Annual report pursuant to Section 13 and 15(d)

IMPAIRMENT OF LONG-LIVED AND OTHER ASSETS

v3.20.4
IMPAIRMENT OF LONG-LIVED AND OTHER ASSETS
12 Months Ended
Dec. 31, 2020
Impairment Or Disposal Of Tangible Assets Disclosure [Abstract]  
IMPAIRMENT OF LONG-LIVED AND OTHER ASSETS

11.

IMPAIRMENT OF LONG-LIVED AND OTHER ASSETS

The Company reviews for impairment indicators related to its long-lived assets on a quarterly basis and goodwill on an annual basis or whenever events or changes in circumstances indicate the carrying amount of those assets may not be fully recoverable.  Due to the temporary closure of the Company’s theatres effective March 18, 2020 as a result of the COVID-19 pandemic (see Note 3), the Company performed long-lived asset impairment evaluations during each quarter during the year ended December 31, 2020.  The following table is a summary of the evaluations performed for each quarter by asset classification.

 

 

 

Impairment

 

Asset

 

Valuation

 

Valuation

 

Test

 

Category

 

Approach

 

Multiple

First Quarter

Quantitative

 

Goodwill

 

Market (1)

 

8 times

 

 

 

Tradename Intangible Assets

 

Income

 

N/A

 

 

 

Other Long-lived Assets

 

Market

 

6 times

 

 

 

 

 

 

 

 

Second Quarter

Qualitative

 

Goodwill

 

N/A

 

N/A

 

 

 

Tradename Intangible Assets

 

N/A

 

N/A

 

 

 

Other Long-lived Assets

 

N/A

 

N/A

 

 

 

 

 

 

 

 

Third Quarter

Quantitative

 

Goodwill

 

Market (1)

 

2.9 to 7 times

 

 

 

Tradename Intangible Assets

 

Income

 

N/A

 

 

 

Other Long-lived Assets

 

Market

 

3.2 to 6 times

 

 

 

 

 

 

 

 

Fourth Quarter

Quantitative

 

Goodwill

 

Market (1)

 

3.1 to 7 times

 

 

 

Tradename Intangible Assets

 

Income

 

N/A

 

 

 

Other Long-lived Assets

 

Market

 

3.1 to 6 times

 

(1)

The Company also used the income approach to test goodwill for impairment for the respective period.  

See Note 1 for a discussion of the Company’s impairment policy and a description of qualitative and quantitative impairment assessments.  

The Company’s theatre asset, goodwill, intangible asset and investment impairment charges were as follows for the periods presented:

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2018

 

 

2019

 

 

2020

 

U.S. Segment

 

 

 

 

 

 

 

 

 

 

 

 

Theatre properties

 

$

18,597

 

 

$

36,005

 

 

$

12,398

 

Theatre operating lease right-of-use assets

 

 

 

 

 

10,457

 

 

 

13,216

 

Investment in NCM (1)

 

 

 

 

 

 

 

 

92,655

 

Cost method investment

 

 

 

 

 

 

 

 

2,500

 

U.S. total

 

 

18,597

 

 

 

46,462

 

 

 

120,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International segment

 

 

 

 

 

 

 

 

 

 

 

 

Theatre properties

 

 

13,775

 

 

 

8,821

 

 

 

9,951

 

Theatre operating lease right-of-use assets

 

 

 

 

 

1,718

 

 

 

5,025

 

Goodwill

 

 

 

 

 

 

 

 

16,128

 

Intangible assets

 

 

 

 

 

 

 

 

833

 

International total

 

 

13,775

 

 

 

10,539

 

 

 

31,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total impairment

 

$

32,372

 

 

$

57,001

 

 

$

152,706

 

 

(1)

See Note 8 for discussion on NCM impairment.

For the years ended December 31, 2018 and 2019, the long-lived asset impairment charges recorded during each of the periods presented were for certain new concept theatres being developed and tested by the Company and other theatres that were individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or the conditions of the areas surrounding the theatre. For the year ended December 31, 2020, long-lived asset and goodwill impairment charges were primarily due to the prolonged impact of the temporary closure of theatres as a result of the COVID-19 pandemic, as discussed at Note 3, and the expected recovery period.