Health Net 2015 Annual Report Download - page 88

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through items related to our Medicaid program, including inter-governmental transfers, and the ACA premium
stabilization program. See Note 2 to our consolidated financial statements for more information.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Net cash used in financing activities increased by $151.8 million for the year ended December 31, 2014 as
compared to the year ended December 31, 2013 primarily due to a $119.5 million decrease in cash from customer funds
administered and a $74.7 million increase in share repurchases, partially offset by a $23.8 million increase in checks
outstanding and a $17.0 million increase in proceeds from the exercise of stock options and employee stock purchases.
Capital Structure
Our debt-to-total capital ratio was 27.2 percent as of December 31, 2015 compared with 22.6 percent as of
December 31, 2014. This increase is primarily due to an increase in borrowings under our revolving credit facility.
Stock Repurchase Program
On May 2, 2011, our Board of Directors authorized our stock repurchase program pursuant to which a total of
$300 million of our outstanding common stock could be repurchased. On March 8, 2012, our Board of Directors
approved a $323.7 million increase to our stock repurchase program and on December 16, 2014, our Board of Directors
approved another increase to our stock repurchase program. This latest increase, when taken together with the
remaining authorization at that time, brought our total authorization up to $400.0 million.
During the year ended December 31, 2015, we repurchased 1.7 million shares of our common stock for aggregate
consideration of $93.8 million under our stock repurchase program. We primarily funded these repurchases through our
revolving credit facility. As of December 31, 2015, the remaining authorization under our stock repurchase program
was $306.2 million.
Our stock repurchase program may be suspended or discontinued at any time, and we have suspended our stock
repurchase program until further notice in connection with our pending Merger with Centene. For additional
information on our stock repurchase program, see Note 9 to our consolidated financial statements.
Revolving Credit Facility
In October 2011, we entered into a $600 million unsecured revolving credit facility due in October 2016, which
includes a $400 million sublimit for the issuance of standby letters of credit and a $50 million sublimit for swing line
loans (which sublimits may be increased in connection with any increase in the credit facility described below). In
addition, we have the ability from time to time to increase the credit facility by up to an additional $200 million in the
aggregate, subject to the receipt of additional commitments. As of December 31, 2015, $285.0 million was outstanding
under our revolving credit facility and the maximum amount available for borrowing under the revolving credit facility
was $307.9 million (see "—Letters of Credit" below). As of February 23, 2016, we had $285.0 million in borrowings
outstanding under our revolving credit facility.
Amounts outstanding under our revolving credit facility bear interest, at the Company’s option, at either (a) the
base rate (which is a rate per annum equal to the greatest of (i) the federal funds rate plus one-half of one percent,
(ii) Bank of America, N.A.’s “prime rate” and (iii) the Eurodollar Rate (as such term is defined in the credit facility) for
a one-month interest period plus one percent) plus an applicable margin ranging from 45 to 105 basis points or (b) the
Eurodollar Rate plus an applicable margin ranging from 145 to 205 basis points. The applicable margins are based on
our consolidated leverage ratio, as specified in the credit facility, and are subject to adjustment following the
Company’s delivery of a compliance certificate for each fiscal quarter.
Our revolving credit facility includes, among other customary terms and conditions, limitations (subject to
specified exclusions) on our and our subsidiaries’ ability to incur debt; create liens; engage in certain mergers,
consolidations and acquisitions; sell or transfer assets; enter into agreements that restrict the ability to pay dividends or
make or repay loans or advances; make investments, loans, and advances; engage in transactions with affiliates; and
make dividends. In addition, we are required to be in compliance at the end of each fiscal quarter with a specified
consolidated leverage ratio and consolidated fixed charge coverage ratio.
Our revolving credit facility contains customary events of default, including nonpayment of principal or other
amounts when due; breach of covenants; inaccuracy of representations and warranties; cross-default and/or cross-
acceleration to other indebtedness of the Company or our subsidiaries in excess of $50 million; certain ERISA-related
events; noncompliance by the Company or any of our subsidiaries with any material term or provision of the HMO