HNT » Topics » 7. STOCK REPURCHASE PROGRAM

This excerpt taken from the HNT 10-Q filed May 11, 2009.

6.    STOCK REPURCHASE PROGRAM

We have a $700 million stock repurchase program authorized by our Board of Directors. Subject to Board approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds and tax benefits the Company receives from employee stock options. The remaining authorization under our stock repurchase program as of March 31, 2009 was $103.3 million. As of March 31, 2009, we had repurchased a cumulative aggregate of 36,623,347 shares of our common stock under our stock repurchase program at an average price of $34.40 per share for aggregate consideration of $1,259.8 million (which amount includes exercise proceeds and tax benefits the Company had received from the exercise of employee stock options). We used net free cash available to fund the share repurchases.

On November 4, 2008, we announced that our stock repurchase program is on hold as a consequence of the uncertain financial environment and the announcement by Health Net’s Board of Directors that Jay Gellert, our President and Chief Executive Officer, will be undertaking a review of the Company’s strategic direction. We did not repurchase shares during the three months ended March 31, 2009.

These excerpts taken from the HNT 10-K filed Feb 27, 2009.

Stock Repurchase Program

We have a $700 million stock repurchase program authorized by our Board of Directors. Subject to Board approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds and tax benefits the Company receives from the employee stock options. We repurchased 6,851,595 shares of our common stock during the year ended December 31, 2008, for aggregate consideration of approximately $242.8 million. We used net free cash available to fund the share repurchases. As of December 31, 2008, the remaining authorization under our stock repurchase program was $103.3 million and, since its inception, we had repurchased an aggregate of 36,623,347 shares of our common stock at an average price of $34.40 for aggregate consideration of approximately $1,259.8 million (which amount includes exercise proceeds and tax benefits the Company had received from the exercise of employee stock options).

On November 4, 2008, we announced that our stock repurchase program is on hold as a consequence of the uncertain financial environment and the announcement by Health Net’s Board of Directors that Jay Gellert, our President and Chief Executive Officer, will be undertaking a review of the Company’s strategic direction.

Stock Repurchase Program

We have a $700 million stock repurchase program authorized by our Board of Directors. Subject to Board approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds and tax benefits the Company receives from employee stock options. We repurchased 6,851,595 shares of our common stock during the year ended December 31, 2008, for aggregate consideration of approximately $242.8 million.

The remaining authorization under our stock repurchase program as of December 31, 2008 was $103.3 million. As of December 31, 2008, we had repurchased a cumulative aggregate of 36,623,347 shares of our common stock under our stock repurchase program at an average price of $34.40 per share for aggregate consideration of $1,259.8 million (which amount includes exercise proceeds and tax benefits the Company had received from the exercise of employee stock options). We used net free cash available to fund the share repurchases.

On December 14, 2006, we entered into an accelerated share repurchase (ASR) agreement with JP Morgan and repurchased 2,689,538 shares at an initial purchase price of $47.22 per share, or $127 million. Under the ASR agreement, JP Morgan purchased an equivalent number of shares in the open market. The repurchased shares were subject to a price adjustment based on JP Morgan’s volume-weighted average purchase price for the shares. If JP Morgan’s volume-weighted average purchase price for the shares was greater than $47.22 per share, we were required to pay JP Morgan an amount equal to the difference between the volume-weighted average purchase price and $47.22 (True-Up). Under the ASR agreement, we could elect to settle the True-Up in shares of Health Net common stock or cash. On March 15, 2007, we settled the True-Up of approximately $7.1 million by delivering 132,806 shares of our common stock to JP Morgan. The settlement is recorded in our statement of stockholders’ equity.

We may repurchase shares of our common stock under the stock repurchase program from time to time in open market transactions, privately negotiated transactions, or through accelerated share repurchase programs, or

 

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HEALTH NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

by any combination of such methods. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, restrictions under our debt obligations, and other market and economic conditions.

Our stock repurchase program does not have an expiration date. The stock purchase program may be suspended or discontinued at any time.

On November 4, 2008, we announced that our stock repurchase program is on hold as a consequence of the uncertain financial environment and the announcement by Health Net’s Board of Directors that Jay Gellert, our President and Chief Executive Officer, will be undertaking a review of the Company’s strategic direction.

This excerpt taken from the HNT 10-Q filed Nov 10, 2008.

6. STOCK REPURCHASE PROGRAM

We have a $700 million stock repurchase program authorized by our Board of Directors. Subject to Board approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds

 

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and tax benefits the Company receives from employee stock options. We repurchased 3,652,495 shares and 6,851,595 shares of our common stock during the three and nine months ended September 30, 2008, respectively, for aggregate consideration of approximately $100 million and $243 million, respectively.

The remaining authorization under our stock repurchase program as of September 30, 2008 was $103 million. As of September 30, 2008, we had repurchased a cumulative aggregate of 36,623,347 shares of our common stock under our stock repurchase program at an average price of $34.40 per share for aggregate consideration of $1,259.8 million (which amount includes exercise proceeds and tax benefits the Company had received from the exercise of employee stock options). We used net free cash available to fund the share repurchases. On November 4, 2008, we announced that our stock repurchase program is on hold as a consequence of the uncertain financial environment and the announcement by Health Net’s Board of Directors that Jay Gellert will be undertaking a review of the Company’s strategy.

This excerpt taken from the HNT 10-Q filed Aug 11, 2008.

5. STOCK REPURCHASE PROGRAM

On October 26, 2007, our Board of Directors increased the size of our stock repurchase program by $250 million, bringing the total amount of the program to $700 million. Subject to Board approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds and tax benefits the Company receives from employee stock options. We repurchased 3,199,100 shares during the three months ended March 31, 2008 for aggregate consideration of approximately $143 million. We did not repurchase any shares under the stock repurchase program during the three months ended June 30, 2008.

 

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The remaining authorization under our stock repurchase program as of June 30, 2008 was $203.3 million. As of June 30, 2008, we had repurchased a cumulative aggregate of 32,970,852 shares of our common stock under our stock repurchase program at an average price of $35.18 for aggregate consideration of $1,159.8 million (which amount includes exercise proceeds and tax benefits the Company had received from the exercise of employee stock options). We used net free cash available to fund the share repurchases.

This excerpt taken from the HNT 10-Q filed May 9, 2008.

5. STOCK REPURCHASE PROGRAM

On October 26, 2007, our Board of Directors increased the size of our stock repurchase program by $250 million, bringing the total amount of the program to $700 million. Subject to Board approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds and tax benefits the Company receives from employee stock options. We repurchased 3,199,100 shares during the three months ended March 31, 2008, for aggregate consideration of approximately $142.8 million.

The remaining authorization under our stock repurchase program as of March 31, 2008 was $203.3 million. As of March 31, 2008, we had repurchased an aggregate of 32,970,852 shares of our common stock under our stock repurchase program at an average price of $35.18 for aggregate consideration of $1,159.8 million (which amount includes exercise proceeds and tax benefits the Company had received from the exercise of employee stock options). We used net free cash available to fund the share repurchases.

These excerpts taken from the HNT 10-K filed Feb 28, 2008.

Stock Repurchase Program

On October 26, 2007, our Board of Directors increased the size of our stock repurchase program by $250 million, bringing the total
amount of the program to $700 million. Subject to Board approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds and tax benefits the Company receives from the employee stock options. We
repurchased 4,322,959 shares during the year ended December 31, 2007, for aggregate consideration of approximately $230 million.

We used
net free cash available to fund the share repurchases. The remaining authorization under our stock repurchase program as of December 31, 2007 was $346 million. As of December 31, 2007, we had repurchased

 


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an aggregate of 29,771,752 shares of our common stock under our stock repurchase program at an average price of $34.16 for aggregate consideration of
approximately $1,017.0 million (which amount includes exercise proceeds and tax benefits the Company had received from the exercise of employee stock options).

SIZE="2">Amortizing Financing Facility

On December 19, 2007, we entered into a five-year, non-interest bearing,
$175 million amortizing financing facility with a non-U.S. lender. For financial reporting purposes, this financing facility will have an effective interest rate of zero as a result of imputed interest being offset by other income related to
the financing facility. The proceeds from the financing facility were used for general corporate purposes.

The financing facility requires
one of our subsidiaries to pay semi-annual distributions, in the amount of $17.5 million, to be paid to a participant in the financing facility. Unless terminated earlier, the final payment under the facility is scheduled to be made on
December 19, 2012.

The financing facility includes limitations (subject to specified exclusions) on our and certain of our
subsidiaries’ ability to incur debt; create liens; engage in certain mergers, consolidations and acquisitions; engage in transactions with affiliates; enter into agreements which will restrict the ability to pay dividends or other distributions
with respect to any shares of capital stock or the ability to make or repay loans or advances; make dividends; and alter the character of ours or their business conducted on the closing date of the financing facility. In addition, the financing
facility documentation also requires that we maintain a specified consolidated leverage ratio and consolidated fixed charge coverage ratio throughout the term of the financing facility. As of December 31, 2007, we were in compliance with all of
the covenants under the financing facility.

The financing facility provides that it may be terminated through a series of put and call
transactions (1) at the option of one of our wholly-owned subsidiaries at any time after December 20, 2009, or (2) upon the occurrence of certain defined acceleration events. These acceleration events, include, but are not limited to:

 







  

nonpayment of certain amounts due by us or certain of our subsidiaries under the financing facility documentation (if not cured within the related time period set
forth therein);

 







  

a change of control (as defined in the financing facility documentation);

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our failure to maintain the following ratings on our senior indebtedness by any two of the following three rating agencies: (A) a rating of at least BB by
Standard & Poor’s Ratings Services, (B) a rating of at least BB by Fitch, Inc., and (C) a rating of at least Ba2 by Moody’s Investors Service, Inc.;

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cross-acceleration to other indebtedness of our Company in excess of $50 million;

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certain ERISA-related events;

 







  

noncompliance by Health Net with any material term or provision of the HMO Regulations or Insurance Regulations (as each such term is defined in the financing
facility documentation);

 







  

events in bankruptcy, insolvency or reorganization of our Company;

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undischarged, uninsured judgments in the amount of $50 million or more against our Company; or

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certain changes in law that could adversely affect a participant in the financing facility.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">In addition, in connection with the financing facility, we entered into a guaranty which will require us to guarantee the payment of the semi-annual
distributions and any other amounts payable by one of our subsidiaries to the financing facility participants under certain circumstances provided under the financing facility. Also in connection with the financing facility, we entered into an
interest rate swap agreement with a non-U.S. bank affiliated with one of the financing facility participants. Under the interest rate swap agreement, we pay a floating payment in an amount equal to LIBOR times a notional principal amount and receive
a fixed payment in an

 


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amount equal to 4.3% times the same notional principal amount from the non-U.S. bank counterparty in return in accordance with a schedule set forth in the
interest rate swap agreement.

Stock Repurchase Program

On October 26, 2007, our Board of Directors increased the size of our stock repurchase program by $250 million, bringing the total amount of the program to $700 million. Subject to Board approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds and tax benefits the Company receives from the employee stock options. We repurchased 4,322,959 shares during the year ended December 31, 2007, for aggregate consideration of approximately $230 million.

We used net free cash available to fund the share repurchases. The remaining authorization under our stock repurchase program as of December 31, 2007 was $346 million. As of December 31, 2007, we had repurchased an aggregate of 29,771,752 shares of our common stock under our stock repurchase program at an average price of $34.16 for aggregate consideration of approximately $1,017.0 million (which amount includes exercise proceeds and tax benefits the Company had received from the exercise of employee stock options).

We may repurchase shares of our common stock under the stock repurchase program from time to time in open market transactions, privately negotiated transactions, or through accelerated share repurchase programs, or by any combination of such methods. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, restrictions under our debt obligations, and other market and economic conditions.

Our stock repurchase program does not have an expiration date. The stock purchase program may be suspended or discontinued at any time. As of December 31, 2007, we have not terminated any repurchase program prior to its expiration date.

This excerpt taken from the HNT 10-Q filed Nov 9, 2007.

Stock Repurchase Program

On October 30, 2007, we announced that our Board of Directors increased the size of our stock repurchase program by $250 million, bringing the total amount of the program to $700 million. Additional amounts are added to the repurchase program from time to time based on exercise proceeds and tax benefits the Company

 

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receives from the employee stock options, subject to board approval. Including the additional $250 million in newly authorized repurchase authority, Health Net has approximately $346 million in remaining repurchase authority.

This excerpt taken from the HNT 10-Q filed Aug 8, 2007.

5. STOCK REPURCHASE PROGRAM

Our Board of Directors has authorized a stock repurchase program pursuant to which we are authorized to repurchase up to $450 million of our common stock. Additional amounts may be added to the program based on exercise proceeds and tax benefits received from the exercise of employee stock options if approved by the Board.

The remaining authorization under our stock repurchase program as of June 30, 2007 was $158.4 million. We repurchased 360,300 shares and 1,360,300 shares of our common stock during the three and six months ended June 30, 2007, respectively, for aggregate consideration of approximately $19.1 million and $73.2 million, respectively. We did not repurchase any shares of common stock under our stock repurchase program during the three and six months ended June 30, 2006. We used net free cash available to fund the share repurchases.

This excerpt taken from the HNT 10-Q filed May 9, 2007.

5. STOCK REPURCHASE PROGRAM

Our Board of Directors has authorized a stock repurchase program pursuant to which we are authorized to repurchase up to $450 million of our common stock. Additional amounts may be added to the program based on exercise proceeds and tax benefits received from the exercise of employee stock options if approved by the Board.

The remaining authorization under our stock repurchase program as of March 31, 2007 was $178 million. During the three months ended March 31, 2007, we repurchased 1,000,000 shares of our common stock for aggregate consideration of approximately $54.1 million. We used net free cash available to fund the share repurchases.

On December 14, 2006, we entered into an accelerated share repurchase (ASR) agreement with JP Morgan and repurchased 2,689,538 shares at an initial purchase price of $47.22 per share, or $127 million. Under the ASR agreement, JP Morgan purchased an equivalent number of shares in the open market. The repurchased shares were subject to a price adjustment based on JP Morgan’s volume-weighted average purchase price for the shares. If JP Morgan’s volume-weighted average purchase price for the shares was greater than $47.22 per share, we were required to pay JP Morgan an amount equal to the difference between the volume-weighted average purchase price and $47.22 (True-Up). Under the ASR agreement, we could elect to settle the True-Up in shares of Health Net common stock or cash. On March 15, 2007, we settled the True-Up of approximately $7.1 million by delivering 132,806 shares of our common stock to JP Morgan. The settlement is recorded in our statement of stockholders’ equity.

This excerpt taken from the HNT 10-K filed Mar 1, 2007.

Stock Repurchase Program

In September 2004, we placed our stock repurchase program on hold, primarily as a result of Moody’s and S&P having downgraded our non-credit-enhanced, senior unsecured long-term debt rating to below investment grade. Our Board of Directors had previously authorized us to repurchase up to $450 million of our common stock under the stock repurchase program.

On October 14, 2006, the Board of Directors authorized the resumption of repurchases of our common stock under the stock repurchase program. At that time, the outstanding amount under the stock repurchase program was $215 million (which amount includes exercise proceeds and tax benefits the Company had received to date from the exercise of employee stock options). The Board of Directors also increased the size of the stock repurchase program by $235 million. As a result, the Company was then authorized under the stock repurchase program to acquire shares of its common stock in an aggregate amount of up to $450 million. Although we are currently limited to repurchases of our common stock in amounts not to exceed $450 million, additional amounts may be added to the program based on exercise proceeds and tax benefits the Company receives from the exercise of employee stock options. However, these additional amounts may not be used to purchase additional shares of our common stock without further approval of the Board of Directors.

On November 9, 2006, we resumed repurchases of our common stock under our stock repurchase program and repurchased 5,470,138 shares for approximately $250 million during the three months ended December 31,

 

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HEALTH NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

2006. Included in the total repurchases are 2,689,538 shares repurchased at an initial purchase price of $47.22 per share, or $127 million, under an accelerated share repurchase (ASR) agreement with JP Morgan executed on December 14, 2006. Under the ASR agreement, JP Morgan is expected to purchase an equivalent number of shares in the open market over a period of several months. The repurchased shares are subject to a future price adjustment based on JP Morgan’s volume-weighted average purchase price for the shares. If JP Morgan’s volume-weighted average purchase price for the shares is greater than $47.22 per share, we will be required to pay JP Morgan an amount equal to the difference between the volume-weighted average purchase price and $47.22 (True-Up). Under the ASR agreement, we may elect to settle the True-Up in shares of Health Net common stock or cash.

We used net free cash available to fund the share repurchases. The remaining authorization under our stock repurchase program as of December 31, 2006 was $200 million. As of December 31, 2006, we had repurchased an aggregate of 25,448,793 shares of our common stock under our stock repurchase program at an average price of $30.92 for aggregate consideration of approximately $787 million (which amount includes exercise proceeds and tax benefits the Company had received from the exercise of employee stock options).

We may repurchase shares of our common stock under the stock repurchase program from time to time in open market transactions, privately negotiated transactions, or through accelerated share repurchase programs, or by any combination of such methods. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, restrictions under our debt obligations, and other market and economic conditions.

Our stock repurchase program does not have an expiration date. The stock purchase program may be suspended or discontinued at any time. As of December 31, 2006, we have not terminated any repurchase program prior to its expiration date.

This excerpt taken from the HNT 10-Q filed Nov 7, 2006.

7. STOCK REPURCHASE PROGRAM

In September 2004, we placed our stock repurchase program on hold, primarily as a result of Moody’s and S&P having downgraded our non-credit-enhanced, senior unsecured long-term debt rating to below investment grade. The stock repurchase program remained on hold as of September 30, 2006. Our Board of Directors had previously authorized us to repurchase up to $450 million (plus exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock under the stock repurchase program. After giving effect to realized exercise proceeds and tax benefits from the exercise of employee stock options, our cumulative total authority from the commencement of our stock repurchase program in 2002 to September 30, 2006 is estimated at $752 million. Share repurchases are made under our stock repurchase program from time to time through open market purchases or through privately negotiated transactions. As of September 30, 2006, we had repurchased an aggregate of 19,978,655 shares of our common stock under our stock repurchase program at an average price of $26.86 for aggregate consideration of approximately $537 million. We used net free cash available to the Company to fund the share repurchases. We did not repurchase any shares of common stock under our stock repurchase program during the three and nine months ended September 30, 2006. The remaining authorization under our stock repurchase program as of September 30, 2006 was $215 million after taking into account exercise proceeds and tax benefits from the exercise of employee stock options.

Our stock repurchase program does not have an expiration date. The stock repurchase program may be suspended or discontinued at any time. As of September 30, 2006, we have not terminated any repurchase program prior to its expiration date.

This excerpt taken from the HNT 10-Q filed Aug 7, 2006.

6. STOCK REPURCHASE PROGRAM

Our Board of Directors has authorized us to repurchase up to $450 million (net of exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock under a stock repurchase program. After giving effect to realized exercise proceeds and tax benefits from the exercise of employee stock options, our total authority under our stock repurchase program is estimated at $732 million. Share repurchases are made under our stock repurchase program from time to time through open market purchases or through privately negotiated transactions. As of June 30, 2006, we had repurchased an aggregate of 19,978,655 shares of our common stock under our stock repurchase program at an average price of $26.86 for aggregate consideration of approximately $537 million. We did not repurchase any shares of common stock under our stock repurchase program during the three and six months ended June 30, 2006. The remaining authorization under our stock repurchase program as of June 30, 2006 was $195 million after taking into account exercise proceeds and tax benefits from the exercise of employee stock options. We used net free cash available to the parent company to fund the share repurchases.

In late 2004 we placed our stock repurchase program on hold, primarily as a result of Moody’s and S&P having downgraded our senior unsecured debt rating to below investment grade. Although our senior unsecured debt rating remains below investment grade, we are currently evaluating the possibility of resuming share repurchases under our stock repurchase program based, in part, on our operating results for the first half of 2006, as well as the amount of cash we expect to have available at the parent company during the second half of 2006. Any decision to resume share repurchases under our stock repurchase program is subject to review and approval by our Board of Directors.

This excerpt taken from the HNT 10-Q filed May 10, 2006.

6. STOCK REPURCHASE PROGRAM

 

Our Board of Directors has previously authorized us to repurchase up to $450 million (net of exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock under a stock repurchase program. After giving effect to realized exercise proceeds and tax benefits from the exercise of employee stock options, our total authority under our stock repurchase program is estimated at $703 million. Share repurchases are made under our stock repurchase program from time to time through open market purchases or through privately negotiated transactions. As of March 31, 2006, we had repurchased an aggregate of 19,978,655 shares of our common stock under our stock repurchase program at an average price of $26.86 for aggregate consideration of approximately $537 million. We did not repurchase any shares of common stock under our stock repurchase program during the three months ended March 31, 2006. The remaining authorization under our stock repurchase program as of March 31, 2006 was $166 million after taking into account exercise proceeds and tax benefits from the exercise of employee stock options. We used net free cash available to the parent company to fund the share repurchases.

 

As a result of the Moody’s downgrade in September 2004 and S&P’s downgrade in November 2004 with respect to our senior unsecured debt rating, we have currently discontinued our repurchases of common stock under

 

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our stock repurchase program. Our decision to resume the repurchase of shares under our stock repurchase program will depend on a number of factors, including, without limitation, any future ratings action taken by Moody’s or S&P on our senior unsecured debt rating (see Note 7). Our stock repurchase program does not have an expiration date. As of March 31, 2006, we have not terminated any repurchase program prior to its expiration date.

 

This excerpt taken from the HNT 10-K filed Feb 13, 2006.

Stock Repurchase Program

 

Our Board of Directors has previously authorized us to repurchase up to $450 million (net of exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock under a stock repurchase program. After giving effect to realized exercise proceeds and tax benefits from the exercise of employee stock options, our total authority under our stock repurchase program is estimated at $687 million. Share repurchases are made under our stock repurchase program from time to time through open market purchases or through privately negotiated transactions. As of December 31, 2005, we had repurchased an aggregate of 19,978,655 shares of our common stock under our stock repurchase program at an average price of $26.86 for aggregate consideration of approximately $537 million. The remaining authorization under our stock repurchase program as of December 31, 2005 was $150 million after taking into account exercise proceeds and tax benefits from the exercise of employee stock options. We used net free cash available to the parent company to fund the share repurchases.

 

As a result of the Moody’s downgrade in September 2004 and S&P’s downgrade in November 2004 with respect to our senior unsecured debt rating, we have currently discontinued our repurchases of common stock under our stock repurchase program. Our decision to resume the repurchase of shares under our stock repurchase program will depend on a number of factors, including, without limitation, any future ratings action taken by Moody’s or S&P on our senior unsecured debt rating. See Note 6 to our consolidated financial statements for additional information regarding the Moody’s and S&P downgrades. Our stock repurchase program does not have an expiration date. As of December 31, 2005, we have not terminated any repurchase program prior to its expiration date.

 

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HEALTH NET, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

This excerpt taken from the HNT 10-Q filed Nov 2, 2005.

7. STOCK REPURCHASE PROGRAM

 

Our Board of Directors has authorized us to repurchase up to $450 million (net of exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock under a stock repurchase program. After giving effect to realized exercise proceeds and tax benefits from the exercise of employee stock options, our total authority under our stock repurchase program is estimated at $676 million. Share repurchases are made under our stock repurchase program from time to time through open market purchases or through privately negotiated transactions. As of September 30, 2005, we had repurchased an aggregate of 19,978,655 shares of our common stock under our stock repurchase program at an average price of $26.86 for aggregate consideration of approximately $536.6 million after taking into account exercise proceeds and tax benefits from the exercise of employee stock options. We did not repurchase any shares of common stock under our stock repurchase program during the three and nine months ended September 30, 2005. The remaining authorization under our stock repurchase program as of September 30, 2005 was $139 million.

 

As a result of the ratings action taken by Moody’s in September 2004 and S&P in November 2004 with respect to our senior unsecured debt rating, we placed our stock repurchase program on hold. Our decision to resume the repurchase of shares under our stock repurchase program will depend on a number of factors, including, without limitation, any future ratings action taken by Moody’s or S&P (see Note 8).

 

This excerpt taken from the HNT 10-Q filed Aug 9, 2005.

7. STOCK REPURCHASE PROGRAM

 

Our Board of Directors has authorized us to repurchase up to $450 million (net of exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock under a stock repurchase program. After giving effect to realized exercise proceeds and tax benefits from the exercise of employee stock options, our total authority under our stock repurchase program is estimated at $639 million. Share repurchases are made under our stock repurchase program from time to time through open market purchases or through privately negotiated transactions. As of June 30, 2005, we had repurchased an aggregate of 19,978,655 shares of our common stock under our stock repurchase program at an average price of $26.86 for aggregate consideration of approximately $536.6 million after taking into account exercise proceeds and tax benefits from the exercise of employee stock options. The remaining authorization under our stock repurchase program as of June 30, 2005 was $102 million.

 

We did not repurchase any shares of common stock during the six months ended June 30, 2005. As a result of the ratings action taken by Moody’s in September 2004 and S&P in November 2004 with respect to our senior unsecured debt rating, we ceased repurchasing shares of common stock under our stock repurchase program. Our decision to resume the repurchase of shares under our stock repurchase program will depend on a number of factors, including, without limitation, any future ratings action taken by Moody’s or S&P (see Note 8).

 

This excerpt taken from the HNT 10-Q filed May 10, 2005.

7. STOCK REPURCHASE PROGRAM

 

Our Board of Directors has authorized us to repurchase up to $450 million (net of exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock under a stock repurchase program. After giving effect to realized exercise proceeds and tax benefits from the exercise of employee stock options, our total authority under our stock repurchase program is estimated at $615 million. Share repurchases are made under our stock repurchase program from time to time through open market purchases or through privately negotiated transactions. As of March 31, 2005, we had repurchased an aggregate of 19,978,655 shares of our common stock under our stock repurchase program at an average price of $26.86 for aggregate consideration of approximately $536.6 million after taking into account exercise proceeds and tax benefits from the exercise of employee stock options. The remaining authorization under our stock repurchase program as of March 31, 2005 was $79 million.

 

We did not repurchase any shares of common stock during the three months ended March 31, 2005. As a result of the ratings action taken by Moody’s in September 2004 and S&P in November 2004 with respect to our senior unsecured debt rating, we ceased repurchasing shares of common stock under our stock repurchase program. Our decision to resume the repurchase of shares under our stock repurchase program will depend on a number of factors, including, without limitation, any future ratings action taken by Moody’s or S&P (see Note 8).

 

This excerpt taken from the HNT 10-K filed Mar 15, 2005.

Stock Repurchase Program

 

In April 2002, our Board of Directors authorized us to repurchase up to $250 million (net of exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock under our stock repurchase program. In August 2003, our Board of Directors authorized us to repurchase up to an additional $200 million (net of exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock under our stock repurchase program. Share repurchases are made under our stock repurchase program from time to time through open market purchases or through privately negotiated transactions. As of December 31, 2004, we had repurchased an aggregate of 19,978,655 shares of our common stock under our stock repurchase program for aggregate consideration of approximately $536.6 million before taking into account exercise proceeds and tax benefits from the exercise of employee stock options. We repurchased 3,179,400 shares of common stock during the year ended December 31, 2004 for $83.7 million. As a result of the ratings action taken by Moody’s in September 2004 and S&P in November 2004 with respect to our senior unsecured debt rating, we ceased repurchasing shares of common stock under our stock repurchase program through the end of 2004. Our decision to resume the repurchase of shares under our stock repurchase program will depend on a number of factors, including, without limitation, any future ratings action taken by Moody’s or S&P (see Note 6).

 

During 2004, we received approximately $18 million in cash and recognized $2 million in tax benefits as a result of option exercises. During 2003 and 2002, we received approximately $42 million and $48 million in cash, respectively, and recognized $15 million and $18 million in tax benefits, respectively, as a result of option exercises.

 

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Table of Contents

HEALTH NET, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

As a result of the $20 million (in 2004), $57 million (in 2003) and $66 million (in 2002) in realized and estimated benefits, our total authority under our stock repurchase program through 2004 is estimated at $593 million based on the authorization we received from our Board of Directors to repurchase up to an aggregate of up to $450 million (net of exercise proceeds and tax benefits from the exercise of employee stock options) of our common stock. The remaining authorization under our stock repurchase program as of December 31, 2004 was $57 million.

 

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