Investment in Mesquite (Mesquite)

12 Months Ended

Feb. 28, 2014

Mesquite

Schedule of Equity Method Investments [Line Items]

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 (doing business as the Oasis Resort and Casino prior to its demolition which was substantially completed by August 31, 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 ended February 28, 2014 and 2013 are as follows:



	2014		2013
Balance, beginning of period	$	3,580,222	$	5,602,222
Equity in net income (loss) of Mesquite	664,000		(2,022,000		)
Balance, end of period	$	4,244,222	$	3,580,222

The Company did not record any impairment related to its equity method investment in Mesquite during the years ended February 28, 2014 and February 28, 2013.

The following tables present condensed financial information of Mesquite as of December 31, 2013 and 2012 and for the years then ended (in thousands).



	2013		2012
Balance Sheets
Current assets	$	13,959	$	11,656
Property and equipment, net	57,248		60,242
Other assets, net	6,768		8,825
Total assets	$	77,975	$	80,723

Current liabilities	$	12,175	$	14,828
Other liabilities	57,495		59,250
Members' equity	8,305		6,645
Total liabilities and members' equity	$	77,975	$	80,723



	2013		2012
Statements of Operations
Net operating revenues	$	93,781	$	97,548
Operating income	$	4,777	$	952
Net income (loss)	$	1,660	$	(5,055	)

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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