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ACQUISITIONS AND DIVESTITURES | 6 Months Ended
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Jun. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES On April 21, 2022, we signed a definitive agreement with private investment firm Clayton, Dubilier & Rice, or CD&R, to divest a 60% interest in the Hospice and Personal Care divisions of Humana’s Kindred at Home subsidiary, or KAH Hospice, at an enterprise valuation of $3.4 billion. These divisions include patient-centered services for Hospice, Palliative, Community and Personal Care. Under the agreement, we will receive cash proceeds of approximately $2.8 billion, which includes a combination of debt repayments from KAH Hospice to Humana and equity proceeds from the 60% interest purchased by CD&R. The transaction is expected to close in the third quarter of 2022 and is subject to customary state and federal regulatory approvals. As of June 30, 2022, we classified KAH Hospice as held-for-sale and aggregated KAH Hospice’s assets and liabilities separately on the balance sheet. With the fair value exceeding the carrying value of KAH Hospice’s net assets, the resulting gain will be recognized upon closing of the transaction. The ultimate gain to be recognized will reflect considerations for costs to sell, changes in the carrying value of net assets and the related tax effect. The carrying value of the assets and liabilities of KAH Hospice classified as held-for-sale approximates fair value. The amount of goodwill included in the carrying value is based on the relative fair value of the Home Solutions reporting unit included within the Healthcare Services segment. During the three months ended June 30, 2022, Humana Inc., our parent company, recognized a deferred tax liability of approximately $167 million for the excess of the book basis over the tax basis of its KAH Hospice subsidiary because realization of the liability in the foreseeable future was apparent with the classification as held-for-sale at June 30, 2022. Upon closing of the transaction, the deferred tax liability will be adjusted to reflect any changes to the excess of the book basis over tax basis of the KAH Hospice subsidiary. KAH Hospice revenues for the three and six months ended June 30, 2022 were $399 million and $781 million, respectively. KAH Hospice pretax earnings for the three and six months ended June 30, 2022 were $64 million and $126 million, respectively. The assets and liabilities of KAH Hospice classified as held-for-sale are as follows:
| June 30, 2022
| (in millions)
Assets |
Cash and cash equivalents | $ | 67 |
Receivables, net of allowances | 178 |
Other current assets | 20 |
Current assets held-for-sale | 265 |
Property and equipment, net | 41 |
Goodwill | 2,331 |
Other assets | 955 |
Long-term assets held-for-sale | 3,327 |
Total assets held-for-sale | $ | 3,592 |
Liabilities |
Trade accounts payable and accrued expenses | $ | 206 |
Current liabilities held-for-sale | 206 |
Other liabilities | 274 |
Long-term liabilities held-for-sale | 274 |
Total liabilities held-for-sale | $ | 480 |
On August 17, 2021, we acquired the remaining 60% interest in Kindred at Home, or KAH, the nation’s largest home health and hospice provider, from TPG Capital, or TPG, and Welsh, Carson, Anderson & Stowe, or WCAS, two private equity funds, or the Sponsors, for an enterprise value of $8.2 billion, which includes our equity value of $2.4 billion associated with our 40% minority ownership interest. We paid the approximate $5.8 billion transaction price (net of our existing equity stake) through a combination of debt financing, the assumption of existing KAH indebtedness and parent company cash. During 2022 and 2021, we acquired various 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 acquired in 2022 and 2021 have been included in our condensed consolidated statements of income and condensed consolidated balance sheets from the respective acquisition dates. Acquisition-related costs recognized in 2022 and 2021 were not material to our results of operations. For asset acquisitions, the goodwill acquired is partially amortizable as deductible expenses for tax purposes. 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.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 + Details
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