ACQUISITIONS AND DIVESTITURES

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES

On March 22, 2015, we signed a definitive agreement to sell our wholly-owned subsidiary, Concentra Inc., or Concentra, to MJ Acquisition Corporation, a joint venture between Select Medical Holdings Corporation and Welsh, Carson, Anderson & Stowe XII, L.P., a private equity fund, for approximately $1,055 million in cash, subject to customary adjustments. The agreement is subject to Hart-Scott-Rodino regulatory clearance and customary closing conditions and is expected to close in the second quarter of this year.

We classified Concentra as held-for-sale and aggregated Concentra’s assets and liabilities separately on the balance sheet, including a reclassification of the prior period balance sheet for comparative purposes. With the fair value exceeding the carrying value of Concentra’s net assets, the resulting gain will be recognized upon closing of the transaction. The ultimate gain recognized will reflect considerations for costs to sell, changes in the carrying value of net assets and the related tax effect.

During the three months ended March 31, 2015, Humana Inc., our parent company, recognized a deferred tax asset of approximately $53 million for the excess of the tax basis over the book basis of its Concentra subsidiary because realization of the asset in the foreseeable future was apparent with the classification as held-for-sale.

Concentra revenues and pretax earnings for the three months ended March 31, 2015 were $246 million and $7 million, respectively. Concentra revenues and pretax earnings for the year ended December 31, 2014 were $998 million and $22 million, respectively.

The assets and liabilities of Concentra that were classified as held-for-sale are as follows:

	March 31, 2015		December 31, 2014
Assets	(in millions)
Receivables, net	$	122	$	115
Property and equipment, net	195		191
Goodwill	480		480
Other intangible assets, net	127		131
Other assets	28		26
Total assets held-for-sale	$	952	$	943
Liabilities
Trade accounts payable and accrued expenses	$	80	$	90
Other liabilities	113		116
Total liabilities held-for-sale	$	193	$	206

During 2014, we acquired health and wellness related businesses which, individually or in the aggregate, have not had a material impact on our results of operations, financial condition, or cash flows. The results of operations and financial condition of these businesses have been included in our condensed consolidated statements of income and condensed consolidated balance sheets from the acquisition dates. Acquisition-related costs recognized in 2014 were not material to our results of operations. The pro forma financial information assuming the acquisitions had occurred as of the beginning of the calendar year prior to the year of acquisition, as well as the revenues and earnings generated during the year of acquisition were not material for disclosure purposes.