United Healthcare 2001 Annual Report Download - page 47

PAGE 46 UnitedHealth Group
In August 2001, the FASB issued SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived
Assets,” which provides new accounting and financial reporting guidance for the impairment or disposal
of long-lived assets and the disposal of segments of a business. We adopted the standard on January 1,
2002, and its adoption did not have any impact on our financial position or results of operations.
RECLASSIFICATIONS
Certain 1999 and 2000 amounts in the consolidated financial statements have been reclassified to
conform to the 2001 presentation. These reclassifications have no effect on net earnings or share-
holders’ equity as previously reported.
[3]ACQUISI TIONS
In October 2001, our Specialized Care Services business segment acquired Spectera, Inc. (Spectera), a leading
vision care benefit company in the United States, to expand the breadth of service offerings we extend to
our customers. We paid $37 million in cash, accrued $25 million for additional consideration due, and
issued 1.2 million shares of common stock with a value of $81 million in exchange for all outstanding shares of
Spectera. The purchase price and related acquisition costs of approximately $146 million exceeded the
preliminary estimated fair value of net assets acquired by $126 million. Under the purchase method of
accounting, we assigned this amount to goodwill. The results of Spectera’s operations since the acquisition
date are included in our 2001 Consolidated Statement of Operations. The pro forma effects of the Spectera
acquisition on our consolidated financial statements were not material. In February 2002, the $25 million of
accrued consideration was satisfied by issuing an additional 335,000 shares of our common stock.
In September 1999, our Ingenix business segment acquired Worldwide Clinical Trials, Inc. (WCT),
a leading clinical research organization. We paid $214 million in cash in exchange for all outstanding
shares of WCT, and we accounted for the purchase using the purchase method of accounting. Only the
post-acquisition results of WCT are included in our consolidated financial statements. The purchase
price and other acquisition costs exceeded the estimated fair value of net assets acquired by $214 million,
which was assigned to goodwill and is being amortized over its estimated useful life of 30 years. The pro
forma effects of the WCT acquisition on our consolidated financial statements were not material.
In June 1999, our Specialized Care Services business segment acquired Dental Benefit Providers, Inc.
(DBP), one of the largest dental benefit management companies in the United States. We paid $105 million
in cash, and we accounted for the acquisition using the purchase method of accounting. The purchase
price and other acquisition costs exceeded the estimated fair value of net assets acquired by $105 million,
which was assigned to goodwill and is being amortized over its estimated useful life of 40 years. The pro
forma effects of the DBP acquisition on our consolidated financial statements were not material.
For the years ended December 31, 2001, 2000 and 1999, consideration paid or issued for smaller
acquisitions accounted for under the purchase method, which were not material to our consolidated
financial statements, was $134 million, $76 million and $15 million, respectively.