Investment In Eldorado

6 Months Ended

Jun. 30, 2011

Investment In Eldorado

Investment In Eldorado

4. Investment in Eldorado

The Company's 17.0359% investment in Eldorado (which was acquired on April 1, 2009 in exchange for a 17.0359% interest originally acquired in Resorts, as described in Note 1) is accounted for under the equity method. The investment, which is reported as Equity income (loss) on Eldorado on the consolidated statement of operations, was originally recorded at fair value and is adjusted by the Company's share of earnings, losses, distributions, and adjustments related to the amortization of definite-lived intangibles of the investment. The Company's allocated income and loss related to Eldorado for the three and six months ended June 30, 2011 and 2010, respectively, are included as a component of net income (loss) on the consolidated statement of operations. As of June 30, 2011 and December 31, 2010, there was no indication that impairment may have existed in relation to the investment in Eldorado.

A roll forward of the Company's equity investment in Eldorado is as follows:

	Total
Beginning balance at January 1, 2011	$	28,197,330
Equity income on Eldorado		619,053
Ending balance at June 30, 2011	$	28,816,383

Summarized balance sheet information for Eldorado is as follows (in thousands):

	June 30, 2011		December 31, 2010
Current assets	$	54,460	$	57,747
Investment in joint ventures		41,362		42,994
Property and equipment, net		204,746		209,996
Intangible assets, net		20,720		20,720
Other assets, net		8,676		2,186
Total assets	$	329,964	$	333,643
Current liabilities	$	37,927	$	27,685
Long-term liabilities		191,747		190,764
13% Preferred equity interest		—		19,289
Non-controlling interest		4,746		4,807
Partners' equity		95,544		91,098
Total liabilities and partners' equity	$	329,964	$	333,643

Summarized results of operations for Eldorado are as follows (in thousands):

	Three months ended June  30, 2011			Six months ended June 30, 2011
Net operating revenues	$	65,644		$	127,383
Operating expenses		(58,297	)		(113,894	)
Loss on sale/disposition of long-lived assets		(25	)		(38	)
Equity income (loss) of unconsolidated affiliates		584			(1,122	)
Operating income		7,906			12,329
Other expense, net		(3,362	)		(8,438	)
Net income		4,544			3,891
Net (income) loss attributable to noncontrolling interest		(14	)		61
Net income attributable to the Company	$	4,530		$	3,952

Effective March 1, 1994, ELLC (96% owned by Resorts) and Galleon, Inc. (a Nevada corporation and now an indirect wholly owned subsidiary of MGM Resorts International (formerly MGM MIRAGE)), entered into a joint venture (the "Silver Legacy Joint Venture") pursuant to a joint venture agreement to develop the Silver Legacy Resort Casino (the "Silver Legacy"). The Silver Legacy consists of a casino and hotel located in Reno, Nevada, which began operations on July 28, 1995. Each partner owns a 50% interest in the Silver Legacy Joint Venture.

Summarized balance sheet information for the Silver Legacy Joint Venture is as follows (in thousands):

	June 30, 2011		December 31, 2010
Current assets	$	42,730	$	38,817
Property and equipment, net		222,487		229,119
Other assets, net		7,299		7,315
Total assets	$	272,516	$	275,251
Current liabilities	$	160,843	$	18,510
Long-term liabilities		8,379		150,911
Partners' equity		103,294		105,830
Total liabilities and partners' equity	$	272,516	$	275,251

Summarized results of operations for the Silver Legacy Joint Venture are as follows (in thousands):

	Three months ended June  30, 2011			Six months ended June  30, 2011
Net revenues	$	33,595		$	61,420
Operating expenses		(29,107	)		(57,080	)
Operating income		4,488			4,340
Other expense, net		(3,762	)		(7,522	)
Net income (loss)	$	726		$	(3,182	)