Anthem Blue Cross 2001 Annual Report Download - page 53

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In addition to the revolving credit facilities described above, Anthem Insurance currently has a $300.0 commercial
paper program available for general corporate purposes. Commercial paper notes are short term senior unsecured
notes, with a maturity not to exceed 270 days from date of issuance. When issued, the notes bear interest at current
market rates. Availability under the commercial paper program is reduced by the amount of any borrowings
outstanding under the Company’s revolving credit facilities. There were no commercial paper notes outstanding
at December 31, 2001 or 2000 or during the years then ended.
Subsequent to December 31, 2001, Anthem and Anthem Insurance entered into two new agreements allowing
aggregate indebtedness of $135.0. Anthem will guarantee all obligations of Anthem Insurance under the facilities.
Anthem also will be permitted to be a borrower under the facilities, if the Indiana Insurance Commissioner approves
Anthem Insurance’s guarantee of Anthem’s obligations under the facilities.
Interest paid during 2001, 2000 and 1999 was $57.4, $49.9 and $28.2, respectively.
Future maturities of debt are as follows: 2002, $0.3; 2003, $100.1; 2004, $1.3; 2005, $0.5; 2006, $220.8 and
thereafter $495.3.
7. Fair Value of Financial Instruments
Considerable judgment is required to develop estimates of fair value for financial instruments. Accordingly, the
estimates shown are not necessarily indicative of the amounts that would be realized in a one time, current market
exchange of all of the financial instruments.
The carrying values and estimated fair values of certain financial instruments are as follows at December 31:
2001 2000
Carrying Fair Carrying Fair
Value Value Value Value
Fixed maturity securities $3,882.7 $3,882.7 $3,048.2 $3,048.2
Equity securities 189.1 189.1 463.1 463.1
Restricted investments 38.7 38.7 42.7 42.7
Debt:
Equity Security Units 220.2 294.4 ––
Other 598.1 681.9 597.7 562.2
The carrying value of all other financial instruments approximates fair value because of the relatively short period of
time between the origination of the instruments and their expected realization. Fair values for securities, restricted
investments and Equity Security Units are based on quoted market prices, where available. For securities not actively
traded, fair values are estimated using values obtained from independent pricing services. The fair value of other debt
is estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for
similar types of borrowing arrangements.
8. Property and Equipment
Property and equipment includes the following at December 31:
2001 2000
Land and improvements $ 21.8 $ 21.0
Building and components 251.2 251.3
Data processing equipment, furniture
and other equipment 432.7 407.6
Leasehold improvements 36.4 37.2
742.1 717.1
Less accumulated depreciation and amortization 339.8 288.3
$402.3 $428.8
Property and equipment includes non-cancelable capital leases of $7.3 and $7.4 at December 31, 2001 and 2000,
respectively. Total accumulated amortization on these leases at December 31, 2001 and 2000 was $3.9 and $3.7,
respectively. The related lease amortization expense is included in depreciation and amortization expense. Depreciation
and leasehold improvement amortization expense for 2001, 2000 and 1999 was $89.6, $75.3 and $47.1, respectively.