XML 26 R13.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Goodwill and Intangible Assets | 12 Months Ended
--- | ---
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill represents the fair value of the consideration provided in an acquisition over the fair value of net assets acquired and is not amortized. The Company tests its goodwill for impairment in the fourth quarter of each year, or more frequently if certain indicators arise. The Company tests for goodwill impairment at the reporting unit level, which is defined as one level below an operating segment. During 2023, the Company identified two reporting units, which include the following: 1) Surgical Facilities and 2) Ancillary Services. The Company compares the carrying value of the net assets of the reporting unit to the estimated fair value of the reporting unit. To determine the fair value of the reporting units, the Company obtained valuations at the reporting unit level prepared by third-party valuation specialists which typically utilizes a combination of the income and market approaches. As of October 1, 2023, prior to its annual impairment testing, all of the Company's goodwill was allocated to the Surgical Facilities reporting unit. As of the October 1, 2023 valuation, the fair value for the Surgical Facilities reporting unit was substantially in excess of its carrying value. A detailed evaluation of potential impairment indicators was performed, which specifically considered changes in interest rates, inflation risk and market volatility. While the Company believes that all assumptions utilized in the testing were appropriate, they may not reflect actual outcomes that could occur. Future estimates of fair value could be adversely affected if the actual outcome of one or more of the Company's assumptions changes materially in the future, including a material decline in the Company’s stock price and the fair value of its long-term debt, lower than expected surgical case volumes, higher market interest rates or increased operating costs. Such changes impacting the calculation of fair value could result in a material impairment charge in the future. In 2023, 2022 and 2021, there were no non-cash impairment charges. A summary of the changes in the carrying amount of goodwill follows (in millions):
|  | December 31,
|  | 2023 |  | 2022
Balance at beginning of period |  | $ | 4,137.1 |  |  | $ | 3,911.8 |
Acquisitions, including post acquisition adjustments |  | 225.9 |  |  | 269.7 |
Disposals and deconsolidations |  | (37.0) |  |  | (44.4) |
Balance at end of period |  | $ | 4,326.0 |  |  | $ | 4,137.1 |
A summary of the Company's acquisitions, disposals and deconsolidations for the years ended December 31, 2023 and 2022 is included in Note 2. "Acquisitions and Dispositions." Intangible Assets The Company has indefinite-lived intangible assets related to the certificates of need held in jurisdictions where certain of its surgical facilities are located, Medicare licenses and certain management rights agreements. The Company tests these intangible assets for impairment in the fourth quarter of each year, or more frequently if certain indicators arise. The Company also has finite-lived intangible assets related to physician guarantee agreements, non-compete agreements and management rights agreements. Physician guarantees are amortized into salaries and benefits costs in the consolidated statements of operations over the commitment period of the contract, generally two to four years. Non-compete agreements and management rights agreements are amortized into depreciation and amortization expense in the consolidated statements of operations over the service lives of the agreements, typically ranging from two to five years for non-compete agreements and 15 years for the management rights agreements. A summary of the components of intangible assets follows (in millions):
|  | December 31, 2023 |  | December 31, 2022
|  | Gross Carrying Amount |  | Accumulated Amortization |  | Net |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net
Finite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Management rights agreements |  | $ | 42.8 |  |  | $ | (12.0) |  |  | $ | 30.8 |  |  | $ | 23.9 |  |  | $ | (10.2) |  |  | $ | 13.7 |
Other |  | 30.0 |  |  | (20.6) |  |  | 9.4 |  |  | 28.5 |  |  | (14.9) |  |  | 13.6 |
Total finite-lived intangible assets |  | 72.8 |  |  | (32.6) |  |  | 40.2 |  |  | 52.4 |  |  | (25.1) |  |  | 27.3 |
Indefinite-lived intangible assets |  | 14.6 |  |  | — |  |  | 14.6 |  |  | 15.0 |  |  | — |  |  | 15.0 |
Total intangible assets |  | $ | 87.4 |  |  | $ | (32.6) |  |  | $ | 54.8 |  |  | $ | 67.4 |  |  | $ | (25.1) |  |  | $ | 42.3 |
Amortization expense for intangible assets was $7.6 million, $6.4 million and $6.9 million for of the years ended December 31, 2023, 2022 and 2021, respectively. Total estimated amortization expense for the next five years and thereafter related to intangible assets follows (in millions):
2024 |  | $ | 5.8 |
2025 |  | 5.3 |
2026 |  | 5.0 |
2027 |  | 3.8 |
2028 |  | 3.3 |
Thereafter |  | 17.0 |
Total |  | $ | 40.2 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 350 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//350/tableOfContent + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration