Quarterly report pursuant to Section 13 or 15(d)

Impairment of Long-Lived Assets

v3.20.1
Impairment of Long-Lived Assets
3 Months Ended
Mar. 31, 2020
Impairment Or Disposal Of Tangible Assets Disclosure [Abstract]  
Impairment of Long-Lived Assets

13.

Impairment of Long-Lived Assets

Due to the temporary closure of the Company’s theatres effective March 18, 2020 as a result of the COVID-19 pandemic (see Note 2), the Company performed a long-lived asset impairment evaluation for all theatres during the three months ended March 31, 2020.  The impairment evaluation was based on the estimated undiscounted cash flows from continuing use through the remainder of the theatre’s useful life.  Significant judgment, including management’s estimate of the impact of temporary theatre closures and other considerations as a result of COVID-19, was involved in estimating cash flows and fair value.  Fair value is determined based on a multiple of cash flows, which was six times for the evaluations performed during the three months ended March 31, 2020.   Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy, as defined by FASB ASC Topic 820-10-35, are based on projected operating performance, market transactions and industry trading multiples.

Below is a summary of impairment charges for the periods presented:

 

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2020

 

 

2019

 

U.S. Segment

 

 

 

 

 

 

 

 

 

Theatre properties

 

 

$

3,643

 

 

$

1,208

 

Theatre operating lease right-of-use assets

 

 

 

5,952

 

 

 

 

U.S. total

 

 

 

9,595

 

 

 

1,208

 

 

 

 

 

 

 

 

 

 

 

International segment

 

 

 

 

 

 

 

 

 

Theatre properties

 

 

 

4,484

 

 

 

4,376

 

Theatre operating lease right-of-use assets

 

 

 

2,540

 

 

 

 

International total

 

 

 

7,024

 

 

 

4,376

 

 

 

 

 

 

 

 

 

 

 

Total Impairment

 

 

$

16,619

 

 

$

5,584