United Healthcare 2009 Annual Report Download - page 67

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UNITEDHEALTH GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
recognizes and measures in its financial statements the identifiable assets acquired, the liabilities, any
noncontrolling interest in the acquiree and the goodwill acquired. The guidance as amended includes recognition
provisions for assets acquired and liabilities assumed that arise from contingencies and the treatment of
contingent purchase price. It also requires additional disclosure requirements intended to enable users to evaluate
the nature and financial effects of the business combination. The Company adopted the new guidance on
January 1, 2009, and applied the provisions prospectively to all new acquisitions closing on or after that date. The
adoption did not have a material impact on the Consolidated Financial Statements.
Recently Issued Accounting Standards. In October 2009, the FASB issued Accounting Standards Update (ASU)
No. 2009-13, “Multiple-Deliverable Revenue Arrangements” (ASU 2009-13). This update removes the criterion
that entities must use objective and reliable evidence of fair value in separately accounting for deliverables and
provides entities with a hierarchy of evidence that must be considered when allocating arrangement
consideration. The new guidance also requires entities to allocate arrangement consideration to the separate units
of accounting based on the deliverables’ relative selling price. The provisions will be effective for revenue
arrangements entered into or materially modified in the Company’s fiscal year 2011 and must be applied
prospectively. The Company is currently evaluating the impact of the provisions of ASU 2009-13.
The Company has determined that all other recently issued accounting standards will not have a material impact
on its Consolidated Financial Statements, or do not apply to its operations.
3. Acquisitions
On June 1, 2009, all of the outstanding shares of AIM Healthcare Services, Inc. (AIM) were acquired for
approximately $440 million in cash. AIM is a leading provider of payment accuracy solutions for health care
payer and hospital clients in all 50 states. On a preliminary basis, the total consideration paid exceeded the
estimated fair value of the net tangible assets acquired by $425 million, of which $166 million has been allocated
to finite-lived intangible assets and $259 million to goodwill. The allocation is pending completion of a valuation
analysis. The acquired goodwill is deductible for income tax purposes. The results of operations and financial
condition of AIM have been included in the Company’s consolidated results and the results of the Ingenix
reporting segment since the acquisition date. The pro forma effects of this acquisition on the Company’s
Consolidated Financial Statements were not material.
On May 30, 2008, the Company acquired all the outstanding shares of Unison Health Plans (Unison) for
approximately $930 million in cash. Unison provides government-sponsored health plan coverage to people in
Pennsylvania, Ohio, Tennessee, Delaware, South Carolina and Washington, D.C. through a network of
independent health care professionals. The total consideration paid exceeded the estimated fair value of the net
tangible assets acquired by $806 million, of which $89 million has been allocated to finite-lived intangible assets
and $717 million to goodwill. The acquired goodwill is not deductible for income tax purposes. The results of
operations and financial condition of Unison have been included in the Company’s consolidated results and the
results of the Health Benefits reporting segment since the acquisition date. The pro forma effects of this
acquisition on the Company’s Consolidated Financial Statements were not material.
On February 25, 2008, the Company acquired all of the outstanding shares of Sierra Health Services, Inc.
(Sierra), a diversified health care services company based in Las Vegas, Nevada, for approximately $2.6 billion
in cash, representing a price of $43.50 per share of Sierra common stock. The total consideration paid exceeded
the estimated fair value of the net tangible assets acquired by $2.5 billion. Based on management’s consideration
of fair value, which included completion of a valuation analysis, $500 million has been allocated to finite-lived
intangible assets and $2.0 billion to goodwill. The acquired goodwill is not deductible for income tax purposes.
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