Goodwill

Changes in goodwill by reportable segments were as follows:

							Other-ancillary
	U.S. dialysis and						services and
	related lab services			HCP			strategic initiatives			Consolidated total
Balance at January 1, 2015	$	5,610,643		$	3,562,534		$	242,118		$	9,415,295
Acquisitions		21,910			29,910			45,273			97,093
Divestitures		(3,370	)		(5,411	)		—			(8,781	)
Goodwill impairment charges		—			(188,769	)		(4,065	)		(192,834	)
Foreign currency and other adjustments		—			—			(16,294	)		(16,294	)
Balance at December 31, 2015	$	5,629,183		$	3,398,264		$	267,032		$	9,294,479
Acquisitions		—			251,216			9,233			260,449
Divestitures		—			—			—			—
Goodwill impairment charge		—			(77,000	)		—			(77,000	)
Foreign currency and other adjustments		—			—			7,700			7,700
Balance at March 31, 2016	$	5,629,183		$	3,572,480		$	283,965		$	9,485,628

Each of the Company’s operating segments described in Note 17 to these condensed 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 HCP operations in each region, to the vascular access service centers in its vascular access services reporting unit, to the physician practices in its physician services reporting unit, and to the dialysis centers within each international reporting unit. For the Company’s other operating segments, no component below the operating segment level is considered a discrete business and therefore these operating segments directly constitute individual reporting units.

During the quarter ended March 31, 2016 the Company completed its annual goodwill impairment assessments for its at-risk HCP reporting units for the quarter ended December 31, 2015. The results of those completed assessments did not differ materially from the preliminary results reported in the Company’s annual financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Based on continuing developments at the Company’s HCP reporting units, including changes in expectations concerning government reimbursement and the Company’s expected ability to mitigate them, medical cost trends and other market conditions, the Company performed additional impairment assessments on certain at-risk HCP reporting units during the quarter ended March 31, 2016. Based on these first quarter assessments, the Company recognized an additional $77,000 goodwill impairment charge for its HCP Nevada reporting unit during the quarter ended March 31, 2016.

The Company’s HCP Nevada, HCP Florida, HCP Colorado Springs, Kidney Care Germany and Kidney Care Malaysia reporting units are at risk of goodwill impairment. As of March 31, 2016, these reporting units have goodwill amounts of $341,668, $537,813, $16,897, $129,242 and $13,998, respectively. As of March 31, 2016, the latest estimated fair values of the HCP Nevada, HCP Florida, HCP Colorado Springs, Kidney Care Germany and Kidney Care Malaysia reporting units (fell short of) exceeded their total carrying amounts by approximately (9.9)%, 4.0%, 15.4%, 13.0% and 6.1%, respectively.

For the Company’s at-risk HCP reporting units, further reductions in reimbursement rates, increases in medical costs, or other significant adverse changes in expected future cash flows or valuation assumptions could result in further goodwill impairment charges in the future. For example, a sustained, long-term reduction of 3% in operating income for HCP Nevada or HCP Florida could reduce their estimated fair values by up to 2.4% and 1.8%, respectively. Separately, an increase in their respective discount rates of 100 basis points could reduce the estimated fair values of HCP Nevada and HCP Florida by up to 3.6% and 3.7%, respectively.

Except as described above, none of the Company’s various other reporting units was considered at risk of goodwill impairment as of March 31, 2016. 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 value of any of its reporting units would be less than its carrying amount.