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28 HEALTH NET 2000 Annual Report
The Board of Directors of the Company addresses its oversight responsibility for the consolidated financial statements
through its Audit Committee (the “Committee”).The Committee currently consists of Gov. George Deukmejian,Thomas
T. Farley, Richard J. Stegemeier (Chairman), and Bruce G.Willison, each of whom is an independent outside director.
In fulfilling its responsibilities in 2000, the Committee reviewed the overall scope of the independent auditors’audit
plan and reviewed the independent auditors’non-audit services to the Company.The Committee also exercised oversight
responsibilities over various financial and regulatory matters.
The Committee’s meetings are designed to facilitate open communication between the independent auditors and
Committee members.To ensure auditor independence, the Committee meets privately with both the independent
auditors and also with the chief auditor of the Company’s Internal Audit Department, thereby providing for full and
free access to the Committee.
Richard J. Stegemeier
Audit Committee Chairman
March 2, 2001
Report of Independent Auditors
To the Board of Directors and Stockholders of
Health Net, Inc.
Woodland Hills, California
We have audited the accompanying consolidated balance sheets of Health Net, Inc. and subsidiaries (the “Company”) as of
December 31, 2000 and 1999, and the related consolidated statements of operations, stockholders’equity, and cash flows for
each of the three years in the period ended December 31, 2000.These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position
of Health Net, Inc. and subsidiaries at December 31, 2000 and 1999, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles gener-
ally accepted in the United States of America.
Los Angeles, California
February 20, 2001
Report of the Audit Committee of the Board of Directors
of Health Net, Inc.