Annual report pursuant to Section 13 and 15(d)

Goodwill And Intangible Assets

v2.4.0.8
Goodwill And Intangible Assets
12 Months Ended
Dec. 31, 2013
Goodwill and Intangible Assets [Abstract]  
Goodwill and Intangible Assets Disclosure
Goodwill and Intangible Assets

During the second quarter of 2012, the Company's subsidiary, Celtic Insurance Company, experienced a high level of medical costs for individual health policies, especially for recently issued policies related to members converted from another insurer during the first quarter of 2012. Additionally, in June 2012, the U.S. Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act which limits the profitability of the individual health insurance business because of minimum medical loss ratios, guaranteed issue policies, and increased competition in the exchange market. As a result of these factors, the Company conducted an impairment analysis of the identifiable intangible assets and goodwill of the Celtic reporting unit. The impairment analysis resulted in goodwill and intangible asset impairments of $28,033, recorded as an impairment loss in the consolidated statement of operations. The impaired identifiable intangible assets of $2,340 and goodwill of $25,693 were reported under the Specialty Services segment; $26,589 of the impairment loss is not deductible for income tax purposes.

The following table summarizes the changes in goodwill by operating segment:  
 
 Managed Care 
 
Specialty Services
 
Total 
Balance as of December 31, 2011
$
151,402

 
$
130,579

 
$
281,981

Impairment

 
(25,693
)
 
(25,693
)
Balance as of December 31, 2012
151,402

 
104,886

 
256,288

Acquisition

 
92,144

 
92,144

Balance as of December 31, 2013
$
151,402

 
$
197,030

 
$
348,432



Goodwill acquisitions and other adjustments were related to the acquisitions and finalization of fair value allocations discussed in Note 3, Noncontrolling Interest and Acquisitions.

Intangible assets at December 31, consist of the following:  
 
 
 
 
 
Weighted Average Life in Years
 
2013
 
2012
 
2013
 
2012
Purchased contract rights
$
21,988

 
$
21,988

 
7.5
 
7.5
Provider contracts
35,537

 
2,737

 
13.2
 
9.8
Customer relationships
13,396

 
13,396

 
8.0
 
8.0
Trade names
8,695

 
6,495

 
18.9
 
16.3
Intangible assets
79,616

 
44,616

 
11.1
 
9.1
Less accumulated amortization:
 
 
 
 
 
 
 
Purchased contract rights
(13,459
)
 
(11,010
)
 
 
 
 
Provider contracts
(3,767
)
 
(1,241
)
 
 
 
 
Customer relationships
(11,425
)
 
(10,214
)
 
 
 
 
Trade names
(2,185
)
 
(1,883
)
 
 
 
 
Total accumulated amortization
(30,836
)
 
(24,348
)
 
 
 
 
Intangible assets, net
$
48,780

 
$
20,268

 
 
 
 


Amortization expense was $6,489, $4,822 and $5,561 for the years ended December 31, 2013, 2012 and 2011 respectively. Estimated total amortization expense related to intangible assets for each of the five succeeding fiscal years is as follows:
Year
 
Expense
2014
 
$
6,800

2015
 
5,900

2016
 
5,900

2017
 
4,400

2018
 
2,600