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Goodwill
 12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill
Goodwill
Changes in the carrying value of goodwill by reportable segments were as follows:
 
U.S. dialysis and
related lab services
 
Other ancillary
services and
strategic initiatives
 
Consolidated total
Balance at January 1, 2016
$
5,629,183

 
$
267,032

 
$
5,896,215

Acquisitions
75,295

 
123,632

 
198,927

Divestitures
(12,891
)
 
(29,645
)
 
(42,536
)
Goodwill impairment charges
—

 
(28,415
)
 
(28,415
)
Foreign currency and other adjustments
—

 
(8,816
)
 
(8,816
)
Balance at December 31, 2016
$
5,691,587

 
$
323,788

 
$
6,015,375

Acquisitions
485,434

 
131,598

 
617,032

Divestitures
(32,260
)
 
(126
)
 
(32,386
)
Goodwill impairment charges
—

 
(36,196
)
 
(36,196
)
Foreign currency and other adjustments
—

 
46,454

 
46,454

Balance at December 31, 2017
$
6,144,761

 
$
465,518

 
$
6,610,279

 
 
 
 
 
 
Goodwill
$
6,144,761

 
$
536,038

 
$
6,680,799

Accumulated impairment charges
—

 
(70,520
)
 
(70,520
)
 
$
6,144,761

 
$
465,518

 
$
6,610,279


The Company elected to early adopt ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment effective January 1, 2017. The amendments in this ASU simplify the test for goodwill impairment by eliminating the second step in the assessment. All goodwill impairment tests performed during 2017 have been performed under this new guidance.
Each of the Company’s operating segments described in Note 25 to these consolidated financial statements represents an individual reporting unit for goodwill impairment testing purposes, except that each sovereign jurisdiction within the Company’s international operating segments is considered a separate reporting unit.
Within the U.S. dialysis and related lab services operating segment, the Company considers each of its dialysis centers to constitute an individual business for which discrete financial information is available. However, since these dialysis centers have similar operating and economic characteristics, and the allocation of resources and significant investment decisions concerning these businesses are highly centralized and the benefits broadly distributed, the Company has aggregated these centers and deemed them to constitute a single reporting unit.
The Company has applied a similar aggregation to the vascular access service centers in its vascular access services reporting unit, to the physician practices in its physician services and direct primary care reporting units, and to the dialysis centers within each international reporting unit. For the Company’s other operating segments, discrete business components below the operating segment level constitute individual reporting units.
During the year ended December 31, 2016, the Company recognized a goodwill impairment charge of $28,415 related to the Company’s vascular access reporting unit as a result of changes in future governmental reimbursement rates for this business and the Company’s expected ability to mitigate them. Specifically, on November 2, 2016, CMS released the 2017 Physician Fee Schedule Final Rule and the Ambulatory Surgical Center Payment Final Rule which reflected significant changes in reimbursement structure for this business unit.
During the year ended December 31, 2017, the Company recognized an additional goodwill impairment charge of $34,696 at its vascular access reporting unit. This charge resulted primarily from continuing changes in the Company’s outlook for this business unit as the Company’s partners and operators continued to evaluate and make decisions concerning changes in operations, including termination of their management services agreements and center closures, as a result of the changes in reimbursement structure discussed above. As of December 31, 2017, there was no goodwill remaining at the Company's vascular access reporting unit.
During the year ended December 31, 2017, the Company also performed annual impairment assessments for various other reporting units. As a result of these assessments, the Company also recognized a goodwill impairment charge of $1,500 at one of its international reporting units during the year ended December 31, 2017. During the year ended December 31, 2015, the Company also recognized a goodwill impairment charge of $4,066 at another international reporting unit.
Based on the most recent assessments, the Company determined that reductions in reimbursement rates, changes in actual or expected growth rates, or other significant adverse changes in expected future cash flows or valuation assumptions could result in goodwill impairment charges in the future for the following reporting units, which remain at risk of goodwill impairment as of December 31, 2017:
Reporting unit
 
Goodwill
balance as of December 31, 2017
 
Carrying amount
coverage(1)
 
Sensitivities
Operating
income(2)
 
Discount
rate(3)
Kidney Care Germany
 
$
316,369

 
13.7%
 
(1.6)%
 
(11.1)%
Kidney Care Portugal
 
$
46,713

 
16.9%
 
(1.9)%
 
(6.0)%
Kidney Care Poland
 
$
46,610

 
11.8%
 
(1.9)%
 
(6.0)%
 
 
(1)
Excess of estimated fair value of the reporting unit over carrying amount as of the latest assessment date.
(2)
Potential impact on estimated fair value of a sustained, long-term reduction of 3% in operating income as of the latest assessment date.
(3)
Potential impact on estimated fair value of an increase in discount rates of 100 basis points as of the latest assessment date.
There were no major changes in the business, prospects, or expected future results of these reporting units from their latest assessment date through December 31, 2017.
Except as described above, none of the Company’s other reporting units were considered at risk of significant goodwill impairment as of December 31, 2017. Since the dates of the Company’s last annual goodwill impairment tests, there have been certain developments, events, changes in operating performance and other changes in key circumstances that have affected the Company’s businesses. However, except as further described above, these did not cause management to believe it is more likely than not that the fair values of any of the Company’s reporting units would be less than their respective carrying amounts as of December 31, 2017.