NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 5 GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill at December 31, 2012 totaled $193.9 million. Goodwill is recorded as a result of business combinations.  Activity in goodwill for the years ended December 31, 2010, 2011 and 2012, is provided below (in thousands):

Balance as of January 1, 2010		106,502
Goodwill acquired through the acquisition of Union Imaging		3,748
Goodwill acquired through the acquisition of Anaheim Open MRI		305
Goodwill acquired through the acquisition of Truxtun Medical Group		10,652
Goodwill acquired through the acquisition of Sonix Medical Resources		884
Goodwill acquired through the acquisition of Health Diagnostics		977
Goodwill acquired through the acquisition of Image Medical Corporation		7,327
Goodwill acquired through the acquisition of Progressive Health		12,856
Goodwill acquired through the acquisition of two imaging centers from Presgar Imaging		102
Balance as of December 31, 2010		143,353
Goodwill acquired through the acquisition of Imaging On Call, LLC		3,799
Goodwill acquired through the acquisition of the imaging practice of Stuart London, MD		600
Goodwill acquired through the acquisition of certain imaging centers from Diagnostic Health Corp.		2,009
Goodwill acquired through the acquisition of Hematology-Oncology		1,016
Adjustments to our preliminary allocation of the purchase price of Image Medical Corp.		2,443
Adjustments to our preliminary allocation of the purchase price of Progressive Health		1,369
Adjustments to our preliminary allocation of the purchase price of Presgar Imaging		155
Goodwill acquired through the acquisition of our controlling interest in Radar, LLC		845
Goodwill acquired through the acquisition of Raven Holdings U.S., Inc.		3,918
Balance as of December 31, 2011		159,507
Goodwill acquired through the acquisition of Camarillo Imaging		86
Goodwill acquired through the acquisition of West Coast Radiology		5,395
Goodwill acquired through the acquisition of Advanced Medical Imaging of Stuart		923
Goodwill acquired through the acquisition of Orthopedic Imaging		302
Adjustments to our preliminary allocation of the purchase price of Raven Holdings U.S., Inc.		7,895
Goodwill acquired through the acquisition of our controlling interest in Upper Chesapeake Imaging		1,849
Goodwill acquired through the acquisition of Vanowen Radiology		386
Goodwill acquired through the acquisition of Clinical Radiologists Medical Imaging		1,838
Goodwill acquired through the acquisition of Lenox Hill Radiology		15,690
Balance as of December 31, 2012	$	193,871

The amount of goodwill from these acquisitions that is deductible for tax purposes is $ 115.5 million.

Other intangible assets are primarily related to the value of management service agreements obtained through our acquisition of Radiologix, Inc. in 2006 and are recorded at a cost of $57.5 million less accumulated amortization of $14.2 million at December 31, 2012.  Also included in other intangible assets is the value of covenant not to compete contracts associated with our recent facility acquisitions totaling $4.6 million less accumulated amortization of $3.7 million, as well as the value of trade names associated with acquired imaging facilities totaling $7.7 million less accumulated amortization of $1.4 million.   Also in connection with our purchase of eRAD and included in other intangible assets is the value of eRAD’s developed technology and its customer relationships. Amortization expense for the year ended December 31, 2012, 2011 and 2010 was $3.5 million, $3.5 million and $3.5 million, respectively.  Intangible assets are amortized using the straight-line method.  Management service agreements are amortized over 25 years using the straight line method. Developed technology and customer relationships are amortized over 5 years using the straight line method.

The following table shows annual amortization expense, by asset classes that will be recorded over the next five years (in thousands):

	2013		2014		2015		2016		2017		Thereafter		Total			Weighted average amortization period remaining in years
Management service contracts	$	2,300	$	2,300	$	2,300	$	2,300	$	2,300	$	31,814	$	43,314			18.8
Covenant not to compete contracts		344		274		160		93		30		10		911			2.5
Customer relationships		196		197		184		1		–		–		578			2.9
Developed technology and in-process R&D		188		189		149		24		–		–		550			3.0
Trade Names		113		–		–		–		–		–		6,321	*		0.8
Total Annual Amortization	$	3,141	$	2,960	$	2,793	$	2,418	$	2,330	$	31,824	$	51,674

 * Includes approximately $6.2 million of trade name intangibles that have an indefinite life.