Impairment of Long-Lived Assets

9 Months Ended

Sep. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Impairment of Long-Lived Assets

NOTE 2—IMPAIRMENT OF LONG-LIVED ASSETS

For the three and nine months ended September 30, 2013, impairment charges aggregated to $2,974 and $3,385, respectively. The impairment charges primarily resulted from the impact of competition in a market where the Company operates one theatre and the continued deterioration of previously impaired theatres. The Company recorded impairment charges of $1,835 and $3,358 during the three and nine months ended September 30, 2012, respectively, which were primarily the result of the Company’s plan to replace two owned theatres prior to the end of their useful lives and the continued deterioration of previously impaired theatres.

The estimated aggregate fair value of the long-lived assets impaired during the three and nine months ended September 30, 2013 was approximately $2,629 and $3,879, 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%.