Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Other Intangible Assets

8.Goodwill and Other Intangible Assets

A reconciliation of goodwill and accumulated goodwill impairment losses is as follows (in thousands):


Balance at December 31, 2014 :
Goodwill	$	2,137,749
Accumulated goodwill impairment losses		(1,263,565)
Goodwill, net	$	874,184
Goodwill acquired		37,758
Balance at December 31, 2015 :
Goodwill	$	2,175,507
Accumulated goodwill impairment losses		(1,263,565)
Goodwill, net	$	911,942
Goodwill acquired		77,743
Balance at December 31, 2016:
Goodwill	$	2,253,250
Accumulated goodwill impairment losses		(1,263,565)
Goodwill, net	$	989,685

Indefinite‑life intangible assets consist primarily of gaming licenses. The table below presents the gross carrying value, accumulated amortization, and net book value of each major class of other intangible assets at December 31, 2016 and 2015:


	December 31, 2016						December 31, 2015
	(in thousands)
	Gross						Gross
	Carrying		Accumulated		Net Book		Carrying		Accumulated		Net Book
	Value		Amortization		Value		Value		Amortization		Value
Indefinite-life intangible assets	$	375,405	$	—	$	375,405	$	375,405	$	—	$	375,405
Other intangible assets		125,584		65,495		60,089		72,223		56,186		16,037
Total	$	500,989	$	65,495	$	435,494	$	447,628	$	56,186	$	391,442

Total other intangible assets increased by $44.1 million for the year ended December 31, 2016 primarily due to $52.0 million of definite-lived other intangible assets related to Rocket Speed and Illinois slot operator acquisitions in 2016 partially offset by amortization for the year ended December 31, 2016. Other intangible assets have a weighted average remaining amortization period of 5.8 years.

In June 2013, the Company finalized the terms of its memorandum of understanding with the State of Ohio, which included an agreement by the Company to pay a relocation fee in return for being able to relocate its existing racetracks in Toledo and Grove City to Dayton and Austintown, respectively. Upon opening of these facilities in 2014, the relocation fee for each new racino was recorded at the present value of the contractual obligation, which was calculated to be $75 million based on the 5% discount rate included in the agreement and was capitalized as an indefinite-lived intangible asset (See Note 9 for further details on the obligation). In addition, the gaming license fee of $50 million for each Ohio racino has been paid ($25 million for each facility in 2014, and $25 million for each facility in 2015).

For the year ended December 31, 2015, the Company recorded other intangible assets impairment charges of $40.0 million, as of the valuation date of October 1, 2015 (the date of our annual impairment test), related to the write-off of our Plainridge Park Casino gaming license and a partial write-down of the gaming license at Hollywood Gaming at Dayton Raceway due to a reduction in the long term earnings forecast at both of these locations.

For the year ended December 31, 2014, the Company recorded goodwill and other intangible assets impairment charges of $80.8 million and $74.5 million, respectively, as of valuation date of October 1, 2014 (the date of our annual impairment test), as we determined that a portion of the value of our goodwill and other intangible assets was impaired due to the Company’s outlook of continued challenging regional gaming conditions at certain properties which persisted in 2014 in its Midwest segment, as well as for the write off of a trademark intangible asset in the South/West segment.

The Company’s intangible asset amortization expense was $9.3 million, $0.5 million, and $11.4 million for the years ended December 31, 2016, 2015 and 2014, respectively.

The following table presents expected intangible asset amortization expense based on existing intangible assets at December 31, 2016 (in thousands):


2017	$	18,142
2018		11,844
2019		7,660
2020		5,233
2021		3,331
Thereafter		13,879
Total	$	60,089

The Company’s remaining goodwill and other intangible assets by reporting unit at December 31, 2016 is shown below (in thousands):


			Other Intangible
Reporting Unit	Goodwill		Assets
Hollywood Casino St. Louis	$	205,783	$	58,418
Hollywood Casino Aurora		207,207		-
Argosy Casino Riverside		154,332		4,964
Zia Park Casino		142,359		—
Hollywood Gaming at Dayton Raceway		15,339		110,436
Hollywood Gaming at Mahoning Valley Race Course		—		125,000
Penn Interactive Ventures		67,164		29,555
Hollywood Casino at Penn National Race Course		1,497		67,607
Prairie State Gaming		33,515		29,822
Hollywood Casino Lawrenceburg		63,189		—
Hollywood Casino Tunica		44,042		—
Boomtown Biloxi		22,365		—
Argosy Casino Alton		9,863		8,284
Tropicana Las Vegas		14,821		—
Others		8,209		1,408
Total	$	989,685	$	435,494

- 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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