Health Net 2013 Annual Report Download - page 84

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Divested Operations and Services Reportable Segment Results
The following table summarizes the operating results for the Divested Operations and Services reportable
segment for the years ended December 31, 2012 and 2011. Our Divested Operations and Services reportable segment
was closed out effective January 1, 2013 as discussed below.
Year Ended December 31,
2013 2012 2011
(Dollars in thousands)
Health plan services premiums ............................ $ — $ — $ 2,344
Net investment income......................................... — — 69
Administrative services fees and other income.... — 11 —
Divested operations and services revenue............ — 40,471 34,446
Total revenues....................................................... — 40,482 36,859
Health plan services ............................................. — 174 930
General and administrative................................... — (94) 1,714
Selling................................................................... — — 202
Depreciation and amortization ............................. — 1 12
Interest.................................................................. — — 185
Divested operations and services expenses.......... — 85,824 163,546
Adjustment to loss on sale of Northeast health
plan subsidiaries .............................................. — — (40,815)
Total expenses...................................................... — 85,905 125,774
Loss from continuing operations before income
taxes................................................................. — (45,423) (88,915)
Income tax benefit................................................ — (17,858) (40,769)
Loss from continuing operations.......................... $ — $ (27,565) $ (48,146)
Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Our Divested Operations and Services reportable segment included operations of our businesses that provided
administrative and run out support services in connection with the Northeast Sale and the transition-related revenues
and expenses of our Medicare PDP business that was sold on April 1, 2012. As of December 31, 2012, we had
substantially completed the administration and run-out of both of our divested businesses. See Notes 3 and 14 to our
consolidated financial statements for additional information regarding the sale of our Medicare PDP business and the
Northeast Sale, and for more information regarding our reportable segments, respectively.
Year Ended December 31, 2012 Compared to Year Ended December 31, 2011
In connection with the sale of our Medicare PDP business, we provided Medicare PDP transition-related services
to CVS Caremark during the year ended December 31, 2012. Revenues and expenses associated with providing
transition-related services to CVS Caremark were $40.5 million and $33.4 million, respectively, for the year ended
December 31, 2012.
Our operating results for the year ended December 31, 2012 were impacted by $7.4 million in lease impairment
costs related to our divested Northeast business, which were included in divested operations and services expenses. Our
operating results for the year ended December 31, 2011 were impacted by a $40.8 million favorable adjustment to loss
on sale of our Northeast health plan subsidiaries as a result of a purchase price adjustment.
On July 1, 2011, the United Administrative Services Agreements terminated and we entered into Claims
Servicing Agreements pursuant to which we adjudicate run out claims and provide limited other administrative services
to United and its affiliates. The revenues and expenses associated with providing services under the Claims Servicing
Agreements were $0 and $52.4 million, respectively, for the year ended December 31, 2012, and the revenues and