Health Net 2006 Annual Report Download - page 49

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(4) No cash dividends were declared in each of the years presented.
(5) Includes loss on settlement from disposition of discontinued operations of $89.1 million, net of tax.
(6) Includes cumulative effect of a change in accounting principle, net of tax, of $8.9 million as a result of adopting SFAS
No. 142 “Goodwill and Other Intangible Assets.”
(7) MCR is calculated as health plan services cost divided by health plan services premiums revenue.
(8) Government contracts cost ratio is calculated as government contracts cost divided by government contracts revenue.
(9) The administrative ratio is computed as the sum of general and administrative and depreciation expenses divided by the
sum of health plan services premiums and administrative services fees and other income.
(10) The selling costs ratio is computed as selling expenses divided by health plan services premium revenues.
(11) PMPM is calculated based on total at-risk member months and excludes ASO member months.
(12) On January 1, 2006, we began offering the new Medicare Part D prescription drug benefits.
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