The Company's allocation of the fair value of assets acquired and liabilities assumed as of the acquisition date of March 24, 2016, is as follows ($ in millions):



Assets Acquired and Liabilities Assumed
Cash and cash equivalents	$	956
Premium and trade receivables ^(a)	1,890
Short-term investments	74
Other current assets	524
Long-term investments	2,037
Restricted deposits	30
Property, software and equipment, net	41
Intangible assets ^(b)	1,530
Other long-term assets	136
Total assets acquired	7,218

Medical claims liability ^(c)	1,482
Borrowings under revolving credit facility	285
Accounts payable and accrued expenses ^{(c) (d)}	2,297
Return of premium payable	435
Unearned revenue	130
Long-term deferred tax liabilities ^(e)	311
Long-term debt ^(f)	418
Other long-term liabilities	432
Total liabilities assumed	5,790

Total identifiable net assets	1,428
Goodwill ^(g)	3,859
Total assets acquired and liabilities assumed	$	5,287

Significant fair value adjustments are noted as follows:


(a)	The fair value of premium and trade receivables approximated their historical cost, with the exception of the risk corridor receivable associated with the Health Insurance Marketplace. The fair value of the risk corridor receivable was estimated at $9 million.

(b)

The identifiable intangible assets acquired are to be measured at fair value as of the completion of the acquisition. The 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 utilized in estimating the fair value of certain intangible assets. The Company determined the fair value of intangibles to be $1,530 million with a weighted average life of 12 years. Intangible assets include purchased contract rights, provider contracts, trade names and developed technologies.


(c)	Medical claims liability and accounts payable and accrued expenses include $160 million of reserves associated with substance abuse rehabilitation claims primarily related to periods prior to the acquisition date.

(d)

Accounts payable and accrued expenses include approximately $253 million related to premium deficiency reserves based on cost trends existing prior to the acquisition date. The premium deficiency reserves are primarily associated with losses in the individual commercial business, largely in California, unfavorable performance in the Arizona commercial business as well as unfavorable performance in the Medicare business primarily in Oregon and Arizona.


(e)	The deferred tax liabilities are presented net of $365 million of deferred tax assets.

(f)

Debt is required to be measured at fair value under the acquisition method of accounting. The fair value of Health Net's $400 million Senior Notes assumed in the acquisition was $418 million. The $18 million increase was initially being amortized as a reduction to interest expense over the remaining life of the debt; however, in November 2016, this debt was redeemed. See further discussion in Note 11, Debt.


(g)	The acquisition resulted in $3,859 million of goodwill related primarily to buyer specific synergies expected from the acquisition and the assembled workforce of Health Net. This goodwill is not deductible for income tax purposes. The Company assigned $3,643 million of goodwill to the Managed Care segment and $216 million of goodwill to the Specialty Services segment.