Express Scripts 2012 Annual Report Download - page 76

Express Scripts 2012 Annual Report74
guidance, amortization of $114.0 million for customer contracts related to the PBM agreement has been included as
an offset to revenues for each of the years ended December 31, 2012, 2011 and 2010. The future aggregate amount
of amortization expense of other intangible assets for our continuing operations is expected to be approximately
$2,045.4 million for 2013, $1,766.9 million for 2014, $1,746.0 million for 2015, $1,738.1 million for 2016 and
$1,320.7 million for 2017. The weighted-average amortization period of intangible assets subject to amortization is
15.5 years in total, and by major intangible class is 5 to 20 years for customer-related intangibles and 2 to 30 years
for other intangible assets.
In connection with the disposition of various businesses (see Note 4 – Dispositions) and pursuant to our
policies for assessing impairment of goodwill and long-lived assets (see Note 1 – Summary of significant accounting
policies), we recorded various charges, as described below.
Held for sale classification for UBC. As a result of our determination that portions of the UBC business
were not core to our future operations, amounts previously classified in continuing operations have been reclassified
to discontinued operations. Amounts classified as discontinued operations included goodwill of $88.5 million and
intangible assets of $157.4 million. Intangible assets were comprised of customer relationships with a carrying value
of $157.4 million (gross value of $181.4 million less accumulated amortization of $24.0 million).
Sale of EAV. We recorded impairment charges associated with EAV totaling $11.5 million, which was
comprised of $2.0 million of goodwill and $9.5 million of intangible assets and reflected fair value. The write-down
of intangible assets was comprised of customer relationships with a carrying value of $3.6 million (gross value of
$5.0 million less accumulated amortization of $1.4 million) and trade names with a carrying value of $5.9 million
(gross value of $7.0 million less accumulated amortization of $1.1 million).
Sale of Liberty. We recorded an impairment charge associated with Liberty totaling $23.0 million to
reflect fair value. The write-down was comprised of customer relationships with a carrying value of $24.2 million
(gross value of $35.0 million less accumulated amortization of $10.8 million) and trade names with a carrying value
of $6.6 million (gross value of $7.0 million less accumulated amortization of $0.4 million). This charge was
allocated to these assets on a pro rata basis using the carrying values as of September 30, 2012.
Sale of CYC. In the third quarter of 2012, we completed the sale of CYC, which was included in our Other
Business Operations segment. In connection with the sale of this line of business, goodwill of $12.0 million and
trade names of $0.7 million were eliminated upon the sale of the business. As a gain was recorded on the sale, the
elimination of these amounts was not recorded as an impairment.
Sale of PMG. In the second quarter of 2010, upon classification of PMG as a discontinued operation,
approximately $22.1 million of goodwill was written off along with intangible assets with a carrying value of $1.7
million (gross value of $5.7 million less accumulated amortization of $4.0 million), consisting of trade names and
customer relationships. The impairment charge is included in the “Net loss from discontinued operations, net of tax”
line item in the accompanying consolidated statement of operations.