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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Note 8—Goodwill and Other Intangible Assets A reconciliation of goodwill and accumulated goodwill impairment losses, by reportable segment, is as follows:
(in millions) | Northeast |  | South |  | West |  | Midwest |  | Other |  | Total
Balance as of January 1, 2018 |  |  |  |  |  |  |  |  |  |  |
Goodwill, gross | $ | 792.0 |  |  | $ | 136.9 |  |  | $ | 159.0 |  |  | $ | 1,046.7 |  |  | $ | 155.3 |  |  | $ | 2,289.9 |
Accumulated goodwill impairment losses | (707.6 | ) |  | (34.6 | ) |  | (16.6 | ) |  | (435.3 | ) |  | (87.7 | ) |  | (1,281.8 | )
Goodwill, net | 84.4 |  |  | 102.3 |  |  | 142.4 |  |  | 611.4 |  |  | 67.6 |  |  | 1,008.1 |
Goodwill acquired during year | 56.4 |  |  | 48.3 |  |  | 51.4 |  |  | 63.4 |  |  | 0.8 |  |  | 220.3 |
Balance as of December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Goodwill, gross | 848.4 |  |  | 185.2 |  |  | 210.4 |  |  | 1,110.1 |  |  | 156.1 |  |  | 2,510.2 |
Accumulated goodwill impairment losses | (707.6 | ) |  | (34.6 | ) |  | (16.6 | ) |  | (435.3 | ) |  | (87.7 | ) |  | (1,281.8 | )
Goodwill, net | 140.8 |  |  | 150.6 |  |  | 193.8 |  |  | 674.8 |  |  | 68.4 |  |  | 1,228.4 |
Goodwill acquired during year | 67.4 |  |  | 44.2 |  |  | — |  |  | — |  |  | — |  |  | 111.6 |
Impairment losses during year | (10.3 | ) |  | (17.4 | ) |  | — |  |  | (60.3 | ) |  | — |  |  | (88.0 | )
Other (1) | (1.5 | ) |  | 7.2 |  |  | 6.4 |  |  | 6.6 |  |  | — |  |  | 18.7 |
Balance as of December 31, 2019 |  |  |  |  |  |  |  |  |  |  |
Goodwill, gross | 914.3 |  |  | 236.6 |  |  | 216.8 |  |  | 1,116.7 |  |  | 156.1 |  |  | 2,640.5 |
Accumulated goodwill impairment losses | (717.9 | ) |  | (52.0 | ) |  | (16.6 | ) |  | (495.6 | ) |  | (87.7 | ) |  | (1,369.8 | )
Goodwill, net | $ | 196.4 |  |  | $ | 184.6 |  |  | $ | 200.2 |  |  | $ | 621.1 |  |  | $ | 68.4 |  |  | $ | 1,270.7 |
(1) | Amounts relate to adjustments made to the preliminary purchase price allocation of Pinnacle during the year ended December 31, 2019, prior to it being finalized, as described in Note 5, “Acquisitions and Other Investments”
2019 Annual Assessment for Impairment As a result of our 2019 annual assessment for impairment, we recognized impairments on our goodwill, gaming licenses, and trademarks, of $88.0 million, $62.6 million, and $20.0 million, respectively. The impairments of goodwill were largely driven by increases in the carrying amount of certain of our reporting units as a result of decreases in the allocated amount of the financing obligation to such reporting units, which was driven by the adoption of ASC 842. The impairments of gaming licenses and trademarks were largely driven by reductions in the long-term projections for certain of our properties where competition has increased due to expansion of gaming legislation, primarily within the Northeast segment. The estimated fair values of the reporting units were determined through a combination of a DCF model and a market-based approach, which utilized Level 3 inputs. The estimated fair values of the gaming licenses and trademarks were determined by using DCF models, which utilized Level 3 inputs. As noted in the table above, the goodwill impairments pertained to our Northeast, South and Midwest segments, in the amounts of $10.3 million, $17.4 million and $60.3 million, respectively. The gaming license impairments pertained to our Northeast and South segments in the amounts of $55.1 million and $7.5 million, respectively. The trademark impairments pertained to our Northeast, South and Midwest segments, in the amounts of $11.5 million, $6.5 million and $2.0 million, respectively. 2018 Annual Assessment for Impairment During the year ended December 31, 2018, the Company completed its 2018 annual assessment for impairment, which did not result in any impairment charges to goodwill or other intangible assets. 2017 Annual and Interim Assessments for Impairment During the third quarter of 2017, the Company identified an indicator of impairment on its goodwill as a result of a reversal of a significant deferred tax valuation allowance, which caused increases in the carrying amounts of certain of our reporting units. As a result of an interim assessment for impairment, one of our reporting units within the West segment was fully impaired, resulting in an impairment charge of $14.8 million, and the goodwill at Sanford-Orlando Kennel Club, which is included in the Other category, was partially impaired, resulting in an impairment charge of $3.2 million. The estimated fair values of the reporting units were determined by using DCF models, which utilized Level 3 inputs. During the year ended December 31, 2017, subsequent to the interim assessment discussed above, the Company completed its 2017 annual assessment for impairment, which did not result in any impairment charges to goodwill or other intangible assets. The aforementioned impairments are included in “Impairment losses” within our Consolidated Statements of Income. See Note 18, “Fair Value Measurements,” for quantitative information about the significant unobservable inputs used in the fair value measurements of other intangible assets. As of October 1, 2019, the date of the most recent annual impairment test, three reporting units had negative carrying amounts. The amount of goodwill at these reporting units was as follows (in millions):
Northeast segment |
Hollywood Casino at Charles Town Races | $ | 8.7 |
Plainridge Park Casino | $ | 6.3 |
Midwest segment |
Ameristar Council Bluffs | $ | 36.2 |
The table below presents the gross carrying amount, accumulated amortization, and net carrying amount of each major class of other intangible assets:
| December 31, 2019 |  | December 31, 2018
(in millions) | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Indefinite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |
Gaming licenses | $ | 1,681.9 |  |  | $ | — |  |  | $ | 1,681.9 |  |  | $ | 1,498.3 |  |  | $ | — |  |  | $ | 1,498.3 |
Trademarks | 302.4 |  |  | — |  |  | 302.4 |  |  | 298.0 |  |  | — |  |  | 298.0 |
Other | 0.7 |  |  | — |  |  | 0.7 |  |  | 0.7 |  |  | — |  |  | 0.7 |
Amortizing intangible assets |  |  |  |  |  |  |  |  |  |  |
Customer relationships | 104.4 |  |  | (69.0 | ) |  | 35.4 |  |  | 98.8 |  |  | (51.5 | ) |  | 47.3 |
Other | 36.1 |  |  | (30.0 | ) |  | 6.1 |  |  | 61.9 |  |  | (49.3 | ) |  | 12.6 |
Total other intangible assets | $ | 2,125.5 |  |  | $ | (99.0 | ) |  | $ | 2,026.5 |  |  | $ | 1,957.7 |  |  | $ | (100.8 | ) |  | $ | 1,856.9 |
During the year ended December 31, 2019, we paid $10.0 million for online and retail sports betting licenses in Pennsylvania and during the year ended December 31, 2018, we purchased two Category 4 gaming licenses to operate up to 750 slot machines and initially up to 30 table games, under each license, in York County, Pennsylvania for $50.1 million and in Berks County, Pennsylvania for $7.5 million, and iGaming and sports betting licenses in Pennsylvania for $20.0 million, all of which have been classified as indefinite-lived intangible assets. Amortization expense related to our amortizing intangible assets was $24.7 million, $17.1 million, and $18.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. The following table presents the estimated amortization expense based on our amortizing intangible assets as of December 31, 2019 (in millions):
Years ending December 31: |
2020 | $ | 19.7 |
2021 | 5.8 |
2022 | 3.9 |
2023 | 3.6 |
2024 | 3.6 |
Thereafter | 4.9 |
Total | $ | 41.5 |

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