Goodwill And Intangible Assets

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the six months ended June 30, 2015 are as follows (in thousands):



Balance at December 31, 2014	$	3,381,149
Goodwill acquired, including post acquisition adjustments	208,196
Goodwill disposed, including impact of deconsolidation transactions	(3,324		)
Balance at June 30, 2015	$	3,586,021

Although the determination of goodwill generated as a result of the Sheridan transaction is still under evaluation as of June 30, 2015, the ambulatory services segment and the physician services segment had approximately $2.0 billion and $1.6 billion, respectively, of goodwill. During the six months ended June 30, 2015, goodwill increased $144.8 million for the ambulatory services segment primarily due to the acquisition of four centers, net of one deconsolidation. During the six months ended June 30, 2015, goodwill increased by $60.0 million for the physician services segment primarily due to the acquisition of four physician practices, net of one deconsolidation, and post-acquisition adjustments associated with the acquisition of Sheridan of approximately $12.9 million, primarily related to deferred income taxes. For the six months ended June 30, 2015 and 2014, respectively, approximately $107.6 million and $25.1 million of goodwill recorded was deductible for tax purposes.

Intangible assets at June 30, 2015 and December 31, 2014 consisted of the following (in thousands):



	June 30, 2015							December 31, 2014
	Gross							Gross
	Carrying		Accumulated					Carrying		Accumulated
	Amount		Amortization			Net		Amount		Amortization			Net
Amortizable intangible assets:
Customer relationships with hospitals	$	1,001,463	$	(46,996	)	$	954,467	$	971,645	$	(22,145	)	$	949,500
Deferred financing cost	59,858		(9,299		)	50,559		59,574		(5,151		)	54,423
Capitalized software	61,765		(23,676		)	38,089		50,387		(19,197		)	31,190
Agreements, contracts and other	4,218		(2,951		)	1,267		3,523		(2,752		)	771
Total amortizable intangible assets	1,127,304		(82,922		)	1,044,382		1,085,129		(49,245		)	1,035,884
Non-amortizable intangible assets:
Trade name	228,000		—			228,000		228,000		—			228,000
Restrictive covenant arrangements	9,995		—			9,995		9,995		—			9,995
Total non-amortizable intangible assets	237,995		—			237,995		237,995		—			237,995
Total intangible assets	$	1,365,299	$	(82,922	)	$	1,282,377	$	1,323,124	$	(49,245	)	$	1,273,879

Approximately $29.8 million of intangible assets related to customer relationships were recorded during the six months ended June 30, 2015 and are estimated to be amortized over a weighted average period of 20 years with no expected residual values.

Amortization of intangible assets for the three months ended June 30, 2015 and 2014 was $16.8 million and $0.6 million, respectively, and $33.4 million and $1.1 million for the six months ended June 30, 2015 and 2014, respectively. Estimated amortization of intangible assets for the remainder of 2015 and each of the following five years and thereafter is $34.1 million, $67.6 million, $66.3 million, $65.2 million, $62.5 million, $59.6 million and $689.1 million, respectively. The Company expects to recognize amortization of all intangible assets over a weighted average period of 17.8 years with no expected residual values.

- 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.

+ References + Details