GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2014

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE I - GOODWILL AND OTHER INTANGIBLE ASSETS

In the third quarter of 2014, as the result of the following indicators, the Company performed Step One of the goodwill impairment test. These factors included, but were not limited to, reductions in same store revenue, net income and cash flow from operations compared with prior years, the reduction in forecasted revenue, net income, and cash from operations for 2014, and a sustained decrease in the Company’s share price during the quarter. The results of this test indicated there was no impairment for any of the Company’s reporting units with goodwill.

The Company performed a qualitative goodwill impairment assessment as of October 1, 2014, the date of its annual assessment test. The results of this test indicated there was no impairment for any of the Company’s reporting units.

The Company performed Step One of the goodwill impairment test again as of December 31, 2014 to take into consideration the impact the restatement adjustments would have on the Company’s forecasted cash flows. The results of this test indicated there was no impairment of goodwill as of December 31, 2014. The Company could incur a material impairment in future years if the Company does not achieve its anticipated cash flows.

In the fourth quarter of 2014, the Patient Care segment’s Dosteon businesses met the requirements to be accounted for as assets held for sale and to be classified as a discontinued operation. Accordingly, the Company allocated $8.4 million of goodwill to the businesses to be sold based upon the relative fair value of the businesses to be sold to the estimated fair value of the reporting unit.

Goodwill allocated to the Company’s reportable segments for the years ended December 31, 2014 and 2013 is as follows:

	Patient Care						Products & Services
(In thousands)	Gross			Accumulated Impairment			Gross			Accumulated Impairment		Total
Balance as of December 31, 2012 (As Restated)	$	585,100		$	(45,808	)	$	136,176		$	—	$	675,468
Additions due to acquisitions	6,774			—			—			—		6,774
Adjustments	436			—			(50		)	—		386
Balance as of December 31, 2013 (As Restated)	592,310			(45,808		)	136,126			—		682,628
Additions due to acquisitions	32,569			—			3,163			—		35,732
Adjustments	65			—			—			—		65
Allocation to Assets held for sale	(8,372		)	—			—			—		(8,372		)
Balance at December 31, 2014	$	616,572		$	(45,808	)	$	139,289		$	—	$	710,053

The balances related to intangible assets as of December 31, 2014 and 2013 are as follows:

	December 31, 2014							(As Restated) December 31, 2013
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer Lists	$	54,405	$	(15,693	)	$	38,712	$	45,811	$	(11,832	)	$	33,979
Trade Names	1,453		(639		)	814		929		(240		)	689
Patents and Other Intangibles	17,672		(7,530		)	10,142		18,797		(6,295		)	12,502

Definite-lived intangible assets	73,530		(23,862		)	49,668		65,537		(18,367		)	47,170
Indefinite life - Trade Name	8,847		—			8,847		9,070		—			9,070

Total	$	82,377	$	(23,862	)	$	58,515	$	74,607	$	(18,367	)	$	56,240

In connection with the Company’s strategic assessment of its Dosteon businesses, we performed an impairment analysis of the associated long-lived intangible assets, in the third quarter of 2014. The Company determined certain assets were not recoverable and recorded an impairment charge of $2.4 million. This impairment charge is recognized within “Loss from discontinued operations, net of income taxes” on the Company’s consolidated statements of operations and comprehensive (loss) income. See Note T - “Discontinued Operations” for additional information.

The weighted average life of the additions to customer lists, patents and other intangibles is ten years as of December 31, 2014.

Total intangible amortization expense from both continuing operations and discontinued operations was approximately $7.4 million, $6.6 million and $5.5 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Estimated aggregate amortization expense for definite-lived intangible assets for each of the five years ending December 31 and thereafter is as follows:

(in thousands)
2015	$	7,121
2016	6,387
2017	6,007
2018	5,689
2019	4,841
Thereafter	19,623

Total	$	49,668

- 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.

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