Health Net 2007 Annual Report Download - page 70

and preservation of principal by investing in high-quality, investment grade securities while maintaining liquidity
in each portfolio sufficient to meet our cash flow requirements and attaining the highest total return on invested
funds.
Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
Net cash used in investing activities increased by $45.3 million compared to the year ended December 31,
2006 primarily due to the following:
• Net increase in purchases of investments available for sale portfolio of $140 million, and
• Increase of $6.3 million in cash paid for acquisitions, of which $80.3 million was paid for the Guardian
Transaction during 2007 as compared to $74 million paid to acquire certain health plan assets of
Universal Care, Inc. during 2006, partially offset by
• Increase in net proceeds of $92.5 million from the sales of property and equipment including the
Shelton, CT and Tucson, AZ facilities.
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005
Net cash used in investing activities decreased by $59.2 million compared to the year ended December 31,
2005 primarily due to the following:
• Reduction in the net purchase of long-term investments of $262 million during 2006, partially offset by
• Universal Care Acquisition for $74 million in 2006, and
• Cash proceeds received of $79 million from the sale of certain non-real estate fixed assets in a sale/
leaseback transaction with an independent third party in 2005.
Financing Activities
Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
Net cash used in financing activities decreased by $57.6 million primarily due to an increase in net
borrowings of $36 million and decrease in share repurchases of $21 million. See “—Capital Structure” below on
more information regarding these transactions.
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005
Net cash used in financing activities increased by $203.7 million primarily due to $254 million used to
repurchase our common stock as discussed in the “—Capital Structure” below.
We received $497 million net proceeds under our bridge and term loan agreements in June 2006 of which
$465 million was used to redeem our Senior Notes in August 2006 and settle our Swap Contracts in September
2006. See “—Capital Structure—Bridge Loan Agreement and—Term Loan Credit Agreement” below.
Capital Structure
Stock Repurchase Program
On October 26, 2007, our Board of Directors increased the size of our stock repurchase program by $250
million, bringing the total amount of the program to $700 million. Subject to Board approval, additional amounts
are added to the repurchase program from time to time based on exercise proceeds and tax benefits the Company
receives from the employee stock options. We repurchased 4,322,959 shares during the year ended December 31,
2007, for aggregate consideration of approximately $230 million.
We used net free cash available to fund the share repurchases. The remaining authorization under our stock
repurchase program as of December 31, 2007 was $346 million. As of December 31, 2007, we had repurchased
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