United Healthcare 2012 Annual Report Download - page 91

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5. Property, Equipment and Capitalized Software
A summary of property, equipment and capitalized software is as follows:
(in millions)
December 31,
2012
December 31,
2011
Land and improvements ................................................. $ 358 $ 45
Buildings and improvements ............................................. 1,910 1,052
Computer equipment ................................................... 1,447 1,345
Furniture and fixtures ................................................... 488 274
Less accumulated depreciation ........................................... (1,542) (1,424)
Property and equipment, net ............................................. 2,661 1,292
Capitalized software .................................................... 2,300 2,239
Less accumulated amortization ........................................... (1,022) (1,016)
Capitalized software, net ................................................ 1,278 1,223
Total property, equipment and capitalized software, net ........................ $3,939 $ 2,515
Depreciation expense for property and equipment for 2012, 2011 and 2010 was $449 million, $386 million and
$398 million, respectively. Amortization expense for capitalized software for 2012, 2011 and 2010 was $412
million, $377 million and $349 million, respectively.
6. Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill, by reportable segment, were as follows:
(in millions) UnitedHealthcare OptumHealth OptumInsight OptumRx Consolidated
Balance at January 1, 2011 ................. $17,837 $ 760 $3,308 $840 $22,745
Acquisitions ............................ 101 1,353 — — 1,454
Dispositions ............................. (2) — (214) — (216)
Adjustments, net ......................... (4) — (4) — (8)
Balance at December 31, 2011 .............. 17,932 2,113 3,090 840 23,975
Acquisitions ............................ 6,557 705 98 — 7,360
Adjustments and foreign currency effects, net . . . (30) — (19) — (49)
Balance at December 31, 2012 .............. $24,459 $2,818 $3,169 $840 $31,286
In October 2012, the Company purchased approximately 60% of the outstanding shares of Amil for
approximately $3.2 billion in a private transaction. Later in the fourth quarter of 2012, the Company purchased
an additional 17.8 million shares of Amil for $0.3 billion, bringing the stake in Amil attributable to the Company
to approximately 65% of Amil’s outstanding shares. Amil is a health care company located in Brazil, providing
health and dental benefits, hospital and clinical services, and advanced care management resources to more than
5 million people. The total consideration paid and fair value of the noncontrolling interest exceeded the estimated
fair value of the net tangible assets acquired by $5.9 billion, of which $1.0 billion has been allocated to finite-
lived intangible assets, $0.6 billion to indefinite-lived intangible assets and $4.3 billion to goodwill. To estimate
the acquisition date fair value of the noncontrolling interest of $2.2 billion, the Company utilized the public share
price as of the date of acquisition. Contingent liabilities were measured based on the probable amount that could
be reasonably estimated. The results of operations and financial condition of Amil have been included in the
Company’s consolidated results and the results of the UnitedHealthcare reportable segment since the acquisition
date. The pro-forma effects of this acquisition on the Company’s results of operations were not material. In
conjunction with the 2012 purchases, the Company generated Brazilian tax deductible goodwill of approximately
$2.7 billion.
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