Investment in Eldorado (Eldorado)

6 Months Ended

Aug. 31, 2014

Eldorado

Schedule of Equity Method Investments [Line Items]

Investment in Eldorado

Investment in Eldorado

On December 14, 2007, the Company, through AcquisitionCo, effectively acquired the Eldorado Interest by transferring the Eldorado-Shreveport Investments in part to 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 was generally not subject to federal income taxes during the period that the Company held the Eldorado Interest and its members were required to include their respective shares of Eldorado’s taxable income in their respective income tax returns. Eldorado’s operating agreement provided that the board of managers would 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 August 31, 2014 and determined that no impairment existed.

The following table presents unaudited condensed financial information of Eldorado for the three and six months ended June 30, 2014 and 2013 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Net operating revenues	$	61,749	$	65,828	$	118,779	$	128,007
Operating income	$	6,775	$	10,500	$	8,327	$	16,525
Net income	$	2,909	$	6,548	$	576	$	8,635

The following table presents unaudited condensed financial information of an Eldorado unconsolidated investee, the Silver Legacy Joint Venture, for the three and six months ended June 30, 2014 and 2013 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Net operating revenues	$	35,516	$	34,886	$	63,093	$	61,704
Operating income	$	6,640	$	5,728	$	8,071	$	5,947
Net loss	$	3,882	$	3,406	$	2,576	$	1,474

See Note 10, "Subsequent Events - Eldorado Transaction," below.