Health Net 2014 Annual Report Download - page 104

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The fair value of our fixed rate borrowing, which consists of only our Senior Notes, as of December 31, 2014 was
approximately $437.0 million, which was based on quoted market prices. Where quoted market prices were not readily
available, fair values were estimated using valuation methodologies based on available and observable market
information. Such valuation methodologies include reviewing the value ascribed to the most recent financing,
comparing the security with securities of publicly traded companies in a similar line of business, and reviewing the
underlying financial performance including estimating discounted cash flows. The following table presents the expected
cash outflows relating to market risk sensitive debt obligations as of December 31, 2014. These cash outflows include
expected principal and interest payments consistent with the terms of the outstanding debt as of December 31, 2014.
2015 2016 2017 2018 2019 Thereafter Total
(Amounts in millions)
Fixed-rate borrowing:
Principal.............................. $ — $ — $ 400.0 $ — $ — $ — $ 400.0
Interest ................................ 25.5 25.5 10.7 ———61.7
Cash outflow on fixed-rate
borrowing ................................ $25.5 $25.5 $410.7 $ — $ — $ — $ 461.7
Variable-rate borrowing:
Principal.............................. $ — $ 100.0 $ — $ — $ — $ — $ 100.0
Interest ................................ 1.8 2.0 ————3.8
Cash outflow on variable-rate
borrowing ................................ $1.8 $102.0 $ — $ — $ — $ — $ 103.8
Total cash outflow on borrowings $27.3 $127.5 $410.7 $ — $ — $ — $ 565.5
Item 8. Financial Statements and Supplementary Data.
The financial statements listed on the accompanying Index to Consolidated Financial Statements set forth on page
F-1 and covered by the Report of Independent Registered Public Accounting Firm are incorporated in this Item 8 by
reference and filed as part of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) that are designed to ensure that information required to be disclosed in the reports we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
forms, and that such information is accumulated and communicated to our management, including our Chief Executive
Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In
designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.
As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with
the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by
this report. Based upon the evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of such
period.