Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2011

Goodwill and Other Intangible Assets and Impairment of Long-Lived Assets [Abstract]

13. Goodwill and Other Intangible Assets

The Company’s goodwill was as follows:


	U.S.		International
	Operating		Operating
	Segment		Segment			Total
Balance at December 31, 2010 ⁽¹⁾	$	948,026	$	174,945		$	1,122,971
Acquisition of ten theatres in Argentina (see Note 6)		—		43,072			43,072
Foreign currency translation adjustments		—		(11,818	)		(11,818	)

Balance at September 30, 2011 ⁽¹⁾	$	948,026	$	206,199		$	1,154,225


⁽¹⁾		Balances are presented net of accumulated impairment losses of $214,031 for the U.S. operating segment and $27,622 for the international operating segment.

The Company evaluates goodwill for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill might exceed its estimated fair value.

The Company evaluates goodwill for impairment at the reporting unit level and has allocated goodwill to the reporting unit based on an estimate of its relative fair value. The Company considers the reporting unit to be each of its sixteen regions in the U.S. and each of its eight countries internationally (Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala are considered one reporting unit). Goodwill impairment is evaluated using a two-step approach requiring the Company to compute the fair value of a reporting unit and compare it with its carrying value. If the carrying value of the reporting unit exceeds the estimated fair value, a second step is performed to measure the potential goodwill impairment. Significant judgment is involved in estimating cash flows and fair value. 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 historical and projected operating performance, recent market transactions and current industry trading multiples. Fair value is determined based on a multiple of cash flows, which was six and a half times for the evaluation performed during the fourth quarter of 2010. No events or changes in circumstances occurred during the nine months ended September 30, 2011 that indicated that the carrying value of goodwill might exceed its estimated fair value.

Intangible assets consisted of the following:


									Foreign
									Currency
	Balance at								Translation			Balance at
	December 31,								Adjustments			September 30,
	2010			Acquisitions ⁽³⁾		Amortization			and Other⁽¹⁾			2011
Intangible assets with finite lives:
Gross carrying amount ⁽²⁾	$	64,319		$	18,685	$	—		$	(3,746	)	$	79,258
Accumulated amortization		(46,185	)		—		(3,132	)		2,791			(46,526	)

Total net intangible assets with finite lives	$	18,134		$	18,685	$	(3,132	)	$	(955	)	$	32,732

Intangible assets with indefinite lives:
Tradename		311,070			—		—			(968	)		310,102

Total intangible assets — net	$	329,204		$	18,685	$	(3,132	)	$	(1,923	)	$	342,834


⁽¹⁾		During the nine months ended September 30, 2011, the Company wrote off an intangible asset with a carrying value of approximately $549 associated with a screen advertising contract in Brazil that was terminated.

⁽²⁾		Consists of vendor contracts, favorable leases and other intangible assets, including amortizing tradenames.

⁽³⁾		Consists of tradename, favorable leases and other intangible assets (see Note 6).

Estimated aggregate future amortization expense for intangible assets is as follows:


For the three months ended December 31, 2011	$	1,445
For the twelve months ended December 31, 2012		5,340
For the twelve months ended December 31, 2013		5,063
For the twelve months ended December 31, 2014		4,528
For the twelve months ended December 31, 2015		4,181
Thereafter		12,175

Total	$	32,732

- 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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