Goodwill

Changes in goodwill by reportable segment were as follows:



	U.S. dialysis and related lab services			Other-ancillary services and strategic initiatives			Consolidated total
Balance at January 1, 2017	$	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
Acquisitions	2,137			13,905			16,042
Foreign currency and other adjustments	—			12,271			12,271
Balance at March 31, 2018	$	6,146,898		$	491,694		$	6,638,592

Balance at March 31, 2018:
Goodwill	$	6,146,898		$	562,214		$	6,709,112
Accumulated impairment charges	—			(70,520		)	(70,520		)
	$	6,146,898		$	491,694		$	6,638,592

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 and 2018 have been performed under this new guidance.

Each of the Company’s operating segments described in Note 19 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 vascular access service centers in its vascular access 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 three months ended March 31, 2018, the Company did not recognize any goodwill impairment charges.

During the three months ended March 31, 2017, the Company recognized a goodwill impairment charge of $24,198 at the Company’s vascular access reporting unit. This charge resulted primarily from changes in the Company's outlook as the Company's partners and operators continued to evaluate potential changes in operations, including termination of their management services agreements and center closures, as a result of recent changes in Medicare reimbursement. There is no goodwill remaining at the Company's vascular access reporting unit.

For the reporting units considered at risk as of December 31, 2017 listed in the table below, there have been no major changes in the business, prospects, or expected future results of these reporting units from their latest assessment date through March 31, 2018. 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 March 31, 2018:



	Goodwill balance as of March 31, 2018		Carrying amount coverage⁽¹⁾		Sensitivities
Reporting unit	Goodwill balance as of March 31, 2018		Carrying amount coverage⁽¹⁾		Operating income⁽²⁾		Discount rate⁽³⁾
Kidney Care Germany	$	337,619	13.7	%	(1.6	)%	(11.1	)%
Kidney Care Portugal	$	48,066	16.9	%	(1.9	)%	(6.0	)%
Kidney Care Poland	$	47,669	11.8	%	(1.9	)%	(6.0	)%


(1)	Excess of estimated fair value of the reporting unit over its 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.

Except as described above, none of the Company's various other reporting units were considered at risk of significant goodwill impairment as of March 31, 2018. 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, these changes did not cause management to believe it is more likely than not that the fair value of any of the Company's reporting units would be less than their respective carrying amounts as of March 31, 2018.