Health Net 2006 Annual Report Download - page 149

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HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 17—Quarterly Information (Unaudited)
The following interim financial information presents the 2006 and 2005 results of operations on a quarterly
basis:
2006
March 31(3) June 30(1),(3) September 30(1),(3) December 31(1),(3)
(Dollars in millions, except per share data)
Total revenues .......................... $3,186.6 $3,266.1 $3,247.4 $3,208.2
Debt refinancing charge ................... — — 70.1 —
Litigation charge ......................... — — — 37.1
Income from operations before income taxes . . 124.9 126.1 92.6 135.2
Net income ............................. 76.6 77.0 90.9(2) 84.8
Basic earnings per share ................... $ 0.67 $ 0.67 $ 0.78(2) $ 0.74
Diluted earnings per share ................. $ 0.65 $ 0.65 $ 0.76(2) $ 0.72
(1) Includes the operations of Universal Care Acquisition effective April 1, 2006.
(2) Includes $32 million of income tax benefit from the sale of certain subsidiaries (see Note 10).
(3) Includes CMS risk factor adjustments for our Medicare business.
2005
March 31 June 30 September 30 December 31
(Dollars in millions, except per share data)
Total revenues ....................................... $2,911.7 $3,019.9 $3,058.8 $2,950.2
Litigation, severance and related benefit costs .............. 67.1 16.2 — —
Income (loss) from operations before income taxes .......... 32.3 88.1 129.8 126.0
Net income (loss) .................................... 21.3 53.6 78.2 76.7
Basic earnings per share (1) ............................ $ 0.19 $ 0.48 $ 0.69 $ 0.67
Diluted earnings per share (1) .......................... $ 0.19 $ 0.47 $ 0.67 $ 0.65
(1) The sum of the quarterly amounts may not equal the year-to-date amounts due to rounding.
Note 18—Subsequent Events
Purchase of Guardian Joint Venture
On February 27, 2007, we announced that we had entered into an agreement with The Guardian Life
Insurance Company of America to purchase Guardian’s 50% stake in the Health Care Solutions (“HCS”) joint
venture (the “Transition Agreement”). We have deposited approximately $69.4 million into an escrow account
pursuant to the terms of our agreement with Guardian, which amount will be released to Guardian upon receipt of
required regulatory approvals and satisfaction of all closing conditions, anticipated to be by the end of the second
quarter of 2007. The amount of the payment is subject to adjustment based on HCS membership at the closing
date.
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