Quarterly report pursuant to Section 13 or 15(d)

Acquisitions (Tables)

v3.19.1
Acquisitions (Tables)
3 Months Ended
Mar. 31, 2019
Business Combinations [Abstract]  
Schedule of Preliminary Allocation of the Fair Value of Assets Acquired and Liabilities Assumed
The Company's preliminary allocation of the fair value of assets acquired and liabilities assumed as of the acquisition date of July 1, 2018 is as follows ($ in millions):
Assets acquired and liabilities assumed
 
 
Cash and cash equivalents
 
$
2,001

Premium and related receivables
 
510

Other current assets
 
31

Restricted deposits
 
495

Property, software and equipment, net
 
48

Intangible assets (a)
 
956

Other long-term assets
 
1

Total assets acquired
 
4,042

 
 
 
Medical claims liability
 
1,210

Accounts payable and accrued expenses
 
258

Return of premium payable
 
123

Unearned revenue
 
115

Other long-term liabilities
 
300

Total liabilities assumed
 
2,006

 
 
 
Total identifiable net assets
 
2,036

Goodwill (b)
 
1,591

Total assets acquired and liabilities assumed
 
$
3,627


The Company has made the following preliminary fair value adjustments based on information reviewed through March 31, 2019. Significant fair value adjustments are noted as follows:

(a)
The identifiable intangible assets acquired are to be measured at fair value as of the completion of the acquisition. The preliminary fair value of intangible assets is determined primarily using variations of the "income approach," which is based on the present value of the future after tax cash flows attributable to each identified intangible asset. Other valuation methods, including the market approach and cost approach, were also considered in estimating the fair value. The Company has estimated the fair value of intangible assets to be $956 million with a weighted average life of 13 years. The identifiable intangible assets include customer relationships, trade names, provider contracts and developed technology.

The fair values and weighted average useful lives for identifiable intangible assets acquired are as follows:
 
 
Fair Value
 
Weighted Average Useful Life (in years)
Customer relationships
 
$
711

 
11
Trade name
 
196

 
20
Provider contracts
 
33

 
15
Developed technologies
 
16

 
2
Total intangible assets acquired
 
$
956

 
13

(b)
The acquisition resulted in $1.6 billion of goodwill related primarily to synergies expected from the acquisition and the assembled workforce of Fidelis Care. All of the goodwill has been assigned to the Managed Care segment. The goodwill is deductible for income tax purposes.