Investments in Joint Ventures

The Company has various investments in 50% owned joint ventures in Las Vegas, Nevada, which are accounted for under the equity method. Under the equity method, original investments are initially recorded at cost and are adjusted by the investor's share of earnings, losses and distributions of the joint ventures. STN Predecessor's carrying value of certain investments in joint ventures also reflects the effect of previously recognized impairment charges. The carrying value of equity method investments may be reduced below zero, resulting in a deficit investment balance, when the investor is committed to provide further financial support for the investee.

Successor

The Company holds 50% equity investments in Barley's, The Greens and Wildfire Lanes, which are managed by the Company on behalf of the joint ventures. The Company also owns a 50% investment in Losee Elkhorn Properties, LLC which owns undeveloped land in North Las Vegas. As a result of fresh‑start reporting, on the Effective Date the carrying values of these investments were adjusted to their fair values, which totaled approximately $10.3 million. These investments are not, in the aggregate, material in relation to the Company's financial position or results of operations. Operating earnings from joint ventures is shown as a separate line item after operating income, and interest and other expense from joint ventures is shown as a separate component under other expense on the Company's consolidated statement of operations. For the Successor period June 17, 2011 through December 31, 2011, Station's equity in losses of joint ventures includes a charge of $2.3 million related to recognizing its 50% share of a goodwill impairment charge recorded by The Greens.

STN Predecessor

STN's investments in joint ventures consist of the following (amounts in thousands):



	STN Predecessor
	Station Casinos, Inc.
	December 31, 2010
Barley's Casino & Brewing Company (“Barley's”) (50.0%)	$	4,756
Wildfire Lanes and Casino (“Wildfire Lanes”) (50.0%)	760
Investments in joint ventures	$	5,516
Green Valley Ranch (50.0%) (a)	$	(38,258	)
The Greens Gaming and Dining (“The Greens”) (50.0%) (b)	(163		)
Aliante Station (50.0%) (a)	(306,346		)
Deficit investments in joint ventures	$	(344,767	)

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(a)	As a result of asset impairment charges and ongoing losses recognized during the Predecessor period, STN's investments in Green Valley Ranch and Aliante Station at December 31, 2010 reflects deficit balances, which are reflected as long-term liabilities in STN's consolidated balance sheet.


(b)	As a result of ongoing losses recognized during the Predecessor period, STN's investment in The Greens at December 31, 2010 reflects a deficit balance, which is reflected as a long-term liability on STN's consolidated balance sheet.

On June 7, 2011, STN Predecessor disposed of its 6.7% investment in Palms Casino Resort and recognized a gain on disposal of $250,000. As a result of previously recognized losses, the carrying value of this investment had been reduced to zero prior to disposal.

For the Predecessor Periods, interest and other expense from joint ventures includes STN Predecessor's 50% interest in the mark-to-market valuation of certain joint ventures' interest rate swaps that were not designated as hedging instruments for accounting purposes.

As further described in Note 1, Station acquired Green Valley Ranch on the Effective Date. Station did not acquire STN Predecessor's investment in Aliante Station.

Impairment Loss

In connection with STN's interim impairment testing during the three months ended September 30, 2010, STN reviewed the carrying value of its investments in joint ventures for impairment because indicators of impairment existed. STN compared the estimated future cash flows of the assets, on an undiscounted basis, to the carrying values of the assets, and recorded impairment charges totaling $16.3 million to reduce the $19.8 million carrying value of its investment in Richfield Homes to its fair value of $3.5 million. The fair values of STN's investments in joint ventures were estimated using discounted cash flow techniques based on Level 3 inputs under ASC Topic 820.

During the year ended December 31, 2009, STN determined that due to the ongoing recession and its impact on the estimated future cash flows from its investments in joint ventures, its investments in joint ventures should be reviewed for impairment. STN compared the estimated future cash flows of each of its investments in joint ventures, on an undiscounted basis, to the carrying value. The carrying values for its investments in certain joint ventures, primarily Green Valley Ranch, were higher than their estimated fair values, and STN recorded impairment losses totaling approximately $30.0 million to reduce the carrying values of its investments in these joint ventures totaling $37.2 million to their fair values totaling $7.2 million.

Summarized balance sheet information for STN's joint ventures is as follows (amounts in thousands):



	STN Predecessor
	Station Casinos, Inc.
	December 31, 2010
Current assets	$	113,439
Property and equipment and other assets, net	1,044,629
Current liabilities	1,362,724
Long-term debt and other liabilities	499,990
Shareholders' equity	(704,646		)

Summarized results of operations for STN's joint ventures are as follows (amounts in thousands):



	STN Predecessor
	Station Casinos, Inc.
	Period January 1, 2011 Through June 16, 2011			Year Ended December 31, 2010			Year Ended December 31, 2009
Net revenues	$	194,554		$	411,861		$	459,688
Operating costs and expenses	177,685			935,529			736,647
Operating income	16,869			(523,668		)	(276,959		)
Interest and other expense, net	(70,858		)	(174,934		)	(114,141		)
Net (loss) income	$	(53,989	)	$	(698,602	)	$	(391,100	)

STN's share of the operating earnings (losses) from its joint ventures is shown as a separate line item after operating income on its consolidated statements of operations. For the years ended December 31, 2010 and 2009, operating losses from joint ventures includes charges of $233.3 million and $124.9 million, respectively, related to recognizing STN's 50% share of impairment charges recorded by Aliante Station in 2010 and Rancho Road, LLC and Aliante Station in 2009. STN's share of interest and other expense from joint ventures is shown as a separate component under other expense on its consolidated statements of operations, which also includes its 50% share of the joint ventures' mark-to-market valuation of their interest rate swaps that are not designated as hedging instruments. The following table identifies STN's total losses from joint ventures during the Predecessor periods (amounts in thousands):



	STN Predecessor
	Station Casinos, Inc.
	Period January 1, 2011 Through June 16, 2011			Year Ended December 31, 2010			Year Ended December 31, 2009
Operating losses from joint ventures	$	(945	)	$	(248,495	)	$	(127,643	)
Interest and other expense from joint ventures	(15,452		)	(66,709		)	(40,802		)
Net losses from joint ventures	$	(16,397	)	$	(315,204	)	$	(168,445	)