SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Amounts in thousands)



	Year Ended December 31,
	2013			2012			2011
REVENUES:
Net investment income	$	1,316		$	1,459		$	493
Other income (loss)	229			204			690
Administrative service fees	464,393			478,037			493,637
Divested operations and services revenues	—			—			33,377
Total revenues	465,938			479,700			528,197
EXPENSES:
General and administrative	431,354			470,156			649,524
Depreciation and amortization	36,185			30,408			33,061
Interest	33,589			35,112			34,456
Divested operations and services expenses	—			—			33,377
Total expenses	501,128			535,676			750,418
Loss from operations before income taxes and equity in net income of subsidiaries	(35,190		)	(55,976		)	(222,221		)
Income tax benefit	13,014			5,633			132,690
Equity in net income (loss) of subsidiaries	192,302			172,406			161,651
Net income	$	170,126		$	122,063		$	72,120

See accompanying notes to condensed financial statements.

SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)



	Year Ended December 31,
	2013			2012			2011
Net income	$	170,126		$	122,063		$	72,120
Other comprehensive income before tax:
Unrealized (losses) gains on investments available-for-sale:
Unrealized holding (losses) gains arising during the period	(78,217		)	65,462			54,607
Less: Reclassification adjustments for gains included in earnings	(23,975		)	(36,680		)	(33,029		)
Unrealized (losses) gains on investments available-for-sale, net	(102,192		)	28,782			21,578
Defined benefit pension plans:
Prior service cost arising during the period	607			—			(1,304		)
Net gain (loss) arising during the period	7,294			(646		)	(12,904		)
Less: Amortization of prior service cost and net loss included in net periodic pension cost	2,572			4,152			628
Defined benefit pension plans, net	10,473			3,506			(13,580		)
Other comprehensive (loss) income, before tax	(91,719		)	32,288			7,998
Income tax (benefit) expense related to components of other comprehensive income	(31,868		)	21,936			(8,147		)
Other comprehensive (loss) income, net of tax	(59,851		)	10,352			16,145
Comprehensive income	$	110,275		$	132,415		$	88,265

See accompanying notes to condensed financial statements.

SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

CONDENSED BALANCE SHEETS

(Amounts in thousands)



	December 31, 2013			December 31, 2012
ASSETS
Current Assets:
Cash and cash equivalents	$	131,350		$	105,809
Investments—available for sale	78,242			—
Other assets	30,965			36,351
Deferred taxes	16,158			—
Due from subsidiaries	177,957			169,853
Total current assets	434,672			312,013
Property and equipment, net	162,679			145,821
Goodwill	319,732			319,732
Other intangible assets, net	1,198			1,823
Investment in subsidiaries	2,608,631			2,648,148
Deferred taxes	6,523			17,823
Other assets	71,661			66,857
Total Assets	$	3,605,096		$	3,512,217
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Due to subsidiaries	$	237,555		$	223,612
Deferred taxes	—			18,807
Other liabilities	100,755			96,162
Total current liabilities	338,310			338,581
Intercompany notes payable—long term	977,233			987,746
Long term debt	499,300			499,095
Other liabilities	161,442			129,765
Total Liabilities	1,976,285			1,955,187
Commitments and contingencies
Stockholders’ Equity:
Common stock	150			149
Additional paid-in capital	1,377,624			1,329,000
Treasury common stock, at cost	(2,179,744		)	(2,092,625		)
Retained earnings	2,463,648			2,293,522
Accumulated other comprehensive income	(32,867		)	26,984
Total Stockholders’ Equity	1,628,811			1,557,030
Total Liabilities and Stockholders’ Equity	$	3,605,096		$	3,512,217

See accompanying notes to condensed financial statements.

SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Amounts in thousands)



	Year Ended December 31,
	2013			2012			2011
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES	$	111,385		$	165,141		$	252,100
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales on investments	6,060			—			—
Maturities of investments	877			—			—
Purchases of investments	(6,841		)	—			—
Purchases of property and equipment	(53,632		)	(68,116		)	(48,046		)
Notes receivable due from subsidiaries	—			7,000			(24,000		)
Capital contributions returned to Parent	2,300			1,500			1,796
Capital contributions to subsidiaries	(7,500		)	(17,560		)	(400		)
Sales (purchases) of restricted investments and other	161			876			(13,361		)
Net cash used in investing activities	(58,575		)	(76,300		)	(84,011		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in checks outstanding, net of deposits	5			(44		)	(37		)
Excess tax benefit on share-based compensation	287			3,222			544
Net borrowings from subsidiaries	39,487			(9,103		)	(14,246		)
Proceeds from exercise of stock options and employee stock purchases	10,762			16,941			13,356
Proceeds from issuance of notes and other financing arrangements	345,000			110,000			978,500
Repayment of debt under financing arrangements	(345,000		)	(122,500		)	(872,212		)
Repurchase of common stock	(77,810		)	(69,496		)	(389,850		)
Net cash used in financing activities	(27,269		)	(70,980		)	(283,945		)
Net increase (decrease) in cash and cash equivalents	25,541			17,861			(115,856		)
Cash and cash equivalents, beginning of period	105,809			87,948			203,804
Cash and cash equivalents, end of period	$	131,350		$	105,809		$	87,948
SUPPLEMENTAL CASH FLOWS DISCLOSURE:
Interest paid	$	30,789		$	31,134		$	31,332
Income taxes paid	80,119			5,001			55,882

See accompanying notes to condensed financial statements.

SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

NOTE TO CONDENSED FINANCIAL STATEMENTS

Note 1—Basis of Presentation

Health Net, Inc.’s ("HNT") investment in subsidiaries is stated at cost plus equity in undistributed earnings (losses) of subsidiaries. HNT’s share of net income (loss) of its unconsolidated subsidiaries is included in consolidated income using the equity method.

This condensed financial information of registrant (parent company only) should be read in conjunction with the consolidated financial statements of Health Net, Inc. and subsidiaries.

Note 2—Subsidiary Transactions

Dividends from Subsidiaries

HNT received cash dividends from its subsidiaries in the amounts of $46,519,000, $140,000,000 and $305,000,000 during the years ended December 31, 2013, 2012 and 2011, respectively.