|6 Months Ended|
Jun. 30, 2013
|LONG-LIVED ASSETS [Abstract]|
NOTE 2—LONG-LIVED ASSETS
Property, Plant and Equipment
In the fourth quarter of 2012, an amphitheater located in New York that is operated by the Company sustained substantial damage during Hurricane Sandy. During 2013, the Company received an insurance recovery and recorded a gain of $9.4 million and $12.6 million for the three and six months ended June 30, 2013, respectively, as a component of loss (gain) on disposal of operating assets in the Concerts segment representing the proceeds received in excess of the carrying value of the assets.
Definite-lived Intangible Assets
The Company has definite-lived intangible assets which are amortized over the shorter of either the lives of the respective 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 expected cash flows basis.
The following table presents the changes in the gross carrying amount and accumulated amortization of definite-lived intangible assets for the six months ended June 30, 2013:
Included in the current year acquisitions amount above of $38.4 million are trademarks and naming rights and revenue-generating contracts primarily associated with the May 2013 acquisition of a controlling interest in a company that promotes festivals.
The 2013 additions to definite-lived intangible assets from acquisitions have weighted-average lives as follows:
The Company tests for possible impairment of definite-lived intangible assets whenever events or circumstances change, such as a significant reduction in operating cash flow or a change in the manner in which the asset is intended to be used which may indicate that the carrying amount of the asset may not be recoverable. During the six months ended June 30, 2012, the Company reviewed the carrying value of certain definite-lived intangible assets that management determined had an indicator that future operating cash flows may not support their carrying value, and it was determined that those assets were impaired since the estimated undiscounted operating cash flows associated with those assets were less than their carrying value. During the second quarter of 2012, the Company recorded an impairment charge related to definite-lived intangible assets of $13.9 million as a component of depreciation and amortization. The impairment charge primarily related to intangible assets for revenue-generating contracts and client/vendor relationships in the Concerts segment. See Note 4—Fair Value Measurements for further discussion of the inputs used to determine the fair value. There were no impairment charges recorded during the six months ended June 30, 2013.
Amortization from definite-lived intangible assets for the three months ended June 30, 2013 and 2012 was $43.3 million and $55.7 million, respectively, and for the six months ended June 30, 2013 and 2012 was $81.5 million and $95.6 million, respectively. The decrease in amortization for the three and six months ended June 30, 2013 is primarily driven by the impairment charge recorded during the second quarter of 2012 discussed above. During the second quarter of 2013, the Company recorded $4.9 million for acceleration of amortization primarily related to a change in estimate of certain venue management and leasehold intangible assets in the Concerts segment due to the reduction in the lease term of a music theater.
Amortization related to nonrecoupable ticketing contract advances for the three months ended June 30, 2013 and 2012 was $10.3 million and $7.9 million, respectively, and for the six months ended June 30, 2013 and 2012 was $23.9 million and $18.7 million, respectively.
As acquisitions and dispositions occur in the future and the valuations of intangible assets for recent acquisitions are completed, amortization may vary. Therefore, the expense to date is not necessarily indicative of the expense expected for the full year.
The following table presents the changes in the carrying amount of goodwill in each of the Company’s reportable segments for the six months ended June 30, 2013:
Included in the current year acquisitions amount above of $48.1 million is goodwill primarily associated with the May 2013 acquisition of a controlling interest in a company that promotes festivals.
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 affiliates which are not consolidated and are accounted for under the equity method of accounting. The Company records its investments in these entities in the balance sheet as investments in nonconsolidated affiliates. The Company’s interests in these operations are recorded in the statement of operations as equity in earnings of nonconsolidated affiliates. For the six months ended June 30, 2013, two of the Company’s investments, which include a 33% owned ticketing distribution services company and a 50% owned artist management company, are considered significant.
Summarized unaudited income statement information for the Company’s significant nonconsolidated affiliates is as follows (at 100%):
Long-lived Asset Disposals
In May 2013, the Company completed the sale of a theatrical theater in New York. In January 2012, the Company completed the sale of an amphitheater in Ohio.
The table below summarizes the asset and liability values at the time of sale for significant disposals and the resulting gain or loss recorded.
Certain agreements relating to disposals of businesses provide for future contingent consideration to be paid to the Company 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 loss (gain) on disposal 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 outstanding contingent consideration is for the period ending December 2013.
The entire disclosure for the aggregate amount of long-lived assets, which may include long-lived assets to be held and used by an entity or disposed, goodwill and intangible assets.
No definition available.