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Goodwill and Intangibles
9 Months Ended
Sep. 30, 2012
Goodwill and Intangibles [Abstract]  
Goodwill and Intangibles

4. Goodwill and Intangibles

In accordance with applicable accounting standards, the Company performed an impairment analysis on its indefinite-lived intangible assets related to the Company’s trade names, licenses and certificates of need to determine the fair values as of September 30, 2012. Lower revenue expectations caused primarily by projected Medicare reimbursement cuts reduced the fair values of certain intangible assets below their carrying values. Based on that analysis, the Company recorded an impairment charge of $650,000 in the third quarter of 2012.

As a result of the impairment charge, the carrying values of the related intangible assets were adjusted to their estimated fair values as of September 30, 2012. Any further decline in the estimated fair values of these intangibles could result in additional impairment charges being recorded. The Company determined that except for the impairment charges described above, there were no indicators that the other intangible assets were impaired at September 30, 2012.

The Company determined that there was no impairment for the goodwill of any reporting units as of September 30, 2012.

The changes in recorded goodwill by segment for the nine months ended September 30, 2012 were as follows (amounts in thousands):

 

         
    Nine Months Ended
September 30,

2012
 

Home-based services segment:

       

Balance at beginning of period

  $ 153,140  

Goodwill from acquisitions

    3,351  

Goodwill related to noncontrolling interest

    902  
   

 

 

 

Balance at September 30, 2012

  $ 157,393  
   

 

 

 

Facility-based services segment:

       

Balance at beginning of period

  $ 11,591  
   

 

 

 

Balance at September 30, 2012

  $ 11,591  
   

 

 

 

Consolidated balance at September 30, 2012

  $ 168,984  
   

 

 

 

The following table summarizes the changes in intangible assets during the nine months ended September 30, 2012 (amounts in thousands):

 

                                 
    Trade Names     Certificate  of
Need/
License
    Other
Intangibles
    Total  

Balance at December 31, 2011

  $ 49,840     $ 8,502     $ 1,047     $ 59,389  

Additions

    1,875       2,133       135       4,143  

Amortization

    —         —         (523     (523

Other (1)

    (257     (477    
—  
 
    (734
   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at September 30, 2012

  $ 51,458     $ 10,158     $ 659     $ 62,275  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes a non-cash impairment charge of $650,000 recorded in the nine months ended September 30, 2012 and $84,000 to reduce the intangibles assets due to the closure of an agency. All reductions are related to the home-based services segment.

Other intangible assets of $60.8 million, net of accumulated amortization, related to the home-based services segment and $1.5 million related to the facility-based services segment as of September 30, 2012.

During the nine months ended September 30, 2012, the Company purchased a certificate of need and noncompete agreement for $1.7 million, primarily paid in cash. The certificate of need was previously leased by the Company. This asset acquisition was allocated among certificate of need and noncompete agreement in the home-based services segment. The certificate of need has an indefinite useful life and will not be subject to amortization. The noncompete agreement will be amortized over the life of the agreement, which is three years.