Impairment of Long-Lived Assets

6 Months Ended

Jun. 30, 2015

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, 2015, impairment charges aggregated to $481 and $1,870, respectively. The impairment charges for the three and six months ended June 30, 2015 were primarily the result of deterioration in the operating results of the impaired theatres, a decline in the market value of a previously closed theatre and the continued deterioration of previously impaired theatres. The Company did not record impairment charges for the three months ended June 30, 2014. For the six months ended June 30, 2014, the Company recorded impairment charges of $358. The impairment charges for the six months ended June 30, 2014 primarily resulted from 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, 2015 was approximately $1,558 and $10,251, respectively. These fair value estimates are considered Level 3 estimates within the fair value hierarchy prescribed by 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%.