Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table shows changes in the carrying amounts of goodwill by reporting unit for the years ended December 31, 2016 and 2017:



	Long Term Acute Care		Inpatient Rehabilitation		Specialty Hospitals			Outpatient Rehabilitation			Concentra		Total
	(in thousands)
Balance as of January 1, 2016	$	—	$	—	$	1,357,379		$	306,595		$	650,650	$	2,314,624
Acquired	—		—		96,785			345,355			4,562		446,702
Measurement period adjustment	—		—		—			—			4,825		4,825
Sold	—		—		(6,758		)	(8,393		)	—		(15,151		)
Balance as of December 31, 2016	$	—	$	—	$	1,447,406		$	643,557		$	660,037	$	2,751,000
Acquired	—		12,887		797			3,797			14,505		31,986
Measurement period adjustment	—		—		(342		)	168			—		(174		)
Reorganization of reporting units	1,045,220		402,641		(1,447,861		)	—			—		—
Balance as of December 31, 2017	$	1,045,220	$	415,528	$	—		$	647,522		$	674,542	$	2,782,812

See Note 2 for details of the goodwill acquired during the period.

Identifiable Intangible Assets

The following table provides the gross carrying amounts, accumulated amortization, and net carrying amounts for the Company’s identifiable intangible assets:



	December 31,
	2016							2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(in thousands)
Identifiable intangibles—Indefinite lived assets:
Trademarks	$	166,698	$	—		$	166,698	$	166,698	$	—		$	166,698
Certificates of need	17,026		—			17,026		19,155		—			19,155
Accreditations	2,235		—			2,235		1,895		—			1,895
Identifiable intangibles—Finite lived assets:
Customer relationships	142,198		(23,185		)	119,013		143,953		(38,281		)	105,672
Favorable leasehold interests	13,089		(2,317		)	10,772		13,295		(4,319		)	8,976
Non-compete agreements	26,655		(1,837		)	24,818		28,023		(3,900		)	24,123
Total identifiable intangible assets	$	367,901	$	(27,339	)	$	340,562	$	373,019	$	(46,500	)	$	326,519

The Company’s accreditations and trademarks have renewal terms. The costs to renew these intangibles are expensed as incurred. At December 31, 2017, the accreditations and trademarks have a weighted average time until next renewal of 1.5 years and 1.9 years, respectively.

The Company’s customer relationships and non-compete agreements amortize over their estimated useful lives. Amortization expense was $8.9 million, $16.3 million, and $17.4 million for the years ended December 31, 2015, 2016, and 2017, respectively.

Estimated amortization expense of the Company’s customer relationships and non-compete agreements for each of the five succeeding years is as follows:



	2018		2019		2020		2021		2022
	(in thousands
Amortization expense	$	16,831	$	16,802	$	16,647	$	16,483	$	16,332

The Company’s leasehold interests have finite lives and are amortized to rent expense over the remaining term of their respective leases to reflect a market rent per period based upon the market conditions present at the acquisition date.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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