Health Net 2013 Annual Report Download - page 128
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HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
F-24
Northeast Sale
On December 11, 2009, we completed the sale of the Acquired Companies to United. As part of the Northeast
Sale, we were required to continue to serve the members of the Acquired Companies and provide certain administrative
services to United until July 1, 2011 under administrative services agreements, and we are required to provide run-out
support services under claims servicing agreements with United, which will be in effect until the last run out claim
under the applicable claims servicing agreement has been adjudicated. All revenues and expenses related to the
Northeast Sale, including those relating to the administrative services and/or claims servicing agreements and any
revenues and expenses related to the run-out, are reported as part of divested operations and services revenue and
expenses. During the year ended December 31, 2012, we recorded no adjustment to the loss on sale of Northeast health
plan subsidiaries, and during the year ended December 31, 2011, we recorded a $40.8 million reduction to the loss on
sale of Northeast health plan subsidiaries.
As of December 31, 2012, we had substantially completed the administration and run-out of our divested
businesses.
Note 4—Investments
Investments classified as available-for-sale, which consist primarily of debt securities, are stated at fair value.
Unrealized gains and losses are excluded from earnings and reported as other comprehensive income, net of income tax
effects. The cost of investments sold is determined in accordance with the specific identification method, and realized
gains and losses are included in net investment income. We periodically assess our available-for-sale investments for
other-than-temporary impairment. Any such other-than-temporary impairment loss is recognized as a realized loss,
which is recorded through earnings, if related to credit losses.
During the years ended December 31, 2013 and 2012, we recognized no losses from other-than-temporary
impairments of our cash equivalents and available-for-sale investments.
As of December 31, 2013, we classified $59.8 million as investments available-for-sale-noncurrent because we
did not intend to sell and we believed it may take longer than a year for such impaired securities to recover. This
classification does not affect the marketability or the valuation of the investments, which are reflected at their market
value as of December 31, 2013. We had no noncurrent available-for-sale investments as of December 31, 2012.