Health Net 2011 Annual Report Download - page 82

Northeast Operations Reportable Segment Results
The following table summarizes the operating results for the Northeast Operations reportable segment for
the years ended December 31, 2011, 2010 and 2009.
Year Ended December 31,
2011 2010 2009
(Dollars in thousands)
Health plan services premiums .................................... $ 2,344 $ 71,150 $2,589,806
Net investment income .......................................... 69 902 38,362
Administrative services fees and other income ........................ — 46 23,285
Northeast administrative services fees and other ...................... 34,446 186,167 —
Total revenues ................................................. 36,859 258,265 2,651,453
Health plan services ............................................ 930 64,465 2,194,389
General and administrative ....................................... 1,714 15,665 403,683
Selling ....................................................... 202 3,151 96,834
Depreciation and amortization .................................... 12 166 16,297
Interest ....................................................... 185 — (128)
Northeast administrative services expenses .......................... 145,879 279,434 —
Loss (adjustment to loss) on sale of Northeast health plan subsidiaries ..... (40,815) (41,959) 105,931
Asset impairment ............................................... — 6,000 —
Total expenses ................................................. 108,107 326,922 2,817,006
Loss from operations before income taxes ........................... (71,248) (68,657) (165,553)
Income tax benefit .............................................. (34,444) (29,256) (42,361)
Net loss ...................................................... $(36,804) $ (39,401) $ (123,192)
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010
The decreases in the revenues and expenses in the Northeast Operations segment in 2011 from 2010 reflect
the ongoing run-out and wind-down of the Acquired Companies. For additional information on the United
Administrative Services Agreements, the Claims Servicing Agreements and the ongoing run out and wind-down
of the Acquired Companies, see Note 2 to the consolidated financial statements under the heading “Subsequent
Accounting for the Northeast Sale.”
Our operating results for the year ended December 31, 2011 were impacted by a $40.8 million favorable
adjustment to loss on sale of our Northeast health plan subsidiaries as a result of purchase price true-up. Our
operating results for the year ended December 31, 2010 were impacted by a $6.0 million goodwill impairment,
reduced by a $42.0 million favorable adjustment to loss on sale of our Northeast health plan subsidiaries. See
Note 2 to our consolidated financial statements for additional information regarding the goodwill impairment and
the adjustment to loss on sale of our Northeast health plan subsidiaries.
On July 1, 2011, the United Administrative Services Agreements terminated following the completion of the
membership transition. At that time we entered into Claims Servicing Agreements pursuant to which we
adjudicate run out claims and provide limited other administrative services to United and its affiliates. The
revenues and expenses associated with providing services under the United Administrative Services Agreements
and the Claims Servicing Agreements were $34.5 million and $145.9 million for the year ended December 31,
2011, respectively, and the revenues and expenses associated with providing services under the United
Administrative Services Agreements were $186.2 million and $279.4 million for the year ended December 31,
2010, respectively. These revenues and expenses are shown separately in the accompanying consolidated
statements of operations.
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