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Goodwill and Other Intangible Assets
6 Months Ended
Jun. 30, 2012
Goodwill and Other Intangible Assets [Abstract]  
Goodwill and other intangible assets

Note 4—Goodwill and Other Intangible Assets

The following table sets forth changes in our goodwill and other intangible assets for the six months ended June 30, 2012.

 

                         
    Amortizing
Intangible Assets
    Non-Amortizing Intangible Assets  

(In millions)

    Goodwill     Other  

Balance at December 31, 2011

  $ 1,163.7     $ 3,360.4     $ 3,199.5  

Impairment

    —         —         (33.0

Amortization expense

    (86.4     —         —    

Other, including foreign currency translation

    0.1       —         0.1  
   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2012

  $ 1,077.4     $ 3,360.4     $ 3,166.6  
   

 

 

   

 

 

   

 

 

 

We completed an impairment assessment of goodwill and other non-amortizing intangible assets during the second quarter of 2012, and recorded an impairment of $33.0 million related to trademark intangibles as a result of reduced revenues associated with our trademarks. For our assessment, we determined the estimated fair value of each reporting unit as a function, or multiple, of earnings before interest, taxes, depreciation and amortization (“EBITDA”), combined with estimated future cash flows discounted at rates commensurate with the Company’s capital structure and the prevailing borrowing rates within the casino industry in general. Both EBITDA multiples and discounted cash flows are common measures used to value and buy or sell cash-intensive businesses such as casinos. We determine the estimated fair values of our non-amortizing intangible assets by primarily using the Relief From Royalty Method and Excess Earnings Method under the income approach.

 

The following table provides the gross carrying value and accumulated amortization for each major class of intangible assets other than goodwill:

 

                                                         
    June 30, 2012     December 31, 2011  

(Dollars in millions)

  Weighted
Average
Remaining
Useful Life
(in years)
    Gross
Carrying
Amount
    Accumulated
Amortization
    Net
Carrying
Amount
    Gross
Carrying
Amount
    Accumulated
Amortization
    Net
Carrying
Amount
 

Amortizing intangible assets

                                                       

Customer relationships

    7.5     $ 1,456.8     $ (555.4   $ 901.4     $ 1,456.7     $ (492.4   $ 964.3  

Contract rights

    2.5       144.5       (59.1     85.4       144.4       (52.3     92.1  

Patented technology

    3.9       118.9       (60.5     58.4       118.9       (45.9     73.0  

Gaming rights

    12.0       42.8       (11.5     31.3       42.8       (10.2     32.6  

Trademarks

    0.6       7.8       (6.9     0.9       7.8       (6.1     1.7  
           

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
            $ 1,770.8     $ (693.4     1,077.4     $ 1,770.6     $ (606.9     1,163.7  
           

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-amortizing intangible assets

                                                       

Trademarks

                            1,875.8                       1,908.7  

Gaming rights

                            1,290.8                       1,290.8  
                           

 

 

                   

 

 

 
                              3,166.6                       3,199.5  
                           

 

 

                   

 

 

 

Total intangible assets other than goodwill

                          $ 4,244.0                     $ 4,363.2