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GOODWILL AND OTHER INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

5. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

During 2013, we did not record any goodwill impairment charges as a result of our annual impairment test and none of the goodwill associated with our various reporting units were considered at risk of impairment as of October 31, 2013. Since the date of our last annual goodwill impairment test, there have been no material developments, events, changes in operating performance or other circumstances that would cause management to believe it is more likely than not that the fair value of any of our reporting units would be less than its carrying amount.

During step one of our annual goodwill impairment test, we determined that the fair value of certain intangible assets was less than the carrying value and as a result recognized a non-cash other intangibles impairment charge of $4.6 million during the fourth quarter of 2013. In addition, we recorded impairment charges of $3.6 million related to intangibles associated with those care centers that were closed or consolidated during 2013 as discussed in Note 12 – Exit Activities. Also during 2013, we recorded a $1.3 million goodwill impairment charge related to an investment we currently consolidate as discussed in Note 1 – Nature of Operations, Consolidation and Presentation of Financial Statements. These impairments did not have any impact on our compliance with our debt covenant or on our cash flows.

During the fiscal year 2012, we recognized the following: a non-cash goodwill impairment charge of $157.9 million, a non-cash other intangibles impairment charge of $4.2 million and a deferred tax benefit of $37.0 million. The goodwill impairment charge primarily resulted from a further decline in our market capitalization and the other intangibles impairment charge was due to a change in the fair value of various non-amortizable licenses and trade names. Included in the non-cash goodwill and other intangibles impairment charges discussed above is $17.4 million and $3.1 million, respectively, related to an equity-method investment we were required to consolidate during the third quarter of 2012, as a result of a significant decline in the projected operating forecasts during the fourth quarter of 2012. These impairments did not have any impact on our compliance with our debt covenants or on our cash flows.

During the fiscal year 2011, we recognized the following: a non-cash goodwill impairment charge of $570.8 million, a non-cash other intangibles impairment charge of $9.1 million and a deferred tax benefit of $141.5 million. The impairments primarily resulted from lower forecasted revenues as a result of reimbursement cuts, declining growth rates and lower operating margins from our home health reporting unit. These impairments did not have any impact on our compliance with our debt covenants or on our cash flows.

The following tables summarize the activity related to our goodwill for the 2013, 2012 and 2011 (amounts in millions):

		Goodwill
		Home Health		Hospice		Total
Balances at December 31, 2010		$	723.3	$	68.1	$	791.4
	Additions		0.0		114.1		114.1
	Impairment		(570.8)		0.0		(570.8)
Balances at December 31, 2011			152.5		182.2		334.7
	Additions		23.6		9.2		32.8
	Impairment		(157.9)		0.0		(157.9)
Balances at December 31, 2012			18.2		191.4		209.6
	Additions		0.1		0.9		1.0
	Write-off (1)		(0.4)		0.0		(0.4)
	Impairment		(1.3)		0.0		(1.3)
Balances at December 31, 2013		$	16.6	$	192.3	$	208.9

Write-off of goodwill related to the sale of care centers as discussed in Note 12 – Exit Activities.

The following summarizes the activity related to our other intangible assets, net for 2013, 2012 and 2011 (amounts in millions):

		Other Intangible Assets, Net
						Non-Compete
						Agreements &
		Certificates of		Acquired		Reacquired
		Need and		Names of		Franchise
		Licenses		Business (1)		Rights (2)		Total
Balances at December 31, 2010		$	41.7	$	4.7	$	7.0	$	53.4
	Additions		2.5		7.3		0.5		10.3
	Write-off		(1.1)		0.0		0.0		(1.1)
	Impairment		(9.1)		0.0		0.0		(9.1)
	Amortization		0.0		(0.2)		(3.3)		(3.5)
Balances at December 31, 2011			34.0		11.8		4.2		50.0
	Additions		3.6		0.0		0.4		4.0
	Impairment		(3.9)		(0.3)		0.0		(4.2)
	Amortization		0.0		0.0		(2.8)		(2.8)
Balances at December 31, 2012			33.7		11.5		1.8		47.0
	Additions		0.6		0.0		0.0		0.6
	Write-off (3)		(1.1)		0.0		0.0		(1.1)
	Impairment		(7.8)		(0.4)		0.0		(8.2)
	Amortization		0.0		0.0		(1.6)		(1.6)
Balances at December 31, 2013		$	25.4	$	11.1	$	0.2	$	36.7

Acquired Names of Business includes $11.1 million of unamortized acquired names and less than $0.1 million of amortized acquired names which have a weighted-average amortization period of 0.3 years.
The weighted-average amortization period of our non-compete agreements is 0.5 years.
Write-off of intangible assets related to the sale of care centers as discussed in Note 12 – Exit Activities.

We expect to recognize the remainder of our amortization expense related to intangible assets during 2014. The estimated aggregate amortization expense for 2014 is $0.2 million. See Note 3 - Acquisitions for further details on additions to goodwill and other intangible assets, net.

- 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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