Note 7 - Long-Lived Assets

6 Months Ended

Jun. 30, 2012

7. Long-Lived Assets

The Company regularly performs reviews of its long-lived assets to determine if facts or circumstances are present, either internal or external, which would indicate that the carrying values of its long-lived assets may not be recoverable. For more details, refer to the Summary of Significant Accounting Policies in Note 1 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Property and Equipment, Net

The components of property and equipment, net, as of June 30, 2012 and December 31, 2011 were as follows:

	June 30, 2012			December 31, 2011
	(in thousands)

Rigs and workover equipment	$	41,770		$	11,750
Other equipment		22,561			3,205
Land and improvements		6,977			5,677
Buildings		4,930			-
Vehicles		1,412			648
Furniture and fixtures		229			100
Assets in progress		1,067			-
		78,946			21,380
Accumulated depreciation		(3,073	)		(320	)
Property and equipment, net	$	75,873		$	21,060

The Other Equipment listed above primarily includes other oilfield services equipment, such as pumps, rig vehicles, trailers, power swivels, BOP accumulators, and various tongs. The assets in progress include $1.0 million of payments toward a new rig at Sun Well and $0.1 million toward a new training facility and gate entry renovations at Baseball Heaven. During the six-month period ended June 30, 2012, the Company wrote down all of the assets of The Show ($0.1 million) to zero-value, as The Show was not meeting forecasted projections, with no expectation to perform as represented when acquired. This impairment is included in “Selling, general and administrative” expenses in the Condensed Statement of Income.

Depreciation expense for the three-month period ended June 30, 2012 aggregated $1.7 million, with $1.1 million in “Cost of revenues” and $0.6 million in “Selling, general and administrative” expenses in the Condensed Statement of Income. Depreciation expense for the six-month period ended June 30, 2012 aggregated $2.8 million, with $1.6 million in “Cost of revenues” and $1.2 million in “Selling, general and administrative” expenses in the Condensed Statement of Income. There was no depreciation expense in the three-month and six-month periods ended July 1, 2011.

Intangible Assets, Net

The components of intangible assets, net, as of June 30, 2012 were as follows:

	Cost		Accumulated Amortization			Net		Amortization Method	Estimated Useful Life (in years)
	(in thousands)
Sports-Related:
Customer relationships	$	235	$	(43	)		192	Straight-line		5

Oilfield Servicing:
Customer relationships		43,100		(2,169	)		40,931	Accelerated		10
Trade names		4,100		(210	)		3,890	Accelerated		5
		47,200		(2,379	)		44,821
Intangible assets, net	$	47,435	$	(2,422	)	$	45,013

The components of intangible assets, net, as of December 31, 2011 were as follows:

	Cost		Accumulated Amortization			Net		Amortization Method	Estimated Useful Life (in years)
	(in thousands)
Sports-Related:
Customer relationships	$	235	$	(20	)		215	Straight-line		5

Oilfield Servicing:
Customer relationships		4,700		(29	)		4,671	Accelerated		10
Trade names		900		-			900	Accelerated		5
		5,600		(29	)		5,571
Intangible assets, net	$	5,835	$	(49	)	$	5,786

Amortization expense for the three-month and six-month periods ended June 30, 2012 were $1.6 million and $2.4 million, respectively, and are included in “Selling, general and administrative” expenses in the Condensed Statements of Income. There was no amortization expense for the three-month and six-month periods ended July 1, 2011.

Estimated aggregate future amortization expenses for the next five years for the intangible assets by reporting segment are as follows:

	Sports-Related		Oilfield Services
	(in thousands)
For the year ended December 31:
2012 (remaining six months)	$	24	$	5,102
2013		47		8,534
2014		47		6,565
2015		47		5,267
2016		27		4,216
Thereafter		-		15,137
	$	192	$	44,821

Goodwill

Goodwill by reporting segment as of June 30, 2012 was as follows:

	Sports-Related			Oilfield Services		Total
	(in thousands)

Balance, December 31, 2011	$	1,989		$	6,255	$	8,244
Acquired goodwill		-			33,655		33,655
Accumulated impairment (see Note 3)		(1,796	)		-		(1,796	)
Balance, June 30, 2012	$	193		$	39,910	$	40,103

During the six-month period ended June 30, 2012, the Company wrote off goodwill from The Show of $1.7 million, as The Show was not meeting forecasted projections, with no expectation to perform as represented when acquired. This impairment charge is included in “Selling, general and administrative” expenses in the Condensed Statement of Income.