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Basis of Presentation
9 Months Ended
Sep. 30, 2013
Basis of Presentation [Abstract]  
Basis of Presentation
BASIS OF PRESENTATION
Health Net, Inc. prepared the accompanying unaudited consolidated financial statements following the rules and regulations of the Securities and Exchange Commission ("SEC") for interim reporting. In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “Company,” “Health Net,” “we,” “us,” and “our” refer to Health Net, Inc. and its subsidiaries. As permitted under those rules and regulations, certain notes or other financial information that are normally required by accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted if they substantially duplicate the disclosures contained in the annual audited financial statements. The accompanying unaudited consolidated financial statements should be read together with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2012 ("Form 10-K").
We are responsible for the accompanying unaudited consolidated financial statements. These consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of our financial position and operating results in accordance with GAAP. In accordance with GAAP, we make certain estimates and assumptions that affect the reported amounts. Actual results could differ from those estimates and assumptions. In addition, revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be indicative of those for the full year.
Subsequent to the issuance of the Company’s 2012 quarterly financial statements for the three and nine months ended September 30, 2012, we determined that inter-governmental pass-through funds ("IGT") received during the three months ended September 30, 2012, were incorrectly classified as operating cash flows in the consolidated statements of cash flows. Generally, IGTs are funds that we receive as intermediaries from government entities, which we subsequently distribute to other third party government entities. As a result, the consolidated statement of cash flows has been restated from the amounts previously reported to reclassify $44.6 million of IGT funds received from operating activities in the consolidated statements of cash flows for the nine months ended September 30, 2012 to cash flows from financing activities. We believe the effects of the restatement are immaterial.
On April 1, 2012, we completed the sale of the business operations of our Medicare stand-alone Prescription Drug Plan business ("Medicare PDP business") to Pennsylvania Life Insurance Company, a subsidiary of CVS Caremark Corporation ("CVS Caremark"). As a result of the sale, the operating results of our Medicare PDP business have been classified as discontinued operations in our consolidated statements of operations for the nine months ended September 30, 2012. See Note 3 for more information on the sale of our Medicare PDP business.