Health Net 1998 Annual Report Download - page 56

5 4 F O U N D ATIO N H EALTH SYST EMS, I N C .
Presented below are segment data for the three years in the period ended December 31,1998 (amounts
in thousands): Government
Contracts/
Health Plan Specialty
1998 Services Services Other Total
Revenues from external sources $7,440,981 $1,356,054 $ — $8,797,035
Intersegment revenues 16,388 234,380 — 250,768
Investment and other income 69,760 18,110 16,011 103,881
Interest expense 11,937 805 1,927 14,669
Depreciation and amortization 87,579 15,104 2,074 104,757
Asset impairment costs
(i)
147,596 5,200 15,162 167,958
Restructuring, merger and other charges
(i)
7,107 — 19,871 26,978
Segment profit (loss)
(i)
(154,613) 113,832 (33,161) (73,942)
Segment assets 2,799,484 1,099,368 142,143 4,040,995
(i)Asset impairment, restructuring,merger and other charges exclude $135.9 million of other charges which were primarily included in health plan services expenses.
Government
Contracts/
Health Plan Specialty
1997 Services Services Other Total
Revenues from external sources $5,829,444 $1,291,275 $ — $7,120,719
Intersegment revenues 28,487 304,678 — 333,165
Investment and other income 72,351 19,248 13,906 105,505
Interest expense 8,474 1,443 2,243 12,160
Depreciation and amortization 67,952 9,648 2,019 79,619
Restructuring, merger and other charges 181,165 40,399 315 221,879
Segment profit (loss) 14,864 58,332 655 73,851
Segment assets 3,457,663 527,859 87,052 4,072,574
Government
Contracts/
Health Plan Specialty
1996 Services Services Other Total
Revenues from external sources $5,395,125 $1,225,723 $ — $6,620,848
Intersegment revenues 20,108 297,378 — 317,486
Investment and other income 63,211 8,808 11,180 83,199
Interest expense 5,460 1,071 672 7,203
Depreciation and amortization 88,369 9,505 348 98,222
Restructuring, merger and other charges 19,708 4,500 — 24,208
Segment profit (loss) 45,777 18,052 — 63,829
Note 16 – Se gme nt Inform a t i o n
As of December 31, 1 9 9 8 , the Company adopted
S F AS No. 1 3 1 ,“ D i s c l o s u res About Segments of an
E n t e rp rise and Related Inform a t i o n ”( “ S FAS 131”).
S F AS 131 establishes annual and interim re p o rt i n g
s t a n d a rds for an enterp ri s e ’s re p o rt a ble segments and
related disclosures about its pro d u c t s ,s e rv i c e s ,g e o-
graphic areas and major customers . Under SFAS 131,
re p o rt a ble segments are to be defined on a basis con-
sistent with re p o rts used by management to assess
p e r f o rmance and allocate re s o u rc e s .The Company ’s
re p o rt a ble segments are business units that offer dif-
f e rent products to different classes of customers .T h e
C o m p a ny has two re p o rt a ble segments: Health Plan
S e rvices and Gove rnment Contracts/Specialty Ser-
v i c e s .The Health Plan Services segment provides a
c o m p re h e n s ive range of health care services thro u g h
HMO and PPO netwo r k s .The Gove rnment Con-
tracts/ Specialty Services segment administers large,
mu l t i - year managed care gove rnment contracts and
also offers behav i o r a l ,d e n t a l ,v i s i o n , and pharm a c e u-
tical products and serv i c e s .
The Company evaluates performance and
allocates resources based on profit or loss from oper-
ations before income taxes.The accounting policies
of the reportable segments are the same as those
described in the summary of significant accounting
policies, except intersegment transactions are not
eliminated.