Health Net 2011 Annual Report Download - page 86

Operating Cash Flows
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010
Net cash provided by operating activities decreased by $204.6 million for the year ended December 31,
2011 compared to the same period in 2010. This decrease was primarily due to $181 million in payments related
to the AmCareco litigation judgment.
Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
Net cash provided by operating activities increased by $225.3 million for the year ended December 31, 2010
compared to the same period in 2009. This increase was primarily due to receipt of $110.0 million for
government underwriting fees and $76.0 million increase in prepaid commercial premiums.
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, 2011 Compared to Year Ended December 31, 2010
Net cash provided by investing activities increased by $422.8 million compared to the year ended
December 31, 2010. This increase is primarily due to a $366.3 million increase in net sales and maturities of
investments in available-for-sale securities and by an $86.0 million increase in cash received from United for
additional consideration related to the Northeast Sale, partially offset by a $29.5 million increase in purchases of
property and equipment.
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 a $302.7 million increase in net purchases of investments in
available-for-sale securities, partially offset by a $250.0 million increase in cash related to the Northeast Sale
(comprised of $80.0 million received from United for additional sale consideration and approximately $170.0
million net cash used in the Northeast Sale in 2009).
Financing Activities
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010
Net cash used in financing activities increased by $5.4 million primarily due to a $153.0 million increase in
share repurchases, a $93.3 million increase in customer funds administered, a $92.6 million decrease in checks
outstanding (net of deposits) and $6.2 million in debt issuance costs, partially offset by a $212.5 million increase
in net borrowings under our revolving credit facility, a $116.7 million decrease in amounts paid under our
amortizing financing facility due to the payoff of that facility in June 2010 and a $9.7 million increase in
proceeds from the exercise of stock options and employee stock purchases. Customer funds administered include
pass-through items and items accounted for under deposit accounting and are comprised of health care cost
payments and reimbursements for the T-3 contract, catastrophic reinsurance subsidy, low-income member cost
sharing subsidy and the coverage gap discount under the Medicare Part D program. See Note 2 to our
consolidated financial statements for more information.
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