Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

less than 90 days

As a result of these policies, we have deferred revenue and costs at December 31, 2013 and 2012 consisting of the following (in thousands):



	2013		2012
Deferred equipment revenue⁽¹⁾	$	811	$	735
Deferred fixed-priced support or maintenance contract revenue	3,854		3,383
Other deferred revenue⁽²⁾	6,578		6,828
Total deferred revenue	11,243		10,946
Less current portion included in other accrued liabilities	11,190		10,811
Long-term portion of deferred revenue included in other liabilities	$	53	$	135
Current portion of deferred costs included in prepaid expenses and other	$	502	$	709
Long-term portion of deferred costs included in other assets	698		1,099
Total deferred costs⁽³⁾	$	1,200	$	1,808


⁽¹⁾	Represents amounts received for sales arrangements that include equipment, hardware, software and PCS. See above discussion for the accounting guidance pertaining to revenue recognition — multiple-deliverable transactions.


⁽²⁾	Represents amounts received in advance for services.


⁽³⁾	Represents costs related to warranties, equipment and hardware included in deferred equipment revenue.

Property and equipment estimated useful lives

Depreciation and amortization are recognized on the straight-line method over the following estimated useful lives:



Buildings and improvements	5 to 40 years
Leasehold improvements	Lesser of lease term or 15 years
Furniture and equipment	3 to 10 years
Software	3 to 10 years
Equipment held under capital leases	5 to 10 years

Property and Equipment

Property and equipment at December 31, 2013 and 2012 consisted of (in thousands):



	2013			2012
Land	$	58,545		$	56,162
Building and improvements	142,099			137,614
Leasehold improvements	176,487			140,944
Furniture and equipment	272,820			243,429
Software	42,524			32,676
Buildings held under capital leases	59,555			30,550
Equipment held under capital leases	835			849
Construction in progress	9,999			35,683
Total property and equipment	762,864			677,907
Less — accumulated depreciation and amortization	(314,498		)	(274,463		)
Total property and equipment, net	$	448,366		$	403,444

Goodwill



	Animal Hospital			Laboratory			All Other			Total
Balance as of December 31, 2011
Goodwill	$	1,035,401		$	96,810		$	126,706		$	1,258,917
Accumulated Impairment losses	—			—			(21,310		)	(21,310		)
Subtotal	1,035,401			96,810			105,396			1,237,607
Goodwill acquired	143,926			34			12,155			156,115
Goodwill impairment	—			—			(99,501		)	(99,501		)
Foreign translation adjustment	1,281			17			—			1,298
Other ⁽¹⁾	(3,260		)	—			(1,028		)	(4,288		)
Balance as of December 31, 2012
Goodwill	1,177,348			96,861			137,833			1,412,042
Accumulated Impairment losses	—			—			(120,811		)	(120,811		)
Subtotal	1,177,348			96,861			17,022			1,291,231
Goodwill acquired	45,615			50			—			45,665
Foreign translation adjustment	(5,651		)	(40		)	—			(5,691		)
Other⁽¹⁾	(731		)	—			443			(288		)
Balance as of December 31, 2013
Goodwill	1,216,581			96,871			138,276			1,451,728
Accumulated Impairment losses	—			—			(120,811		)	(120,811		)
Subtotal	$	1,216,581		$	96,871		$	17,465		$	1,330,917


⁽¹⁾	In 2013, "Other" primarily includes measurement period adjustments and a write-off related to a sale of an animal hospital. In 2012, "Other" includes acquisition-price adjustments, which consist primarily of an adjustment related to capital leases and buy outs of noncontrolling interest partners.

Other Intangible Assets



2.	Summary of Significant Accounting Policies, continued

k. Other Intangible Assets

In addition to goodwill, we have amortizable intangible assets at December 31, 2013 and 2012, as follows (in thousands):



	2013							2012
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Non-contractual customer relationships	$	109,842	$	(41,895	)	$	67,947	$	110,404	$	(36,605	)	$	73,799
Covenants not-to-compete	8,843		(4,661		)	4,182		12,707		(7,357		)	5,350
Favorable lease asset	7,458		(4,373		)	3,085		7,228		(3,866		)	3,362
Technology	5,240		(3,015		)	2,225		6,588		(4,179		)	2,409
Trademarks	13,115		(4,194		)	8,921		12,494		(3,001		)	9,493
Contracts	608		(305		)	303		956		(570		)	386
Client lists	50		(42		)	8		50		(26		)	24
Total	$	145,156	$	(58,485	)	$	86,671	$	150,427	$	(55,604	)	$	94,823

Amortization of intangible assets estimated useful lives

Amortization is recognized on the straight-line method over the following estimated useful lives:



Non-contractual hospital customer relationships		5 years
Non-contractual laboratory customer relationships		20 to 25 years
All other non-contractual customer relationships		3 to 10 years
Covenants not-to-compete		2 to 25 years
Favorable lease asset		1 to 18 years
Technology		5 to 7 years
Trademarks		2 to 10 years
Contracts		6 years
Client lists		3 years

Aggregate amortization expense

The following table summarizes our aggregate amortization expense related to other intangible assets (in thousands):



	For the Years Ended December 31,
	2013		2012		2011
Aggregate amortization expense	$	20,934	$	22,731	$	13,391

Estimated amortization expense related to intangible assets



	For the Years Ended December 31,
	2013		2012		2011
Aggregate amortization expense	$	20,934	$	22,731	$	13,391

The estimated amortization expense related to intangible assets for each of the five succeeding years and thereafter at December 31, 2013 is as follows (in thousands):



2014	$	21,342
2015	18,999
2016	15,689
2017	9,321
2018	5,649
Thereafter	15,671

Total	$	86,671

Calculation of Basic and Diluted Earnings per Share

Basic and diluted earnings per share were calculated as follows (in thousands, except per share amounts):



	For Years Ended December 31,
	2013		2012		2011
Net income attributable to VCA Antech, Inc.	$	137,511	$	45,551	$	95,405
Weighted average common shares outstanding:
Basic	88,621		87,681		86,606
Effect of dilutive potential common stock:
Stock options	305		479		560
Non-vested shares and units	737		511		228
Diluted	89,663		88,671		87,394
Basic earnings per common share	$	1.55	$	0.52	$	1.10
Diluted earnings per common share	$	1.53	$	0.51	$	1.09