Health Net 2011 Annual Report Download - page 85

our portfolio holdings of obligations of state and other political subdivisions and $387.2 million, or 24.8% of our
portfolio holdings of corporate debt securities as of December 31, 2011. Such amount includes noncurrent
corporate debt securities of $2.1 million.
We had gross unrealized losses of $4.8 million as of December 31, 2011, and $14.1 million as of
December 31, 2010. Included in the gross unrealized losses as of December 31, 2011 and December 31, 2010 are
$0.3 million and $1.7 million, respectively, related to noncurrent investments available-for-sale. We believe that
these impairments are temporary and we do not intend to sell these investments. It is not likely that we will be
required to sell any security in an unrealized loss position before recovery of its amortized cost basis. Given the
current market conditions and the significant judgments involved, there is a continuing risk that further declines
in fair value may occur and additional material other-than-temporary impairments may be recorded in future
periods. No impairment was recognized during the years ended December 31, 2011 or 2010.
Liquidity
We believe that expected cash flow from operating activities, any existing cash reserves and other working
capital and lines of credit are adequate to allow us to fund existing obligations, repurchase shares under our stock
repurchase program, introduce new products and services, enter into new lines of business and continue to
operate and develop health care-related businesses at least for the next twelve months. We regularly evaluate
cash requirements for current operations and commitments, for acquisitions and other strategic transactions and
for business expansion opportunities. We may elect to raise additional funds for these purposes, either through
issuance of debt or equity, the sale of investment securities or otherwise, as appropriate. Based on the
composition and quality of our investment portfolio, our expected ability to liquidate our investment portfolio as
needed, and our expected operating and financing cash flows, we do not anticipate any liquidity constraints as a
result of the current credit environment. However, continued turbulence in U.S. and international markets and
certain costs associated with the implementation of health care reform legislation could adversely affect our
liquidity.
Our cash flow from operating activities is impacted by, among other things, the timing of collections on our
amounts receivable from state and federal governments and agencies. Our receivable from CMS related to our
Medicare business was $198.5 million as of December 31, 2011 and $121.0 million as of December 31, 2010.
The receivable from DHCS related to our California Medicaid business was $87.4 million as of December 31,
2011 and $112.3 million as of December 31, 2010. Our receivable from the DoD relating to our current and prior
contracts for the TRICARE North Region were $234.7 million and $266.5 million as of December 31, 2011 and
December 31, 2010, respectively. The timing of collection of such receivables is impacted by government audit
and can extend for periods beyond a year.
During 2011, we paid approximately $181 million related to the AmCareco litigation judgment with
borrowings from our revolving credit facility. For additional information regarding the AmCareco judgment, see
“—Results of Operations—Consolidated Results” above.
Our total cash and cash equivalents as of December 31, 2011 and 2010 were $230.3 million and $350.1
million, respectively. The changes in cash and cash equivalents are summarized as follows:
Year Ended December 31,
2011 2010 2009
(Dollars in millions)
Net cash provided by operating activities ................................. $103.4 $ 308.0 $ 82.7
Net cash provided by (used in) investing activities .......................... 222.2 (200.6) (135.2)
Net cash (used in) provided by financing activities .......................... (445.5) (440.1) 67.1
Net (decrease) increase in cash and cash equivalents ........................ $(119.9) $(332.7) $ 14.6
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