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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
5. GOODWILL AND OTHER INTANGIBLE ASSETS
We ceased amortizing goodwill upon adopting Statement 142 on January 1, 2002 as described in Note 2.
The following table adjusts net income and basic and diluted earnings per common share to reflect the non-
amortization of goodwill assuming the non-amortization provisions of Statement 142 were adopted as of January
1, 2001 for the years ended December 31, 2003, 2002 and 2001:
2003 2002 2001
(in thousands, except per share
results)
Net income:
Reported net income .............................................. $228,934 $142,755 $117,171
Add back: goodwill amortization expense, net of tax ................ — — 52,246
Adjusted net income .............................................. $228,934 $142,755 $169,417
Basic earnings per common share:
Reported basic earnings per common share ............................ $ 1.44 $ 0.87 $ 0.71
Add back: goodwill amortization expense, net of tax ................ — — 0.32
Adjusted basic earnings per common share ............................ $ 1.44 $ 0.87 $ 1.03
Diluted earnings per common share:
Reported diluted earnings per common share .......................... $ 1.41 $ 0.85 $ 0.70
Add back: goodwill amortization expense, net of tax ................ — — 0.31
Adjusted diluted earnings per common share .......................... $ 1.41 $ 0.85 $ 1.01
Amortization expense for other intangible assets was approximately $11.6 million in 2003, $15.7 million in
2002 and $13.5 million in 2001. The following table presents our estimate of amortization expense for each of
the five next succeeding fiscal years:
(in thousands)
For the years ending December 31:
2004 ...................................................... $9,060
2005 ...................................................... $5,440
2006 ...................................................... $ 352
2007 ...................................................... $ 352
2008 ...................................................... $ 227
The following table presents details of other intangible assets included in other non-current assets in the
accompanying consolidated balance sheets at December 31, 2003 and 2002:
Weighted
Average
Useful Life
2003 2002
Cost
Accumulated
Amortization Net Cost
Accumulated
Amortization Net
(years) (in thousands)
Other intangible assets:
Subscriber contracts ......... 9 $ 85,496 $75,194 $10,302 $ 85,496 $68,284 $17,212
Provider contracts ........... 5 12,128 8,075 4,053 12,128 5,644 6,484
Government contracts ........ 2 11,820 11,820 — 11,820 9,764 2,056
Licenses and other ........... 26 5,065 1,376 3,689 5,065 1,161 3,904
Total other intangible
assets ............... 9 $114,509 $96,465 $18,044 $114,509 $84,853 $29,656
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