Health Net 2005 Annual Report Download - page 110

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HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows our investments’ gross unrealized losses and fair value for individual securities
that have been in a continuous loss position through December 31, 2005:
Less than 12 Months 12 Months or More Total
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
(Dollars in millions)
Mortgage-backed ...................... $130.8 $ (2.6) $162.1 $ (4.6) $ 292.9 $ (7.2)
U.S. government and agencies ............ 168.9 (3.5) 182.8 (5.3) 351.7 (8.8)
Obligation of states and other political
subdivisions ........................ 276.2 (2.3) 4.2 (0.1) 280.4 (2.4)
Corporate debt ........................ 99.1 (2.3) 74.9 (2.5) 174.0 (4.8)
$675.0 $(10.7) $424.0 $(12.5) $1,099.0 $(23.2)
The following table shows the number of our individual securities that have been in a continuous loss
position at December 31, 2005.
Less than
12 Months
12 Months
or More Total
Mortgage-backed .................................... 41 45 86
U.S. government and agencies .......................... 45 40 85
Obligation of states and other political subdivisions ......... 93 2 95
Corporate debt ...................................... 32 22 54
211 109 320
The unrealized loss position for these securities is due to interest rate volatility. The above referenced
investments are interest-yielding debt securities of varying maturities. The value of fixed-income securities is
sensitive to fluctuations in short- and long-term interest rates, with the value decreasing as such rates increase
and increasing as such rates decrease.
The investments listed above are highly rated securities. The corporate debt securities have a minimum
rating of “A” or better and all other investments have a minimum rating of “AA” or better as rated by S&P
and/or Moody’s. At this time, there is no indication of default on interest or principal payments.
Note 5—Property and Equipment
Property and equipment is comprised of the following as of December 31:
2005 2004
(Dollars in millions)
Land .................................................... $ 8.9 $ 8.9
Leasehold improvements under development .................... 2.2 5.3
Buildings and improvements ................................. 64.7 72.2
Furniture, equipment and software ............................. 198.5 387.6
274.3 474.0
Less accumulated depreciation ................................ (148.5) (289.4)
Property and equipment, net .................................. $125.8 $ 184.6
Our depreciation expense was $30.3 million, $41.4 million and $55.9 million for the years ended
December 31, 2005, 2004 and 2003, respectively.
F-22