Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

As a result of these policies, we have deferred revenue and costs at December 31, 2015 and 2014 consisting of the following (in thousands):



	2015			2014
Deferred equipment revenue⁽¹⁾	$	753		$	883
Deferred fixed-priced support or maintenance contract revenue	3,811			4,265
Other deferred revenue⁽²⁾	10,083			9,190
Total deferred revenue	14,647			14,338
Less current portion included in other accrued liabilities	14,647			14,304
Long-term portion of deferred revenue included in other liabilities	$	—		$	34
Current portion of deferred costs included in prepaid expenses and other	$	1,172		$	866
Long-term portion of deferred costs included in other assets	(72		)	1,126
Total deferred costs⁽³⁾	$	1,100		$	1,992

____________________________


⁽¹⁾	Represents amounts received for sales arrangements that include equipment, hardware, software and services.


⁽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, 2015 and 2014 consisted of (in thousands):



	2015			2014
Land	$	72,651		$	64,495
Building and improvements	156,417			152,812
Leasehold improvements	213,272			193,274
Furniture and equipment	325,244			296,789
Software	46,366			39,987
Buildings held under capital leases	58,984			59,555
Equipment held under capital leases	55			875
Construction in progress	22,230			12,466
Total property and equipment	895,219			820,253
Less — accumulated depreciation and amortization	(387,466		)	(352,212		)
Total property and equipment, net	$	507,753		$	468,041

Other Intangible Assets

In addition to goodwill, we have amortizable intangible assets at December 31, 2015 and 2014, as follows (in thousands):



	2015							2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Non-contractual customer relationships	$	116,082	$	(48,821	)	$	67,261	$	101,056	$	(45,295	)	$	55,761
Covenants not-to-compete	12,435		(4,779		)	7,656		10,093		(4,422		)	5,671
Favorable lease asset	9,441		(5,440		)	4,001		9,576		(4,962		)	4,614
Technology	1,377		(589		)	788		1,627		(414		)	1,213
Trademarks	11,591		(4,086		)	7,505		13,503		(4,015		)	9,488
Contracts	—		—			—		100		(11		)	89
Franchise rights	11,730		(1,564		)	10,166		11,730		(391		)	11,339
Total	$	162,656	$	(65,279	)	$	97,377	$	147,685	$	(59,510	)	$	88,175

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		5 to 25 years
All other non-contractual customer relationships		5 to 7 years
Covenants not-to-compete		3 to 25 years
Favorable lease asset		4 to 27 years
Technology		4 to 10 years
Trademarks		2 to 10 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,
	2015		2014		2013
Aggregate amortization expense	$	23,395	$	21,039	$	20,934

Estimated amortization expense related to intangible assets

The estimated amortization expense related to intangible assets for each of the five succeeding years and thereafter at December 31, 2015 is as follows (in thousands):



Definite-lived intangible assets:
2016	$	22,841
2017	17,302
2018	14,006
2019	11,127
2020	6,390
Thereafter	24,671
Total	$	96,337
Indefinite-lived intangible assets:
Trademarks	1,040
Total intangible assets	$	97,377

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,
	2015		2014		2013
Net income attributable to VCA Inc.	$	211,049	$	135,438	$	137,511
Weighted average common shares outstanding:
Basic	81,443		86,656		88,621
Effect of dilutive potential common stock:
Stock options	330		302		305
Non-vested shares and units	641		867		737
Diluted	82,414		87,825		89,663
Basic earnings per common share	$	2.59	$	1.56	$	1.55
Diluted earnings per common share	$	2.56	$	1.54	$	1.53