Investment in Mesquite (Mesquite)

12 Months Ended

Feb. 28, 2013

Mesquite

Schedule of Equity Method Investments [Line Items]

Investment in Mesquite

Investment in Mesquite

Mesquite is engaged in the hotel casino industry in Mesquite, Nevada through its wholly-owned subsidiaries C & HRV, LLC (doing business as Virgin River Hotel/Casino/Bingo) and VRCC, LLC and its wholly-owned subsidiaries 5.47 RBI, LLC and RBG, LLC (doing business as CasaBlanca Resort/Golf/Spa) and its wholly-owned subsidiary CasaBlanca Resorts, LLC (known as the Oasis Resort and Casino prior to its demolition in May 2013) and its wholly-owned subsidiaries Oasis Interval Ownership, LLC, Oasis Interval Management, LLC and Oasis Recreational Properties, Inc.

On August 1, 2011, the Company acquired the 40% Mesquite Interest in exchange for $8,222,222 in cash that was contributed to the Company by the Newport Funds in July 2011. The acquisition was completed upon the transfer to Mesquite of all of the assets of Black Gaming, LLC (“Black Gaming”), including Black Gaming’s direct and indirect ownership interests in its subsidiaries. The transfer of the Black Gaming assets to Mesquite and the acquisition by AcquisitionCo of the Mesquite Interest were pursuant to a joint plan of reorganization (the “Plan”) filed by Black Gaming and its subsidiaries with the United States Bankruptcy Court for the District of Nevada (the “Court”) on March 1, 2010, and approved by the Court on June 28, 2010.

Changes in the Company’s investment in Mesquite during the years endedFebruary 28, 2013 and December 31, 2011 and the two months endedFebruary 29, 2012 are as follows:

	February 28, 2013			February 29, 2012		December 31, 2011
Balance, beginning of period (1)	$	5,602,222		$	5,602,222	$	8,222,222
Equity in net loss of Mesquite	(2,022,000		)	—		(2,620,000		)
Balance, end of period	$	3,580,222		$	5,602,222	$	5,602,222

(1) The period ended December 31, 2011 includes activity beginning August 1, 2011, the date of acquisition.

The Company did not record any impairment related to its equity method investment in Mesquite during the years endedFebruary 28, 2013 and December 31, 2011 and the two months endedFebruary 29, 2012.

The following tables present condensed financial information of Mesquite for the years ended December 31, 2012 and 2011 (in thousands).

	2012		2011
Balance Sheets
Current assets	$	11,656	$	13,556
Property and equipment, net	60,242		64,947
Other assets, net	8,825		10,960
Total assets	$	80,723	$	89,463
Current liabilities	$	14,828	$	13,050
Other liabilities	59,250		64,713
Equity	6,645		11,700
Total liabilities and members' equity	$	80,723	$	89,463

	2012			2011
	Year Ended			Five Months Ended			Seven Months Ended		Twelve Months Ended
	December 31, 2012			December 31, 2011			July 31, 2011		December 31, 2011
	(The Company's Investee)						(Predecessor)		(Combined, unaudited)
Net operating revenues	$	97,548		$	37,341		$	60,785	$	98,126
Operating income (loss)	$	952		$	(4,062	)	$	3,035	$	(1,027	)
Reorganization items	$	—		$	—		$	90,473	$	90,473
Net income (loss)	$	(5,055	)	$	(6,550	)	$	92,693	$	86,143