XML 40 R22.htm IDEA: XBRL DOCUMENT v2.4.0.6
Note 14 - Assignment of Hospice Business
6 Months Ended
Jun. 30, 2012
Equity Method Investments and Joint Ventures Disclosure [Text Block]
Note 14 – Assignment of Hospice Business and Additional Ownership Acquisition in Caris

On January 1, 2012, we assigned our membership interest in Solaris Hospice to Caris in exchange for an additional 2.7% limited partnership interest.  At January 1, 2012, the carrying value of the assets and liabilities of the eight Solaris Hospice entities was $4,311,000.  In accordance with ASC 810, Consolidation, the carrying values were reclassified to “investments in limited liability companies” in our interim condensed consolidated balance sheets.  Of the carrying values that were reclassified, $2,945,000 was previously recorded goodwill.

On June 1, 2012, we acquired an additional 7.5% limited partnership interest in Caris for $7.5 million.  As a result of these two transactions and as of June 30, 2012, we have a 75.1% non–controlling ownership interest in the equity method investment.

Consolidation Considerations

Due to our increased ownership percentage in Caris, we have considered whether Caris should be consolidated by NHC under the guidance provided in ASC Topic 810, Consolidation.  We do not consolidate Caris because (1) Caris’ equity at risk is sufficient to finance its activities without additional subordinated financial support, (2) the general partner of the Partnership has the power to direct the activities that most significantly impact the economic performance of Caris, and (3) the equity holders of Caris possess the characteristics of a controlling financial interest, including voting rights that are proportional to their economic interests.  Supporting the assertions above is the following:  (1) the ownership percentage of the general partner did not change and remains equally divided between NHC and another party, (2) the general partner manages and controls the Partnership with full and complete discretion, and (3) the limited partners have no right or power to take part in the control of the business of the Partnership, which is where our ownership percentage increase occurred.