19. Fair Value Measurements

ASC 820, "Fair Value Measurements and Disclosures," establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of the hierarchy are described below:

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Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

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Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly quoted intervals.

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Level 3: Unobservable inputs that reflect the reporting entity's own assumptions, as there is little, if any, related market activity.

The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy.

The following tables set forth the assets measured at fair value on a recurring basis, by input level, in the consolidated balance sheets at December 31, 2012 (in thousands):

	Balance Sheet Location	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2012 Total

Assets:
Investment in corporate debt securities	Other assets	$	—	$	6,790	$	—	$	6,790

The valuation technique used to measure the fair value of the investment in corporate debt securities is the market approach. See Note 4 for a description of the input used in calculating the fair value measurement of investment in corporate debt securities. As described in Note 10, the investment in corporate debt securities was redeemed in 2013.

There were no long-lived assets measured at fair value on a non-recurring basis during the year ended December 31, 2012. The amounts below represent the long-lived assets measured at fair value on a nonrecurring basis during the year ended December 31, 2013 (in thousands):

	Balance Sheet Location	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2013 Total		Total Reduction in Fair Value Recorded during the year ended December 31, 2013

Assets:
Goodwill	Goodwill	$	—	$	—	$	136,975	$	136,975	$	(807,464	)
Intangible assets	Other intangible assets		—		—		234,819		234,819		(322,753	)
Long-lived assets	Other assets		—		6,452		—		6,452		(2,200	)


										$	(1,132,417	)

For the year ended December 31, 2013, as a result of the Spin-Off, the Company recorded pre-tax impairment charges of $1,058.4 million ($842.9 million, net of taxes), as it determined that a portion of the value of its goodwill and other intangible assets was impaired. Additionally, as a result of a new gaming license being awarded for the development of a new casino in Sioux City, Iowa to another applicant in April 2013, the Company recorded a pre-tax impairment charge of $71.8 million ($70.5 million, net of taxes) for Argosy Casino Sioux City for the year ended December 31, 2013, as the Company determined that the fair value of its Sioux City reporting unit was less than its carrying amount based on the Company's analysis of the estimated future expected cash flows the Company anticipates receiving from the operations of the Sioux City facility. In addition, in conjunction with the relocation of the Company's two racetracks in Ohio, the Company recorded a pre-tax impairment charge of $2.2 million ($1.4 million, net of taxes) for the year ended December 31, 2013 for the parcels of land that the racetracks currently reside on, as the land was reclassified as held for sale in 2013 as the Company expects the land to be sold in 2014.

The valuation technique used to measure the fair value of goodwill and intangible assets was the income approach and long-lived assets was the market approach. For the land held for sale in Ohio, the fair value is based on the expected proceeds to be received by the Company upon completion of the sale. See Note 4 for a description of the inputs and the information used to develop the inputs in calculating the fair value measurements of goodwill, indefinite-life intangible assets and long-lived assets.