Molina Medicaid Solutions - DHHR

e10vk7. ReceivablesHealth Plans segment receivables consist primarily of amounts due from the various states in which we operate. Such receivables are subject to potential retroactiveadjustment. Because all of our receivable amounts are readily determinable and our creditors are in almost all instances state governments, our allowance for doubtful accountsis immaterial. Any amounts determined to be uncollectible are charged to expense when such determination is made. Accounts receivable were as follows:December 31,2010 2009(In thousands)Health Plans Segment:California $ 46,482 $ 34,289Michigan 13,596 14,977Missouri 22,841 19,670New Mexico 18,310 11,919Ohio 21,622 37,004Utah 1,589 6,107Washington 14,486 9,910Wisconsin 5,437 —Other 3,598 2,778Total Health Plans 147,961 136,654Molina Medicaid Solutions Segment 20,229 —$ 168,190 $ 136,65492Table of ContentsMOLINA HEALTHCARE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)8. Property and EquipmentA summary of property and equipment is as follows:December 31,2010 2009(In thousands)Land $ 3,524 $ 3,524Building and improvements 49,735 41,476Furniture and equipment 60,074 54,898Capitalized computer software costs 90,003 66,526203,336 166,424Less: accumulated depreciation and amortization on building and improvements, furniture and equipment (54,341) (50,911)Less: accumulated amortization for capitalized computer software costs (48,458) (37,342)(102,799) (88,253)Property and equipment, net $ 100,537 $ 78,171Depreciation expense recognized for building and improvements, and furniture and equipment was $13.9 million, $11.0 million, and $9.0 million for the years endedDecember 31, 2010, 2009 and 2008, respectively. Amortization expense recognized for capitalized computer software costs was $20.1 million, $14.2 million, and $11.7 millionfor the years ended December 31, 2010, 2009, and 2008, respectively.9. Goodwill and Intangible AssetsOther intangible assets are amortized over their useful lives ranging from one to 15 years. The weighted average amortization period for contract rights and licenses isapproximately 11 years, for customer relationships is approximately 5 years, for backlog is approximately 2 years, and for provider networks is approximately 10 years. Basedon the balances of our identifiable intangible assets as of December 31, 2010, we estimate that our intangible asset amortization will be $27.5 million in 2011, $19.0 million in2012, $15.8 million in 2013, $12.8 million in 2014, and $7.0 million in 2015. The following table provides the details of identified intangible assets, by major class, for theperiods indicated:Accumulated NetCost Amortization Balance(In thousands)Intangible assets:Contract rights and licenses (Health Plans segment) $ 120,920 $ 64,201 $ 56,719Customer relationships (Molina Medicaid Solutions segment) 24,550 3,418 21,132Backlog (Molina Medicaid Solutions segment) 23,600 8,316 15,284Provider networks (Health Plans segment) 18,622 6,257 12,365Balance at December 31, 2010 $ 187,692 $ 82,192 $ 105,500Intangible assets:Contract rights and licenses $ 119,101 $ 51,246 $ 67,855Provider networks 17,146 4,155 12,991Balance at December 31, 2009 $ 136,247 $ 55,401 $ 80,84693Table of ContentsMOLINA HEALTHCARE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The changes in the carrying amount of goodwill and indefinite-lived intangible assets were as follows (in thousands):Balance as of December 31, 2009 $ 133,408Goodwill recorded for acquisition of Molina Medicaid Solutions on May 1, 2010 72,367Goodwill recorded for acquisition of the Wisconsin health plan on September 1, 2010 5,474Goodwill adjustment related to the 2009 acquisition of the Florida health plan 979Balance at December 31, 2010 $ 212,22810. Restricted InvestmentsPursuant to the regulations governing our health plan subsidiaries, we maintain statutory deposits and deposits required by state Medicaid authorities. Additionally, wemaintain restricted investments as protection against the insolvency of capitated providers. The following table presents the carrying value of restricted investments by healthplan, and by our insurance company:December 31,2010 2009(In thousands)California $ 372 $ 368Florida 4,508 2,052Insurance Company 4,689 4,686Michigan 1,000 1,000Missouri 508 503New Mexico 15,881 15,497Ohio 9,066 9,036Texas 3,501 1,515Utah 1,279 578Washington 151 151http://sec.gov/Archives/edgar/data/1179929/000095012311023069/a58840e10vk.htm[1/6/2012 11:08:51 AM]