Quarterly report pursuant to Section 13 or 15(d)

Impairment of Long-Lived Assets

v3.20.2
Impairment of Long-Lived Assets
6 Months Ended
Jun. 30, 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.  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.

The Company performed a qualitative impairment analysis on its long-lived assets as of June 30, 2020, considering the timing of expected theatre reopenings on its estimated cash flows as well as market transactions and industry trading multiples.  As a result of the qualitative assessment, no impairment of long-lived assets was recorded during the three months ended June 30, 2020.

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

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

U.S. Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Theatre properties

 

$

 

 

$

1,044

 

 

$

3,643

 

 

$

2,252

 

Theatre operating lease right-of-use assets

 

 

 

 

 

8,047

 

 

 

5,952

 

 

 

8,047

 

U.S. total

 

 

 

 

 

9,091

 

 

 

9,595

 

 

 

10,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Theatre properties

 

 

 

 

 

1,775

 

 

 

4,484

 

 

 

6,151

 

Theatre operating lease right-of-use assets

 

 

 

 

 

1,628

 

 

 

2,540

 

 

 

1,628

 

International total

 

 

 

 

 

3,403

 

 

 

7,024

 

 

 

7,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Impairment

 

$

 

 

$

12,494

 

 

$

16,619

 

 

$

18,078