Health Net 2010 Annual Report Download - page 113
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HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
related to our Northeast Operations reporting unit. We also classified the Acquired Companies’ assets and
liabilities as held for sale; therefore, we were required to measure these assets and liabilities at the lower of
carrying value or fair value less cost to sell. As a result, in the year ended December 31, 2009, we recorded
goodwill impairment of $137.0 million, impairments of other intangible assets of $6.3 million and impairments
of property and equipment of $31.6 million.
The carrying amount of goodwill by reporting unit is as follows:
Western
Region
Operations
Northeast
Operations-
Sold
Northeast
Operations-
Retained Total
(Dollars in millions)
Balance as of December 31, 2008 ........................ $ 0 $ 0 $ 0 $752.0
Reallocation ......................................... 609.0 137.0 6.0
Impairment related to Northeast Sale ...................... 0 (137.0) 0 (137.0)
Other impairment ..................................... (3.1) 0 0 (3.1)
Balance as of December 31, 2009 ........................ 605.9 0 6.0 611.9
Impairment related to Northeast Operations ................ 0 0 (6.0) (6.0)
Balance as of December 31, 2010 ........................ $605.9 $ 0 $ 0 $ 605.9
The intangible assets that continue to be subject to amortization using the straight-line method over their
estimated lives are as follows:
Gross
Carrying
Amount
Accumulated
Amortization
Intangible
Assets Sold
Fair Value
Adjustment
Net
Balance
Weighted
Average Life
(in years)
(Dollars in millions)
As of December 31, 2009:
Provider networks .............. $ 40.5 $(31.5) $ 0 $ 0 $ 9.0 19.4
Employer groups (Note 3) ........ 76.8 (24.3) (46.2) (6.3) 0 0
Customer relationships and other
(Note 3) ..................... 29.5 (10.4) 0 0 19.1 11.1
Trade name (Note 3) ............ 3.2 (3.2) 0 0 0 1.5
Covenant not-to-compete ......... 2.2 (2.2) 0 0 0 2.0
$152.2 $(71.6) $(46.2) $(6.3) $28.1
As of December 31, 2010:
Provider networks .............. $ 40.5 $(32.6) $ 0 $ 0 $ 7.9 19.4
Customer relationships and other
(Note 3) ..................... 29.5 (13.2) 0 0 16.3 11.1
$ 70.0 $(45.8) $ 0 $ 0 $24.2
The amortization expense was $3.8 million, $10.7 million and $20.0 million for the years ended
December 31, 2010, 2009 and 2008, respectively.
F-16