Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

The Company recognized goodwill of $195.1 million as a result of the Restructuring Transactions, and the goodwill of STN was eliminated in accordance with the accounting guidance for fresh-start reporting. The Company's goodwill represents the portion of the reorganization value that is not attributable to specific tangible or identified intangible assets. The changes in the carrying amount of goodwill for the Successor period June 17, 2011 through December 31, 2011, the Predecessor period January 1, 2011 through June 16, 2011, and for the year ended December 31, 2010 are as follows (amounts in thousands):



	Successor		Predecessors
	Station Casinos LLC		Station Casinos, Inc.			Green Valley Ranch Gaming, LLC		Station Casinos, Inc.			Green Valley Ranch Gaming, LLC
	Period June 17, 2011 Through December 31, 2011		Period January 1, 2011 Through June 16, 2011					Year Ended December 31, 2010
Balance at beginning of the period:
Goodwill	$	195,132	$	2,986,993		$	—	$	2,986,993		$	—
Accumulated impairment losses	—		(2,862,680		)	—		(2,802,294		)	—
Goodwill, net of accumulated impairment losses	195,132		124,313			—		184,699			—
Changes in carrying amount during the period:
Elimination of Predecessors' goodwill in fresh-start reporting	—		(124,313		)	—		—			—
Impairment losses recognized during the period	—		—			—		(60,386		)	—
	—		(124,313		)	—		(60,386		)	—
Balance at end of the period:
Goodwill	$	195,132	$	—		$	—	$	2,986,993		$	—
Accumulated impairment losses	—		—			—		(2,862,680		)	—
Goodwill, net of accumulated impairment losses	$	195,132	$	—		$	—	$	124,313		$	—

Intangible assets, net as of December 31, 2011 and 2010 consist of the following (in thousands):



	Successor
	Station Casinos LLC
	December 31, 2011
	Estimated life (years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Brands	Indefinite	$	77,200	—			$	77,200
License rights	Indefinite	300		—			300
Customer relationships	15	22,800		(819		)	21,981
Management contracts	7-20	115,000		(5,554		)	109,446
Beneficial leases	2-10	3,990		(393		)	3,597
Other	1-2	2,050		(482		)	1,568
		$	221,340	$	(7,248	)	$	214,092



	STN Predecessor
	Station Casinos, Inc.
	December 31, 2010
	Estimated life (years)	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment Losses			Net Carrying Amount
Brands	Indefinite	$	214,791	—			$	(115,237	)	$	99,554
License rights	Indefinite	4,531		—			(4,190		)	341
Customer relationships	15	268,961		(18,942		)	(241,363		)	8,656
Management contracts	3-20	521,464		(127,957		)	(229,534		)	163,973
Other	1	8,654		(8,654		)	—			—
		$	1,018,401	$	(155,553	)	$	(590,324	)	$	272,524

The intangible asset for customer relationships refers to the value associated with our rated casino guests. The Company amortizes its finite-lived intangible assets, including its customer relationship intangible asset, using the straight-line method over their estimated useful lives. The aggregate amortization expense for those assets that are amortized under the provisions of ASC Topic 350 was approximately $7.2 million, $1.6 million, $16.0 million, and $53.8 million for the Successor period June 17, 2011 through December 31, 2011, the STN Predecessor period January 1, 2011 through June 16, 2011, and the STN Predecessor years ended December 31, 2010 and 2009, respectively. Estimated annual amortization expense for intangible assets for the years ended December 31, 2012, 2013, 2014, 2015, and 2016 is anticipated to be approximately $13.4 million, $13.0 million, $12.2 million, $18.3 million, and $18.3 million respectively.

STN Predecessor Impairment Losses

2010 Impairment Losses

During the three months ended September 30, 2010, STN Predecessor determined that a triggering event, as described in ASC Topics 350 and 360, had occurred due to developments in its bankruptcy proceedings, and STN therefore tested its goodwill and intangible assets for impairment. Certain of these assets were determined to be impaired and STN Predecessor recognized impairment charges in its consolidated statements of operations as described in more detail below.

STN Predecessor tested the goodwill of each of its reporting units for impairment by comparing the carrying value of each reporting unit, including goodwill, with its fair value. For reporting units where carrying value exceeded fair value, the implied fair value of the reporting unit's goodwill was measured by allocating the fair value of the reporting unit to the assets and liabilities of the unit, as if the reporting unit had been acquired in a business combination. Where the carrying value of a reporting unit's goodwill exceeded its implied fair value, STN recognized an impairment loss in an amount equal to that excess. During the three months ended September 30, 2010, goodwill of the Santa Fe Station and Boulder Station reporting units with carrying amounts totaling $184.7 million were written down to their implied fair values totaling $124.3 million, resulting in an impairment charge of $60.4 million. As a result of these interim goodwill impairment charges recognized during the three months ended September 30, 2010, STN's annual goodwill impairment testing as of October 1, 2010 resulted in no additional impairment charges. The fair value of each reporting unit is estimated using the expected present value of future cash flows along with value indications provided by the current valuation multiples of comparable publicly traded companies, which are generally classified as Level 3 inputs under ASC Topic 820.

STN Predecessor tested its finite-lived intangible assets for impairment by comparing their carrying values with their fair values, and for those with carrying values that exceeded their fair values, impairment was recognized based on the excess of carrying value over fair value. Customer relationship intangible assets with carrying values totaling $8.6 million were written down to their fair value of $8.1 million, resulting in an impairment charge of $0.5 million. STN estimated the fair value of its customer relationship intangible assets using a discounted cash flow model based on Level 3 inputs under ASC Topic 820.

During the year ended December 31, 2010, STN decided to discontinue the exclusivity arrangement associated with one of its indefinite-lived license right intangibles, which had a carrying value of $1.0 million. As a result, STN determined that this asset had become fully impaired and recorded an impairment charge equal to the carrying value of this asset. In addition, during STN's interim impairment testing it determined that a license asset with a carrying value of $3.5 million was impaired, primarily as a result of changes in its potential utilization, therefore this asset was written down to its estimated fair value of $0.3 million and STN recognized a $3.2 million impairment charge. STN estimated the fair value of the license asset based on solicited offers and comparable asset sales estimates, which are Level 3 inputs under ASC Topic 820.

2009 Impairment Losses

During the year ended December 31, 2009, STN determined that its restructuring activities and the continuation of the economic downturn constituted indicators of impairment, and therefore tested its finite-lived intangible assets for impairment. As a result, STN Predecessor wrote down certain customer relationship intangible assets with carrying values totaling $22.5 million to their fair value of $9.9 million. Likewise, its brands with carrying amounts totaling $129.2 million were written down to their fair values of $99.6 million. As a result, STN Predecessor recognized impairment losses totaling $12.6 million and $29.7 million, respectively, for its customer relationship and brand intangibles. The impairment of STN's brands and customers relationships was the result of the ongoing recession which resulted in decreased projected cash flow estimates, decreased valuation multiples for gaming assets due to market conditions and higher discount rates resulting from turmoil in the credit markets. The concentration of STN's customer base in the Las Vegas valley, where the impact of the recession has been particularly significant, negatively impacted its projected cash flow estimates.

In addition, during the year ended December 31, 2009, as a result of decreases in the projected revenue streams for certain of STN's managed properties, management contract intangible assets with carrying values totaling $258.7 million were written down to their fair values totaling $45.8 million. The majority of the $212.9 million management contract impairment charge related to STN's contracts to manage Green Valley Ranch, Aliante Station, and Gun Lake.

As a result of STN's annual goodwill impairment testing for the year ended December 31, 2009, goodwill of certain reporting units, primarily Boulder Station, Santa Fe Station and Sunset Station, with a total carrying amount of $366.5 million was written down to implied fair value of $184.7 million, resulting in a goodwill impairment charge of $181.8 million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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