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5. GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | Goodwill at December 31, 2013 totaled $196.4 million. Goodwill is recorded as a result of business combinations. Activity in goodwill for the years ended December 31, 2011, 2012 and 2013, is provided below (in thousands):
Balance as of January 1, 2011 |  |  | 143,353 |
Goodwill acquired through the acquisition of Imaging On Call, LLC |  |  | 3,799 |
Goodwill acquired through the acquisition of the imaging practice of Stuart London, MD |  |  | 600 |
Goodwill acquired through the acquisition of certain imaging centers from Diagnostic Health Corp. |  |  | 2,009 |
Goodwill acquired through the acquisition of Hematology-Oncology |  |  | 1,016 |
Adjustments to our preliminary allocation of the purchase price of Image Medical Corp. |  |  | 2,443 |
Adjustments to our preliminary allocation of the purchase price of Progressive Health |  |  | 1,369 |
Adjustments to our preliminary allocation of the purchase price of Presgar Imaging |  |  | 155 |
Goodwill acquired through the acquisition of our controlling interest in Radar, LLC |  |  | 845 |
Goodwill acquired through the acquisition of Raven Holdings U.S., Inc. |  |  | 3,918 |
Balance as of December 31, 2011 |  |  | 159,507 |
Goodwill acquired through the acquisition of Camarillo Imaging |  |  | 86 |
Goodwill acquired through the acquisition of West Coast Radiology |  |  | 5,395 |
Goodwill acquired through the acquisition of Advanced Medical Imaging of Stuart |  |  | 923 |
Goodwill acquired through the acquisition of Orthopedic Imaging |  |  | 302 |
Adjustments to our preliminary allocation of the purchase price of Raven Holdings U.S., Inc. |  |  | 7,895 |
Goodwill acquired through the acquisition of our controlling interest in Upper Chesapeake Imaging |  |  | 1,849 |
Goodwill acquired through the acquisition of Vanowen Radiology |  |  | 386 |
Goodwill acquired through the acquisition of our controlling interest in Clinical Radiology |  |  | 1,838 |
Goodwill acquired through the acquisition of Lenox Hill Radiology |  |  | 15,690 |
Balance as of December 31, 2012 |  |  | 193,871 |
Goodwill acquired through the acquisition of breast surgery practice in Mission Viejo, CA |  |  | 185 |
Adjustments to our preliminary allocation of the purchase price of Lenox Hill Radiology |  |  | (3,219 | )
Goodwill acquired through the acquisition of Park West |  |  | 2,047 |
Goodwill acquired through the acquisition of imaging center in Brooklyn, NY |  |  | 4,206 |
Goodwill associated with the sale of a wholly owned imaging center in Northfield, NJ |  |  | (1,000 | )
Goodwill acquired through the acquisition of South Valley Med Imaging |  |  | 305 |
Balance as of December 31, 2013 |  | $ | 196,395 |
The amount of goodwill from these acquisitions that is deductible for tax purposes is $116.0 million. Other intangible assets are primarily related to the value of management service agreements obtained through our acquisition of Radiologix, Inc. in 2006 and are recorded at a cost of $57.5 million less accumulated amortization of $16.4 million at December 31, 2013. Also included in other intangible assets is the value of covenant not to compete contracts associated with our recent facility acquisitions totaling $4.8 million less accumulated amortization of $4.1 million, as well as the value of trade names associated with acquired imaging facilities totaling $9.0 million less accumulated amortization of $1.5 million. Also in connection with our purchase of eRAD and included in other intangible assets is the value of eRAD’s developed technology and its customer relationships. Amortization expense for the year ended December 31, 2013, 2012 and 2011 was $3.1 million, $3.5 million and $3.5 million, respectively. Intangible assets are amortized using the straight-line method. Management service agreements are amortized over 25 years using the straight line method. Developed technology and customer relationships are amortized over 5 years using the straight line method. The following table shows annual amortization expense, by asset classes that will be recorded over the next five years (in thousands):
|  | 2014 |  |  | 2015 |  |  | 2016 |  |  | 2017 |  |  | 2018 |  |  | Thereafter |  |  | Total |  |  | Weighted average amortization period remaining in years |
Management Service Contracts |  | $ | 2,315 |  |  | $ | 2,315 |  |  | $ | 2,315 |  |  | $ | 2,315 |  |  | $ | 2,315 |  |  | $ | 29,521 |  |  | $ | 41,097 |  |  |  | 17.8 |
Covenant not to compete contracts |  |  | 304 |  |  |  | 190 |  |  |  | 123 |  |  |  | 60 |  |  |  | 16 |  |  |  | – |  |  |  | 693 |  |  |  | 2.9 |
Customer relationships |  |  | 197 |  |  |  | 184 |  |  |  | 1 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 382 |  |  |  | 1.9 |
Developed technology and in-process R&D |  |  | 189 |  |  |  | 149 |  |  |  | 24 |  |  |  |  |  |  |  | – |  |  |  | – |  |  |  | 362 |  |  |  | 2.0 |
Trade Names* |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 7,508 |  |  |  | 7,508 |  |  |  | – |
Total Annual Amortization |  | $ | 3,005 |  |  | $ | 2,838 |  |  | $ | 2,463 |  |  | $ | 2,375 |  |  | $ | 2,331 |  |  | $ | 37,029 |  |  | $ | 50,042 |  |  |  |  |
* These trade name intangibles have an indefinite life

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13854-109267 + Details
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