Goodwill and Other Intangible Assets, Net

12 Months Ended

Dec. 31, 2016

Goodwill and Other Intangible Assets, Net [Abstract]

Goodwill and Other Intangible Assets, Net

7. Goodwill and Other Intangible Assets, Net

The following is a summary of the carrying amount of goodwill as of December 31, 2016 and December 31, 2015 presented on an operating segment basis (dollars in thousands):

	December 31, 2016							December 31, 2015
	Gross Carrying Amount		Dispositions and Other Reductions			Net		Gross Carrying Amount		Dispositions and Other Reductions			Net
Retirement Centers	$	28,141	$	(820	)	$	27,321	$	28,141	$	(721	)	$	27,420
Assisted Living		600,162		(48,817	)		551,345		591,814		(20,348	)		571,466
Brookdale Ancillary Services		126,810		—			126,810		126,810		—			126,810
Total	$	755,113	$	(49,637	)	$	705,476	$	746,765	$	(21,069	)	$	725,696

The Company concluded that goodwill for all reporting units was not impaired as of October 1, 2016 (the Company's annual measurement date) and as of December 31, 2016. Factors the Company considers important in its analysis, which could trigger an impairment of such assets, include significant underperformance relative to historical or projected future operating results, significant negative industry or economic trends, a significant decline in the Company's stock price for a sustained period and a decline in its market capitalization below net book value. A change in anticipated operating results or the other metrics indicated above could necessitate further analysis of potential impairment at an interval prior to the Company's annual measurement date.

Approximately $28.5 million and $0.1 million of goodwill in the Assisted Living and Retirement Centers segments, respectively, was allocated to the communities identified as held for sale during 2016. Refer to Note 4 for more information about the Company's assets held for sale.

The following is a summary of other intangible assets at December 31, 2016 and 2015 (dollars in thousands):

	December 31, 2016							December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Community purchase options	$	4,738	$	—		$	4,738	$	40,270	$	—		$	40,270
Health care licenses		65,126		—			65,126		66,612		—			66,612
Trade names		27,800		(21,135	)		6,665		27,800		(14,209	)		13,591
Other		13,531		(7,053	)		6,478		13,531		(4,818	)		8,713
Total	$	111,195	$	(28,188	)	$	83,007	$	148,213	$	(19,027	)	$	129,186

Amortization expense related to definite-lived intangible assets for the years ended December 31, 2016, 2015 and 2014 was $9.2 million, $12.2 million and $8.0 million, respectively. Health care licenses were determined to be indefinite-lived intangible assets and are not subject to amortization. The community purchase options are not currently amortized, but will be added to the cost basis of the related communities if the option is exercised, and will then be depreciated over the estimated useful life of the community. During the year ended December 31, 2016, the Company exercised one community purchase option and added the $7.3 million carrying value of the community purchase option intangible to the cost basis of the property, plant and equipment of the community. The Company is amortizing the trade names and management contract intangibles assets over their estimated weighted average useful lives of three years and nine years, respectively.

During 2016, the Company recorded $28.2 million and $1.5 million of non-cash impairment charges related to community purchase options and health care licenses, respectively. These impairment charges are primarily due to lower than expected operating performance at the communities subject to the community purchase options and reflect the amount by which the carrying values of the community purchase options exceeded their estimated fair value.

Future amortization expense for intangible assets with definite lives is estimated to be as follows (dollars in thousands):

Year Ending December 31,	Future Amortization
2017	$	3,575
2018		3,565
2019		2,487
2020		982
2021		982
Thereafter		1,552
Total	$	13,143

- 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 + Details