Investment in Eldorado (Eldorado)

9 Months Ended

Nov. 30, 2013

Eldorado

Schedule of Equity Method Investments [Line Items]

Investment in Eldorado

Investment in Eldorado

On December 14, 2007, the Company, through AcquisitionCo, effectively acquired its Eldorado Interest by transferring the Eldorado-Shreveport Investments in part to Eldorado Resorts, LLC (“Resorts”) and the balance to Donald L. Carano (“Carano”), free and clear of any liens. The Eldorado-Shreveport Investments included first mortgage bonds due 2012 co-issued by Eldorado Casino Shreveport Joint Venture (the “Louisiana Partnership”) and Shreveport Capital Corporation, a wholly-owned subsidiary of the Louisiana Partnership (the “Mortgage Bonds”) and 11,000 preferred shares issued by Shreveport Gaming Holdings, Inc. (“SGH”), then a partner of the Louisiana Partnership, that is not affiliated with Resorts or the Company. The original principal amount of the Mortgage Bonds was $38,045,363. Previously in May 2007, NGOF contributed the Eldorado-Shreveport Investments to the Company at the estimated fair value of such investments as of that date. Effective April 1, 2009, Resorts became a wholly-owned subsidiary of Eldorado when all of the members of Resorts, including AcquisitionCo, exchanged their interests in Resorts for identical interests in Eldorado. Of the Company’s 17.0359% Eldorado Interest, 14.47% and 2.5659% interests were acquired directly from Resorts and Carano, respectively.

As a limited liability company, Eldorado is generally not subject to federal income taxes and its members are required to include their respective shares of Eldorado’s taxable income in their respective income tax returns. Eldorado’s operating agreement provides that the board of managers will distribute each year to each member an amount equal to such member’s allocable share of taxable income multiplied by the highest marginal combined federal, state, and local income tax rate applicable to the members for that year.

We evaluated our investment in Eldorado for possible impairment as of November 30, 2013 and determined that no impairment existed.

The following table presents unaudited condensed financial information of Eldorado for the three and nine months endedNovember 30, 2013 (restated) and 2012 (in thousands):

	Three Months Ended				Nine Months Ended
	November 30,				November 30,
	2013		2012		2013		2012
	(Restated)				(Restated)
Net operating revenues	$	63,631	$	65,907	$	191,638	$	194,771
Operating income	$	7,092	$	6,816	$	23,617	$	20,629
Net income	$	3,184	$	1,973	$	11,819	$	7,822

The following table presents unaudited condensed financial information of one of Eldorado’s unconsolidated investees, the Silver Legacy Joint Venture, for the three and nine months endedNovember 30, 2013 and 2012 (in thousands):

	Three Months Ended					Nine Months Ended
	November 30,					November 30,
	2013		2012			2013		2012
Net operating revenues	$	34,979	$	33,667		$	96,683	$	89,902
Operating income	$	5,903	$	4,576		$	11,850	$	2,891
Net Income (loss)	$	3,756	$	(3,744	)	$	5,230	$	(13,546	)

Prior to 2012, as a result of Eldorado's identification of triggering events, Eldorado fully impaired its investment in the Silver Legacy Joint Venture and discontinued the equity method of accounting until the fourth quarter of 2012 when additional investments by Eldorado in the Silver Legacy Joint Venture were made. At such time, Eldorado recognized its share of the Silver Legacy Joint Venture's net losses not recognized during the period that the equity method of accounting was suspended. During 2012, the Silver Legacy Joint Venture underwent a Chapter 11 bankruptcy reorganization which required cash advances from, and deposits by, the owners of the joint venture, but did not affect the ownership interest percentages of its owners.

Reference is made to the discussion under "Proposed Eldorado Transaction," below, regarding a proposed transaction pursuant to which the Company's interest in Eldorado may be converted into an interest in a new entity of which Eldorado would, by merger, become a part.