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Goodwill | 9 Months Ended
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Sep. 30, 2016
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill |
6. | Goodwill
Changes in goodwill by reportable segments were as follows:
|  |  |  |  |  |  |  |  |  | Other-ancillary |  |  |  |  |
|  | U.S. dialysis and |  |  |  |  |  |  | services and |  |  |  |  |
|  | related lab services |  |  | DMG |  |  | 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 |  |  | 52,792 |  |  |  | 248,901 |  |  |  | 70,116 |  |  |  | 371,809 |
Divestitures |  |  | (4,222 | ) |  |  | (2,223 | ) |  |  | (29,374 | ) |  |  | (35,819 | )
Goodwill impairment charges |  |  | — |  |  |  | (253,000 | ) |  |  | — |  |  |  | (253,000 | )
Foreign currency and other adjustments |  |  | — |  |  |  | — |  |  |  | 5,527 |  |  |  | 5,527 |
Balance at September 30, 2016 |  | $ | 5,677,753 |  |  | $ | 3,391,942 |  |  | $ | 313,301 |  |  | $ | 9,382,996 |
Each of the Company’s operating segments described in Note 18 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 DMG 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 fourth quarter of 2015, the Company recognized $206,169 in goodwill and other intangible asset impairment charges on certain DMG reporting units based on assessments performed after circumstances indicated it had become more likely than not that the goodwill of certain DMG reporting units had become impaired. These circumstances included underperformance of the business in recent quarters, as well as changes in other market conditions, including government reimbursement cuts and the Company’s expected ability to mitigate them. Based on continuing developments at the Company’s DMG reporting units during 2016, including the Medicare Advantage final benchmark rates for 2017 announced on April 4, 2016, further changes in expectations concerning future government reimbursement rates and the Company’s expected ability to mitigate them, as well as medical cost and utilization trends, underperformance of certain at-risk units in recent quarters and other market conditions, the Company performed additional impairment assessments for certain at-risk DMG reporting units during each of the first three quarters of 2016. As a result of these assessments, the Company recognized additional goodwill impairment charges of $77,000 for its DMG Nevada reporting unit during the quarter ended March 31, 2016, and impairment charges of $79,000 for its DMG Nevada reporting unit and $97,000 for its DMG Florida reporting unit during the quarter ended June 30, 2016, for a total of $253,000 in goodwill impairment charges for its DMG reporting units during the nine months ended September 30, 2016. The Company’s DMG Nevada, DMG Florida, DMG Colorado Springs and Lifeline vascular access reporting units are at risk of goodwill impairment. As of September 30, 2016, these reporting units have goodwill amounts of $261,204, $442,835, $16,897 and $63,111, respectively. As of September 30, 2016, the latest estimated fair values of the DMG Nevada, DMG Florida, DMG Colorado Springs and Lifeline vascular access reporting units (fell short of) exceeded their total carrying amounts by approximately (27.8)%, (1.5)%, 15.4% and 14.0%, respectively. For the Company’s at-risk DMG reporting units, further reductions in reimbursement rates, increases in medical cost or utilization trends, 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 DMG Nevada or DMG Florida could reduce their estimated fair values by up to 2.5% and 1.9%, respectively. Separately, an increase in their respective discount rates of 100 basis points could reduce the estimated fair values of DMG Nevada and DMG Florida by up to 5.5% and 4.9%, respectively. Similarly, a long-term reduction of 3% in operating income or, separately, an increase in the discount rate of 100 basis points could reduce the estimated fair value of Lifeline vascular access by up to 2.6% and 5.0%. Except as described above, none of the Company’s various other reporting units were considered at risk of goodwill impairment as of September 30, 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 their carrying amounts.

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