Intangible Assets

6 Months Ended

12 Months Ended

Jun. 30, 2013

Dec. 31, 2012

3. Intangible Assets

The gross carrying amounts of the Company's indefinite-lived intangible assets consist of the following:

	December 31, 2012		June 30, 2013

	(in thousands)
Goodwill	$	1,640,534	$	1,641,796
Trademarks		57,709		57,709
Certificates of need		11,914		11,921
Accreditations		2,122		2,083

Total	$	1,712,279	$	1,713,509

The Company's accreditations and trademarks have renewal terms. The costs to renew these intangibles are expensed as incurred. At June 30, 2013, the accreditations and trademarks have a weighted average time until next renewal of approximately 1.5 years and 7.0 years, respectively.

The changes in the carrying amount of goodwill for the Company's reportable segments for the six months ended June 30, 2013 are as follows:

	Specialty Hospitals		Outpatient Rehabilitation			Total

	(in thousands)
Balance as of December 31, 2012	$	1,333,220	$	307,314		$	1,640,534
Goodwill acquired during the period		1,395		—			1,395
Purchase price adjustment		—		(133	)		(133	)

Balance as of June 30, 2013	$	1,334,615	$	307,181		$	1,641,796

5. Intangible Assets

Intangible assets consist of the following:

	As of December 31, 2011

	Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Amortized intangible assets
Non-compete agreements	$	25,909	$	(25,569	)
Indefinite-lived intangible assets
Goodwill	$	1,631,716
Trademarks		57,709
Certificates of need		11,914
Accreditations		2,160

Total	$	1,703,499

	As of December 31, 2012

	Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Amortized intangible assets
Non-compete agreements	$	25,909	$	(25,909	)
Indefinite-lived intangible assets
Goodwill	$	1,640,534
Trademarks		57,709
Certificates of need		11,914
Accreditations		2,122

Total	$	1,712,279

The Company's accreditations and trademarks have renewal terms. The costs to renew these intangibles are expensed as incurred. At December 31, 2012, the accreditations and trademarks have a weighted average time until next renewal of 1.5 years and 7.5 years, respectively.

Amortization expense for intangible assets with finite lives follows:

	For the Year Ended December 31

	2010		2011		2012
	(In thousands)
Amortization expense	$	4,247	$	1,306	$	340

Amortization expense for the Company's intangible assets primarily relates to the amortization of the value associated with the non-compete agreements entered into in connection with the acquisitions of the outpatient rehabilitation division of HealthSouth Corporation, Kessler Rehabilitation Corporation and SemperCare Inc. and the value assigned to the Company's contract therapy relationships. During 2010 the non-compete agreement related to the acquisition of Kessler Rehabilitation Corporation and the Company's contract therapy relationships were fully amortized, during 2011 the non-compete agreement related to the acquisition of SemperCare Inc. was fully amortized and during 2012 the non-compete agreement related to the acquisition of substantially all of the outpatient rehabilitation division of HealthSouth Corporation.

Generally accepted accounting principles require any amounts recorded, such as goodwill, by the parent as a result of the Merger be "pushed down" and recorded in the Company's consolidated financial statements. The changes in the carrying amount of goodwill for the Company's reportable segments for the years ended December 31, 2011 and 2012 are as follows:

	Specialty Hospitals			Outpatient Rehabilitation			Total

	(In thousands)
Balance as of January 1, 2011	$	1,330,609		$	300,643		$	1,631,252
Goodwill revision(1)		7,114			—			7,114
Goodwill acquired during year(2)		(1,420	)		3,875			2,455
Goodwill allocated to dispositions during the year		(2,750	)		(6,355	)		(9,105	)

Balance as of December 31, 2011	$	1,333,553		$	298,163		$	1,631,716
Goodwill acquired during year		—			9,151			9,151
Other		(333	)		—			(333	)

Balance as of December 31, 2012	$	1,333,220		$	307,314		$	1,640,534

(1): During 2011, the Company made a revision to the Regency purchase price allocation resulting from the finalization of the intangible asset valuations.
(2): During 2011, the Company completed the post-closing settlement of net working capital with the seller of Regency for $3.9 million in cash received.

- 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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