Marketable Securities, Eldorado Resorts, Inc.

Effective September 19, 2014, as a result of the ERI Merger, the Company’s previous interest in Eldorado was converted into 4,030,440 shares of ERI common stock, $0.00001 par value, including post-closing adjustments, representing approximately 8.6% of such shares then outstanding. Upon conversion, the fair market value of the ERI shares, based on then current trading activity, was approximately $7.1 million less than the carrying value of the Eldorado Interest prior to the ERI Merger, resulting in a write down of the Company's investment and a charge to other comprehensive loss for an unrealized holding loss. Subsequently through November 30, 2015, additional adjustments to carrying value of the ERI shares based on trading activity have resulted in an unrealized holding gain of approximately $22.4 million ($20.5 million during the nine months ended November 30, 2015).

Through the date of this filing, the estimated fair value of the ERI common shares based on trading activity is approximately 11% higher than the carrying value as of November 30, 2015.

The original cost of the Company’s investment in Eldorado in 2007 (prior to subsequent impairment charges and equity in the earnings (losses) of the investee through September 18, 2014) was approximately $38 million.

The following table presents unaudited condensed financial information of ERI and Eldorado for the three and nine months ended September 30, 2015 and 2014, respectively (in thousands):



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2015		2014			2015		2014
Net operating revenues	$	183,540	$	78,949		$	533,624	$	197,728
Operating income	$	24,092	$	2,778		$	59,235	$	11,105
Net income (loss)	$	5,399	$	(4,064	)	$	4,030	$	(3,488	)

Recent events involving ERI include, among others, the following:

•

On July 13, 2015, ERI commenced a cash tender offer and consent solicitation for any and all of the $168.0 million principal amount of 8.625% Senior Secured Notes due 2019 issued by ERI's wholly owned subsidiaries, Eldorado Resorts, LLC and Eldorado Capital Corp. (the "Eldorado Notes") and for any and all of the $560.7 million principal amount of 11.50% Senior Secured Second Lien Notes due 2019 issued by ERI's wholly owned subsidiary, MTR Gaming Group, Inc. (the "MTR Notes"). The total consideration offered in the tender offer was $1,047.92 per $1,000 principal amount of the Eldorado Notes tendered and accepted for purchase and $1,066.39 per $1,000 principal amount of MTR Notes tendered and accepted for purchase, which included a cash consent payment of $30 per $1,000 in principal amount of Eldorado Notes and MTR Notes. According to ERI’s public disclosure, the tender offer was consummated on July 23, 2015, and approximately $130.0 million in aggregate principal amount of Eldorado Notes and $403.9 million in aggregate principal amount of MTR Notes were accepted for purchase, with the Eldorado Notes and MTR Notes that remained outstanding following the consummation of the tender offer being satisfied and discharged pursuant to the terms of the indentures governing those notes. ERI announced the redemption of all of the Eldorado Notes on July 28, 2015.

•

On July 23, 2015, ERI entered into a new $425 million seven-year term loan (the "New ERI Term Loan") and a new $150 million five-year revolving credit facility (the "New ERI Revolving Credit Facility" and, together with the New ERI Term Loan, the “New ERI Credit Facility”). Also on July 23, 2015, ERI incurred $40 million of borrowings under the New ERI Revolving Credit Facility. The New ERI Term Loan will bear interest at a rate per annum of, at ERI’s option, either (x) LIBOR plus 3.25%, with a LIBOR floor of 1.0%, or (y) a base rate plus 2.25%, and will have an issue price of 99.5% of the principal amount of the New ERI Term Loan. The New ERI Revolving Credit Facility will bear interest at a rate per annum of, at ERI’s option, either (x) LIBOR plus a spread ranging from 2.5% to 3.25%, or (y) a base rate plus a spread ranging from 1.5% to 2.25%, in each case with the spread determined based on ERI’s total leverage ratio. Additionally, ERI will be subject to fees on the unused portion of the New ERI Revolving Credit Facility. The New ERI Credit Facility is secured by substantially all of ERI’s personal property assets and substantially all personal property assets of each subsidiary that guaranties the New ERI Credit Facility (other than certain subsidiary guarantors designated as immaterial or restricted subsidiaries), and mortgages on the real property and improvements owned or leased by ERI or a guarantor. As of September 30, 2015, ERI had $423.9 million outstanding on the New ERI Term Loan and $18.0 million in borrowings outstanding under the New ERI Revolving Credit Facility. ERI had $132 million of available borrowing capacity under the New ERI Revolving Credit Facility as of September 30, 2015. At September 30, 2015, the interest rate on the New ERI Term Loan was 4.25% and the interest rate on the New ERI Revolving Credit Facility was 3.25%.

•

On July 23, 2015, ERI issued $375.0 million in aggregate principal amount of 7.0% Senior Notes due 2023 (the “ERI Senior Notes”). The ERI Senior Notes are guaranteed by all of ERI's direct and indirect restricted subsidiaries, othern than immaterial subsidiaries. Interest is payable semi-annually in arrears on February 1st and August 1st of each year. The ERI Senior Notes or any portion thereof may be redeemed beginning in 2018 at a redemption price of 105.25%, declining to 100.00% in 2021 and thereafter.

•

On November 24, 2015 (the "Closing Date"), ERI consummated the Silver Legacy/ Circus Circus Reno Acquisition. The aggregate consideration was approximately $80.2 million of cash, comprised of the purchase price of $72.5 million and a $7.7 million working capital adjustment, plus the assumption of amounts outstanding under the joint venture’s credit facility, of which approximately $80.5 million was outstanding as of the Closing Date. ERI funded the purchase price and repaid the borrowings outstanding under the joint venture's credit facility using a portion of the proceeds from the sale of the ERI Senior Notes, borrowings under the New ERI Revolving Credit Facility and cash on hand.


•	On November 24, 2015, ERI withdrew its registration statement relating to its proposed common stock offering. The proceeds of the offering were intended to pay a portion of the purchase price for the assets acquired in the Silver Legacy/Circus Circus Reno Acquisition; however, as described above, those transactions were consummated utilizing other financing options and available cash on hand.

Management believes that ERI’s consummation of the Silver Legacy/Circus Circus Reno Acquisition and its debt refinancing are likely to significantly impact the Company’s future financial performance. However, the nature and extent of any such impact will depend on numerous factors that are beyond the control of the Company. Accordingly, management is unable to determine at this time the nature or extent to which the Company’s future financial performance may be affected by these events.