Health Net 2002 Annual Report Download - page 62

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60 | HEALTH NET, INC.
The following table illustrates the effect of adopting SFAS No. 142 on net income as previously reported (amounts in
millions, except per share data):
Years Ended December 31,
2002 2001 2000
Reported income before cumulative effect of a change in accounting principle $237.5 $86.5 $163.6
Add back: Goodwill amortization (net of tax effect) –25.7 26.5
Adjusted income before cumulative effect of a change in accounting principle 237.5 112.2 190.1
Reported cumulative effect of a change in accounting principle, net of tax (8.9) ––
Adjusted net income $228.6 $112.2 $190.1
Years Ended December 31,
2002 2001 2000
BASIC EARNINGS PER SHARE:
Reported income before cumulative effect of a change in accounting principle $1.91 $0.70 $1.34
Add back: Goodwill amortization (net of tax effect) –0.21 0.22
Adjusted income before cumulative effect of a change in accounting principle 1.91 0.91 1.56
Reported cumulative effect of a change in accounting principle, net of tax (0.07) ––
Adjusted net income $1.84 $0.91 $1.56
Years Ended December 31,
2002 2001 2000
DILUTED EARNINGS PER SHARE:
Reported income before cumulative effect of a change in accounting principle $1.89 $0.69 $1.33
Add back: Goodwill amortization (net of tax effect) –0.20 0.21
Adjusted income before cumulative effect of a change in accounting principle 1.89 0.89 1.54
Reported cumulative effect of a change in accounting principle, net of tax (0.07) ––
Adjusted net income $1.82 $0.89 $1.54
The changes in the carrying amount of goodwill by reporting unit are as follows (amounts in millions):
Employer
Behavioral Services
Health Plans Health Dental/Vision Subacute Group Total
Balance at January 1, 2001 $741.7 $3.9 $0.7 $6.1 $38.8 $791.2
Amortization (25.8) (0.4) – (0.2) (1.2) (27.6)
Other adjustments 0.8 – – – – 0.8
Balance at December 31, 2001 716.7 3.5 0.7 5.9 37.6 764.4
Impairment losses – (3.5) – – (5.4) (8.9)
Reclassification from other intangible assets 6.9 – – – – 6.9
Goodwill written off related to sale of
business unit – – – – (0.3) (0.3)
Balance at December 31, 2002 $723.6 $ – $0.7 $5.9 $31.9 $762.1