Acquisitions and divestitures

Other routine acquisitions

During the three months ended March 31, 2017, the Company acquired dialysis and other businesses consisting of 12 dialysis centers located in the U.S., three dialysis centers located outside the U.S., and two other medical businesses for a total of $77,236 in net cash, $2,205 in deferred purchase price obligations, and $1,495 in earn-outs and liabilities assumed. The assets and liabilities for all of these acquisitions were recorded at their estimated fair values at the dates of the acquisitions and are included in the Company’s condensed consolidated financial statements, as are their operating results, from the designated effective dates of the acquisitions. Certain income tax amounts are pending final evaluation and quantification of any pre-acquisition tax contingencies. In addition, valuation of medical claims liabilities and certain other working capital items relating to these acquisitions are pending final quantification.

The following table summarizes the assets acquired and liabilities assumed in these transactions and recognized at their acquisition dates at estimated fair values:



Current assets	$	1,123
Property and equipment	5,604
Amortizable intangible and other long-term assets	6,173
Goodwill	78,729
Noncontrolling interests assumed	(8,052		)
Deferred income taxes	(2,194		)
Liabilities assumed	(447		)
Aggregate purchase price	$	80,936

Amortizable intangible assets acquired during the first three months of 2017 had weighted-average estimated useful lives of five years. The majority of the intangible assets acquired during the first three months of 2017 relate to non-compete agreements having a weighted-average useful life and amortization period of five years. The total amount of goodwill deductible for tax purposes associated with these acquisitions was approximately $69,691.

Contingent earn-out obligations

The Company has several contingent earn-out obligations associated with acquisitions that could result in the Company paying the former owners of acquired companies a total of up to $13,754 if certain EBITDA, operating income performance targets or quality margins are met primarily over the next one to seven years.

Contingent earn-out obligations are remeasured to fair value at each reporting date until the contingencies are resolved with changes in the liability due to the re-measurement recorded in earnings. See Note 16 to these condensed consolidated financial statements for further details. As of March 31, 2017, the Company has estimated the fair value of these contingent earn-out obligations to be $8,565, of which a total of $4,653 is included in other liabilities and the remaining $3,912 is included in other long-term liabilities in the Company’s condensed consolidated balance sheet.

The following is a reconciliation of changes in the contingent earn-out obligations for the three months ended March 31, 2017:



Beginning balance, January 1, 2017	$	9,977
Contingent earn-out obligations associated with acquisitions	1,053
Remeasurement of fair value for contingent earn-out obligations	102
Payments on contingent earn-out obligations	(2,567		)
	$	8,565