Anthem Blue Cross 2000 Annual Report Download - page 11

9
Anthem Insurance Companies, Inc.
Notes to Consolidated Financial Statements (continued)
2. Acquisitions, Divestitures and Discontinued Operations (continued)
Unaudited pro forma results of operations assuming the 1999 acquisitions occurred on January 1, 1999 would have
resulted in total revenues of $7,186.4, income from continuing operations of $83.3 and net income of $5.5 for 1999,
respectively.
1998
During 1998, the Company made acquisitions with purchase prices aggregating $35.2. All acquisitions were
accounted for as purchases and the purchase prices were allocated to the assets and liabilities of the acquired entities
based upon their estimated fair values. The total purchase price for these acquisitions exceeded the fair value of the
net tangible assets acquired by approximately $28.3, which was assigned to goodwill and other intangible assets and
are being amortized over periods not to exceed 20 years. The pro forma effects of these acquisitions are insignificant
to the Company’ s consolidated results of operations.
Divestitures:
1999
During 1999, the Company divested of several small business operations, which were no longer deemed
strategically aligned with the Company’ s core business. The Company recognized a loss of $14.2 (net of income tax
benefit of $6.1) on these disposals. The pro forma effects of these divestitures are insignificant to the consolidated
results of operations.
Discontinued Operations:
1999
During 1999, the Company recognized additional losses of $6.0, net of income tax benefit of $6.2, resulting from
sales agreement contingency adjustments relating to the discontinued operations sold in prior years.
1998
In March 1998, the Company made the decision to exit principally all of its non-Blue Cross and Blue Shield health
businesses as follows:
In May 1998 the Company principally completed its exit from its non-health insurance related businesses through
the sale of its durable medical equipment business for $23.3, resulting in a gain of $12.9 (net of income tax expense
of $8.4).
In June 1998, the Company completed the sale of two of its HMO businesses for $10.1 resulting in a gain of $3.3
(net of income tax expense of $1.8). Further, in July 1998, the Company completed the sale of Anthem Health and
Life Insurance Company for $77.5 resulting in a gain of $1.1 (including income tax benefit of $14.1). In September
1998, the Company made a provision of $10.4 (net of income tax benefit of $3.4) for the estimated loss on the
disposal of its remaining non-Blue Cross and Blue Shield health businesses.