Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangibles

v3.22.2
Goodwill and Intangibles
6 Months Ended
Jun. 30, 2022
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 six months ended June 30, 2022 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, 2021 $ 968,435  $ 556,332  $ 167,027  $ 15,770  $ 40,862  $ 1,748,426 
Net working capital adjustments —  1,440  —  —  —  1,440 
Acquisitions 2,190  —  —  —  —  2,190 
Noncontrolling interests 504  —  —  —  —  504 
Disposals (440) (690) —  —  —  (1,130)
Balance as of June 30, 2022 $ 970,689  $ 557,082  $ 167,027  $ 15,770  $ 40,862  $ 1,751,430 
Intangible assets:
Balance as of December 31, 2021 $ 237,979  $ 117,340  $ 24,245  $ 5,919  $ 14,519  $ 400,002 
Acquisitions 810  —  —  —  —  810 
Amortization (1,193) (985) (6) (275) (291) (2,750)
Disposals (490) (397) (54) —  —  (941)
Balance as of June 30, 2022 $ 237,106  $ 115,958  $ 24,185  $ 5,644  $ 14,228  $ 397,121 
The Company did record impairments of goodwill and intangible assets related to the closure of underperforming locations. Goodwill impairment of $1.1 million and Medicare licenses impairment of $0.9 million was recorded during the six months ended June 30, 2022. Goodwill impairment of $0.02 million and Medicare licenses impairment of $0.9 million was recorded during the six months ended June 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.
The following tables summarize the changes in intangible assets during the six months ended June 30, 2022 and December 31, 2021 (amounts in thousands): 
2022 2021
Indefinite-lived intangible assets:
   Trade names $ 208,233  $ 207,780 
   Certificates of need/licenses 173,371  173,955 
   Net total $ 381,604  $ 381,735 
Definite-lived intangible assets:
   Trade names
      Gross carrying amount $ 11,073  $ 11,073 
      Accumulated amortization (10,410) (9,606)
      Net total $ 663  $ 1,467 
   Non-compete agreements
      Gross carrying amount $ 14,524  $ 14,524 
      Accumulated amortization (8,828) (7,172)
      Net total $ 5,696  $ 7,352 
   Customer relationships
      Gross carrying amount $ 11,822  $ 11,822 
      Accumulated amortization (2,664) (2,374)
      Net total $ 9,158  $ 9,448 
   Total definite-lived intangible assets
      Gross carrying amount $ 37,419  $ 37,419 
      Accumulated amortization (21,902) (19,152)
      Net total $ 15,517  $ 18,267 
Total intangible assets:
   Gross carrying amount $ 419,023  $ 419,154 
   Accumulated amortization (21,902) (19,152)
   Net total $ 397,121  $ 400,002 
         
Remaining useful lives for trade names, customer relationships, and non-compete agreements were 7.3, 15.8, and 4.4 years, respectively, at June 30, 2022. Similar periods at December 31, 2021 were 7.8, 16.3, and 4.9 years for trade names, customer relationships, and non-compete agreements, respectively. Amortization expense was $1.1 million and $0.3 million for the three months ended June 30, 2022 and 2021 and $2.8 million and $0.6 million for the six months ended June 30, 2022 and 2021. Amortization expense was recorded in general and administrative expenses.