XML 22 R10.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Goodwill and Other Intangible Assets
 6 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets
As of each balance sheet date, other intangible assets consisted of the following:
June 30, 2024December 31, 2023
(in thousands)Weighted-average amortization periodGross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Value		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Value
Customer relationships15 years$4,197,480 $(2,230,784)$1,966,696 $4,197,480 $(2,090,703)$2,106,777 
Provider network15 years896,800 (482,279)414,521 896,800 (452,386)444,414 
Technology6 years21,850 (7,198)14,652 21,850 (5,455)16,395 
Trade names9 years2,670 (1,044)1,626 2,670 (919)1,751 
Trade namesIndefinite60,300 — 60,300 63,000 — 63,000 
Non-compete5 years1,000 (230)770 1,000 (130)870 
Total$5,180,100 $(2,721,535)$2,458,565 $5,182,800 $(2,549,593)$2,633,207 
Goodwill for the three and six months ended June 30, 2024 and 2023 was as follows:
(in thousands)20242023
Beginning balance, January 1$3,829,002 $3,705,199 
Loss on impairment (516,350)— 
Ending balance, March 31$3,312,652 $3,705,199 
Acquisitions— 124,157 
Loss on impairment(553,701)— 
Ending balance, June 30$2,758,951 $3,829,356 
The goodwill arose from the acquisition of the Company in 2016 by Holdings, the HST acquisition in 2020, the DHP acquisition in 2021 and the BST acquisition in 2023. The carrying value of goodwill was $2,759.0 million and $3,829.0 million as of June 30, 2024 and December 31, 2023, respectively.
During the three months ended March 31, 2024
We concluded that the significant declines in our stock price and market capitalization during the month of March 2024 represented a triggering event and therefore performed an impairment assessment of goodwill and indefinite-lived intangible assets as of March 31, 2024.
The estimated fair value of our indefinite-lived trade names was less than their carrying value and as a result a loss on impairment of $2.7 million was recorded during the three months ended March 31, 2024.
The quantitative assessment of our goodwill as of March 31, 2024 indicated that the estimated fair value of the reporting unit was less than its carrying value, and as a result a loss on impairment of $516.4 million was recorded during the three months ended March 31, 2024.
The loss on impairment of goodwill and intangible assets was primarily due to the use of a higher discount rate in response to significant declines in our stock price and lower EBITDA multiples. There were no material changes in the forecasted revenues and expenses utilized in the analysis compared to November 1, 2023.
The Company incurred a goodwill impairment charge of $516.4 million in the first quarter of 2024. Of this impairment charge, $490.2 million is permanently nondeductible for income tax purposes resulted in an income tax expense of $103.0 million. The impairment charge is treated as a discrete item for the three months ended March 31, 2024, which impacted our effective tax rate versus our statutory tax rate.
During the three months ended June 30, 2024
We concluded that the significant declines in our stock price and market capitalization during the three months ended June 30, 2024, along with revised forecasts, represented triggering events and therefore performed an impairment assessment of goodwill and indefinite-lived intangible assets as of June 30, 2024.
No impairment was recorded for our indefinite-lived trade names during the three months ended June 30, 2024 as their fair value exceeded their carrying value.
The quantitative assessment of our goodwill as of June 30, 2024 indicated that the estimated fair value of the reporting unit was less than its carrying value, and as a result a loss on impairment of $553.7 million was recorded during the three months ended June 30, 2024.
The loss on impairment of goodwill was primarily due to the use of lower projected cash flows, lower EBITDA multiples and the use of a higher discount rate in response to the estimation uncertainty of our cash flow projections.
The Company incurred a goodwill impairment charge of $553.7 million during three months ended June 30, 2024. Of this impairment charge, $522.1 million is permanently nondeductible for income tax purposes resulted in an income tax expense of $109.6 million. The impairment charge is treated as a discrete item for the three months ended June 30, 2024, which impacted our effective tax rate versus our statutory tax rate.
Impairment losses are included in Loss on impairment of goodwill and intangible assets in the accompanying unaudited condensed consolidated statements of loss and comprehensive loss. No impairment was recorded in the three and six months ended June 30, 2023.
In the quantitative impairment test of goodwill performed in the three months ended June 30, 2024, we calculate the estimated enterprise fair value of the reporting unit using (i) a discounted cash flow analysis, (ii) forecasted EBITDA trading multiples for comparable publicly traded companies and (iii) historical EBITDA multiples for comparable acquisitions, giving equal weight to the three approaches. Assumptions used in the discounted cash flow analysis include forecasted revenues, forecasted expenses, the terminal growth rate and the discount rate. The fair value measurements are based on significant unobservable inputs, and thus represent Level 3 inputs. Following the goodwill impairment the carrying value of this reporting unit equaled its fair value as of June 30, 2024. Therefore, if business conditions or expectations were to change materially, it may be necessary to record further impairment charges in the future.