Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangibles, Net

v3.19.3.a.u2
Goodwill and Other Intangibles, Net
12 Months Ended
Dec. 31, 2019
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, 2019 and 2018 (amounts in thousands):
 
 
Home Health
 
Hospice
 
Home and community-
based
 
Facility-based
 
Healthcare Innovations
 
Total
Goodwill
 
 
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2017
 
$
261,456

 
$
88,814

 
$
28,541

 
$
13,790

 
$

 
$
392,601

Acquisitions
 
558,628

 
29,263

 
137,042

 

 
40,755

 
765,688

Noncontrolling interests
 
3,297

 
506

 

 

 

 
3,803

Adjustments and disposals
 
(779
)
 

 

 
404

 

 
(375
)
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

Intangibles Assets
 
 
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2017
 
$
88,078

 
$
31,955

 
$
9,533

 
$
5,045

 
$

 
$
134,611

Acquisitions
 
130,055

 
5,453

 
14,420

 

 
16,892

 
166,820

Amortization
 
(1,636
)
 
(398
)
 
(5
)
 
(97
)
 

 
(2,136
)
Adjustments and disposals
 
(1,115
)
 

 

 
(801
)
 

 
(1,916
)
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

The Company determined that there was no impairment for the goodwill of any reporting units as of December 31, 2019, 2018 and 2017 based on the Company's annual impairment testing. The Company did record $0.6 million, $0.6 million and $1.5 million of impairment of goodwill during the years ended December 31, 2019, 2018 and 2017 due to the closure of underperforming locations. The amount of disposal of goodwill was determined using prices of comparable business in the market. This was recorded in impairment of intangibles and other on the Company's consolidated statements of income and disclosed 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, 2019; however, the Company did record $7.1 million related to impairments of other intangibles related to the lifting of a moratoria and closure of underperforming locations. 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 adjustments and disposals.
The following tables summarize the changes in intangible assets during the twelve months ended December 31, 2019 and 2018 (amounts in thousands):
 
 
2019
 
2018
Indefinite-lived intangible assets:
 
 
 
 
  Trade Names
 
$
163,499

 
$
156,049

  Certificates of Need/Licenses
 
129,689

 
128,577

  Net total
 
$
293,188

 
$
284,626

 
 
 
 
 
Definite-lived intangible assets:
 
 
 
 
  Trade Names
 
 
 
 
Gross carrying amount
 
$
10,182

 
$
10,127

Accumulated amortization
 
(9,229
)
 
(8,817
)
Net total
 
$
953

 
$
1,310

Non-compete agreements
 
 
 
 
Gross carrying amount
 
$
6,795

 
$
5,980

Accumulated amortization
 
(5,991
)
 
(5,729
)
Net total
 
$
804

 
$
251

Customer relationships
 
 
 
 
Gross carrying amount
 
$
11,822

 
$
11,822

Accumulated amortization
 
(1,211
)
 
(630
)
Net total
 
$
10,611

 
$
11,192

Total definite-lived intangible assets
 
 
 
 
Gross carrying amount
 
$
28,799

 
$
27,929

Accumulated amortization
 
(16,431
)
 
(15,176
)
Net total
 
$
12,368


$
12,753

 
 
 
 
 
Total intangible assets:
 
 
 
 
Gross carrying amount
 
$
321,987

 
$
312,555

Accumulated amortization
 
(16,431
)
 
(15,176
)
Net total
 
$
305,556

 
$
297,379

Remaining useful lives of trade names, customer relationships, and non-compete agreements were 9.8, 18.2, and 2.8 years, respectively at December 31, 2019. Similar amounts at December 31, 2018 were 8.8 and 19.3 and 2.8 years, respectively.
Amortization expense for the Company's intangible assets was $1.3 million for the year ended December 31, 2019 and $2.1 million for the years ended December 31, 2018 and 2017, which was recorded in general and administrative expenses.
The estimated intangible asset amortization expense for each of the five years subsequent to December 31, 2019 is as follows (amounts in thousands):
Year
 
Amortization amount
2020
 
$
1,179

2021
 
1,012

2022
 
819

2023
 
687

2024
 
687

Total
 
$
4,384