LONG-LIVED ASSETS |
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LONG-LIVED ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-LIVED ASSETS |
NOTE 2-LONG-LIVED ASSETS
Property, Plant and Equipment
During the third quarter of 2011, the Company recorded an impairment charge of $5.7 million related to an amphitheater that was no longer in operation in the Concerts segment. It was determined that this asset was impaired since the estimated undiscounted cash flows associated with this asset was less than its carrying value. See Note 5-Fair Value Measurements for further discussion of the inputs used to determine the fair value. The impairment charge was recorded as a component of depreciation and amortization. During 2010, the Company recorded no significant impairment charges.
Definite-lived Intangible Assets
The Company has definite-lived intangible assets which are amortized over the shorter of either the respective lives of the agreements or the period of time the assets are expected to contribute to the Company's future cash flows. The amortization is recognized on either a straight-line or units of production basis. The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the nine months ended September 30, 2011:
During 2011, the Company recorded definite-lived intangible assets totaling $21.4 million, primarily related to revenue-generating contracts. Additions primarily related to the January 2011 acquisition of TGLP, a primary ticketing business in the Washington D.C. metro area and the April 2011 acquisition of Serviticket, a Spanish ticketing company.
The 2011 additions to definite-lived intangible assets have weighted average lives as follows:
During 2011, the Company recorded a divestiture of $4.4 million relating to the sale of an artist management company.
Amortization expense from definite-lived intangible assets for the three months ended September 30, 2011 and 2010 was $38.8 million and $32.9 million, respectively, and amortization expense for the nine months ended September 30, 2011 and 2010 was $120.7 million and $83.7 million, respectively. The increase in amortization expense is primarily driven by the additional definite-lived intangible assets obtained in the Merger, the acquisition of the remaining 49% interest in, and control of, LN-Haymon in April 2010 and the acquisitions of Ticketnet in November 2010 and Serviticket. Also adding to the increase in amortization expense for the nine months ended September 30, 2011 as compared to the same period of the prior year was a $6.1 million reduction to amortization expense in 2010 related to a non-cash gain on the settlement of a pre-existing relationship with LN-Haymon.
For the three months ended September 30, 2011 and 2010, the Company recorded amortization expense related to nonrecoupable ticketing contract advances of $9.3 million and $2.9 million, respectively, and for the nine months ended September 30, 2011 and 2010, recorded $22.8 million and $7.6 million, respectively.
As acquisitions and dispositions occur in the future and the valuation of intangible assets for recent acquisitions are completed, amortization expense may vary.
Goodwill
The following table presents the changes in the carrying amount of goodwill in each of the Company's segments for the nine months ended September 30, 2011:
Included in the current year acquisitions above is $17.9 million related to the acquisition of Serviticket.
Included in the prior year acquisitions above are reductions primarily due to a tax valuation adjustment relating to the Merger offset by the addition of $3.0 million related to the finalization of the valuation for the Ticketnet acquisition.
The Company is in the process of finalizing its acquisition accounting for recent acquisitions which could result in a change to the associated purchase price allocations, including goodwill.
Investments in nonconsolidated affiliates
The Company has investments in various nonconsolidated affiliates that are accounted for under the equity method of accounting whereby the Company records its investments in these entities in the balance sheet as investments in nonconsolidated affiliates. The Company's interests in their operations are recorded in the statement of operations as equity in earnings of nonconsolidated affiliates. For the nine months ended September 30, 2011, one of the Company's investments, which is in a ticketing distribution services company, is considered significant. The Company owns a 33% interest in this company.
Summarized unaudited income statement information for the Company's significant nonconsolidated affiliate is as follows (at 100 percent):
Long-lived Asset Disposals
In January 2011, the Company sold its 50% controlling interest in an artist management company. In May 2011, the Company completed the sale of the Selma amphitheater in San Antonio. In connection with the Merger, the Company reached an agreement with the DOJ that Ticketmaster would divest its Paciolan ticketing business and, in March 2010, the Company completed this sale to Comcast.
The table below summarizes the asset and liability values at the time of disposal and the resulting loss or gain recorded.
Certain agreements relating to disposals of businesses provide for future contingent consideration based on the financial performance of the businesses sold. The Company will record additional amounts related to such contingent consideration, with a corresponding adjustment to gain (loss) on sale of operating assets, if and when it is determinable that the applicable financial performance targets will be met. The aggregate of these contingent considerations, if all existing performance targets are met, would not significantly impact the results of operations of the Company. The last contingency period for which the Company has an outstanding contingent consideration is for the year ended December 31, 2013.
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