United Healthcare 2013 Annual Report Download - page 87

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5. Property, Equipment and Capitalized Software
A summary of property, equipment and capitalized software is as follows:
(in millions)
December 31,
2013
December 31,
2012
Land and improvements ................................................. $ 318 $ 358
Buildings and improvements ............................................. 2,051 1,910
Computer equipment ................................................... 1,519 1,447
Furniture and fixtures ................................................... 564 488
Less accumulated depreciation ........................................... (1,760) (1,542)
Property and equipment, net ............................................. 2,692 2,661
Capitalized software .................................................... 2,233 2,300
Less accumulated amortization ........................................... (915) (1,022)
Capitalized software, net ................................................ 1,318 1,278
Total property, equipment and capitalized software, net ........................ $4,010 $ 3,939
Depreciation expense for property and equipment for the years ended December 31, 2013, 2012 and 2011 was
$445 million, $449 million and $386 million, respectively. Amortization expense for capitalized software for the
years ended December 31, 2013, 2012 and 2011 was $411 million, $412 million and $377 million, respectively.
6. Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill, by reportable segment, were as follows:
(in millions) UnitedHealthcare OptumHealth OptumInsight OptumRx Consolidated
Balance at January 1, 2012 ................. $17,932 $2,113 $3,090 $840 $23,975
Acquisitions ............................ 6,557 705 98 — 7,360
Foreign currency effects and adjustments, net . . (30) — (19) — (49)
Balance at December 31, 2012 .............. 24,459 2,818 3,169 840 31,286
Acquisitions ............................ 408 48 483 — 939
Dispositions ............................. (5) — — — (5)
Foreign currency effects and adjustments, net . . (611) (6) 1 — (616)
Balance at December 31, 2013 .............. $24,251 $2,860 $3,653 $840 $31,604
In the fourth quarter of 2012, the Company purchased Amil, a health care company located in Brazil, providing
health and dental benefits, hospital and clinical services, and advanced care management resources to nearly
7 million people. During 2013, the Company acquired all of Amil’s remaining public shares for $1.5 billion,
bringing the Company’s ownership of Amil to 90%. The remaining stake in Amil is held by shareholders,
including Amil’s CEO, who has been a member of the Company’s Board of Directors since October 2012, who
have committed to retain the shares for at least five years, through October 2017. These shareholders have the
right to put the shares to the Company and the Company has the right to call these shares upon expiration of the
five year term, unless accelerated upon certain events, at fair market value. Related to this acquisition, Amil’s
CEO invested approximately $470 million in unregistered UnitedHealth Group common shares in the fourth
quarter of 2012 and has committed to hold those shares for the same five year term, subject to certain exceptions.
The total consideration paid and fair value of the noncontrolling interest exceeded the estimated fair value of the
net tangible assets acquired by $6.0 billion, of which $0.7 billion has been allocated to finite-lived intangible
assets, $0.7 billion to indefinite-lived intangible assets and $4.6 billion to goodwill. In conjunction with the Amil
share purchases, the Company generated Brazilian tax deductible goodwill of approximately R$8.9 billion ($3.8
billion in U.S. dollars at December 31, 2013).
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