Goodwill and other intangible assets

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Note 3 - Goodwill and other intangible assets

Following is a summary of our goodwill and other intangible assets for our two reportable segments, Pharmacy Benefit Management (“PBM”) and Other Business Operations.



	March 31, 2015							December 31, 2014
(in millions)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Goodwill
PBM	$	29,288.6	$	(106.9	)	$	29,181.7	$	29,290.6	$	(107.1	)	$	29,183.5
Other Business Operations	97.4		—			97.4		97.4		—			97.4
	$	29,386.0	$	(106.9	)	$	29,279.1	$	29,388.0	$	(107.1	)	$	29,280.9
Other intangible assets
PBM
Customer contracts	$	17,570.9	$	(6,024.7	)	$	11,546.2	$	17,571.4	$	(5,603.2	)	$	11,968.2
Trade names	226.6		(66.9		)	159.7		226.6		(61.3		)	165.3
Miscellaneous	111.7		(58.1		)	53.6		116.6		(58.4		)	58.2
	17,909.2		(6,149.7		)	11,759.5		17,914.6		(5,722.9		)	12,191.7
Other Business Operations
Customer relationships	120.2		(86.5		)	33.7		120.2		(82.6		)	37.6
Trade names	35.8		(10.8		)	25.0		35.8		(9.9		)	25.9
	156.0		(97.3		)	58.7		156.0		(92.5		)	63.5
Total other intangible assets	$	18,065.2	$	(6,247.0	)	$	11,818.2	$	18,070.6	$	(5,815.4	)	$	12,255.2

The aggregate amount of amortization expense of other intangible assets was $436.9 million and $442.6 million for the three months ended March 31, 2015 and 2014, respectively. Amortization of $23.8 million and $28.5 million for customer contracts related to our agreement to provide PBM services to members of the affiliated health plans of Anthem (formerly known as WellPoint) has been included as an offset to revenues for the three months ended March 31, 2015 and 2014, respectively. The future aggregate amount of amortization expense of other intangible assets is expected to be approximately $1,747.0 million for 2015, $1,741.0 million for 2016, $1,324.0 million for 2017, $1,313.0 million for 2018 and $1,307.0 million for 2019. The weighted-average amortization period of intangible assets subject to amortization is 16 years, and by major intangible asset class is 4 to 20 years for customer-related intangible assets, 10 years for trade names (excluding legacy Express Scripts, Inc. trade names which have an indefinite life) and 3 to 30 years for other intangible assets.

Following is a summary of the change in the net carrying value of goodwill by reportable segment:



(in millions)	PBM			Other Business Operations		Total
Balance at December 31, 2014	$	29,183.5		$	97.4	$	29,280.9
Foreign currency translation	(1.8		)	—		(1.8		)
Balance at March 31, 2015	$	29,181.7		$	97.4	$	29,279.1

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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