Impairment of Long-Lived Assets

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Impairment of Long-Lived Assets

NOTE 2—IMPAIRMENT OF LONG-LIVED ASSETS

For the three and six months ended June 30, 2013, impairment charges aggregated to $207 and $411, respectively. The impairment charges were primarily the result of the continued deterioration of previously impaired theatres. During the three months ended June 30, 2013, competition entered a market where the Company operates one theatre. Due to the limited time in which competition has been in the market and seasonality of the Company’s business, the Company is currently not able to estimate the financial impact on the operating results of the theatre. The Company recorded impairment charges of $50 and $1,536 during the three and six months ended June 30, 2012, respectively, which were primarily the result of the Company’s plan to replace an owned theatre prior to the end of its useful life and the continued deterioration of previously impaired theatres.

The estimated aggregate fair value of the long-lived assets impaired during the three and six months ended June 30, 2013 was approximately $712 and $1,250, respectively. These fair value estimates are considered Level 3 estimates within the fair value hierarchy prescribed by Accounting Standards Codification (“ASC 820”) Fair Value Measurements, and were derived primarily from discounting estimated future cash flows. Future cash flows for a particular theatre are based on historical cash flows for that theatre, after giving effect to future attendance fluctuations, and are projected through the remainder of its lease term or useful life. The Company projects future attendance fluctuations of (10%) to 10%. The risk-adjusted rate of return used to discount these cash flows ranges from 10% to 15%.