United Healthcare 2014 Annual Report Download - page 87
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The acquisition date fair values and weighted-average useful lives assigned to finite-lived intangible assets
acquired in business combinations consisted of the following by year of acquisition:
2014 2013
(in millions, except years)
Fair
Value
Weighted-
Average
Useful Life
Fair
Value
Weighted-
Average
Useful Life
Customer-related .............................................. $314 14 years $55 12 years
Trademarks and technology ..................................... 148 6years 27 12 years
Other ....................................................... 2 14years —
Total acquired finite-lived intangible assets ......................... $464 11 years $82 12 years
Estimated full year amortization expense relating to intangible assets for each of the next five years ending
December 31 is as follows:
(in millions)
2015 ................................................................................. $518
2016 ................................................................................. 487
2017 ................................................................................. 442
2018 ................................................................................. 392
2019 ................................................................................. 288
Amortization expense relating to intangible assets for December 31, 2014, 2013 and 2012 was $524 million,
$519 million and $448 million, respectively.
7. Medical Costs Payable
The following table shows the components of the change in medical costs payable for the years ended
December 31:
(in millions) 2014 2013 2012
Medical costs payable, beginning of period ............................. $11,575 $ 11,004 $ 9,799
Acquisitions ..................................................... — — 1,029
Reported medical costs:
Current year ................................................. 93,677 89,970 81,086
Prior years .................................................. (420) (680) (860)
Total reported medical costs ........................................ 93,257 89,290 80,226
Claim payments:
Payments for current year ...................................... (82,374) (78,989) (71,832)
Payments for prior year ........................................ (10,418) (9,730) (8,218)
Total claim payments .............................................. (92,792) (88,719) (80,050)
Medical costs payable, end of period .................................. $12,040 $ 11,575 $ 11,004
For the year ended December 31, 2014, the favorable medical cost reserve development was due to a number of
individual factors that were not material. The net favorable development for the years ended December 31, 2013
and 2012 was primarily driven by lower than expected health system utilization levels. In 2012, reserves were
also impacted by increased efficiency in claims processing and handling.
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