Health Net 2009 Annual Report Download - page 45

disaster or similar event could have a material adverse effect on our business, financial condition and results
of operations.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
We lease office space for our principal executive offices in Woodland Hills, California. Our executive
offices, comprising approximately 125,315 square feet, are occupied under a lease that will expire on
December 31, 2014. A significant portion of our California HMO operations are also housed in Woodland Hills,
in a separate 333,954 square foot leased facility. The lease for this two-building facility expires December 31,
2011. Combined rent and rent-related obligations for our Woodland Hills facilities were approximately $14.8
million in 2009.
We also lease an aggregate of approximately 548,807 square feet of office space in Rancho Cordova,
California for certain Commercial and Government operations. Our aggregate rent and rent-related obligations
under these leases were approximately $11.6 million in 2009. These leases expire at various dates ranging from
2010 to 2014. We also lease a total of approximately 67,293 square feet of office space in San Rafael, California
for certain specialty services operations.
On March 29, 2007 we sold our 68-acre commercial campus in Shelton, Connecticut (the Shelton Property)
to The Dacourt Group, Inc. (Dacourt), dba HN Property Owner, LLC, and leased it back from the Buyer under an
operating lease agreement for an initial term of ten years with an option to extend for two additional terms of ten
years each. Under the Shelton Property lease agreement and other lease agreements, we lease an aggregate of
approximately 492,673 square feet of office space in Shelton, Connecticut primarily used for the provision of
administrative services to United and certain of its affiliates as part of our Northeast Operations. Our aggregate
rent and rent-related obligations under these leases was approximately $9.5 million in 2009. These leases expire
at various dates ranging from 2016 to 2017.
In addition to the office space referenced above, we lease approximately 73 sites in 23 states, totaling
approximately 824,122 square feet of space. We also own a data center facility in Rancho Cordova, California
comprising approximately 82,000 square feet of space.
We believe that our ownership and rental costs are consistent with those associated with similar space in the
applicable local areas. Our properties are well maintained, adequately meet our needs and are being utilized for
their intended purposes.
Item 3. Legal Proceedings.
Litigation Related to the Sale of Businesses
AmCareco Litigation
We are a defendant in two related litigation matters pending in Louisiana and Texas state courts, both of
which relate to claims asserted by three separate state receivers overseeing the liquidation of three health plans in
Louisiana, Texas and Oklahoma that were previously owned by our former subsidiary, Foundation Health
Corporation (FHC), which merged into Health Net, Inc. in January 2001. In 1999, FHC sold its interest in these
plans to AmCareco, Inc. (AmCareco). We retained a minority interest in the three plans after the sale. Thereafter,
the three plans became known as AmCare of Louisiana (AmCare-LA), AmCare of Oklahoma (AmCare-OK) and
AmCare of Texas (AmCare-TX). In 2002, three years after the sale of the plans to AmCareco, each of the
AmCare plans was placed under state oversight and ultimately into receivership. The receivers for each of the
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