Health Net 2002 Annual Report Download - page 85

Download and view the complete annual report

Please find page 85 of the 2002 Health Net annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 90

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90

HEALTH NET, INC. | 83
Real Estate Lease Termination Costs— The 2001 Charge
included charges of $5.1 million related to termination of
lease obligations and non-cancelable lease costs for excess
office space resulting from streamlined operations and
consolidation efforts. Through December 31, 2002, we
had paid $1.7 million of the termination obligations. The
balance of the termination obligations of $3.4 million will
be paid during the remainder of the respective lease terms.
Other Costs— The 2001 Charge included charges of $3.4
million related to costs associated with closing certain data
center operations and systems and other activities which
were completed and paid during in the first quarter ended
March 31, 2002.
NOTE 15—Segment Information
SFAS No. 131, “Disclosures About Segments of an
Enterprise and Related Information” (SFAS No. 131),
establishes annual and interim reporting standards for an
enterprise’s reportable segments and related disclosures
about its products, services, geographic areas and major
customers. Under SFAS No. 131, reportable segments are
to be defined on a basis consistent with reports used by
our chief operating decision maker to assess performance
and allocate resources. The Company’s reportable segments
are business units that offer different products to different
classes of customers.
We currently operate within two reportable segments:
Health Plan Services and Government Contracts. Our
current Health Plan Services reportable segment includes
the operations of our health plans in the states of Arizona,
California, Connecticut, New Jersey, New York, Oregon
and Pennsylvania, the operations of our health and life
insurance companies and our behavioral health, dental,
vision and pharmaceutical services subsidiaries.
Our Government Contracts reportable segment
includes government-sponsored multi-year managed care
plans through the TRICARE programs and other govern-
ment contracts.
The Company evaluates performance and allocates
resources based on profit or loss from operations 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.
During the fourth quarter of 2002, changes we made
in our organizational structure, in the interrelationships of
our businesses and internal reporting resulted in changes
to our reportable segments.
Certain 2001 and 2000 amounts have been reclassi-
fied to conform to the 2002 presentation as a result of
changes in our organizational structure. See Notes 1 and 2.