $(159.0)
Net cash (used in) investing activities .................................... (200.6) (135.1) (67.8)
Net cash (used in) financing activities .................................... (403.5) (97.8) (112.0)
Net (decrease) increase in cash and cash equivalents ........................ $(332.7) $ 14.6 $(338.8)
Operating Cash Flows
Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
Net cash provided by operating activities increased by $23.9 million for the year ended December 31, 2010
compared to the same period in 2009. This increase was primarily due to a $76 million increase in prepaid
commercial premiums partially offset by a $36 million increase in our CMS catastrophic and low-income
subsidies receivable.
Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
Net cash from operating activities increased by $406.5 million for the year ended December 31, 2009
compared to the same period in 2008. This increase was primarily due to a $246 million decrease in cash used for
operations strategy, and litigation and regulatory matters, a $140 million decrease in our CMS catastrophic and
low-income subsidies receivable and a $17 million Medi-Cal rate court settlement related to 2001-2002 rates
paid in 2009.
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, 2010 Compared to Year Ended December 31, 2009
Net cash used in investing activities increased by $65.4 million compared to the year ended December 31,
2009. This increase is primarily due to $302 million increase in net purchases of investments in available-for-sale
securities, partially offset by a $250 million increase in cash related to the sale of the Northeast operations
(comprised of $80 million received from United for additional sale consideration and approximately $170 million
net cash used in the sale of the Northeast operations in 2009).
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.
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