Health Net 2013 Annual Report Download - page 25

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50% of the assets, cash flow or earning power of the Company is sold or otherwise transferred to any other person, the
Rights will “flip-over” and entitle each holder of a Right, other than an Acquiring Person or an Adverse Person and such
person’s affiliates and associates, to purchase, upon exercise at the then current exercise price of such Right, such
number of shares of common stock of the acquiring company which at the time of such transaction would have a
market value of two times such exercise price.
We may redeem the Rights at a price of $0.01 per Right at any time until the earlier of (i) 10 days following the
date that any Acquiring Person becomes the beneficial owner of 15% or more of the outstanding Common Stock and
(ii) the date the Rights expire. In addition, at any time after a person becomes an Acquiring Person or is determined to
be an 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. See “Item 1A. Risk Factors—Acquisitions, divestitures and other significant
transactions may adversely affect our business.”
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, statements including the words “believes,” “anticipates,” “plans,”
“expects,” “may,” “should,” “could,” “estimate,” “intend,” “feels,” “will,” “projects” and other similar expressions are
intended to identify forward-looking statements. Actual results could differ materially from those expressed in, or
implied or projected by the forward-looking information and statements due to, among other things, health care reform
and other increased government participation in and taxation or regulation of health benefits and managed care
operations, including but not limited to the implementation of the Patient Protection and Affordable Care Act and the
Health Care and Education Reconciliation Act of 2010 (collectively, the "ACA") and related fees, assessments and
taxes; the Company’s ability to successfully participate in California’s Coordinated Care Initiative, which is subject to a
number of risks inherent in untested health care initiatives and requires us to adequately predict the costs of providing
benefits to individuals that are generally among the most chronically ill within each of Medicare and Medi-Cal and
implement delivery systems for benefits with which we have limited operating experience; our ability to successfully
participate in the federal and state health insurance exchanges under the ACA, which have experienced technical
challenges in implementation and which involve uncertainties related to the mix and volume of business that could
negatively impact the adequacy of our premium rates and may not be sufficiently offset by the risk apportionment
provisions of the ACA; increasing health care costs; our ability to reduce administrative expenses while maintaining
targeted levels of service and operating performance; negative prior period claims reserve developments; rate cuts and
other risks and uncertainties affecting our Medicare or Medicaid businesses; our ability to successfully participate in
Arizona’s Medicaid program; trends in medical care ratios; membership declines or negative changes in our health care
product mix; unexpected utilization patterns or unexpectedly severe or widespread illnesses; the timing of collections
on amounts receivable from state and federal governments and agencies, including collections of amounts owed under
the T-3 contract; litigation costs; regulatory issues with federal and state agencies including, but not limited to, the
California Department of Managed Health Care, the Centers for Medicare & Medicaid Services, the Office of Civil
Rights of the U.S. Department of Health and Human Services and state departments of insurance; operational issues;
changes in economic or market conditions including a further decline in the economy; failure to effectively oversee our
third-party vendors; noncompliance by our or our business associates with any privacy laws or any security breach
involving the misappropriation, loss or other unauthorized use or disclosure of confidential information; impairment of