Humana 2011 Annual Report Download - page 107

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
customers. The preliminary allocation of the purchase price resulted in goodwill of $117 million and other
intangible assets of $60 million. The goodwill was assigned to the Retail segment and is not deductible for tax
purposes. The other intangible assets, which primarily consist of technology and customer contracts, have a
weighted average useful life of 6.5 years. The purchase price allocation is preliminary, subject to completion of
valuation analyses, including, for example, refining assumptions used to calculate the fair value of other
intangible assets.
On December 21, 2010, we acquired Concentra Inc., or Concentra, a health care company based in Addison,
Texas, for $805 million. During 2011, we accrued and paid $6 million related to the final determination of
working capital that existed at the acquisition date and recorded immaterial adjustments to the acquisition date
fair value of Concentra’s net tangible assets acquired with a corresponding adjustment to goodwill. Through its
affiliated clinicians, Concentra delivers occupational medicine, urgent care, physical therapy, and wellness
services to workers and the general public through its operation of medical centers and worksite medical
facilities. The Concentra acquisition provides us entry into the primary care space on a national scale, offering
additional means for achieving health and wellness solutions and providing an expandable platform for growth
with a management team experienced in physician asset management and alternate site care. The total
consideration of $811 million exceeded our estimated fair value of the net tangible assets acquired by
approximately $725 million, of which we allocated $188 million to other intangible assets and $537 million to
goodwill. The goodwill was assigned to the Health and Well-Being Services segment. The other intangible
assets, which primarily consist of customer relationships and trade name, have a weighted average useful life of
13.7 years. Approximately $58 million of the acquired goodwill is deductible for tax purposes.
The results of operations and financial condition of MD Care, Anvita, and Concentra have been included in
our consolidated statements of comprehensive income and consolidated balance sheets from the acquisition
dates. Acquisition-related costs recognized in connection with these acquisitions were not material. The pro
forma financial information assuming the acquisitions had occurred as of January 1, 2010 was not material to our
results of operations.
During the second half of 2011, we entered into definitive agreements to acquire Arcadian Management
Services, Inc., or Arcadian, a Medicare Advantage HMO, and SeniorBridge, a chronic-care provider providing
in-home care for seniors. Arcadian serves Medicare Advantage HMO members in 15 U.S. states, offering us an
opportunity to expand our Medicare footprint and grow our Medicare enrollment. SeniorBridge will expand our
existing clinical and home health capabilities and strengthen our offerings for members with complex chronic-
care needs. The closings of these acquisitions are subject to federal and/or state regulatory approvals.
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