Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangibles, Net

v3.20.4
Goodwill and Other Intangibles, Net
12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangibles, Net Goodwill and Other Intangibles, Net
The following table summarizes changes in goodwill and other intangibles assets by segment during the twelve months ended December 31, 2020 and 2019 (amounts in thousands):
Home Health
Hospice
Home and community-
based
Facility-based
HCI
Total
Goodwill
Balance as of December 31, 2018 $ 822,602  $ 118,583  $ 165,583  $ 14,194  $ 40,755  $ 1,161,717 
Acquisitions 40,237  6,726  551  938  —  48,452 
Noncontrolling interests 4,489  2,351  —  550  —  7,390 
Adjustments and disposals 596  1,215  495  —  107  2,413 
Balance as of December 31, 2019 $ 867,924  $ 128,875  $ 166,629  $ 15,682  $ 40,862  $ 1,219,972 
Acquisitions 12,025  21,025  134  88  —  33,272 
Noncontrolling interests 4,695  2,122  10  —  —  6,827 
Adjustments and disposals (644) (280) —  —  —  (924)
Balance as of December 31, 2020 $ 884,000  $ 151,742  $ 166,773  $ 15,770  $ 40,862  $ 1,259,147 
Intangibles Assets
Balance as of December 31, 2018 $ 215,382  $ 37,010  $ 23,948  $ 4,147  $ 16,892  $ 297,379 
Acquisitions 12,537  2,452  154  1,202  —  16,345 
Amortization (436) (154) (4) (32) (629) (1,255)
Adjustments and disposals (7,611) 1,282  (2) —  (582) (6,913)
Balance as of December 31, 2019 $ 219,872  $ 40,590  $ 24,096  $ 5,317  $ 15,681  $ 305,556 
Acquisitions 7,193  4,212  127  —  —  11,532 
Amortization (556) (70) (15) (6) (581) (1,228)
Adjustments and disposals (505) —  —  —  —  (505)
Balance as of December 31, 2020 $ 226,004  $ 44,732  $ 24,208  $ 5,311  $ 15,100  $ 315,355 
The Company determined that there was no impairment for the goodwill of any reporting units as of December 31, 2020, 2019 and 2018 based on the Company's annual impairment testing. The Company did record $0.5 million of impairment of goodwill during the year ended December 31, 2020 and $0.6 million during the years ended December 31, 2019 and 2018. The goodwill impairment was due to the closure of underperforming locations. The amount of disposal of goodwill was determined using prices of comparable businesses in the market. This was recorded in impairment of intangibles and other on the Company's consolidated statements of income and disclosed in the changes in goodwill table in adjustments and disposals.
The Company performed an impairment analysis on its indefinite-lived intangible assets related to the Company's trade names, licenses and certificates of need and determined that it is not more likely than not that the fair values of the indefinite-lived intangible assets are less than its carrying amount as of November 30, 2020; however, the Company did record $0.7 million, $7.1 million, and $3.7 million during the years ended December 31, 2020, 2019 and 2018. During the years ended December 31, 2020 and 2018, the impairments related to closures of underperforming locations. During the year ended December 31, 2019, the impairments related to the lifting of a moratoria of $6.1 million and closure of underperforming locations of $1.0 million. The Medicare license impairment was a result of CMS action to remove all federal moratoria with regard to Medicare provider enrollment in four states. This was recorded in impairment of intangibles and other on the Company's consolidated statements of income and disclosed in the changes in intangible assets table in adjustments and disposals.
The following tables summarize the changes in intangible assets during the twelve months ended December 31, 2020 and 2019 (amounts in thousands):
2020 2019
Indefinite-lived intangible assets:
  Trade Names $ 168,700  $ 163,499 
  Certificates of Need/Licenses 135,013  129,689 
  Net total $ 303,713  $ 293,188 
Definite-lived intangible assets:
  Trade Names
Gross carrying amount $ 10,212  $ 10,182 
Accumulated amortization (9,480) (9,229)
Net total $ 732  $ 953 
Non-compete agreements
Gross carrying amount $ 7,267  $ 6,795 
Accumulated amortization (6,387) (5,991)
Net total $ 880  $ 804 
Customer relationships
Gross carrying amount $ 11,822  $ 11,822 
Accumulated amortization (1,792) (1,211)
Net total $ 10,030  $ 10,611 
Total definite-lived intangible assets
Gross carrying amount $ 29,301  $ 28,799 
Accumulated amortization (17,659) (16,431)
Net total $ 11,642  $ 12,368 
Total intangible assets:
Gross carrying amount $ 333,014  $ 321,987 
Accumulated amortization (17,659) (16,431)
Net total $ 315,355  $ 305,556 
Remaining useful lives of trade names, customer relationships, and non-compete agreements were 8.8, 17.3, and 2.9 years, respectively at December 31, 2020. Similar amounts at December 31, 2019 were 9.8 and 18.2 and 2.8 years, respectively.
Amortization expense for the Company's intangible assets was $1.2 million, $1.3 million, and $2.1 million for the years ended December 31, 2020, 2019 and 2018, which was recorded in general and administrative expenses.
The estimated intangible asset amortization expense for each of the five years subsequent to December 31, 2020 is as follows (amounts in thousands):
Year Amortization amount
2021 $ 1,187 
2022 993 
2023 831 
2024 687 
2025 687 
Total $ 4,385