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,
	2015			2014			2013
REVENUES:
Net investment (loss) income	$	(3,554	)	$	(125	)	$	1,316
Other income	27			8			229
Administrative service fees	477,960			477,440			464,393
Total revenues	474,433			477,323			465,938
EXPENSES:
General and administrative	556,666			524,751			431,354
Depreciation and amortization	21,707			28,207			36,185
Interest	33,309			31,376			33,589
Asset Impairment	1,884			88,528			—
Total expenses	613,566			672,862			501,128
Loss from operations before income taxes and equity in net income of subsidiaries	(139,133		)	(195,539		)	(35,190		)
Income tax benefit	82,312			53,011			13,014
Equity in net income (loss) of subsidiaries	242,498			288,157			192,302
Net income	$	185,677		$	145,629		$	170,126

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,
	2015			2014			2013
Net income	$	185,677		$	145,629		$	170,126
Other comprehensive (loss) income before tax:
Unrealized (losses) gains on investments available-for-sale:
Unrealized holding (losses) gains arising during the period	(10,480		)	59,073			(78,217		)
Less: Reclassification adjustments for gains included in earnings	(192		)	(2,710		)	(23,975		)
Unrealized (losses) gains on investments available-for-sale, net	(10,672		)	56,363			(102,192		)
Defined benefit pension plans:
Prior service cost arising during the period	—			—			607
Net gain (loss) arising during the period	6,416			(11,893		)	7,294
Less: Amortization of prior service cost and net loss included in net periodic pension cost	2,560			600			2,572
Defined benefit pension plans, net	8,976			(11,293		)	10,473
Other comprehensive (loss) income, before tax	(1,696		)	45,070			(91,719		)
Income tax (benefit) expense related to components of other comprehensive income	(306		)	15,464			(31,868		)
Other comprehensive (loss) income, net of tax	(1,390		)	29,606			(59,851		)
Comprehensive income	$	184,287		$	175,235		$	110,275

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, 2015			December 31, 2014
ASSETS
Current Assets:
Cash and cash equivalents	$	28,063		$	61,212
Other assets	64,064			36,740
Deferred taxes	365			11,538
Assets held for sale	—			50,000
Due from subsidiaries	79,629			128,967
Total current assets	172,121			288,457
Property and equipment, net	118,483			53,016
Goodwill	312,732			312,732
Other intangible assets, net	—			573
Investment in subsidiaries	3,359,203			3,060,191
Deferred taxes	3,667			36,453
Other assets	69,481			70,760
Total Assets	$	4,035,687		$	3,822,182
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Due to subsidiaries	$	155,502		$	284,654
Deferred taxes	19,619			34,684
Borrowings under revolving credit facility	285,000			—
Other liabilities	121,767			130,580
Total current liabilities	581,888			449,918
Intercompany notes payable—long term	1,069,224			1,047,947
Long term debt	399,709			499,504
Other liabilities	151,786			115,591
Total Liabilities	2,202,607			2,112,960
Commitments and contingencies
Stockholders’ Equity:
Common stock	154			153
Additional paid-in capital	1,497,562			1,444,705
Treasury common stock, at cost	(2,454,939		)	(2,341,652		)
Retained earnings	2,794,954			2,609,277
Accumulated other comprehensive loss	(4,651		)	(3,261		)
Total Stockholders’ Equity	1,833,080			1,709,222
Total Liabilities and Stockholders’ Equity	$	4,035,687		$	3,822,182

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,
	2015			2014			2013
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES	$	323,057		$	153,063		$	111,385
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales on investments	—			81,263			6,060
Maturities of investments	—			1,512			877
Purchases of investments	—			(3,032		)	(6,841		)
Purchases of property and equipment	(57,749		)	(62,491		)	(53,632		)
Capital contributions returned to Parent	518			—			2,300
Capital contributions to subsidiaries	(414,200		)	(188,000		)	(7,500		)
Sales (purchases) of restricted investments and other	—			—			161
Net cash used in investing activities	(471,431		)	(170,748		)	(58,575		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in checks outstanding, net of deposits	38			(46		)	5
Excess tax benefit on share-based compensation	2,915			1,701			287
Net borrowings from subsidiaries	21,277			70,714			39,487
Proceeds from exercise of stock options and employee stock purchases	18,972			27,727			10,762
Proceeds from issuance of notes and other financing arrangements	360,000			—			345,000
Repayment of debt under financing arrangements	(175,000		)	—			(345,000		)
Repurchase of common stock	(112,977		)	(152,549		)	(77,810		)
Net cash provided by (used in) financing activities	115,225			(52,453		)	(27,269		)
Net (decrease) increase in cash and cash equivalents	(33,149		)	(70,138		)	25,541
Cash and cash equivalents, beginning of period	61,212			131,350			105,809
Cash and cash equivalents, end of period	$	28,063		$	61,212		$	131,350
SUPPLEMENTAL CASH FLOWS DISCLOSURE:
Interest paid	$	31,622		$	29,670		$	30,789
Income taxes paid	276,468			83,499			80,119

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 $353,482,000, $617,500,000 and $46,519,000 during the years ended December 31, 2015, 2014 and 2013, respectively.