Express Scripts 2014 Annual Report Download - page 75

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Express Scripts 2014 Annual Report
Theaggregateamountofamortizationexpenseofotherintangibleassetsforourcontinuingoperationswas
$1,776.4million,$2,037.8millionand$1,632.0millionfortheyearsendedDecember31,2014,2013and2012,respectively.
AmortizationexpensefortheyearsendedDecember31,2014,2013and2012includes$22.9million,$19.6millionand$43.6
million,respectively,offeesincurred,recordedininterestexpenseintheconsolidatedstatementofoperations,relatedtoour
debtinstruments.Additionally,amortizationof$112.4million,$114.0millionand$114.0millionforcustomercontractsrelated
tothePBMagreementhasbeenincludedasanoffsettorevenuesfortheyearsendedDecember31,2014,2013and2012,
respectively.Thefutureaggregateamountofamortizationexpenseofotherintangibleassetsforourcontinuingoperationsis
expectedtobeapproximately$1,746.8millionfor2015,$1,741.0millionfor2016,$1,324.2millionfor2017,$1,313.1million
for2018and$1,306.8millionfor2019.Theweighted-averageamortizationperiodofintangibleassetssubjecttoamortization
is16years,andbymajorintangibleclassis5to20yearsforcustomer-relatedintangibles,10yearsfortradenames(excluding
legacyESItradenameswhichhaveanindefinitelife)and3to30yearsforotherintangibleassets.
Inconnectionwithanassetacquisitionand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additionsandcharges,asdescribedbelow.
Asset acquisition of SmartD.OurPBMgrosscustomercontractbalanceasofDecember31,2013included$14.5
millionrelatedtotheassetacquisitionoftheSmartDMedicarePartDPDPinSeptember2013.During2014,wefinalizedthe
purchasepricerelatedtothecustomercontract,resultinginareductionoftheassetvalueby$2.2million.Thisnewintangible
assethasausefullifeof10years.Theassetacquisitionaddedapproximately87,000coveredMedicarelivestoourexisting
MedicarePartDPDPoffering.
Sale of acute infusion therapies line of business. Inconnectionwithenteringintoanagreementforthesaleofthe
acuteinfusiontherapieslineofbusiness,amountspreviouslyclassifiedincontinuingoperationshavebeenreclassifiedto
discontinuedoperationsfortheyearendedDecember31,2012.Amountsreclassifiedasdiscontinuedoperationsincluded
goodwillof$39.4million.During2013,werecordedgoodwillimpairmentchargesassociatedwithouracuteinfusiontherapies
lineofbusinesstotaling$32.9million.Asagainwasrecordedonthesale,theeliminationoftheremaininggoodwillof$6.5
millionwasnotrecordedasanimpairment.
Sale of portions of UBC.AsaresultofourdeterminationthatportionsoftheUBCbusinesswerenolongercoreto
ourfutureoperations,amountspreviouslyclassifiedincontinuingoperationswerereclassifiedtodiscontinuedoperationsin
2012.Amountsreclassifiedasdiscontinuedoperations,andsubsequentlywrittenoffinconnectionwiththesaleoftheselines
ofbusinessthroughout2013,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).Asagainwasrecordedonthesaleofthesebusinesses,theeliminationoftheseamountswasnot
recordedasanimpairment.
Sale of EAV.In2012,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.In2012,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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.
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