Humana 2007 Annual Report Download - page 87

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
5. MEDICARE PART D
As discussed in Note 2, on January 1, 2006, we began covering prescription drug benefits in accordance
with Medicare Part D under multiple contracts with CMS. In 2007, we paid $725.5 million related to our
reconciliation with CMS regarding the 2006 Medicare Part D risk corridor provisions. The consolidated balance
sheets include the following amounts associated with Medicare Part D as of December 31, 2007 and 2006:
2007 2006
Risk
Corridor
Settlement
CMS
Subsidies
Risk
Corridor
Settlement
CMS
Subsidies
(in thousands)
Other current assets ................................... $ 30,578 $ 580,383 $ 18,365 $449,984
Trade accounts payable and accrued expenses .............. (133,169) (273,045) (757,084) (327,718)
Net current (liability) asset ......................... $(102,591) $ 307,338 $(738,719) $122,266
6. PROPERTY AND EQUIPMENT, NET
Property and equipment was comprised of the following at December 31, 2007 and 2006:
2007 2006
(in thousands)
Land ................................................................. $ 16,699 $ 15,912
Buildings ............................................................. 320,180 291,437
Equipment and computer software ......................................... 1,256,382 1,080,093
Assets held for sale ..................................................... — 3,645
1,593,261 1,391,087
Accumulated depreciation ................................................ (956,020) (846,083)
Property and equipment, net .......................................... $ 637,241 $ 545,004
Depreciation expense was $162.4 million in 2007, $128.6 million in 2006, and $105.1 million in 2005.
7. GOODWILL AND OTHER INTANGIBLE ASSETS
Changes in the carrying amount of goodwill, by operating segment, for the year ended December 31, 2007
were as follows:
Commercial Government Total
(in thousands)
Balance at December 31, 2005 ................................. $ 741,260 $523,315 $1,264,575
CHA acquisition ......................................... 39,912 — 39,912
Contingent purchase price settlements related to:
Prior years acquisitions ............................... 1,329 4,815 6,144
Balance at December 31, 2006 ................................. 782,501 528,130 1,310,631
DefenseWeb acquisition .................................. — 17,486 17,486
CompBenefits acquisition ................................. 299,439 — 299,439
KMG acquisition ........................................ 36,383 — 36,383
Balance at December 31, 2007 ................................. $1,118,323 $545,616 $1,663,939
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