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Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2021
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets A summary of goodwill and related adjustments is provided below:
|  | Goodwill |
|  | Hospice |  |  | Personal Care |  |  | Home Health |  |  | Total |
|  | (Amounts In Thousands) |
Goodwill at December 31, 2019 |  | $ | 146,983 |  |  | $ | 126,577 |  |  | $ | 1,808 |  |  | $ | 275,368 |
Additions for acquisitions |  |  | 169,207 |  |  |  | 24,660 |  |  |  | — |  |  |  | 193,867 |
Divestiture |  |  | (1,167 | ) |  |  | — |  |  |  | — |  |  |  | (1,167 | )
Adjustments to previously recorded goodwill |  |  | (190 | ) |  |  | 1,211 |  |  |  | (17 | ) |  |  | 1,004 |
Goodwill at December 31, 2020 |  |  | 314,833 |  |  |  | 152,448 |  |  |  | 1,791 |  |  |  | 469,072 |
Additions for acquisitions |  |  | 13,370 |  |  |  | 115 |  |  |  | 21,579 |  |  |  | 35,064 |
Adjustments to previously recorded goodwill |  |  | 131 |  |  |  | 125 |  |  |  | — |  |  |  | 256 |
Goodwill at December 31, 2021 |  | $ | 328,334 |  |  | $ | 152,688 |  |  | $ | 23,370 |  |  | $ | 504,392 |
In connection with the acquisition of Armada, the Company recognized goodwill in its hospice and home health segments of $13.4 million and $15.0 million, respectively, and $6.5 million with the acquisition of Summit in our home health segment in 2021. In 2020, the Company recognized goodwill in the hospice segment of $169.2 million related to the acquisition of Queen City Hospice. Additionally, in connection with the acquisitions of County Homemakers, A Plus and SunLife for the year ended December 31, 2020, the Company recognized goodwill of approximately $24.7 million in the personal care segment. In 2020, the Company divested certain branches and their related net assets including $1.2 million of related goodwill. The Company recognized a $0.3 million loss on the disposition, reflected in general and administrative expense for the year ended December 31, 2020. Goodwill adjustments to previously recorded goodwill are generally related to accounts receivable and accrued expenses based on the final valuations. See Note 4 to the Notes to Consolidated Financial Statements for additional information regarding the acquisitions made by the Company in 2020 and 2021. The Company’s identifiable intangible assets consist of customer and referral relationships, trade names and trademarks, non-competition agreements and state licenses. Amortization is computed using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from one to twenty-five years. Customer and referral relationships are amortized systematically over the periods of expected economic benefit, which range from five to ten years. Goodwill and certain state licenses are not amortized pursuant to ASC Topic 350. We test intangible assets with indefinite useful lives for impairment at the reporting unit level on an annual basis, as of October 1, or whenever potential impairment triggers occur, such as a significant change in business climate or regulatory changes that would indicate that an impairment may have occurred. The Company estimates the fair value of the reporting unit using both a discounted cash flow model as well as a market multiple model. The cash flow forecasts are adjusted by an appropriate discount rate based on the Company’s estimate of a market participant’s weighted-average cost of capital. These models are both based on the Company’s best estimate of future revenues and operating costs and are reconciled to the Company’s consolidated market capitalization, wit h consideration of the amount a potential acquirer would be required to pay, in the form of a control premium. The determination of fair value in the Company’s goodwill impairment analysis is based on an estimate of fair value for each reporting unit utili zing known and estimated inputs at the evaluation date. Some of those inputs include, but are not limited to, the most recent price of the Company’s common stock and fair value of long term debt, estimates of future revenue and expense growth, estimated ma rket multiples, expected capital expenditures, income tax rates and cost of invested capital. Significant assumptions used in the analysis included an 8.5% discount rate and long-term revenue growth rates that ranged from 3.0% to 5.0%. For the fiscal year 2021 impairment test, the fair value of the reporting units exceeded their respective carrying values (commonly referred to as “headroom”) by at least 100% in the personal care and home health segments, and by 20% in the hospice segment. The Company did no t record any impairment charges for the years ended December 31, 2021, 2020 or 2019. The carrying amount and accumulated amortization of each identifiable intangible asset category consisted of the following at December 31, 2021 and 2020:
|  | Customer and referral relationships |  |  | Trade names and trademarks |  |  | Non- competition agreements |  |  | State Licenses |  |  | Total |
|  | (Amounts in Thousands) |
Intangible assets with indefinite lives |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 21,124 |  |  | $ | 21,124 |
Intangible assets subject to amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross carrying amount |  |  | 44,672 |  |  |  | 42,926 |  |  |  | 6,785 |  |  |  | 12,508 |  |  |  | 106,891 |
Accumulated amortization |  |  | (36,342 | ) |  |  | (18,494 | ) |  |  | (3,831 | ) |  |  | (5,027 | ) |  |  | (63,694 | )
Intangible assets subject to amortization, net |  |  | 8,330 |  |  |  | 24,432 |  |  |  | 2,954 |  |  |  | 7,481 |  |  |  | 43,197 |
Net balance at December 31, 2021 |  | $ | 8,330 |  |  | $ | 24,432 |  |  | $ | 2,954 |  |  | $ | 28,605 |  |  | $ | 64,321 |
Intangible assets with indefinite lives |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 20,791 |  |  | $ | 20,791 |
Intangible assets subject to amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross carrying amount |  |  | 44,672 |  |  |  | 42,926 |  |  |  | 6,225 |  |  |  | 12,507 |  |  |  | 106,330 |
Accumulated amortization |  |  | (34,439 | ) |  |  | (15,191 | ) |  |  | (2,887 | ) |  |  | (3,055 | ) |  |  | (55,572 | )
Intangible assets subject to amortization, net |  |  | 10,233 |  |  |  | 27,735 |  |  |  | 3,338 |  |  |  | 9,452 |  |  |  | 50,758 |
Net balance at December 31, 2020 |  | $ | 10,233 |  |  | $ | 27,735 |  |  | $ | 3,338 |  |  | $ | 30,243 |  |  | $ | 71,549 |
During the year ended December 31, 2021, the Company acquired indefinite lived state licenses and non-competition agreements of $0.4 million and $0.6 million, respectively, related to the acquisition of Armada. During the year ended December 31, 2020, the Company acquired (i) indefinite lived state licenses, trade names and non-competition agreements of $7.5 million, $11.0 million and $1.5 million, respectively, related to the acquisition of Queen City Hospice, (ii) state licenses, subject to amortization of $0.3 million and $0.1 million in trade names related to the acquisition of County Homemakers, and (iii) a trade name of $1.4 million related to the acquisition of A Plus. Amortization expense related to the identifiable intangible assets amounted to $8.5 million, $7.1 million and $6.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. The weighted average remaining useful lives of identifiable intangible assets as of December 31, 2021 is 9.3 years. The estimated future intangible amortization expense is as follows:
For the year ended December 31, |  | Total (Amount in Thousands) |
2022 |  | $ | 6,660 |
2023 |  |  | 6,176 |
2024 |  |  | 5,933 |
2025 |  |  | 4,310 |
2026 |  |  | 3,686 |
Thereafter |  |  | 16,432 |
Total, intangible assets subject to amortization |  | $ | 43,197 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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