Health Net 2006 Annual Report Download - page 48

Item 6. Selected Financial Data.
The following selected financial and operating data are derived from our audited consolidated financial
statements. The selected financial and operating data should be read in conjunction with “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial
statements and notes thereto contained elsewhere in this Annual Report on Form 10-K.
Year Ended December 31,
2006(12) 2005 2004 2003 2002
(Dollars in thousands, except per share and PMPM data)
REVENUES:
Health plan services premiums (1) ............ $10,364,740 $ 9,506,865 $ 9,517,530 $ 9,046,303 $ 8,539,162
Government contracts ...................... 2,376,014 2,307,483 2,021,871 1,865,773 1,498,689
Net investment income ..................... 111,042 72,751 58,147 59,332 65,210
Administrative services fees and other
income (1) ............................. 56,554 53,434 48,845 93,294 91,697
Total revenues ........................ $12,908,350 $11,940,533 $11,646,393 $11,064,702 $10,194,758
INCOME SUMMARY (2):
Income from continuing operations before
cumulative effect of changes in accounting
principle ............................... $ 329,313 $ 229,785 $ 42,604(3)$ 323,080 $ 234,521
Net income .............................. $ 329,313 $ 229,785 $ 42,604 $ 234,030(5)$ 225,580(6)
NET INCOME PER SHARE—DILUTED (2):
Income from continuing operations before
cumulative effect of changes in accounting
principle ............................... $ 2.78 $ 1.99 $ 0.38 $ 2.73 $ 1.86
Net income .............................. $ 2.78 $ 1.99 $ 0.38 $ 1.98 $ 1.79
Weighted average shares outstanding:
Diluted .............................. 118,310 115,641 113,038 118,278 126,004
BALANCE SHEET DATA (4):
Cash and cash equivalents and investments
available for sale ........................ $ 2,120,844 $ 2,106,303 $ 1,782,102 $ 1,943,660 $ 1,841,768
Total assets .............................. 4,297,022 3,940,722 3,653,194 3,549,276 3,460,751
Senior notes payable ....................... — 387,954 397,760 398,963 398,821
Bridge loan .............................. 200,000 ————
Term loan ............................... 300,000 ————
Total stockholders’ equity ................... 1,778,965 1,589,075 1,272,880 1,294,225 1,300,416
OPERATING DATA:
Pretax margin ............................ 3.7% 3.2% 0.6% 4.7% 3.5%
Health plan services medical care ratio
(MCR) (7) ............................. 83.0% 84.3% 88.4% 83.1% 83.9%
Government contracts cost ratio (8) ........... 94.0% 95.8% 95.3% 95.9% 96.9%
Administrative ratio (9) ..................... 11.4% 10.3% 9.7% 10.6% 10.6%
Selling costs ratio (10) ...................... 2.4% 2.3% 2.5% 2.6% 2.3%
Health plan services premiums per member per
month (PMPM) (11) ..................... $ 243.70 $ 235.80 $ 216.34 $ 200.93 $ 186.00
Health plan services costs PMPM (11) ......... $ 202.22 $ 198.75 $ 191.24 $ 166.96 $ 155.99
Net cash provided by (used in) operating
activities ............................... $ 277,937 $ 191,394 $ (54,912) $ 379,772 $ 413,517
Net cash (used in) investing activities .......... $ (184,879) $ (244,046) $ (14,242) $ (105,522) $ (182,891)
Net cash (used in) provided by financing
activities ............................... $ (130,737) $ 73,035 $ (69,615) $ (246,172) $ (305,562)
(1) Reflects reclassification of administrative services only revenue (ASO) amounts for 2005, 2004, 2003 and 2002. See
Note 2 to the consolidated financial statements.
(2) Includes debt refinancing, litigation, severance and related benefit costs, asset impairments and net (gain) loss on sales of
business and properties of $107.2 million, $83.3 million, $31.7 million, $(2.5) million and $65.3 million for 2006, 2005,
2004, 2003 and 2002, respectively.
(3) Includes $169 million of pretax expenses associated with provider settlements. See Note 12 to the consolidated financial
statements.
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