|9 Months Ended|
Sep. 30, 2013
|LONG-LIVED ASSETS [Abstract]|
Property, Plant and Equipment
In the fourth quarter of 2012, an amphitheater in New York that is operated by the Company sustained substantial damage during Hurricane Sandy. During 2013, the Company received insurance recoveries and recorded a gain of $2.0 million and $14.6 million for the three and nine months ended September 30, 2013, respectively, as a component of 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 nine months ended September 30, 2013:
Included in the current year acquisitions amount above of $51.4 million are trademarks and naming rights and revenue-generating contracts primarily associated with the May 2013 acquisition of a controlling interest in a festival promoter.
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 nine months ended September 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. For the nine months ended September 30, 2012, the Company recorded impairment charges related to definite-lived intangible assets of $13.8 million as a component of depreciation and amortization. The impairment charges primarily related to intangible assets for revenue-generating contracts and client/vendor relationships in the Concerts segment. See Note 5—Fair Value Measurements for further discussion of the inputs used to determine the fair value. There were no significant impairment charges recorded during the nine months ended September 30, 2013.
Amortization of definite-lived intangible assets for the three months ended September 30, 2013 and 2012 was $42.9 million and $40.8 million, respectively, and for the nine months ended September 30, 2013 and 2012 was $124.5 million and $136.4 million, respectively. The decrease in amortization for the nine months ended September 30, 2013 is primarily driven by the impairment charge recorded in the first nine months of 2012 discussed above. In addition, the Company recorded impairment charges related to client/vendor relationship intangible assets in the Artist Nation segment in December 2012 which have contributed to the decrease in amortization. For the three and nine months ended September 30, 2013, the Company recorded $3.8 million and $9.0 million, respectively, for acceleration of amortization primarily related to changes in estimates 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 September 30, 2013 and 2012 was $18.8 million and $12.8 million, respectively, and for the nine months ended September 30, 2013 and 2012 was $42.7 million and $31.5 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 nine months ended September 30, 2013:
Included in the current year acquisitions amount above of $37.3 million is goodwill primarily associated with the May 2013 acquisition of a controlling interest in a festival promoter.
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 and its allocation between segments.
Long-lived Asset Disposals
In May 2013, the Company completed the sale of a theatrical theater in New York. During the third quarter of 2013, a contingent liability related to the sale was resolved resulting in an additional $7.0 million of gain on disposal of operating assets. 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 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 long-lived assets, which may include long-lived physical assets used in the normal conduct of business and not intended for resale, goodwill and intangible assets.
No definition available.