Goodwill And Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill And Intangible Assets [Abstract]

Note 10 – Goodwill and Intangible Assets

Goodwill associated with our business combinations is tested for impairment at the beginning of the fourth quarter with continued evaluation through the end of the fourth quarter of every year. The fair value estimates of each of our reporting units is based on the projected profits and cash flows of the related assets using each reporting unit's weighted average cost of capital as a discount rate. As a result of this test, whereby the Step 1 Test was passed for all reporting units, it was determined that there is no impairment to our goodwill as of December 31, 2011 or 2010. At December 31, 2011 or 2010, our goodwill consisted of the following (dollars in thousands):


					Real
2011		Cinema			Estate		Total
Balance as of January 1, 2011	$	16,311		$	5,224	$	21,535
Goodwill acquired during 2011		539			-		539
Foreign currency translation adjustment		203			-		203
Balance at December 31, 2011	$	17,053		$	5,224	$	22,277

					Real
2010		Cinema			Estate		Total
Balance as of January 1, 2010	$	32,187		$	5,224	$	37,411
Change in goodwill due to a purchase price adjustment		(16,936	)		-		(16,936	)
Foreign currency translation adjustment		1,060			-		1,060
Balance at December 31, 2010	$	16,311		$	5,224	$	21,535

For the years ended December 31, 2010 and 2009, in accordance with the sale agreement of Consolidated Entertainment, the initial aggregate purchase price of the cinemas was adjusted down by $16.9 million and $226,000, respectively, resulting in a corresponding decrease in goodwill associated with the purchased cinemas. We do not anticipate any further purchase price adjustments associated with this transaction.

Goodwill is tested for impairment annually or more frequently whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Historically, we have performed our annual goodwill impairment test at the beginning of the fourth quarter for all of our reporting units except for the US Cinemas reporting unit. The goodwill included in the US Cinemas reporting unit, which was created in the first quarter of 2008 as part of the Pacific Theater cinemas acquisition, was tested as of the anniversary date of such acquisition, February 22, 2009, and no impairment was indicated. During the fourth quarter of 2009, we changed the date on which we perform our annual goodwill impairment test for the US Cinemas reporting unit from February 22 to the first day of the fourth quarter to better align the annual goodwill impairment tests for our US Cinemas reporting unit with our other reporting units and our budgeting and forecasting process. We believe this change in accounting principle is to an alternative accounting principle that is preferable under the circumstances. The change in our annual goodwill impairment test date for the US Cinemas reporting unit is not intended to nor does it delay, accelerate or avoid an impairment charge nor does the change have any impact on our financial position, results of operations, or cash flows for any prior periods when applied retrospectively.

We have intangible assets subject to amortization consisting of the following (dollars in thousands):


						Other
		Beneficial		Trade		Intangible
2011		Leases		Name		Assets		Total
Gross carrying amount	$	24,471	$	7,220	$	456	$	32,147
Less: Accumulated amortization		11,238		2,553		357		14,148
Total, net	$	13,233	$	4,667	$	99	$	17,999

						Other
		Beneficial		Trade		Intangible
2010		Leases		Name		Assets		Total
Gross carrying amount	$	24,180	$	7,220	$	456	$	31,856
Less: Accumulated amortization		9,435		1,993		272		11,700
Total, net	$	14,745	$	5,227	$	184	$	20,156

After the issuance of the 2010 financial statements, management identified a misclassification of $10.5 million of gross intangible asset value and $1.2 million in accumulated amortization between the trade name and beneficial leases columns within the presentation of the 2010 table of intangible assets subject to amortization. The presentation of the 2010 table of intangible assets subject to amortization presented above has been adjusted to reflect this correction. This correction only affects the presentation of the above table and does not have any effect to the balances or activity presented on our consolidated balance sheets or consolidated statements of operations, respectively.

We have intangible assets other than goodwill that are subject to amortization which are being amortized over various periods. We amortize our beneficial leases over the lease period, the longest of which is approximately 30 years; our trade name using an accelerated amortization method over its estimated useful life of 45 years; and our option fee and other intangible assets over 10 years. For the years ended December 31, 2011, 2010, and 2009, our amortization expense was $2.4 million, $2.6 million, and $2.7 million, respectively. The estimated amortization expense in the five succeeding years and thereafter is as follows (dollars in thousands):


Year Ending December 31,
2012	$	2,433
2013		2,258
2014		2,000
2015		1,882
2016		1,624
Thereafter		7,802
Total future amortization expense	$	17,999

- 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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