Health Net 2015 Annual Report Download - page 179

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
F-18
The carrying amount of goodwill by reporting unit is as follows:
Western
Region
Operations Total
(Dollars in millions)
Balance as of December 31, 2013................................................ $ 565.9 $ 565.9
Goodwill allocated to sale of business (see Note 3) .................... (7.0)(7.0)
Balance as of December 31, 2014................................................ $ 558.9 558.9
Balance as of December 31, 2015................................................ $ 558.9 $ 558.9
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
Net
Balance
Weighted
Average Life
(in years)
(Dollars in millions)
As of December 31, 2015:
Provider networks................................................. $ 41.5 $ (38.0) $ 3.5 18.9
Customer relationships and other ......................... 29.5 (23.9) 5.6 11.1
$ 71.0 $ (61.9) $ 9.1
As of December 31, 2014:
Provider networks................................................. $ 41.5 $ (36.9) $ 4.6 18.9
Customer relationships and other ......................... 29.5 (22.3) 7.2 11.1
$ 71.0 $ (59.2) $ 11.8
The amortization expense was $2.8 million, $3.0 million and $3.4 million for the years ended December 31,
2015, 2014 and 2013, respectively.
Estimated annual pretax amortization expense for other intangible assets for each of the next five years ending
December 31 is as follows (dollars in millions):
Year Amount
2016........................................................................................................................................... $ 2.2
2017........................................................................................................................................... 2.2
2018........................................................................................................................................... 2.1
2019........................................................................................................................................... 0.9
2020........................................................................................................................................... 0.6
Policy Acquisition Costs
Policy acquisition costs are those variable costs that relate to the acquisition of new and renewal commercial
health insurance business. Such costs include broker commissions, costs of policy issuance and underwriting, and other
costs we incur to acquire new commercial business or renew existing business. Our commercial health insurance
business typically has a one-year term and may be canceled upon a 30-day notice. We expense these costs as incurred
and report them as selling expenses in our consolidated statements of operations.