We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Health Net Inc. | NYSE:HNT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 67.19 | 0 | 01:00:00 |
|
|
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
95-4288333
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
21650 Oxnard Street, Woodland Hills, CA
|
91367
|
(Address of principal executive offices)
|
(Zip Code)
|
x
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
|
|
|
|
|
|
|
|
Page
|
Part I—FINANCIAL INFORMATION
|
|
Item 1—Financial Statements (Unaudited)
|
|
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013
|
|
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013
|
|
Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013
|
|
Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2014 and 2013
|
|
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013
|
|
Condensed Notes to Consolidated Financial Statements
|
|
Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 3—Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 4—Controls and Procedures
|
|
Part II—OTHER INFORMATION
|
|
Item 1—Legal Proceedings
|
|
Item 1A—Risk Factors
|
|
Item 2—Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Item 3—Defaults Upon Senior Securities
|
|
Item 4—Mine Safety Disclosures
|
|
Item 5—Other Information
|
|
Item 6—Exhibits
|
|
Signatures
|
Item 1.
|
Financial Statements
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Health plan services premiums
|
$
|
3,261,878
|
|
|
$
|
2,578,874
|
|
|
$
|
6,143,223
|
|
|
$
|
5,210,943
|
|
Government contracts
|
154,083
|
|
|
139,942
|
|
|
298,173
|
|
|
274,454
|
|
||||
Net investment income
|
12,043
|
|
|
17,143
|
|
|
23,145
|
|
|
46,694
|
|
||||
Administrative services fees and other income
|
(6,612
|
)
|
|
2,472
|
|
|
(4,214
|
)
|
|
3,377
|
|
||||
Total revenues
|
3,421,392
|
|
|
2,738,431
|
|
|
6,460,327
|
|
|
5,535,468
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Health plan services (excluding depreciation and amortization)
|
2,763,179
|
|
|
2,191,918
|
|
|
5,165,521
|
|
|
4,460,654
|
|
||||
Government contracts
|
133,208
|
|
|
127,400
|
|
|
265,182
|
|
|
252,875
|
|
||||
General and administrative
|
344,734
|
|
|
291,437
|
|
|
705,757
|
|
|
536,672
|
|
||||
Selling
|
64,002
|
|
|
57,769
|
|
|
128,154
|
|
|
116,330
|
|
||||
Depreciation and amortization
|
9,641
|
|
|
9,514
|
|
|
19,304
|
|
|
18,953
|
|
||||
Interest
|
7,826
|
|
|
8,365
|
|
|
15,647
|
|
|
16,653
|
|
||||
Total expenses
|
3,322,590
|
|
|
2,686,403
|
|
|
6,299,565
|
|
|
5,402,137
|
|
||||
Income from operations before income taxes
|
98,802
|
|
|
52,028
|
|
|
160,762
|
|
|
133,331
|
|
||||
Income tax (benefit) provision
|
(22,065
|
)
|
|
18,545
|
|
|
11,108
|
|
|
49,798
|
|
||||
Net income
|
$
|
120,867
|
|
|
$
|
33,483
|
|
|
$
|
149,654
|
|
|
$
|
83,533
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.51
|
|
|
$
|
0.42
|
|
|
$
|
1.87
|
|
|
$
|
1.05
|
|
Diluted
|
$
|
1.49
|
|
|
$
|
0.42
|
|
|
$
|
1.85
|
|
|
$
|
1.04
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
80,250
|
|
|
79,367
|
|
|
80,026
|
|
|
79,438
|
|
||||
Diluted
|
81,218
|
|
|
80,085
|
|
|
81,070
|
|
|
80,287
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income
|
$
|
120,867
|
|
|
$
|
33,483
|
|
|
$
|
149,654
|
|
|
$
|
83,533
|
|
Other comprehensive income (loss) before tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses) on investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses) arising during the period
|
23,520
|
|
|
(65,763
|
)
|
|
51,908
|
|
|
(74,853
|
)
|
||||
Less: Reclassification adjustments for gains included in earnings
|
(1,928
|
)
|
|
(5,647
|
)
|
|
(2,236
|
)
|
|
(22,936
|
)
|
||||
Unrealized gains (losses) on investments available-for-sale, net
|
21,592
|
|
|
(71,410
|
)
|
|
49,672
|
|
|
(97,789
|
)
|
||||
Defined benefit pension plans:
|
|
|
|
|
|
|
|
||||||||
Prior service cost arising during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss arising during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Less: Amortization of prior service cost and net loss included in net periodic pension cost
|
150
|
|
|
643
|
|
|
300
|
|
|
1,286
|
|
||||
Defined benefit pension plans, net
|
150
|
|
|
643
|
|
|
300
|
|
|
1,286
|
|
||||
Other comprehensive income (loss) before tax
|
21,742
|
|
|
(70,767
|
)
|
|
49,972
|
|
|
(96,503
|
)
|
||||
Income tax expense (benefit) related to components of other comprehensive income
|
7,683
|
|
|
(24,882
|
)
|
|
17,556
|
|
|
(33,910
|
)
|
||||
Other comprehensive income (loss), net of tax
|
14,059
|
|
|
(45,885
|
)
|
|
32,416
|
|
|
(62,593
|
)
|
||||
Comprehensive income (loss)
|
$
|
134,926
|
|
|
$
|
(12,402
|
)
|
|
$
|
182,070
|
|
|
$
|
20,940
|
|
|
June 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
603,097
|
|
|
$
|
433,155
|
|
Investments-available-for-sale (amortized cost: 2014-$1,662,725, 2013-$1,602,456)
|
1,668,943
|
|
|
1,567,020
|
|
||
Premiums receivable, net of allowance for doubtful accounts (2014-$631, 2013-$643)
|
849,089
|
|
|
430,012
|
|
||
Amounts receivable under government contracts
|
193,043
|
|
|
194,041
|
|
||
Other receivables
|
183,795
|
|
|
68,919
|
|
||
Deferred taxes
|
81,293
|
|
|
94,060
|
|
||
Other assets
|
259,878
|
|
|
132,683
|
|
||
Total current assets
|
3,839,138
|
|
|
2,919,890
|
|
||
Property and equipment, net
|
209,385
|
|
|
201,395
|
|
||
Goodwill
|
565,886
|
|
|
565,886
|
|
||
Other intangible assets, net
|
13,229
|
|
|
13,842
|
|
||
Deferred taxes
|
9,530
|
|
|
5,793
|
|
||
Investments-available-for-sale-noncurrent (amortized cost: 2014-$808, 2013-$67,943)
|
652
|
|
|
59,768
|
|
||
Other noncurrent assets
|
139,205
|
|
|
162,551
|
|
||
Total Assets
|
$
|
4,777,025
|
|
|
$
|
3,929,125
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Reserves for claims and other settlements
|
$
|
1,488,322
|
|
|
$
|
984,075
|
|
Health care and other costs payable under government contracts
|
94,195
|
|
|
72,098
|
|
||
Unearned premiums
|
130,905
|
|
|
123,969
|
|
||
Accounts payable and other liabilities
|
496,349
|
|
|
397,036
|
|
||
Total current liabilities
|
2,209,771
|
|
|
1,577,178
|
|
||
Senior notes payable
|
399,402
|
|
|
399,300
|
|
||
Borrowings under revolving credit facility
|
100,000
|
|
|
100,000
|
|
||
Deferred taxes
|
22,376
|
|
|
10,409
|
|
||
Other noncurrent liabilities
|
223,595
|
|
|
213,427
|
|
||
Total Liabilities
|
2,955,144
|
|
|
2,300,314
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Preferred stock ($0.001 par value, 10,000 shares authorized, none issued and outstanding)
|
—
|
|
|
—
|
|
||
Common stock ($0.001 par value, 350,000 shares authorized; issued 2014-151,555 shares; 2013-150,224 shares)
|
152
|
|
|
150
|
|
||
Additional paid-in capital
|
1,406,768
|
|
|
1,377,624
|
|
||
Treasury common stock, at cost (2014-71,251 shares of common stock; 2013-70,704 shares of common stock)
|
(2,197,890
|
)
|
|
(2,179,744
|
)
|
||
Retained earnings
|
2,613,302
|
|
|
2,463,648
|
|
||
Accumulated other comprehensive loss
|
(451
|
)
|
|
(32,867
|
)
|
||
Total Stockholders’ Equity
|
1,821,881
|
|
|
1,628,811
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
4,777,025
|
|
|
$
|
3,929,125
|
|
|
Common Stock
|
Additional Paid-In Capital
|
Common Stock
Held in Treasury
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
|
||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
Balance as of January 1, 2013
|
148,727
|
|
$
|
149
|
|
$
|
1,329,000
|
|
(67,426
|
)
|
$
|
(2,092,625
|
)
|
$
|
2,293,522
|
|
$
|
26,984
|
|
$
|
1,557,030
|
|
Net income
|
|
|
|
|
|
83,533
|
|
|
83,533
|
|
||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
(62,593
|
)
|
(62,593
|
)
|
||||||||||||
Exercise of stock options and vesting of restricted stock units
|
1,325
|
|
1
|
|
16,204
|
|
|
|
|
|
16,205
|
|
||||||||||
Share-based compensation expense
|
|
|
16,877
|
|
|
|
|
|
16,877
|
|
||||||||||||
Tax detriment related to equity compensation plans
|
|
|
(1,332
|
)
|
|
|
|
|
(1,332
|
)
|
||||||||||||
Repurchases of common stock
|
|
|
|
(3,229
|
)
|
(85,496
|
)
|
|
|
(85,496
|
)
|
|||||||||||
Balance as of June 30, 2013
|
150,052
|
|
$
|
150
|
|
$
|
1,360,749
|
|
(70,655
|
)
|
$
|
(2,178,121
|
)
|
$
|
2,377,055
|
|
$
|
(35,609
|
)
|
$
|
1,524,224
|
|
Balance as of January 1, 2014
|
150,224
|
|
$
|
150
|
|
$
|
1,377,624
|
|
(70,704
|
)
|
$
|
(2,179,744
|
)
|
$
|
2,463,648
|
|
$
|
(32,867
|
)
|
$
|
1,628,811
|
|
Net income
|
|
|
|
|
|
149,654
|
|
|
149,654
|
|
||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
32,416
|
|
32,416
|
|
||||||||||||
Exercise of stock options and vesting of restricted stock units
|
1,331
|
|
2
|
|
12,098
|
|
|
|
|
|
12,100
|
|
||||||||||
Share-based compensation expense
|
|
|
15,700
|
|
|
|
|
|
15,700
|
|
||||||||||||
Tax benefit related to equity compensation plans
|
|
|
1,346
|
|
|
|
|
|
1,346
|
|
||||||||||||
Repurchases of common stock
|
|
|
|
(547
|
)
|
(18,146
|
)
|
|
|
(18,146
|
)
|
|||||||||||
Balance as of June 30, 2014
|
151,555
|
|
$
|
152
|
|
$
|
1,406,768
|
|
(71,251
|
)
|
$
|
(2,197,890
|
)
|
$
|
2,613,302
|
|
$
|
(451
|
)
|
$
|
1,821,881
|
|
|
Six months ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
149,654
|
|
|
$
|
83,533
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Amortization and depreciation
|
19,304
|
|
|
18,953
|
|
||
Share-based compensation expense
|
15,700
|
|
|
16,877
|
|
||
Deferred income taxes
|
3,476
|
|
|
12,748
|
|
||
Excess tax benefit on share-based compensation
|
(1,354
|
)
|
|
(430
|
)
|
||
Net realized (gain) loss on investments
|
(2,236
|
)
|
|
(22,936
|
)
|
||
Other changes
|
15,926
|
|
|
15,524
|
|
||
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
|
|
|
|
||||
Premiums receivable and unearned premiums
|
(412,141
|
)
|
|
(232,780
|
)
|
||
Other current assets, receivables and noncurrent assets
|
(216,808
|
)
|
|
27,481
|
|
||
Amounts receivable/payable under government contracts
|
33,597
|
|
|
29,051
|
|
||
Reserves for claims and other settlements
|
504,247
|
|
|
(24,887
|
)
|
||
Accounts payable and other liabilities
|
188,343
|
|
|
(57,604
|
)
|
||
Net cash provided by (used in) operating activities
|
297,708
|
|
|
(134,470
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Sales of investments
|
192,250
|
|
|
573,406
|
|
||
Maturities of investments
|
43,679
|
|
|
51,414
|
|
||
Purchases of investments
|
(228,437
|
)
|
|
(559,442
|
)
|
||
Purchases of property and equipment
|
(29,956
|
)
|
|
(26,765
|
)
|
||
Sales (purchases) of restricted investments and other
|
760
|
|
|
(2,589
|
)
|
||
Net cash (used in) provided by investing activities
|
(21,704
|
)
|
|
36,024
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from exercise of stock options and employee stock purchases
|
6,472
|
|
|
8,173
|
|
||
Excess tax benefit on share-based compensation
|
1,354
|
|
|
430
|
|
||
Repurchases of common stock
|
(12,518
|
)
|
|
(77,464
|
)
|
||
Borrowings under financing arrangements
|
—
|
|
|
323,000
|
|
||
Repayment of borrowings under financing arrangements
|
—
|
|
|
(298,000
|
)
|
||
Net increase (decrease) in checks outstanding, net of deposits
|
—
|
|
|
75,552
|
|
||
Customer funds administered
|
(101,370
|
)
|
|
6,263
|
|
||
Net cash (used in) provided by financing activities
|
(106,062
|
)
|
|
37,954
|
|
||
Net increase (decrease) in cash and cash equivalents
|
169,942
|
|
|
(60,492
|
)
|
||
Cash and cash equivalents, beginning of period
|
433,155
|
|
|
340,110
|
|
||
Cash and cash equivalents, end of period
|
$
|
603,097
|
|
|
$
|
279,618
|
|
SUPPLEMENTAL CASH FLOWS DISCLOSURE:
|
|
|
|
||||
Interest paid
|
$
|
14,754
|
|
|
$
|
15,499
|
|
Income taxes paid
|
59,324
|
|
|
34,006
|
|
1.
|
BASIS OF PRESENTATION
|
|
Unrealized Gains (Losses) on investments available-for-sale
|
|
Defined Benefit Pension Plans
|
|
Accumulated Other Comprehensive Income (loss)
|
||||||
Three Months Ended June 30:
|
|
|
(Dollars in millions)
|
|
|
||||||
Balance as of April 1, 2013
|
$
|
20.9
|
|
|
$
|
(10.6
|
)
|
|
$
|
10.3
|
|
Other comprehensive loss before reclassifications
|
(42.6
|
)
|
|
—
|
|
|
(42.6
|
)
|
|||
Amounts reclassified from accumulated other comprehensive (loss) income
|
(3.7
|
)
|
|
0.4
|
|
|
(3.3
|
)
|
|||
Other comprehensive (loss) income for the three months ended June 30, 2013
|
(46.3
|
)
|
|
0.4
|
|
|
(45.9
|
)
|
|||
Balance as of June 30, 2013
|
$
|
(25.4
|
)
|
|
$
|
(10.2
|
)
|
|
$
|
(35.6
|
)
|
|
|
|
|
|
|
||||||
Balance as of April 1, 2014
|
$
|
(10.0
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(14.5
|
)
|
Other comprehensive income (loss) before reclassifications
|
15.2
|
|
|
—
|
|
|
15.2
|
|
|||
Amounts reclassified from accumulated other comprehensive (loss) income
|
(1.3
|
)
|
|
0.1
|
|
|
(1.2
|
)
|
|||
Other comprehensive income for the three months ended June 30, 2014
|
13.9
|
|
|
0.1
|
|
|
14.0
|
|
|||
Balance as of June 30, 2014
|
$
|
3.9
|
|
|
$
|
(4.4
|
)
|
|
$
|
(0.5
|
)
|
Six Months Ended June 30:
|
|
|
|
|
|
||||||
Balance as of January 1, 2013
|
$
|
38.0
|
|
|
$
|
(11.0
|
)
|
|
$
|
27.0
|
|
Other comprehensive (loss) income before reclassifications
|
(48.5
|
)
|
|
—
|
|
|
(48.5
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(14.9
|
)
|
|
0.8
|
|
|
(14.1
|
)
|
|||
Other comprehensive (loss) income for the six months ended June 30, 2013
|
(63.4
|
)
|
|
0.8
|
|
|
(62.6
|
)
|
|||
Balance as of June 30, 2013
|
$
|
(25.4
|
)
|
|
$
|
(10.2
|
)
|
|
$
|
(35.6
|
)
|
|
|
|
|
|
|
||||||
Balance as of January 1, 2014
|
$
|
(28.3
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
(32.9
|
)
|
Other comprehensive income (loss) before reclassifications
|
33.7
|
|
|
—
|
|
|
33.7
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
(1.5
|
)
|
|
0.2
|
|
|
(1.3
|
)
|
|||
Other comprehensive income for the six months ended June 30, 2014
|
32.2
|
|
|
0.2
|
|
|
32.4
|
|
|||
Balance as of June 30, 2014
|
$
|
3.9
|
|
|
$
|
(4.4
|
)
|
|
$
|
(0.5
|
)
|
(a)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost.
|
|
Western
Region Operations |
|
Total
|
||||
|
(Dollars in millions)
|
||||||
Balance as of December 31, 2013
|
$
|
565.9
|
|
|
$
|
565.9
|
|
Balance as of June 30, 2014
|
$
|
565.9
|
|
|
$
|
565.9
|
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Balance |
|
Weighted
Average Life (in years) |
||||||
|
(Dollars in millions)
|
|
|
||||||||||
As of June 30, 2014:
|
|
|
|
|
|
|
|
||||||
Provider networks
|
$
|
41.5
|
|
|
$
|
(36.3
|
)
|
|
$
|
5.2
|
|
|
18.9
|
Customer relationships and other
|
29.5
|
|
|
(21.5
|
)
|
|
8.0
|
|
|
11.1
|
|||
|
$
|
71.0
|
|
|
$
|
(57.8
|
)
|
|
$
|
13.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||
As of December 31, 2013:
|
|
|
|
|
|
|
|
||||||
Provider networks
|
$
|
40.5
|
|
|
$
|
(35.7
|
)
|
|
$
|
4.8
|
|
|
19.4
|
Customer relationships and other
|
29.5
|
|
|
(20.5
|
)
|
|
9.0
|
|
|
11.1
|
|||
|
$
|
70.0
|
|
|
$
|
(56.2
|
)
|
|
$
|
13.8
|
|
|
|
Year
|
Amount
|
|
|
2014
|
$
|
3.0
|
|
2015
|
2.8
|
|
|
2016
|
2.2
|
|
|
2017
|
2.2
|
|
|
2018
|
2.1
|
|
•
|
Reversed
$7.9 million
previously recorded as administrative services fees and other income in 2013 and for the three months ended March 31, 2014.
|
•
|
Recorded payments on a grossed-up basis by recording Medi-Cal payments received as premium revenue and estimated Medi-Cal claim payments as health care costs (incurred claims), each via retroactive adjustments to premium revenues and health care costs. See the Three Months Ended June 30, 2014 - Full Risk column in the table below.
|
•
|
Recorded retrospective premium revenue adjustments based upon the state settlement agreement (see Note 2 - "Health Plan Services Revenue Recognition" above).
|
|
Recorded In
|
||||||||||
|
Year Ended December 31, 2013
|
|
Three Months Ended March 31, 2014
|
|
Three Months Ended June 30, 2014
|
||||||
|
|
|
|
|
|
||||||
(Dollars in millions)
|
No Risk
|
|
No Risk
|
|
Full Risk
|
||||||
|
|
|
|
|
|
||||||
Health plan services premiums
|
$
|
4.4
|
|
|
$
|
—
|
|
|
$
|
154.7
|
|
Health plan services expenses
|
—
|
|
|
—
|
|
|
144.0
|
|
|||
General and administrative expenses
|
4.4
|
|
|
—
|
|
|
—
|
|
|||
Administrative services fees and other income
|
6.5
|
|
|
1.4
|
|
|
(7.9
|
)
|
|||
Pretax income
|
$
|
6.5
|
|
|
$
|
1.4
|
|
|
$
|
2.8
|
|
|
Western Region
Operations |
|
Government
Contracts |
|
Corporate/Other/
Eliminations |
|
Total
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Three months ended June 30, 2014
|
|
|
|
|
|
|
|
||||||||
Revenues from external sources
|
$
|
3,267.3
|
|
|
$
|
154.1
|
|
|
$
|
—
|
|
|
$
|
3,421.4
|
|
Intersegment revenues
|
3.1
|
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
||||
Segment pretax income (loss)
|
80.7
|
|
|
21.4
|
|
|
(3.3
|
)
|
|
98.8
|
|
||||
Three months ended June 30, 2013
|
|
|
|
|
|
|
|
||||||||
Revenues from external sources
|
$
|
2,598.5
|
|
|
$
|
139.9
|
|
|
$
|
—
|
|
|
$
|
2,738.4
|
|
Intersegment revenues
|
2.8
|
|
|
—
|
|
|
(2.8
|
)
|
|
—
|
|
||||
Segment pretax income (loss)
|
46.8
|
|
|
18.1
|
|
|
(12.9
|
)
|
|
52.0
|
|
||||
Six months ended June 30, 2014
|
|
|
|
|
|
|
|
||||||||
Revenues from external sources
|
$
|
6,162.1
|
|
|
$
|
298.2
|
|
|
$
|
—
|
|
|
$
|
6,460.3
|
|
Intersegment revenues
|
6.1
|
|
|
—
|
|
|
(6.1
|
)
|
|
—
|
|
||||
Segment pretax income (loss)
|
133.7
|
|
|
34.5
|
|
|
(7.4
|
)
|
|
160.8
|
|
||||
Six months ended June 30, 2013
|
|
|
|
|
|
|
|
||||||||
Revenues from external sources
|
$
|
5,261.0
|
|
|
$
|
274.5
|
|
|
$
|
—
|
|
|
$
|
5,535.5
|
|
Intersegment revenues
|
5.7
|
|
|
—
|
|
|
(5.7
|
)
|
|
—
|
|
||||
Segment pretax income (loss)
|
119.1
|
|
|
27.1
|
|
|
(12.9
|
)
|
|
133.3
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Commercial premium revenue
|
$
|
1,377.5
|
|
|
$
|
1,298.6
|
|
|
$
|
2,641.6
|
|
|
$
|
2,624.0
|
|
Medicare premium revenue
|
757.2
|
|
|
688.6
|
|
|
1,512.4
|
|
|
1,395.0
|
|
||||
Medicaid premium revenue
|
1,121.9
|
|
|
591.7
|
|
|
1,983.9
|
|
|
1,191.9
|
|
||||
Dual Eligibles premium revenue
|
5.3
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
||||
Total health plan services premiums
|
$
|
3,261.9
|
|
|
$
|
2,578.9
|
|
|
$
|
6,143.2
|
|
|
$
|
5,210.9
|
|
|
|
June 30, 2014
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Holding
Gains
|
|
Gross
Unrealized
Holding
Losses
|
|
Carrying
Value
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
Current:
|
|
|
|
|
|
|
|
|
||||||||
Asset-backed securities
|
|
$
|
421.7
|
|
|
$
|
4.1
|
|
|
$
|
(3.7
|
)
|
|
$
|
422.1
|
|
U.S. government and agencies
|
|
23.7
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
||||
Obligations of states and other political subdivisions
|
|
728.1
|
|
|
10.1
|
|
|
(7.1
|
)
|
|
731.1
|
|
||||
Corporate debt securities
|
|
489.2
|
|
|
4.7
|
|
|
(1.9
|
)
|
|
492.0
|
|
||||
|
|
$
|
1,662.7
|
|
|
$
|
18.9
|
|
|
$
|
(12.7
|
)
|
|
$
|
1,668.9
|
|
Noncurrent:
|
|
|
|
|
|
|
|
|
||||||||
Asset-backed securities
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.7
|
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.7
|
|
|
|
December 31, 2013
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Holding
Gains
|
|
Gross
Unrealized
Holding
Losses
|
|
Carrying
Value
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
Current:
|
|
|
|
|
|
|
|
|
||||||||
Asset-backed securities
|
|
$
|
394.7
|
|
|
$
|
3.4
|
|
|
$
|
(8.7
|
)
|
|
$
|
389.4
|
|
U.S. government and agencies
|
|
23.7
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
||||
Obligations of states and other political subdivisions
|
|
734.3
|
|
|
5.9
|
|
|
(30.3
|
)
|
|
709.9
|
|
||||
Corporate debt securities
|
|
449.8
|
|
|
3.6
|
|
|
(9.4
|
)
|
|
444.0
|
|
||||
|
|
$
|
1,602.5
|
|
|
$
|
12.9
|
|
|
$
|
(48.4
|
)
|
|
$
|
1,567.0
|
|
Noncurrent:
|
|
|
|
|
|
|
|
|
||||||||
Asset-backed securities
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
1.1
|
|
Obligations of states and other political subdivisions
|
|
53.4
|
|
|
—
|
|
|
(6.3
|
)
|
|
47.1
|
|
||||
Corporate debt securities
|
|
13.2
|
|
|
—
|
|
|
(1.6
|
)
|
|
11.6
|
|
||||
|
|
$
|
67.9
|
|
|
$
|
—
|
|
|
$
|
(8.1
|
)
|
|
$
|
59.8
|
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Current:
|
|
(Dollars in millions)
|
||||||
Due in one year or less
|
|
$
|
58.0
|
|
|
$
|
58.2
|
|
Due after one year through five years
|
|
325.2
|
|
|
328.6
|
|
||
Due after five years through ten years
|
|
417.3
|
|
|
422.3
|
|
||
Due after ten years
|
|
440.5
|
|
|
437.7
|
|
||
Asset-backed securities
|
|
421.7
|
|
|
422.1
|
|
||
Total current investments available-for-sale
|
|
$
|
1,662.7
|
|
|
$
|
1,668.9
|
|
|
|
|
|
|
||||
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Noncurrent:
|
|
(Dollars in millions)
|
||||||
Asset-backed securities
|
|
0.8
|
|
|
0.7
|
|
||
Total noncurrent investments available-for-sale
|
|
$
|
0.8
|
|
|
$
|
0.7
|
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||
Asset-backed securities
|
|
$
|
45.9
|
|
|
$
|
(0.1
|
)
|
|
$
|
151.7
|
|
|
$
|
(3.6
|
)
|
|
$
|
197.6
|
|
|
$
|
(3.7
|
)
|
Obligations of states and other political subdivisions
|
|
37.4
|
|
|
(0.2
|
)
|
|
301.9
|
|
|
(6.9
|
)
|
|
339.3
|
|
|
(7.1
|
)
|
||||||
Corporate debt securities
|
|
42.4
|
|
|
(0.1
|
)
|
|
96.1
|
|
|
(1.8
|
)
|
|
138.5
|
|
|
(1.9
|
)
|
||||||
|
|
$
|
125.7
|
|
|
$
|
(0.4
|
)
|
|
$
|
549.7
|
|
|
$
|
(12.3
|
)
|
|
$
|
675.4
|
|
|
$
|
(12.7
|
)
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||
Asset-backed securities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.7
|
|
|
$
|
(0.1
|
)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.7
|
|
|
$
|
(0.1
|
)
|
|
|
Less than
12 Months
|
|
12 Months
or More
|
|
Total
|
|||
Asset-backed securities
|
|
19
|
|
|
58
|
|
|
77
|
|
Obligations of states and other political subdivisions
|
|
26
|
|
|
129
|
|
|
155
|
|
Corporate debt securities
|
|
41
|
|
|
91
|
|
|
132
|
|
|
|
86
|
|
|
278
|
|
|
364
|
|
|
|
Less than
12 Months
|
|
12 Months
or More
|
|
Total
|
|||
Asset-backed securities
|
|
—
|
|
|
1
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||
Asset-backed securities
|
|
$
|
225.3
|
|
|
$
|
(7.9
|
)
|
|
$
|
22.5
|
|
|
$
|
(0.8
|
)
|
|
$
|
247.8
|
|
|
$
|
(8.7
|
)
|
U.S. government and agencies
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
||||||
Obligations of states and other political subdivisions
|
|
453.5
|
|
|
(23.5
|
)
|
|
79.7
|
|
|
(6.8
|
)
|
|
533.2
|
|
|
(30.3
|
)
|
||||||
Corporate debt securities
|
|
242.8
|
|
|
(9.0
|
)
|
|
6.7
|
|
|
(0.4
|
)
|
|
249.5
|
|
|
(9.4
|
)
|
||||||
|
|
$
|
925.6
|
|
|
$
|
(40.4
|
)
|
|
$
|
108.9
|
|
|
$
|
(8.0
|
)
|
|
$
|
1,034.5
|
|
|
$
|
(48.4
|
)
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||
Asset-backed securities
|
|
$
|
0.5
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
1.2
|
|
|
$
|
(0.2
|
)
|
Obligations of states and other political subdivisions
|
|
17.4
|
|
|
(2.2
|
)
|
|
29.6
|
|
|
(4.1
|
)
|
|
47.0
|
|
|
(6.3
|
)
|
||||||
Corporate debt securities
|
|
7.5
|
|
|
(0.9
|
)
|
|
4.1
|
|
|
(0.7
|
)
|
|
11.6
|
|
|
(1.6
|
)
|
||||||
|
|
$
|
25.4
|
|
|
$
|
(3.2
|
)
|
|
$
|
34.4
|
|
|
$
|
(4.9
|
)
|
|
$
|
59.8
|
|
|
$
|
(8.1
|
)
|
•
|
100%
of the principal amount of the Senior Notes then outstanding to be redeemed; or
|
•
|
the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a
360
-day year consisting of
twelve
30
-day months) at the applicable treasury rate plus
30
basis points
|
•
|
failure to pay interest for
30
days after the date payment is due and payable; provided that an extension of an interest payment period by us in accordance with the terms of the Senior Notes shall not constitute a failure to pay interest;
|
•
|
failure to pay principal or premium, if any, on any note when due, either at maturity, upon any redemption, by declaration or otherwise;
|
•
|
failure to perform any other covenant or agreement in the notes or indenture for a period of
60
days after notice that performance was required;
|
•
|
(A) our failure or the failure of any of our subsidiaries to pay indebtedness for money we borrowed or any of our subsidiaries borrowed in an aggregate principal amount of at least
$50 million
, at the later of final maturity and the expiration of any related applicable grace period and such defaulted payment shall not have been made, waived or extended within
30
days after notice or (B) acceleration of the maturity of indebtedness for money we borrowed or any of our subsidiaries borrowed in an aggregate principal amount of at least
$50 million
, if that acceleration results from a default under the instrument giving rise to or securing such indebtedness for money borrowed and such indebtedness has not been discharged in full or such acceleration has not been rescinded or annulled within
30
days after notice; or
|
•
|
events in bankruptcy, insolvency or reorganization of our Company.
|
|
Level 1
|
|
Level 2
|
|
Level 2-
noncurrent |
|
Level 3
|
|
Total
|
||||||||||
As of June 30, 2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
603.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
603.1
|
|
Investments—available-for-sale
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed securities
|
$
|
—
|
|
|
$
|
218.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
218.3
|
|
Commercial mortgage-backed securities
|
—
|
|
|
124.4
|
|
|
0.7
|
|
|
—
|
|
|
125.1
|
|
|||||
Other asset-backed securities
|
—
|
|
|
79.4
|
|
|
—
|
|
|
—
|
|
|
79.4
|
|
|||||
U.S. government and agencies:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
23.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
|||||
U.S. Agency securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Obligations of states and other political subdivisions
|
—
|
|
|
731.1
|
|
|
—
|
|
|
—
|
|
|
731.1
|
|
|||||
Corporate debt securities
|
—
|
|
|
492.0
|
|
|
—
|
|
|
—
|
|
|
492.0
|
|
|||||
Total investments at fair value
|
$
|
23.7
|
|
|
$
|
1,645.2
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
1,669.6
|
|
Embedded contractual derivative
|
—
|
|
|
—
|
|
|
—
|
|
|
13.3
|
|
|
13.3
|
|
|||||
State-sponsored health plans settlement account deficit
|
—
|
|
|
—
|
|
|
—
|
|
|
9.6
|
|
|
9.6
|
|
|||||
Total assets at fair value
|
$
|
626.8
|
|
|
$
|
1,645.2
|
|
|
$
|
0.7
|
|
|
$
|
22.9
|
|
|
$
|
2,295.6
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 2-
noncurrent |
|
Level 3
|
|
Total
|
||||||||||
As of December 31, 2013:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
433.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
433.2
|
|
Investments—available-for-sale
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset-backed debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed securities
|
$
|
—
|
|
|
$
|
203.5
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
203.9
|
|
Commercial mortgage-backed securities
|
—
|
|
|
144.1
|
|
|
0.7
|
|
|
—
|
|
|
144.8
|
|
|||||
Other asset-backed securities
|
—
|
|
|
41.8
|
|
|
—
|
|
|
—
|
|
|
41.8
|
|
|||||
U.S. government and agencies:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities
|
23.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
|||||
U.S. Agency securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Obligations of states and other political subdivisions
|
—
|
|
|
709.9
|
|
|
47.1
|
|
|
—
|
|
|
757.0
|
|
|||||
Corporate debt securities
|
—
|
|
|
444.0
|
|
|
11.6
|
|
|
—
|
|
|
455.6
|
|
|||||
Total investments at fair value
|
$
|
23.7
|
|
|
$
|
1,543.3
|
|
|
$
|
59.8
|
|
|
$
|
—
|
|
|
$
|
1,626.8
|
|
Embedded contractual derivative
|
—
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
|
7.2
|
|
|||||
State-sponsored health plans settlement account deficit
|
—
|
|
|
—
|
|
|
—
|
|
|
62.9
|
|
|
62.9
|
|
|||||
Total assets at fair value
|
$
|
456.9
|
|
|
$
|
1,543.3
|
|
|
$
|
59.8
|
|
|
$
|
70.1
|
|
|
$
|
2,130.1
|
|
|
|
|
Three months ended June 30,
|
||||||||||||||||||||||||||||||
|
2014
|
|
2013
|
||||||||||||||||||||||||||||
|
Available-For-Sale Investments
|
|
Embedded Contractual Derivative
|
|
State-Sponsored Health Plans Settlement Account Deficit
|
|
Total
|
|
Available-For-Sale Investments
|
|
Embedded Contractual Derivative
|
|
State-Sponsored Health Plans Settlement Account Deficit
|
|
Total
|
||||||||||||||||
Opening balance
|
$
|
—
|
|
|
$
|
11.4
|
|
|
$
|
50.0
|
|
|
$
|
61.4
|
|
|
$
|
—
|
|
|
$
|
10.9
|
|
|
$
|
20.8
|
|
|
$
|
31.7
|
|
Transfers into Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total gains or losses for the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Realized in net income
|
—
|
|
|
1.9
|
|
|
(40.4
|
)
|
|
(38.5
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
14.6
|
|
|
14.5
|
|
||||||||
Unrealized in accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Purchases, issues, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases/additions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Closing balance
|
$
|
—
|
|
|
$
|
13.3
|
|
|
$
|
9.6
|
|
|
$
|
22.9
|
|
|
$
|
—
|
|
|
$
|
10.8
|
|
|
$
|
35.4
|
|
|
$
|
46.2
|
|
Change in unrealized gains (losses) included in net income for assets held at the end of the reporting period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Six months ended June 30,
|
||||||||||||||||||||||||||||||
|
2014
|
|
2013
|
||||||||||||||||||||||||||||
|
Available-For-Sale Investments
|
|
Embedded Contractual Derivative
|
|
State-Sponsored Health Plans Settlement Account Deficit
|
|
Total
|
|
Available-For-Sale Investments
|
|
Embedded Contractual Derivative
|
|
State-Sponsored Health Plans Settlement Account Deficit
|
|
Total
|
||||||||||||||||
Opening balance
|
$
|
—
|
|
|
$
|
7.2
|
|
|
$
|
62.9
|
|
|
$
|
70.1
|
|
|
$
|
0.2
|
|
|
$
|
11.2
|
|
|
$
|
—
|
|
|
$
|
11.4
|
|
Transfers into Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total gains or losses for the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Realized in net income
|
—
|
|
|
6.1
|
|
|
(53.3
|
)
|
|
(47.2
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
35.4
|
|
|
35.0
|
|
||||||||
Unrealized in accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Purchases, issues, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases/additions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
||||||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Closing balance
|
$
|
—
|
|
|
$
|
13.3
|
|
|
$
|
9.6
|
|
|
$
|
22.9
|
|
|
$
|
—
|
|
|
$
|
10.8
|
|
|
$
|
35.4
|
|
|
$
|
46.2
|
|
Change in unrealized gains (losses) included in net income for assets held at the end of the reporting period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three months ended June 30, 2013
|
|
Six months ended June 30, 2013
|
||||
|
Embedded Contractual Derivative
|
||||||
Opening balance, April 1 and January 1
|
$
|
4.2
|
|
|
$
|
3.2
|
|
Transfers into Level 3
|
—
|
|
|
—
|
|
||
Transfers out of Level 3
|
—
|
|
|
—
|
|
||
Total gains or losses for the period:
|
|
|
|
||||
Realized in net income
|
0.6
|
|
|
1.6
|
|
||
Unrealized in accumulated other comprehensive income
|
—
|
|
|
—
|
|
||
Purchases, issues, sales and settlements:
|
|
|
|
||||
Purchases
|
—
|
|
|
—
|
|
||
Issues
|
—
|
|
|
—
|
|
||
Sales
|
—
|
|
|
—
|
|
||
Settlements
|
—
|
|
|
—
|
|
||
Closing balance
|
$
|
4.8
|
|
|
$
|
4.8
|
|
|
Fair Value as of
June 30, 2014
|
|
Valuation Technique(s)
|
|
Unobservable Input
|
|
Range (Weighted Average)
|
|||||||
Embedded contractual derivative asset
|
$
|
13.3
|
|
|
Monte Carlo Simulation Approach
|
|
Health Net Health Care Expenditures
|
|
-5.58
|
%
|
—
|
8.13%
|
|
(1.64%)
|
|
National Health Care Expenditures
|
|
-1.13
|
%
|
—
|
10.95%
|
|
(2.52%)
|
||||||
Goodwill - Western Region reporting unit
|
$
|
565.9
|
|
|
Income Approach
|
|
Discount Rate
|
|
9.0
|
%
|
—
|
9.0%
|
|
(9.0%)
|
State-sponsored health plans settlement account deficit
|
$
|
9.6
|
|
|
Income Approach
|
|
Discount Rate
|
|
1.135
|
%
|
—
|
1.135%
|
|
(1.135%)
|
|
Fair Value as of
December 31, 2013
|
|
Valuation Technique(s)
|
|
Unobservable Input
|
|
Range (Weighted Average)
|
|||||||
Embedded contractual derivative asset
|
$
|
7.2
|
|
|
Monte Carlo Simulation Approach
|
|
Health Net Health Care Expenditures
|
|
-3.34
|
%
|
—
|
7.34%
|
|
(2.20%)
|
|
National Health Care Expenditures
|
|
-0.77
|
%
|
—
|
9.46%
|
|
(3.63%)
|
||||||
Goodwill - Western Region reporting unit
|
$
|
565.9
|
|
|
Income Approach
|
|
Discount Rate
|
|
10.0
|
%
|
—
|
10.0%
|
|
(10.0%)
|
State-sponsored health plans settlement account deficit
|
$
|
62.9
|
|
|
Income Approach
|
|
Discount Rate
|
|
1.135
|
%
|
—
|
1.135%
|
|
(1.135%)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
(Dollars in thousands, except per share data)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Health plan services premiums
|
|
$
|
3,261,878
|
|
|
$
|
2,578,874
|
|
|
$
|
6,143,223
|
|
|
$
|
5,210,943
|
|
Government contracts
|
|
154,083
|
|
|
139,942
|
|
|
298,173
|
|
|
274,454
|
|
||||
Net investment income
|
|
12,043
|
|
|
17,143
|
|
|
23,145
|
|
|
46,694
|
|
||||
Administrative services fees and other income
|
|
(6,612
|
)
|
|
2,472
|
|
|
(4,214
|
)
|
|
3,377
|
|
||||
Total revenues
|
|
3,421,392
|
|
|
2,738,431
|
|
|
6,460,327
|
|
|
5,535,468
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
||||||||
Health plan services (excluding depreciation and amortization)
|
|
2,763,179
|
|
|
2,191,918
|
|
|
5,165,521
|
|
|
4,460,654
|
|
||||
Government contracts
|
|
133,208
|
|
|
127,400
|
|
|
265,182
|
|
|
252,875
|
|
||||
General and administrative
|
|
344,734
|
|
|
291,437
|
|
|
705,757
|
|
|
536,672
|
|
||||
Selling
|
|
64,002
|
|
|
57,769
|
|
|
128,154
|
|
|
116,330
|
|
||||
Depreciation and amortization
|
|
9,641
|
|
|
9,514
|
|
|
19,304
|
|
|
18,953
|
|
||||
Interest
|
|
7,826
|
|
|
8,365
|
|
|
15,647
|
|
|
16,653
|
|
||||
Total expenses
|
|
3,322,590
|
|
|
2,686,403
|
|
|
6,299,565
|
|
|
5,402,137
|
|
||||
Income from operations before income taxes
|
|
98,802
|
|
|
52,028
|
|
|
160,762
|
|
|
133,331
|
|
||||
Income tax (benefit) provision
|
|
(22,065
|
)
|
|
18,545
|
|
|
11,108
|
|
|
49,798
|
|
||||
Net income
|
|
$
|
120,867
|
|
|
$
|
33,483
|
|
|
$
|
149,654
|
|
|
$
|
83,533
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.51
|
|
|
$
|
0.42
|
|
|
$
|
1.87
|
|
|
$
|
1.05
|
|
Diluted
|
|
$
|
1.49
|
|
|
$
|
0.42
|
|
|
$
|
1.85
|
|
|
$
|
1.04
|
|
|
Three months ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
|
(Dollars in millions)
|
||||||
Reconciliation of Adjusted Days Claims Payable:
|
|
|
|
||||
(1) Reserve for Claims and Other Settlements—GAAP
|
$
|
1,488.3
|
|
|
$
|
1,013.1
|
|
Less: Capitation, Provider and Other Claim Settlements and MAPD Payables
|
(351.7
|
)
|
|
(143.1
|
)
|
||
(2) Reserve for Claims and Other Settlements—Adjusted
|
$
|
1,136.6
|
|
|
$
|
870.0
|
|
(3) Health Plan Services Cost—GAAP
|
$
|
2,763.2
|
|
|
$
|
2,191.9
|
|
Less: Capitation, Provider and Other Claim Settlements and MAPD Costs
|
(1,156.0
|
)
|
|
(836.9
|
)
|
||
(4) Health Plan Services Cost—Adjusted
|
$
|
1,607.2
|
|
|
$
|
1,355.0
|
|
(5) Number of Days in Period
|
91
|
|
|
91
|
|
||
(1) / (3) * (5) Days Claims Payable—GAAP (using end of period reserve amount)
|
49.0
|
|
|
42.1
|
|
||
(2) / (4) * (5) Days Claims Payable—Adjusted (using end of period reserve amount)
|
64.4
|
|
|
58.4
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Income tax (benefit) expense
|
$
|
(22.1
|
)
|
|
$
|
18.5
|
|
|
$
|
11.1
|
|
|
$
|
49.8
|
|
Effective income tax rate
|
(22.3
|
)%
|
|
35.6
|
%
|
|
6.9
|
%
|
|
37.3
|
%
|
|
As of
June 30, 2014
|
|
As of
June 30, 2013
|
|
Increase/
(Decrease)
|
|
%
Change
|
||||
California
|
|
|
|
|
|
|
|
||||
Large Group
|
492
|
|
|
608
|
|
|
(116
|
)
|
|
(19.1
|
)%
|
Small Group
|
240
|
|
|
241
|
|
|
(1
|
)
|
|
(0.4
|
)%
|
Individual
|
272
|
|
|
98
|
|
|
174
|
|
|
177.6
|
%
|
Commercial Risk
|
1,004
|
|
|
947
|
|
|
57
|
|
|
6.0
|
%
|
Medicare Advantage
|
162
|
|
|
146
|
|
|
16
|
|
|
11.0
|
%
|
Medi-Cal/Medicaid
|
1,359
|
|
|
1,118
|
|
|
241
|
|
|
21.6
|
%
|
Dual Eligibles
|
2
|
|
|
—
|
|
|
2
|
|
|
|
|
Total California
|
2,527
|
|
|
2,211
|
|
|
316
|
|
|
14.3
|
%
|
|
|
|
|
|
|
|
|
||||
Arizona
|
|
|
|
|
|
|
|
||||
Large Group
|
48
|
|
|
64
|
|
|
(16
|
)
|
|
(25.0
|
)%
|
Small Group
|
43
|
|
|
42
|
|
|
1
|
|
|
2.4
|
%
|
Individual
|
99
|
|
|
14
|
|
|
85
|
|
|
607.1
|
%
|
Commercial Risk
|
190
|
|
|
120
|
|
|
70
|
|
|
58.3
|
%
|
Medicare Advantage
|
46
|
|
|
43
|
|
|
3
|
|
|
7.0
|
%
|
Medicaid
|
45
|
|
|
—
|
|
|
45
|
|
|
|
|
Total Arizona
|
281
|
|
|
163
|
|
|
118
|
|
|
72.4
|
%
|
|
|
|
|
|
|
|
|
||||
Northwest
|
|
|
|
|
|
|
|
|
|||
Large Group
|
28
|
|
|
23
|
|
|
5
|
|
|
21.7
|
%
|
Small Group
|
25
|
|
|
40
|
|
|
(15
|
)
|
|
(37.5
|
)%
|
Individual
|
4
|
|
|
3
|
|
|
1
|
|
|
33.3
|
%
|
Commercial Risk
|
57
|
|
|
66
|
|
|
(9
|
)
|
|
(13.6
|
)%
|
Medicare Advantage
|
54
|
|
|
47
|
|
|
7
|
|
|
14.9
|
%
|
Total Northwest
|
111
|
|
|
113
|
|
|
(2
|
)
|
|
(1.8
|
)%
|
|
|
|
|
|
|
|
|
|
|||
Total Health Plan Enrollment
|
|
|
|
|
|
|
|
||||
Large Group
|
568
|
|
|
695
|
|
|
(127
|
)
|
|
(18.3
|
)%
|
Small Group
|
308
|
|
|
323
|
|
|
(15
|
)
|
|
(4.6
|
)%
|
Individual
|
375
|
|
|
115
|
|
|
260
|
|
|
226.1
|
%
|
Commercial Risk
|
1,251
|
|
|
1,133
|
|
|
118
|
|
|
10.4
|
%
|
Medicare Advantage
|
262
|
|
|
236
|
|
|
26
|
|
|
11.0
|
%
|
Medi-Cal/Medicaid
|
1,404
|
|
|
1,118
|
|
|
286
|
|
|
25.6
|
%
|
Dual Eligibles
|
2
|
|
|
—
|
|
|
2
|
|
|
|
|
|
2,919
|
|
|
2,487
|
|
|
432
|
|
|
17.4
|
%
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Dollars in thousands, except PMPM data)
|
||||||||||||||
Commercial premiums
|
$
|
1,377,460
|
|
|
$
|
1,298,569
|
|
|
$
|
2,641,637
|
|
|
$
|
2,623,983
|
|
Medicare premiums
|
757,194
|
|
|
688,579
|
|
|
1,512,352
|
|
|
1,394,977
|
|
||||
Medicaid premiums
|
1,121,912
|
|
|
591,726
|
|
|
1,983,922
|
|
|
1,191,983
|
|
||||
Dual Eligibles premiums
|
5,312
|
|
|
—
|
|
|
5,312
|
|
|
—
|
|
||||
Health plan services premiums
|
3,261,878
|
|
|
2,578,874
|
|
|
6,143,223
|
|
|
5,210,943
|
|
||||
Net investment income
|
12,043
|
|
|
17,143
|
|
|
23,145
|
|
|
46,694
|
|
||||
Administrative services fees and other income
|
(6,612
|
)
|
|
2,472
|
|
|
(4,214
|
)
|
|
3,377
|
|
||||
Total revenues
|
3,267,309
|
|
|
2,598,489
|
|
|
6,162,154
|
|
|
5,261,014
|
|
||||
Health plan services
|
2,763,179
|
|
|
2,191,918
|
|
|
5,165,521
|
|
|
4,460,654
|
|
||||
Premium tax
|
31,930
|
|
|
51,167
|
|
|
74,388
|
|
|
59,360
|
|
||||
Health insurer fee
|
37,844
|
|
|
—
|
|
|
74,137
|
|
|
—
|
|
||||
Other ACA fees
|
22,546
|
|
|
569
|
|
|
45,073
|
|
|
1,142
|
|
||||
Administrative expenses
|
249,665
|
|
|
232,377
|
|
|
506,259
|
|
|
468,846
|
|
||||
Total general and administrative
|
341,985
|
|
|
284,113
|
|
|
699,857
|
|
|
529,348
|
|
||||
Selling
|
64,002
|
|
|
57,769
|
|
|
128,154
|
|
|
116,330
|
|
||||
Depreciation and amortization
|
9,641
|
|
|
9,514
|
|
|
19,304
|
|
|
18,953
|
|
||||
Interest
|
7,826
|
|
|
8,365
|
|
|
15,647
|
|
|
16,653
|
|
||||
Total expenses
|
3,186,633
|
|
|
2,551,679
|
|
|
6,028,483
|
|
|
5,141,938
|
|
||||
Income from operations before income taxes
|
80,676
|
|
|
46,810
|
|
|
133,671
|
|
|
119,076
|
|
||||
Income tax provision
|
42,874
|
|
|
16,023
|
|
|
72,245
|
|
|
43,652
|
|
||||
Net income
|
$
|
37,802
|
|
|
$
|
30,787
|
|
|
$
|
61,426
|
|
|
$
|
75,424
|
|
Pretax margin
|
2.5
|
%
|
|
1.8
|
%
|
|
2.2
|
%
|
|
2.3
|
%
|
||||
Commercial premium yield
|
(0.4
|
)%
|
|
2.0
|
%
|
|
1.6
|
%
|
|
2.4
|
%
|
||||
Commercial premium PMPM (d)
|
$
|
378.91
|
|
|
$
|
380.30
|
|
|
$
|
388.87
|
|
|
$
|
382.81
|
|
Commercial health care cost trend
|
(3.4
|
)%
|
|
(2.3
|
)%
|
|
(2.9
|
)%
|
|
(2.8
|
)%
|
||||
Commercial health care cost PMPM (d)
|
$
|
311.85
|
|
|
$
|
322.98
|
|
|
$
|
317.46
|
|
|
$
|
327.07
|
|
Commercial medical care ratio (MCR) (e)
|
82.3
|
%
|
|
84.9
|
%
|
|
81.6
|
%
|
|
85.4
|
%
|
||||
Medicare Advantage MCR (e)
|
90.9
|
%
|
|
89.9
|
%
|
|
91.3
|
%
|
|
90.9
|
%
|
||||
Medicaid MCR (e)
|
83.6
|
%
|
|
79.5
|
%
|
|
81.9
|
%
|
|
79.8
|
%
|
||||
Dual Eligibles MCR (e)
|
60.0
|
%
|
|
—
|
|
|
60.0
|
%
|
|
—
|
|
||||
Health plan services MCR (a)
|
84.7
|
%
|
|
85.0
|
%
|
|
84.1
|
%
|
|
85.6
|
%
|
||||
Administrative expense ratio (b)
|
7.7
|
%
|
|
9.0
|
%
|
|
8.2
|
%
|
|
9.0
|
%
|
||||
Total G&A expense ratio (b)
|
10.5
|
%
|
|
11.0
|
%
|
|
11.4
|
%
|
|
10.2
|
%
|
||||
Selling costs ratio (c)
|
2.0
|
%
|
|
2.2
|
%
|
|
2.1
|
%
|
|
2.2
|
%
|
(a)
|
Health plan services medical care ratio ("MCR") is calculated as health plan services cost divided by health plan services premiums revenue.
|
(b)
|
Administrative expense and Total G&A expense ratios are computed as either administrative expenses or total general and administrative expense divided by the sum of health plan services premiums revenue and administrative services fees and other income.
|
(c)
|
The selling costs ratio is computed as selling expenses divided by health plan services premiums revenue.
|
(d)
|
Per member per month ("PMPM") is calculated based on commercial at-risk member months and excludes administrative services only ("ASO") member months.
|
(e)
|
Commercial, Medicare Advantage, Medicaid and Dual Eligibles MCR is calculated as commercial, Medicare Advantage, Medicaid or Dual Eligibles health care cost divided by commercial, Medicare, Medicaid or Dual Eligibles premiums, as applicable.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Government contracts revenues
|
$
|
154,083
|
|
|
$
|
139,942
|
|
|
$
|
298,173
|
|
|
$
|
274,454
|
|
Government contracts costs
|
132,634
|
|
|
121,826
|
|
|
263,704
|
|
|
247,301
|
|
||||
Income from operations before income taxes
|
21,449
|
|
|
18,116
|
|
|
34,469
|
|
|
27,153
|
|
||||
Income tax provision
|
8,942
|
|
|
7,537
|
|
|
14,328
|
|
|
11,161
|
|
||||
Net income
|
$
|
12,507
|
|
|
$
|
10,579
|
|
|
$
|
20,141
|
|
|
$
|
15,992
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Costs included in government contract costs
|
$
|
574
|
|
|
$
|
5,574
|
|
|
$
|
1,478
|
|
|
$
|
5,574
|
|
Costs included in G&A
|
2,749
|
|
|
7,324
|
|
|
5,900
|
|
|
7,324
|
|
||||
Loss from operations before income taxes
|
(3,323
|
)
|
|
(12,898
|
)
|
|
(7,378
|
)
|
|
(12,898
|
)
|
||||
Income tax benefit
|
(73,881
|
)
|
|
(5,015
|
)
|
|
(75,465
|
)
|
|
(5,015
|
)
|
||||
Net income (loss)
|
$
|
70,558
|
|
|
$
|
(7,883
|
)
|
|
$
|
68,087
|
|
|
$
|
(7,883
|
)
|
|
June 30,
|
|
June 30,
|
|
Change Period over Period
|
||||||
|
2014
|
|
2013
|
|
|||||||
|
(Dollars in millions)
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
297.7
|
|
|
$
|
(134.5
|
)
|
|
$
|
432.2
|
|
|
June 30,
|
|
June 30,
|
|
Change Period over Period
|
||||||
|
2014
|
|
2013
|
|
|||||||
|
(Dollars in millions)
|
||||||||||
Net cash (used in) provided by investing activities
|
$
|
(21.7
|
)
|
|
$
|
36.0
|
|
|
$
|
(57.7
|
)
|
|
June 30,
|
|
June 30,
|
|
Change Period over Period
|
||||||
|
2014
|
|
2013
|
|
|||||||
|
(Dollars in millions)
|
||||||||||
Net cash (used in) provided by financing activities
|
$
|
(106.1
|
)
|
|
$
|
38.0
|
|
|
$
|
(144.1
|
)
|
Period
|
|
Total Number
of Shares
Purchased (a)
|
|
|
Average
Price Paid
per Share
|
|
Total
Price Paid
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Programs (b)
|
|
Maximum
Dollar Value of
Shares (or Units)
that May Yet Be
Purchased Under
the Programs (b)
|
|||||||
January 1—January 31
|
|
7,545
|
|
(c)
|
$
|
33.25
|
|
|
$
|
250,843
|
|
|
—
|
|
|
$
|
280,000,018
|
|
February 1—February 28
|
|
268,851
|
|
(c)
|
32.05
|
|
|
8,617,165
|
|
|
—
|
|
|
$
|
280,000,018
|
|
||
March 1—March 31
|
|
261,001
|
|
(c)
|
34.17
|
|
|
8,917,445
|
|
|
—
|
|
|
$
|
280,000,018
|
|
||
April 1—April 30
|
|
2,645
|
|
(c)
|
33.49
|
|
|
88,589
|
|
|
—
|
|
|
$
|
280,000,018
|
|
||
May 1—May 31
|
|
5,975
|
|
(c)
|
39.22
|
|
|
242,204
|
|
|
—
|
|
|
$
|
280,000,018
|
|
||
June 1—June 30
|
|
748
|
|
(c)
|
39.82
|
|
|
29,785
|
|
|
—
|
|
|
$
|
280,000,018
|
|
||
|
|
546,765
|
|
|
$
|
33.19
|
|
|
$
|
18,146,031
|
|
|
—
|
|
|
|
(a)
|
During the six months ended June 30, 2014, we did not repurchase any shares of our common stock outside our stock repurchase program, except shares withheld in connection with our various stock option and long-term incentive plans.
|
(b)
|
On May 2, 2011, our Board of Directors authorized and on May 4, 2011 we announced our stock repurchase program, pursuant to which a total of $300 million of our common stock could be repurchased. On March 8, 2012, our Board of Directors approved and on March 13, 2012 we announced a $323.7 million increase to our stock repurchase program. Our stock repurchase program does not have an expiration date. During the six months ended June 30, 2014, we did not have any repurchase program expire, and we did not terminate any repurchase program prior to its expiration date.
|
(c)
|
Includes shares withheld by the Company to satisfy tax withholding and/or exercise price obligations arising from the vesting and/or exercise of restricted stock units, stock options and other equity awards.
|
•
|
100% of the principal amount of the Senior Notes then outstanding to be redeemed; or
|
•
|
the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable treasury rate plus 30 basis points
|
•
|
failure to pay interest for 30 days after the date payment is due and payable; provided that an extension of an interest payment period by us in accordance with the terms of the Senior Notes shall not constitute a failure to pay interest;
|
•
|
failure to pay principal or premium, if any, on any note when due, either at maturity, upon any redemption, by declaration or otherwise;
|
•
|
failure to perform any other covenant or agreement in the notes or indenture for a period of 60 days after notice that performance was required;
|
•
|
(A) our failure or the failure of any of our subsidiaries to pay indebtedness for money we borrowed or any of our subsidiaries borrowed in an aggregate principal amount of at least $50 million, at the later of final maturity and the expiration of any related applicable grace period and such defaulted payment shall not have been made, waived or extended within 30 days after notice or (B) acceleration of the maturity of indebtedness for money we borrowed or any of our subsidiaries borrowed in an aggregate principal amount of at least $50 million, if that acceleration results from a default under the instrument giving rise
|
•
|
events in bankruptcy, insolvency or reorganization of our Company.
|
Completion Factor (a)
Percentage-point Increase (Decrease) in Factor |
|
Western Region Operations Health Plan Services
(Decrease) Increase in Reserves for Claims |
2%
|
|
$ (68.9) million
|
1%
|
|
$ (35.3) million
|
(1)%
|
|
$ 37.1 million
|
(2)%
|
|
$ 76.0 million
|
Medical Cost Trend (b)
Percentage-point Increase (Decrease) in Factor |
|
Western Region Operations Health Plan Services
Increase (Decrease) in Reserves for Claims |
2%
|
|
$ 26.8 million
|
1%
|
|
$ 13.4 million
|
(1)%
|
|
$ (13.4) million
|
(2)%
|
|
$ (26.8) million
|
(a)
|
Impact due to change in completion factor for the most recent three months. Completion factors indicate how complete claims paid to date are in relation to the estimate of total claims for a given period. Therefore, an increase in completion factor percent results in a decrease in the remaining estimated reserves for claims.
|
(b)
|
Impact due to change in annualized medical cost trend used to estimate the per member per month cost for the most recent three months.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 3.
|
Defaults Upon Senior Securities.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description
|
|
|
10.1†
|
Certain Compensation and Benefit Arrangements with Respect to Health Net, Inc.’s Non-Employee Directors, as amended and restated on July 18, 2014, a copy of which is filed herewith.
|
10.2†*
|
Amendment No. 4 to Master Agreement, effective as of March 1, 2014, between Health Net, Inc. and International Business Machines Corporation, a copy of which is filed herewith.
*
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, a copy of which is filed herewith.
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, a copy of which is filed herewith.
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, a copy of which is furnished herewith.
|
101
|
The following materials from Health Net, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 formatted in XBRL (eXtensible Business Reporting Language): (1) Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013, (2) Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013, (3) Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013, (4) Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2014 and 2013, (5) Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013 and (6) Condensed Notes to Consolidated Financial Statements.
|
†
|
A copy of the exhibit is being filed with this Quarterly Report on Form 10-Q.
|
*
|
This Exhibit has been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.
|
|
|
|
HEALTH NET, INC.
(REGISTRANT)
|
Date:
|
August 6, 2014
|
By:
|
/s/ JOSEPH C. CAPEZZA
|
|
|
|
Joseph C. Capezza
|
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
Date:
|
August 6, 2014
|
By:
|
/s/ MARIE MONTGOMERY
|
|
|
|
Marie Montgomery
|
|
|
|
Senior Vice President and Corporate Controller (Principal Accounting Officer)
|
|
|
|
|
Exhibit
Number
|
Description
|
|
|
10.1†
|
Certain Compensation and Benefit Arrangements with Respect to Health Net, Inc.’s Non-Employee Directors, as amended and restated on July 18, 2014, a copy of which is filed herewith.
|
10.2†*
|
Amendment No. 4 to Master Agreement, effective as of March 1, 2014, between Health Net, Inc. and International Business Machines Corporation, a copy of which is filed herewith.*
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, a copy of which is filed herewith.
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, a copy of which is filed herewith.
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, a copy of which is furnished herewith.
|
101
|
The following materials from Health Net, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 formatted in XBRL (eXtensible Business Reporting Language): (1) Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013, (2) Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013, (3) Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013, (4) Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2014 and 2013, (5) Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013 and (6) Condensed Notes to Consolidated Financial Statements.
|
†
|
A copy of the exhibit is being filed with this Quarterly Report on Form 10-Q.
|
*
|
This Exhibit has been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.
|
1 Year Health Net Chart |
1 Month Health Net Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions