Health Net 2007 Annual Report Download - page 23

Rights expire at a price of $.01 per Right. In addition, at any time after a person becomes an Acquiring Person or
is determined to be and Adverse Person and prior to such person becoming (together with such person’s affiliates
and associates) the beneficial owner of 50% or more of the outstanding Common Stock, at the election of our
Board of Directors, the outstanding Rights (other than those beneficially owned by an Acquiring Person, Adverse
Person or an affiliate or associate of an Acquiring Person or Adverse Person) may be exchanged, in whole or in
part, for shares of Common Stock, or shares of preferred stock of the Company having essentially the same value
or economic rights as such shares.
Potential Acquisitions and Divestitures
We continue to evaluate the profitability realized or likely to be realized by our existing businesses and
operations. From time to time we review, from a strategic standpoint, potential acquisitions and divestitures in
light of our core businesses and growth strategies.
Item 1A. Risk Factors
Cautionary Statements
The following discussion, as well as other portions of this Annual Report on Form 10-K, contain “forward-
looking statements” within the meaning of Section 21E of the Exchange Act, and Section 27A of the Securities
Act of 1933, as amended, regarding our business, financial condition and results of operations. We intend such
forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of
complying with these safe harbor provisions. These forward-looking statements involve a number of risks and
uncertainties. All statements, other than statements of historical information provided or incorporated by
reference herein, may be deemed to be forward-looking statements. Without limiting the foregoing, the words
“believes,” “anticipates,” “plans,” “expects,” “may,” “should,” “could,” “estimate” and “intend” and other
similar expressions are intended to identify forward-looking statements. Managed health care companies operate
in a highly competitive, constantly changing environment that is significantly influenced by, among other things,
aggressive marketing and pricing practices of competitors and regulatory oversight. Actual results could differ
materially due to, among other things, rising health care costs, negative prior period claims reserve
developments, trends in medical care ratios, issues relating to provider contracts, litigation costs, regulatory fines,
operational issues, health care reform and general business conditions. Additional factors that could cause our
actual results to differ materially from those reflected in forward-looking statements include, but are not limited
to, the factors set forth below and the risks discussed in our other filings from time to time with the SEC.
Any or all forward-looking statements in this Form 10-K and in any other public filings or statements we
make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or
unknown risks and uncertainties. Many of the factors discussed below will be important in determining future
results. These factors should be considered in conjunction with any discussion of operations or results by us or
our representatives, including any forward-looking discussion, as well as comments contained in press releases,
presentations to securities analysts or investors or other communications by us. You should not place undue
reliance on any forward-looking statements, which reflect management’s analysis, judgment, belief or
expectation only as of the date thereof. Except as may be required by law, we do not undertake to address or
update forward-looking statements in future filings or communications regarding our business or operating
results, and do not undertake to address how any of these factors may have caused results to differ from
discussions or information contained in previous filings or communications.
Our profitability will depend, in part, on our ability to accurately predict and control health care costs.
A substantial majority of the revenue we receive is used to pay the costs of health care services or supplies
delivered to our members. The total health care costs we incur are affected by the number and type of individual
services provided and the cost of each service. Our future profitability will depend, in part, on our ability to
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