Surgery Partners, Inc.SGRY
Surgery Partners, Inc. Goodwill & Intangibles Disclosure
Goodwill and Intangible Assets
Goodwill
Goodwill represents the fair value of the consideration provided in an acquisition over the fair value of net assets acquired and is not amortized.
The Company tests its goodwill for impairment in the fourth quarter of each year, or more frequently if certain indicators arise. The Company tests for goodwill impairment at the reporting unit level. During 2025, the Company identified two reporting units, American Group and National Group.
The Company compares the carrying value of the net assets of the reporting units to the estimated fair values. To determine the fair value of the reporting units, the Company obtained valuations at the reporting unit level prepared by third-party valuation specialists which typically utilizes a combination of the income and market approaches.
Based on the Company's annual goodwill impairment assessment performed as of October 1, 2025, it was determined that the estimated fair values of the reporting units were substantially in excess of their carrying values. A detailed evaluation of potential impairment indicators was performed, which specifically considered changes in interest rates, inflation risk and market volatility. While the Company believes that all assumptions utilized in the testing were appropriate, they may not reflect actual outcomes that could occur. Future estimates of fair value could be adversely affected if the actual outcome of one or more of the Company's assumptions changes materially in the future, including a material decline in the Company’s stock price and the fair value of its long-term debt, lower than expected surgical case volumes, higher market interest rates or increased operating costs. Such changes impacting the calculation of fair value could result in a material impairment charge in the future.
In 2025, 2024 and 2023, there were no non-cash impairment charges.
A summary of the changes in the carrying amount of goodwill follows (in millions):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Balance at beginning of period | $ | 5,068.0 | $ | 4,326.0 | ||||||||||
| Acquisitions, including post acquisition adjustments | 176.4 | 757.2 | ||||||||||||
| Disposals and deconsolidations | (49.8) | (15.2) | ||||||||||||
| Balance at end of period | $ | 5,194.6 | $ | 5,068.0 | ||||||||||
A summary of the Company's acquisitions, disposals and deconsolidations for the years ended December 31, 2025 and 2024 is included in Note 2. "Acquisitions and Dispositions."
Intangible Assets
The Company has indefinite-lived intangible assets related to the certificates of need held in jurisdictions where certain of its surgical facilities are located and Medicare licenses. The Company tests these intangible assets for impairment in the fourth quarter of each year, or more frequently if certain indicators arise. The Company also has finite-lived intangible assets related to physician guarantee agreements, non-compete agreements and management rights agreements. Physician guarantees are amortized into salaries and benefits costs in the consolidated statements of operations over the commitment period of the contract, generally to four years. Non-compete agreements and management rights agreements are amortized into depreciation and amortization expense in the consolidated statements of operations over the service lives of the agreements, typically ranging from to five years for non-compete agreements and 15 years for the management rights agreements.
A summary of the components of intangible assets follows (in millions):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||||||||||||||||
| Finite-lived intangible assets: | ||||||||||||||||||||||||||||||||||||||
| Management rights agreements | $ | 53.2 | $ | (22.5) | $ | 30.7 | $ | 50.3 | $ | (18.7) | $ | 31.6 | ||||||||||||||||||||||||||
| Other | 30.2 | (25.0) | 5.2 | 30.1 | (22.7) | 7.4 | ||||||||||||||||||||||||||||||||
| Total finite-lived intangible assets | 83.4 | (47.5) | 35.9 | 80.4 | (41.4) | 39.0 | ||||||||||||||||||||||||||||||||
| Indefinite-lived intangible assets | 5.1 | — | 5.1 | 6.7 | — | 6.7 | ||||||||||||||||||||||||||||||||
| Total intangible assets | $ | 88.5 | $ | (47.5) | $ | 41.0 | $ | 87.1 | $ | (41.4) | $ | 45.7 | ||||||||||||||||||||||||||
Amortization expense for intangible assets was $6.1 million, $8.7 million and $7.6 million for of the years ended December 31, 2025, 2024 and 2023, respectively.
Total estimated amortization expense for the next five years and thereafter related to intangible assets follows (in millions):
| 2026 | $ | 6.0 | ||||||
| 2027 | 5.4 | |||||||
| 2028 | 4.6 | |||||||
| 2029 | 3.8 | |||||||
| 2030 | 3.1 | |||||||
| Thereafter | 13.0 | |||||||
| Total | $ | 35.9 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 10, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 16, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | Mar 11, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.