Health Net 2009 Annual Report Download - page 110

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
goodwill of $137 million. We updated our goodwill impairment assessment test performed as of September 30,
2009 to December 11, 2009 and no additional impairment was indicated.
After impairing the goodwill, we compared the Acquired Companies’ adjusted carrying value to its
estimated fair value less cost to sell. The carrying value of the assets and liabilities held for sale exceeded the fair
value less cost to sell by approximately $6 million. As of September 30, 2009, the assets and liabilities held for
sale included $46.2 million in other intangible assets and we reduced the carrying value of these intangibles by
the $6 million. Additionally, upon classifying the Acquired Companies’ assets and liabilities as held for sale we
ceased recording amortization expense related to these intangible assets.
On December 11, 2009, we completed the Northeast Sale (see Note 3 to the consolidated financial
statements for information regarding the Northeast Sale).
We also evaluated the recoverability of other long-lived assets held and used in the retained portion of the
Northeast Operations, including property and equipment. In the year ended December 31, 2009, we impaired all
property and equipment owned and used by the Northeast health plan operations totaling $31.6 million based on
our fixed assets redeployment strategy and our impairment assessments.
The carrying amount of goodwill by reporting unit is as follows:
West
Operations
Northeast
Operations-
Sold
Northeast
Operations-
Retained Total
(Dollars in millions)
Balance as of December 31, 2008 .......................... $752.0
Reallocation .......................................... $609.0 $ 137.0 $ 6.0
Impairment related to Northeast Sale ....................... — (137.0) — (137.0)
Other impairment ...................................... (3.1) — — (3.1)
Balance as of December 31, 2009 .......................... $605.9 $ — $ 6.0 $ 611.9
The intangible assets that continue to be subject to amortization using the straight-line method over their
estimated lives are as follows:
Gross
Carrying
Amount
Accumulated
Amortization
Intangible
Assets Sold
Fair Value
Adjustment
Net
Balance
Weighted
Average
Life
(in years)
(Dollars in millions)
As of December 31, 2008:
Provider networks ....................... $ 40.5 $(30.1) $ — $— $10.4 19.4
Employer groups (Note 3) ................ 76.8 (18.3) — — 58.5 6.5
Customer relationships and other (Note 3) .... 29.5 (7.6) — — 21.9 11.1
Trade name (Note 3) ..................... 3.2 (3.2) — — — 1.5
Covenant not-to-compete (Note 3) .......... 2.2 (1.7) — — 0.5 2.0
$152.2 $(60.9) $ — $— $91.3
As of December 31, 2009:
Provider networks ....................... $ 40.5 $(31.5) $ — $— $ 9.0 19.4
Employer groups (Note 3) ................ 76.8 (24.3) (46.2) (6.3) — —
Customer relationships and other ........... 29.5 (10.4) — — 19.1 11.1
Trade name ............................ 3.2 (3.2) — — — 1.5
Covenant not-to-compete ................. 2.2 (2.2) — — — 2.0
$152.2 $(71.6) $(46.2) $(6.3) $28.1
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