Quarterly report pursuant to Section 13 or 15(d)

Impairment of Long-Lived Assets

v3.21.2
Impairment of Long-Lived Assets
9 Months Ended
Sep. 30, 2021
Impairment Or Disposal Of Tangible Assets Disclosure [Abstract]  
Impairment of Long-Lived Assets
13.
Impairment of Long-Lived Assets

The Company performed long-lived asset impairment evaluations at the end of each quarter during the nine months ended September 30, 2021. The following table is a summary of the evaluations performed by asset classification:

 

Asset

 

Impairment

 

Valuation

 

Valuation

 

Category

 

Test Type

 

Approach

 

Multiple

 

 

 

 

 

 

 

 

First and Second Quarters

 

 

 

 

 

 

 

Goodwill

 

Qualitative

 

N/A

 

N/A

 

Tradename Intangible Assets

 

Qualitative

 

N/A

 

N/A

 

Other Long-lived Assets

 

Qualitative

 

N/A

 

N/A

 

 

 

 

 

 

 

 

Third Quarter

 

 

 

 

 

 

 

Goodwill

 

Qualitative

 

N/A

 

N/A

 

Tradename Intangible Assets

 

Qualitative

 

N/A

 

N/A

 

Other Long-lived Assets

 

Quantitative (1)

 

Market

 

3.1 to 6 times

(1)
Quantitative test performed for certain theatre level assets where indicators existed under a qualitative test. For theatre level asset evaluations performed, the Company used the lesser of the remaining theatre lease term or the applicable market multiple to determine impairment exposure.

Goodwill – The Company evaluates goodwill for impairment as follows:

Qualitative approach The Company’s qualitative assessment of goodwill for each reporting unit considers economic and market conditions, industry trading multiples and the impact of recent developments and events on the estimated fair values as determined during its most recent quantitative assessment

Tradename Intangible assets – The Company evaluates tradename intangible assets for impairment as follows:

Qualitative approach The Company’s qualitative assessment considers industry and market conditions and recent developments that may impact the revenue forecasts and other estimates used in its most recent quantitative assessment.

Other Long-lived Assets– The Company evaluates other long-lived assets for impairment as follows:

Quantitative approach The Company performs a quantitative evaluation at the theatre level using 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. 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.
Qualitative approach The Company performs a qualitative evaluation for certain theatres based on the results of the quantitative evaluation noted above. The Company’s qualitative evaluation considers relevant market transactions, industry trading multiples and recent developments that would impact its estimates of future cash flows.

The following table is a summary of the impairment recorded as a result of the evaluations performed during the three and nine months ended September 30, 2021 and 2020:

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

U.S. Segment

 

 

 

 

 

 

 

 

 

 

 

 

Theatre properties

 

$

4,801

 

 

$

2,075

 

 

$

4,801

 

 

$

5,718

 

Theatre operating lease right-of-use assets

 

 

2,638

 

 

 

1,123

 

 

 

2,638

 

 

 

7,075

 

Cost method investment

 

 

 

 

 

2,500

 

 

 

 

 

 

2,500

 

U.S. total

 

 

7,439

 

 

 

5,698

 

 

 

7,439

 

 

 

15,293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International segment

 

 

 

 

 

 

 

 

 

 

 

 

Theatre properties

 

 

39

 

 

 

938

 

 

 

39

 

 

 

5,422

 

Theatre operating lease right-of-use assets

 

 

2

 

 

 

1,654

 

 

 

2

 

 

 

4,194

 

Goodwill

 

 

 

 

 

16,128

 

 

 

 

 

 

16,128

 

Intangible assets

 

 

 

 

 

177

 

 

 

 

 

 

177

 

International total

 

 

41

 

 

 

18,897

 

 

 

41

 

 

 

25,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Total Impairment

 

$

7,480

 

 

$

24,595

 

 

$

7,480

 

 

$

41,214