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UnitedHealth Group 53
6 GOODWILL AND OTHER INTANGIBLE ASSETS
We adopted FAS No. 142, “Goodwill and Other Intangible Assets,” on January 1, 2002. Under FAS No. 142,
goodwill and intangible assets with indefinite useful lives are not amortized. The following table shows net
earnings and earnings per common share adjusted to reflect the adoption of the non-amortization
provision of FAS No. 142 as of the beginning of the respective periods:
For the Year Ended December 31,
(in millions, except per share data) 2003 2002 2001
NET EARNINGS
Reported Net Earnings $1,825 $1,352 $913
Goodwill Amortization, net of tax effects ––89
Adjusted Net Earnings $1,825 $1,352 $1,002
BASIC NET EARNINGS PER COMMON SHARE
Reported Basic Net Earnings per Share $3.10 $2.23 $1.46
Goodwill Amortization, net of tax effects ––0.14
Adjusted Basic Net Earnings per Share $3.10 $2.23 $1.60
DILUTED NET EARNINGS PER COMMON SHARE
Reported Diluted Net Earnings per Share $2.96 $2.13 $1.40
Goodwill Amortization, net of tax effects ––0.13
Adjusted Diluted Net Earnings per Share $2.96 $2.13 $1.53
Changes in the carrying amount of goodwill, by operating segment, during the year ended December 31,
2003, were as follows:
Health Care Specialized Consolidated
(in millions)
Services Uniprise Care Services Ingenix Total
Balance at January 1, 2002 $1,166 $698 $322 $537 $2,723
Acquisitions and Subsequent Payments 527 – 41 75 643
Dispositions – – – (3) (3)
Balance at December 31, 2002 1,693 698 363 609 3,363
Acquisitions and Subsequent Payments 77 – 46 23 146
Balance at December 31, 2003 $ 1,770 $ 698 $ 409 $ 632 $ 3,509
The weighted-average useful life, gross carrying value, accumulated amortization and net carrying value of
other intangible assets as of December 31, 2003 and 2002 were as follows:
Weighted- December 31, 2003 December 31, 2002
Average Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying
(in millions)
Useful Life Value Amortization Value Value Amortization Value
Customer Contracts and
Membership Lists 12 years $93 $ (6) $ 87 $64 $(1) $63
Patents, Trademarks
and Technology 9 years 73 (26) 47 58 (24) 34
Other 14 years 57 (11) 46 31 (6) 25
Total 10 years $223 $ (43) $ 180 $153 $(31) $122
Amortization expense relating to intangible assets was $18 million in 2003 and $9 million in 2002.
Estimated future amortization expense relating to intangible assets for the years ending December 31
are as follows:
(in millions)
2004 2005 2006 2007 2008
$21 $20 $19 $18 $17