Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangibles

v3.21.2
Goodwill and Intangibles
9 Months Ended
Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangibles Goodwill and Intangibles
The changes in recorded goodwill and intangible assets by reporting unit for the nine months ended September 30, 2021 were as follows (amounts in thousands):  
Home health reporting unit Hospice
reporting
unit
Home and community-based services
reporting
 unit
Facility-based
reporting
 unit
HCI reporting unit Total
Goodwill:
Balance as of December 31, 2020 $ 884,000  $ 151,742  $ 166,773  $ 15,770  $ 40,862  $ 1,259,147 
Acquisitions 7,057  336,844  254  —  —  344,155 
Noncontrolling interests 78  —  —  —  —  78 
Disposals (20) —  —  —  —  (20)
Balance as of September 30, 2021 $ 891,115  $ 488,586  $ 167,027  $ 15,770  $ 40,862  $ 1,603,360 
Intangible assets:
Balance as of December 31, 2020 $ 226,004  $ 44,732  $ 24,208  $ 5,311  $ 15,100  $ 315,355 
Acquisitions 1,478  35,971  46  —  —  37,495 
Amortization (354) (242) (7) (4) (436) (1,043)
Disposals (1,279) —  —  —  —  (1,279)
Balance as of September 30, 2021 $ 225,849  $ 80,461  $ 24,247  $ 5,307  $ 14,664  $ 350,528 
The Company did record impairments of goodwill and intangible assets related to the closure of underperforming locations. Goodwill impairment of $0.02 million and Medicare licenses impairment of $0.9 million was recorded during the nine months ended September 30, 2021. This was recorded in impairment of intangibles and other on the Company's condensed consolidated statements of income. The amount of disposal of goodwill was determined using prices of comparable businesses in the market. The amount of disposal of the Medicare licenses was its carrying value at the time of closure. In addition, the Company divested a certificate of need of $0.4 million, which was accounted for as a loss on the sale of an entity and recorded in general and administrative expenses.
The following tables summarize the changes in intangible assets during the nine months ended September 30, 2021 and December 31, 2020 (amounts in thousands): 
2021 2020
Indefinite-lived intangible assets:
   Trade names $ 190,743  $ 168,700 
   Certificates of Need/Licenses 147,338  135,013 
   Net total $ 338,081  $ 303,713 
Definite-lived intangible assets:
   Trade names
      Gross carrying amount $ 10,238  $ 10,212 
      Accumulated amortization (9,575) (9,480)
      Net total $ 663  $ 732 
   Non-compete agreements
      Gross carrying amount $ 9,088  $ 7,267 
      Accumulated amortization (6,899) (6,387)
      Net total $ 2,189  $ 880 
   Customer relationships
      Gross carrying amount $ 11,822  $ 11,822 
      Accumulated amortization (2,227) (1,792)
      Net total $ 9,595  $ 10,030 
   Total definite-lived intangible assets
      Gross carrying amount $ 31,148  $ 29,301 
      Accumulated amortization (18,701) (17,659)
      Net total $ 12,447  $ 11,642 
Total intangible assets:
   Gross carrying amount $ 369,229  $ 333,014 
   Accumulated amortization (18,701) (17,659)
   Net total $ 350,528  $ 315,355 
         
Remaining useful lives for trade names, customer relationships, and non-compete agreements were 8.1, 16.5, and 2.8 years, respectively, at September 30, 2021. Similar periods at December 31, 2020 were 8.8, 17.3, and 2.9 years for trade names, customer relationships, and non-compete agreements, respectively. Amortization expense was $0.4 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $1.0 million and $0.9 million during the nine months ended September 30, 2021 and 2020, respectively. Amortization expense was recorded in general and administrative expenses.