As of December 31, 1995, the Company leased approximately 1.4 million aggregate square feet of space for its principal administrative offices in Hartford, Connecticut and the greater Minneapolis/St. Paul, Minnesota area. In connection with its operations outside of the Minneapolis/St. Paul, Minnesota and Hartford, Connecticut areas, as of December 31, 1995, the Company leased approximately 4.2 million aggregate square feet for office space or space for computer facilities and claims processing centers nationwide. Such space corresponds to areas in which its health plans or managed care services specialty programs operate or where it has a satellite administrative office. The Company's leases expire at various dates through 2011. As of December 31, 1995, the Company owned approximately 333,000 aggregate square feet of space for administrative offices in various states and its staff model clinic operations in Florida.
On January 3, 1995, the Company acquired GenCare Health Systems, Inc. (GenCare), a health plan based in St. Louis, Missouri, serving 230,000 members at the time of acquisition. On February 28, 1995, the Company acquired Group Sales and Services of Puerto Rico, Inc. (Group Sales), a health plan based in San Juan, Puerto Rico, serving 135,000 members at the time of acquisition. On October 2, 1995, the Company acquired The MetraHealth Companies, Inc. (MetraHealth). MetraHealth was formed in January 1995 by combining the group health care operations of Metropolitan Life Insurance Company and The Travelers Insurance Group. At the time of acquisition, MetraHealth served over 10 million individuals, including 5.9 million in network-based care programs, 469,000 of whom were health plan members. Each of these acquisitions was accounted for as a purchase transaction. Accordingly, only the post-acquisition results of GenCare, Group Sales and MetraHealth are included in the Company's consolidated financial results.
Premium revenues in 1995 of $4.93 billion increased $1.55 billion, or 46%, compared to 1994. Excluding the effects of the Company's 1995 acquisitions of GenCare, Group Sales and MetraHealth, the increase in 1995 premium revenues over 1994 was 19%, reflecting year-over-year enrollment growth of 21% and an average premium rate increase on renewing commercial groups of approximately 1% to 2%.
Restructuring charges of $153.8 million recorded in the fourth quarter of 1995 include $102.3 million for activities under the Company's integration plan and $51.5 million for asset impairment. The restructuring charges do not cover certain aspects of the plan, including new information systems, anticipated operating losses from businesses to be discontinued, employee relocation, and training. These costs will be recognized in future periods as incurred.
/1/ Does not include the reclassification of the current maturities of long-term investments to short-term investments of $126.6 million in 1993, which are non cash transactions. Also does not include the reclassification of $11.0 million of long-term investments to restricted investments in 1993.
Goodwill represents costs in excess of net assets of businesses acquired which are amortized on a straight-line basis over periods not exceeding 40 years. The Company periodically evaluates whether events and circumstances have occurred which may affect the estimated useful life or the recoverability of the remaining balance of its goodwill.
Effective January 1, 1993, the Company adopted Statement of Financial Accounting Standards No.109, "Accounting for Income Taxes." The cumulative effect of adopting this statement and its impact on the Company's consolidated results of operations was not significant.
Net earnings per common share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of outstanding stock options. The convertible preferred stock is not considered a common stock equivalent for purposes of determining primary earnings per share.
At December 31, 1995, approximately $2.29 billion of the Company's cash and investments were restricted under various state regulations which require certain of the Company's subsidiaries to retain cash generated from their operations. In addition, investments of $44.6 million at December 31, 1995, were held by trustees or state regulatory agencies to ensure adequate financial reserves exist as required by state regulatory agencies. Investment income earned on these investments accrues to the Company.