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5. GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 5 – GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is recorded as a result of business combinations. Activity in goodwill for the years ended December 31, 2016 and 2017 is provided below (in thousands):

Balance as of December 31, 2015		$	239,408
Goodwill acquired through the acquisition of Advanced Radiological Imaging			1,280
Adjustments to our preliminary allocation of the purchase price of Diagnostic Imaging Group, LLC			(47	)
Goodwill acquired through the acquisition of Landmark Imaging, LLC			38
Goodwill held for sale			(1,126	)
Balance as of December 31, 2016			239,553
Goodwill acquired through the acquisition of Resolution Imaging Medical Corp			1,901
Goodwill acquired through the acquisition of MRI Centers Inc.			401
Goodwill disposed through the transfer to Santa Monica Imaging Group JV			(1,901	)
Goodwill acquired through the acquisition of D&D Diagnostics, Inc.			1,519
Goodwill acquired through the acquisition of Stockton MRI, Inc.			3,101
Goodwill disposed through the sale of Hematology Oncology			(110	)
Goodwill acquired through the acquisition of DIA, Inc.			9,185
Goodwill disposed through the sale of Breastlink Medical Group, Inc.			(509	)
Goodwill acquired through the acquisition of RDI, Inc.			1,202
Adjustments to our preliminary allocation of the purchase price of DIA, Inc.			1,058
Goodwill acquired through the acquisition of RadSite, LLC			1,665
Goodwill transferred to other assets			(289	)
Balance as of December 31, 2017		$	256,776

The amount of goodwill from these acquisitions that is deductible for tax purposes as of December 31, 2017 is $110.1 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 $25.7 million at December 31, 2017. Also included in other intangible assets is the value of covenant not to compete contracts associated with our facility acquisitions totaling $6.4 million less accumulated amortization of $5.8 million, as well as the value of trade names associated with acquired imaging facilities totaling $10.2 million less accumulated amortization of $1.5 million and dispositions of $750,000.

Total amortization expense was $2.6 million for each of the years ended December 31, 2017 and 2016 and $3.0 million for the year ended December 31, 2015. Intangible assets are amortized using the straight-line method. Management service agreements are amortized over 25 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):

		2018				2019				2020				2021				2022				Thereafter				Total				Weighted average amortization period remaining in years
Management Service Contracts		$	2,287			$	2,287			$	2,287			$	2,287			$	2,287			$	20,396			$	31,831				13.9
Covenant not to compete contracts			279				199				119				43				14				–				654				2.8
Trade Names*			–				–				–				–				–				7,937				7,937				–
Total Annual Amortization		$	2,566			$	2,486			$	2,406			$	2,330			$	2,301			$	28,333			$	40,422

* These trade name intangibles have an indefinite life

X

- References

No definition available.

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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
-URI http://asc.fasb.org/topic&trid=2144416

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