Restructuring Activities
As a result of restructuring activities implemented during 2012 and 2011, we recorded liabilities for employee termination costs and lease and other contract exit costs. The restructuring activities are classified as components of general and administrative expenses in the consolidated statements of income for the respective period in which they occurred. There were no restructuring activities implemented during 2013.
The 2012 restructuring activities were initiated primarily as a result of personnel changes, organizational realignment to create efficiencies in our business processes and certain integration activities associated with the Amerigroup acquisition. Activity related to these liabilities for the year ended December 31, 2013 and 2012, by segment, is as follows:
|
| | | | | | | | | | | | | | | |
| Commercial and Specialty Business | | Government Business | | Other | | Total |
2012 Restructuring Activities | | | | | | | |
Employee termination costs: | | | | | | | |
Costs incurred in 2012 | $ | 70.8 |
| | $ | 64.5 |
| | $ | 3.5 |
| | $ | 138.8 |
|
2012 payments | (10.8 | ) | | (9.8 | ) | | (0.6 | ) | | (21.2 | ) |
Liabilities for employee termination costs ending balance at December 31, 2012 | 60.0 |
| | 54.7 |
| | 2.9 |
| | 117.6 |
|
2013 payments | (34.6 | ) | | (34.6 | ) | | (1.7 | ) | | (70.9 | ) |
Liabilities released in 2013 | (12.0 | ) | | (15.9 | ) | | (0.6 | ) | | (28.5 | ) |
Liabilities for employee termination costs ending balance at December 31, 2013 | 13.4 |
| | 4.2 |
| | 0.6 |
| | 18.2 |
|
| | | | | | | |
Lease and other contract exit costs: | | | | | | | |
Costs incurred in 2012 | 8.8 |
| | 3.0 |
| | 0.1 |
| | 11.9 |
|
2012 payments | (0.1 | ) | | — |
| | — |
| | (0.1 | ) |
Liabilities for lease and other contract exit costs ending balance at December 31, 2012 | 8.7 |
| | 3.0 |
| | 0.1 |
| | 11.8 |
|
2013 payments | (5.7 | ) | | (2.0 | ) | | (0.1 | ) | | (7.8 | ) |
Liabilities released in 2013 | (0.6 | ) | | (0.2 | ) | | — |
| | (0.8 | ) |
Liabilities for lease and other contract exit costs ending balance at December 31, 2013 | 2.4 |
| | 0.8 |
| | — |
| | 3.2 |
|
Total liabilities for 2012 restructuring activities ending balance at December 31, 2013 | $ | 15.8 |
| | $ | 5.0 |
| | $ | 0.6 |
| | $ | 21.4 |
|
The 2011 restructuring activities were initiated as a result of a change in strategic focus primarily in response to Health Care Reform. At December 31, 2013, our total liabilities for 2011 restructuring activities were $17.5, of which $1.9 related to employee termination costs and $15.6 related to lease and other contract exit costs. Payments for lease and other contract exit costs will continue to occur over the remaining terms of the related contracts.
