Goodwill and other intangible assets

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure

Goodwill and other intangible assets

The following tables summarize the activity relating to goodwill and other intangible assets:



	Weighted-Average Useful Lives	Original Gross Carrying Amount		Amortization/ Purchase Price Adjustments			Impairments			Net Carrying Amount at December 31, 2011
	(Amounts in thousands)
Goodwill:
Missouri properties acquisition	Indefinite	$	86,435	$	(15,467	)	$	—		$	70,968
Other	Indefinite	5		—			—			5
Total Goodwill		86,440		(15,467		)	—			70,973
Other Intangible Assets:
Ameristar East Chicago gaming license	Indefinite	231,400		—			(218,800		)	12,600
Total Goodwill and Other Intangible Assets		$	317,840	$	(15,467	)	$	(218,800	)	$	83,573



	Weighted-Average Useful Lives	Original Gross Carrying Amount		Amortization/ Purchase Price Adjustments			Impairments			Net Carrying Amount at December 31, 2010
	(Amounts in thousands)
Goodwill:
Ameristar East Chicago acquisition	Indefinite	$	262,247	$	1,193		$	(263,440	)	$	—
Missouri properties acquisition	Indefinite	86,435		(14,263		)	—			72,172
Other	Indefinite	5		—			—			5
Total Goodwill		348,687		(13,070		)	(263,440		)	72,177
Other Intangible Assets:
Ameristar East Chicago gaming license	Indefinite	231,400		—			(218,800		)	12,600
Ameristar East Chicago trade name and customer list	2.1 years	1,630		(1,630		)	—			—
Ameristar St. Charles HOME nightclub service mark license	3.6 years	300		(109		)	(191		)	—
Total Other Intangible Assets		233,330		(1,739		)	(218,991		)	12,600
Total Goodwill and Other Intangible Assets		$	582,017	$	(14,809	)	$	(482,431	)	$	84,777

At December 31, 2011, the Company had approximately $71.0 million in goodwill related to the acquisition of the Missouri properties in December 2000 and $12.6 million in other intangible assets resulting from the acquisition of Ameristar East Chicago in September 2007. The Company performs an annual assessment of the goodwill and other indefinite-lived intangible assets for Ameristar East Chicago, Ameristar Kansas City and Ameristar St. Charles to determine if the carrying value exceeds the fair value. Additionally, the guidance requires an immediate impairment assessment if a change in circumstances occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The goodwill related to the Company’s Missouri properties was assessed during the fourth quarter of 2011 using a qualitative analysis outlined in ASU No. 2011-08 to determine whether the existence of events or circumstances would lead to the conclusion that it is more likely than not that the fair values are less than the carrying amounts. Events and circumstances considered in this review included macroeconomic conditions, new competition, temporary road construction near our properties, financial performance of the reporting units and other financial and non-financial events. Based on these factors, the Company concluded the fair value of the Missouri properties was not more likely than not less than the carrying amounts. Accordingly, the Company was not required to perform the two-step goodwill impairment analysis.

The Company also performed an annual impairment review of Ameristar East Chicago’s indefinite-lived gaming license in the fourth quarters of both 2011 and 2010. These reviews did not result in any impairment charges related to the gaming license.

In addition to its annual fourth quarter review, the Company performed an impairment review of Ameristar East Chicago’s goodwill and intangible assets in the second quarter of 2010. The permanent closure of a highway bridge near the East Chicago property during the fourth quarter of 2009 significantly adversely impacted forecasted financial results for the property. Closure of the bridge has made access to the property inconvenient for many of Ameristar East Chicago’s guests and has significantly impacted the property’s business levels and operating results. This Ameristar East Chicago impairment assessment resulted in a total of $56.0 million of non-cash impairment charges, with $21.4 million relating to the goodwill and $34.6 million relating to the gaming license. The impairment charge completely eliminated the carrying value of the goodwill. The East Chicago gaming license was reduced to $12.6 million.

In 2009, the Company recorded a total of $111.7 million in non-cash impairment charges for the goodwill related to the East Chicago property acquisition. The 2009 reduction in the value of the goodwill was attributable to the significant deterioration of the debt and equity capital markets, as well as a lowering of the Company’s growth assumptions for the property to reflect its then-current operating performance (relative to the assumptions at the time of acquisition) and the decline in general economic conditions, as well as a result of the bridge closure described above.

Intangible assets initially recorded as part of the Ameristar East Chicago acquisition included a customer list with an estimated value of $0.4 million and an estimated useful life of five years and a trade name with an estimated value of $1.2 million and an estimated useful life of one year. The East Chicago gaming license, which has an indefinite life, is not amortized.

During the third quarter of 2010, in addition to its annual fourth quarter review, the Company performed an impairment review of Ameristar St. Charles’ HOME nightclub service mark license due to the permanent closure of the nightclub. The impairment assessments performed resulted in a total of $0.2 million of impairment charges and completely eliminated the carrying value of the license. The license was acquired by the Company in 2009 to use certain trade names and other intellectual property related to the HOME nightclub at the St. Charles property.

For the year ended December 31, 2011, goodwill relating to the Missouri properties acquisition decreased $1.2 million. Goodwill will continue to be reduced through 2016 by annual tax benefits of $1.2 million resulting from differences in the values assigned to certain purchased assets for financial reporting and tax purposes.

The Company utilized Level 3 inputs as described in “Note 8 - Fair value measurements” to determine fair value relating to goodwill and intangible assets.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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