5. GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is recorded as a result of business combinations. Activity in goodwill for the years ended December 31, 2014 and 2015, is provided below (in thousands):

Balance as of December 31, 2013		196,395
Goodwill acquired through the acquisition of Corinthian		310
Goodwill acquired through the acquisition of Westchester Imaging		231
Goodwill acquired through the acquisition of Garden State Radiology		50
Goodwill acquired through the acquisition of Medical Imaging of Manhattan		1,433
Goodwill acquired through the acquisition of Liberty Pacific		1,288
Goodwill acquired through the acquisition of Moreno Valley		362
Goodwill acquired through the acquisition of Hematology-Oncology		235
Balance as of December 31, 2014		200,304
Adjustment to our allocation of goodwill for the acquisition of Liberty Pacific		200
Goodwill acquired through the acquisition of California Radiology		2,107
Goodwill acquired through the acquisition of New York Radiology Partners		9,897
Goodwill disposed through the sale of New Jersey Imaging Partners		(18,833	)
Goodwill acquired through the acquisition of Hanford Imaging, LP		785
Goodwill acquired through the acquisition of Murry Hill Radiology and MRI		4,123
Goodwill acquired through the acquisition of Phillip L Chatam, M.D., Inc.		790
Goodwill acquired through the acquisition of Diagnostic Imaging Group, LLC		40,035
Balance as of December 31, 2015	$	239,408

The amount of goodwill from these acquisitions that is deductible for tax purposes as of December 31, 2015 is $109.9 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 $21.1 million at December 31, 2015. Also included in other intangible assets is the value of covenant not to compete contracts associated with our facility acquisitions totaling $5.8 million less accumulated amortization of $4.9 million, as well as the value of trade names associated with acquired imaging facilities totaling $10.2 million less accumulated amortization of $1.5 million and dispositions of $750,000. 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.

Total amortization expense for the years ended December 31, 2015, 2014 and 2013 was $3.0 million, $3.1 million, and $3.1 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):

	2016		2017		2018		2019		2020		Thereafter		Total		Weighted average amortization period remaining in years
Management Service Contracts	$	2,309	$	2,309	$	2,309	$	2,309	$	2,309	$	24,861	$	36,406		15.7
Covenant not to compete contracts		304		241		198		112		30		–		885		3.4
Customer relationships		1		–		–		–		–		–		1		–
Developed technology and in-process R&D		24		–		–		–		–		–		24		0.8
Trade Names*		–		–		–		–		–		7,937		7,937		–
Total Annual Amortization	$	2,638	$	2,550	$	2,507	$	2,421	$	2,339	$	32,798	$	45,253

* These trade name intangibles have an indefinite life