Cigna 2013 Annual Report Download - page 105

PART II
ITEM 8. Financial Statements and Supplementary Data
The condensed balance sheet at the acquisition date was as follows:
(In millions)
Investments $23
Cash and cash equivalents 54
Value of business acquired (reported in Deferred policy acquisition costs in the Consolidated Balance Sheet) 26
Goodwill 116
Separate account assets 99
Other assets, including other intangibles 98
Total assets acquired 416
Insurance liabilities 58
Accounts payable, accrued expenses and other liabilities 32
Separate account liabilities 99
Total liabilities acquired 189
Redeemable noncontrolling interest 111
Net assets acquired $ 116
The results of Finans Emeklilik are included in the Company’s as well as further enhances its distribution network of agents and
Consolidated Financial Statements from the date of acquisition. The brokers. Results of this business are reported in the Global
pro forma effects on total revenues and net income assuming the Supplemental Benefits segment.
acquisition had occurred as of January 1, 2011 were not material to In accordance with GAAP, the total purchase price has been allocated
the Company for the years ended December 31, 2012 and 2011. to the tangible and intangible net assets acquired based on
management’s estimates of their fair value. Approximately
$168 million was allocated to intangible assets, primarily the VOBA
B. Acquisition of Great American
asset that will be amortized in proportion to premium recognized over
Supplemental Benefits Group
the life of the contracts, primarily over 15 years. Amortization is
On August 31, 2012, the Company acquired Great American expected to be higher in early years and decline as policies lapse.
Supplemental Benefits Group, one of the largest providers of Goodwill has been allocated to the Global Supplemental Benefits
supplemental health insurance products in the U.S. with cash from segment. Substantially all of the goodwill is tax deductible and will be
internal resources. The acquisition provides the Company with an amortized over 15 years for federal income tax purposes.
increased presence in the Medicare supplemental benefits market. It
also extends the Company’s global direct-to-consumer retail channel
The condensed balance sheet at the acquisition date was as follows:
(In millions)
Investments $ 211
Cash and cash equivalents 36
Reinsurance recoverables 448
Goodwill 168
Value of business acquired (reported in Deferred policy acquisition costs in the Consolidated Balance Sheet) 144
Other assets, including other intangibles 35
Total assets acquired 1,042
Insurance liabilities 707
Accounts payable, accrued expenses and other liabilities 9
Total liabilities acquired 716
Net assets acquired $ 326
The results of this business have been included in the Company’s HealthSpring provides Medicare Advantage coverage in 15 states and
Consolidated Financial Statements from the date of acquisition. The the District of Columbia, as well as a large, national stand-alone
pro forma effects on total revenues and net income assuming the Medicare prescription drug business. The acquisition of HealthSpring
acquisition had occurred as of January 1, 2011 were not material to strengthens the Company’s ability to serve individuals across their life
the Company for the years ended December 31, 2012 and 2011. stages as well as deepens its presence in a number of geographic
markets. The addition of HealthSpring brings industry leading
physician partnership capabilities and creates the opportunity to
C. Acquisition of HealthSpring, Inc.
deepen the Company’s existing client and customer relationships, as
On January 31, 2012 the Company acquired the outstanding shares well as facilitates a broader deployment of its range of health and
of HealthSpring, Inc. (‘‘HealthSpring’’) for $55 per share in cash and wellness capabilities and product offerings. The Company funded the
Cigna stock awards, representing a cost of approximately $3.8 billion. acquisition with internal cash resources.
CIGNA CORPORATION - 2013 Form 10-K 73