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Goodwill and Intangible, Net
 3 Months Ended
Mar. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible, Net

Note 4 – Goodwill and Intangible, Net

 

The Company concluded that the impact of the current COVID-19 pandemic on operations and financial results is an indicator that impairment may exist related to its goodwill and other intangible assets. As a result, the Company performed an impairment assessment on goodwill and intangibles. As a result of these impairment assessments, the Company determined that there was an impairment of the goodwill in its Casinos segment and recognized a non-cash impairment of goodwill of $6.5 million. There was no impairment of the remaining goodwill or other intangible assets.

 

The estimated fair value of goodwill was determined using discounted cash flow models which utilized Level 3 inputs as follows: discount rate of 12.0%; long-term revenue growth rate of 3.0%. The impairment charge is included in “Impairment of goodwill” on the consolidated statements of operations.

The following table summarizes goodwill activity by reportable segment:

 

 

(In thousands)

 

Casinos

 

 

Distributed

Gaming

 

 

Total

Goodwill

 

Balance, December 31, 2019

 

$

86,466

 

 

$

97,859

 

 

$

184,325

 

Goodwill impairment

 

 

(6,461

)

 

 

—

 

 

 

(6,461

)

Balance, March 31, 2020

 

$

80,005

 

 

$

97,859

 

 

$

177,864

 

 

 

 

 

March 31, 2020

 

 

 

Weighted-

 

Gross

 

 

 

 

 

 

 

 

 

 

 

Average Life

 

Carrying

 

 

Cumulative

 

 

Intangible

 

(In thousands)

 

Remaining

 

Value

 

 

Amortization

 

 

Assets, Net

 

Indefinite-lived intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gaming licenses

 

Indefinite

 

$

53,690

 

 

$

—

 

 

$

53,690

 

Trade names

 

Indefinite

 

 

960

 

 

 

—

 

 

 

960

 

Other

 

Indefinite

 

 

185

 

 

 

—

 

 

 

185

 

 

 

 

 

 

54,835

 

 

 

—

 

 

 

54,835

 

Amortizing intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

9.8 years

 

 

81,104

 

 

 

(25,608

)

 

 

55,496

 

Player relationships

 

1.7 years

 

 

42,989

 

 

 

(30,139

)

 

 

12,850

 

Non-compete agreements

 

2 years

 

 

9,840

 

 

 

(5,946

)

 

 

3,894

 

Gaming license

 

8.1 years

 

 

2,100

 

 

 

(963

)

 

 

1,137

 

In-place lease value

 

1.1 years

 

 

1,171

 

 

 

(717

)

 

 

454

 

Leasehold interest

 

1.4 years

 

 

570

 

 

 

(384

)

 

 

186

 

Other

 

6.1 years

 

 

1,814

 

 

 

(1,198

)

 

 

616

 

 

 

 

 

 

139,588

 

 

 

(64,955

)

 

 

74,633

 

Balance, March 31, 2020

 

 

 

$

194,423

 

 

$

(64,955

)

 

$

129,468

 

 

Intangible assets, net, consisted of the following:

 

 

 

December 31, 2019

 

 

 

Weighted-

 

Gross

 

 

 

 

 

 

 

 

 

 

 

Average Life

 

Carrying

 

 

Cumulative

 

 

Intangible

 

(In thousands)

 

Remaining

 

Value

 

 

Amortization

 

 

Assets, Net

 

Indefinite-lived intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gaming licenses

 

Indefinite

 

$

53,690

 

 

$

—

 

 

$

53,690

 

Trade names

 

Indefinite

 

 

960

 

 

 

—

 

 

 

960

 

Liquor Licenses

 

Indefinite

 

 

185

 

 

 

—

 

 

 

185

 

 

 

 

 

 

54,835

 

 

 

—

 

 

 

54,835

 

Amortizing intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

10.0 years

 

 

81,105

 

 

 

(24,140

)

 

 

56,965

 

Player relationships

 

2.0 years

 

 

42,990

 

 

 

(26,649

)

 

 

16,341

 

Non-compete agreements

 

2.2 years

 

 

9,840

 

 

 

(5,467

)

 

 

4,373

 

Gaming licenses

 

8.3 years

 

 

2,100

 

 

 

(929

)

 

 

1,171

 

In-place lease value

 

1.3 years

 

 

1,301

 

 

 

(724

)

 

 

577

 

Leasehold interest

 

1.6 years

 

 

570

 

 

 

(345

)

 

 

225

 

Other

 

6.3 years

 

 

1,814

 

 

 

(1,150

)

 

 

664

 

 

 

 

 

 

139,720

 

 

 

(59,404

)

 

 

80,316

 

Balance, December 31, 2019

 

 

 

$

194,555

 

 

$

(59,404

)

 

$

135,151

 

 

The Rocky Gap gaming license is being amortized over its 15 year term.

Total amortization expense related to intangible assets was $5.6 million and $5.7 million for the three months ended March 31, 2020 and 2019, respectively. Estimated future amortization expense related to intangible assets, is as follows:

 

(In thousands)

 

Remainder

of 2020

 

 

2021

 

 

2022

 

 

2023

 

 

2024

 

 

Thereafter

 

 

 

 

Total

 

Estimated amortization expense

 

$

15,342

 

 

$

8,054

 

 

$

7,479

 

 

$

7,367

 

 

$

6,472

 

 

$

29,919

 

 

 

 

$

74,633