Long-term Debt and Liabilities Subject to Compromise

Successor

Long-term debt consists of the following (amounts in thousands):



	Successor
	Station Casinos LLC
	December 31, 2011
Propco Term Loan Tranche B-1, due June 17, 2016, interest at a margin above LIBOR or base rate (3.30% at December 31, 2011), net of unamortized discount of $25.0 million	$	169,952
Propco Term Loan Tranche B-2, due June 17, 2016, interest at a margin above LIBOR or base rate (4.30% at December 31, 2011), net of unamortized discount of $77.7 million	668,520
Propco Term Loan Tranche B-3, due June 17, 2016, interest at a margin above LIBOR or base rate (2.37% at December 31, 2011), net of unamortized discount of $123.6 million (a)	501,369
Propco Revolver due June 17, 2016, interest at a margin above LIBOR or base rate (3.86% at December 31, 2011), net of unamortized discount of $7.9 million	71,010
Opco Term Loan, due June 17, 2016, interest at a margin above LIBOR or base rate (3.29% at December 31, 2011), net of unamortized discount of $42.6 million	344,763
Opco Revolver, due June 17, 2016, interest at a margin above LIBOR or base rate (5.25% at December 31, 2011)	3,600
GVR First Lien Term Loan, due June 17, 2016, interest at a margin above LIBOR or base rate (6.25% at December 31, 2011)	206,425
GVR First Lien Revolver, due June 17, 2016, interest at a margin above LIBOR or base rate (7.00% at December 31, 2011)	4,200
GVR Second Lien Term Loan, due June 17, 2017, interest at a margin above LIBOR or base rate (10.00% at December 31, 2011)	90,000
Restructured Land Loan, due June 16, 2016, interest at a margin above LIBOR or base rate (3.80% at December 31, 2011), net of unamortized discount of $17.5 million	88,950
Other long-term debt, weighted-average interest of 3.95% at December 31, 2011, maturity dates ranging from 2012 to 2027	46,438
Total long-term debt	2,195,227
Current portion of long-term debt	(16,380		)
Total long-term debt, net	$	2,178,847

________________________________

(a) Effective January 3, 2012, the Tranche B-3 term loan was converted to fixed rate senior notes at the election of the lenders.

Effective June 17, 2011, the Company and its subsidiaries entered into:


•	A new credit agreement (the “Propco Credit Agreement”) with Deutsche Bank AG Cayman Islands Branch, as administrative agent, the other lender parties thereto (collectively, the “Mortgage Lenders”), consisting of a term loan facility in the principal amount of $1.575 billion and a revolving credit facility in the amount of $125 million; and


•	A new credit agreement (the “Opco Credit Agreement”) with Deutsche Bank AG Cayman Islands Branch, as administrative agent, and the other lender parties there to, consisting of approximately $436 million in aggregate principal amount of term loans and a revolving credit facility in the amount of $25 million; and


•	An amended and restated credit agreement (the “Restructured Land Loan”) with the Deutsche Bank AG Cayman Islands Branch and JPMorgan Chase Bank, N.A. as initial lenders (the “Land Loan Lenders”), consisting of a term loan facility with a principal amount of $105 million; and

•

A new first lien credit agreement with Jefferies Finance LLC and Goldman Sachs Lending Partners LLC, as initial lenders (collectively, the “GVR Lenders”), consisting of a revolving credit facility in the amount of $10 million (the “GVR First Lien Revolver”) and a term loan facility in the amount of $215 million (the “GVR First Lien Term Loan and together with the GVR First Lien Revolver, the “GVR First Lien Credit Agreement”), and a new second lien credit agreement with the GVR Lenders with a term loan facility in the amount of $90 million (the “GVR Second Lien Term Loan” and together with the GVR First Lien Credit Agreement, the “GVR Credit Agreements”).

The Propco Credit Agreement, Opco Credit Agreement, the Restructured Land Loan, and the GVR Credit Agreements are referred to herein as the “Credit Agreements”. The Credit Agreements contain a number of covenants that impose significant operating and financial restrictions on the Company, including restrictions on the Company and its subsidiaries' ability to, among other things: (a) incur additional debt or issue certain preferred units; (b) pay dividends on or make certain redemptions, repurchases or distributions in respect of the Company's membership interests or make other restricted payments; (c) make certain investments; (d) sell certain assets; (e) create liens on certain assets; (f) consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; and (g) enter into certain transactions with its affiliates. In addition, the Credit Agreements contain certain financial covenants, including minimum interest coverage ratio, total leverage ratio and maximum capital expenditures.

The Credit Agreements also contain certain events of default including, among other things, nonpayment of principal when due; nonpayment of interest, fees or other amounts after a five business day grace period; material inaccuracy of representations and warranties; violation of covenants (subject, in the case of certain covenants, to certain grace periods); cross‑default; bankruptcy events; certain Employee Retirement Income Security Act events; material judgments; and a change of control.

Propco Credit Agreement

As of the Effective Date, the Company, as borrower, entered into the Propco Term Loan and the Propco Revolver. The Propco Term Loan originally had three tranches: Tranche B-1 in the principal amount of $200 million, Tranche B-2 in the principal amount of $750 million and Tranche B-3 in the principal amount of $625 million. The initial maturity date of the loans made under the Propco Credit Agreement is on the fifth anniversary of the Effective Date but may be extended for two additional one-year periods, subject to the absence of defaults, accuracy of representations and warranties, payment of an extension fee equal to 1.00% of the outstanding principal amount of the term loans, plus the revolving credit commitments, for each extension, and pro forma compliance with total leverage and interest coverage ratios. Effective January 3, 2012, the lenders elected (a) to fix the interest rate on the Tranche B-3 loan, and (b) to exchange all of such fixed rate Tranche B-3 loans for senior unsecured notes in a form suitable for resale under Rule 144A of the Securities Act of 1933, as amended (the "Senior Notes"). See the Senior Notes section below for additional information.

Interest accrues on the principal balance of the outstanding amounts under the Tranche B-1 loans at the rate per annum, as selected by the Company, of not more than LIBOR plus 3.00% or base rate plus 2.00% for the first three years of the term; LIBOR plus 3.50% or base rate plus 2.50% for the fourth and fifth year; LIBOR plus 4.50% or base rate plus 3.50% in the sixth year if the Company elects to exercise the first optional extension of the maturity of the loans; and LIBOR plus 5.50% or base rate plus 4.50% for the seventh year if the Company elects to exercise the second optional extension of the maturity of the loans. The base rate is subject to a floor equal to one-month LIBOR plus 1.00%. Interest accrues on the Tranche B-2 loan at a rate per annum, as selected by the Company of not more than LIBOR plus 4.00% or base rate plus 3.00%. Interest accrues on the principal balance of the outstanding amounts under the Propco Revolver at the rate per annum, as selected by the Company, of not more than LIBOR plus 3.00% or base rate plus 2.00%. Additionally, the Company is subject to a fee of 0.50% for the unfunded portion of the Propco Revolver. The Company is required to hedge 50% of the outstanding principal balance of the term loans for a period of no less than three years from the date of entry into the applicable swap. Pursuant to this requirement, the Company entered into a floating-to-fixed interest rate swap with a notional amount of $850 million (such notional amount reducing over the life of the arrangement), terminating July 1, 2015, which effectively converts a portion of its floating-rate debt to a fixed rate. Under the terms of the interest rate swap, the Company pays a fixed rate of approximately 1.29% and receive one-month LIBOR. (See Note 16—Derivative Instruments).

The Propco Credit Agreement contains certain financial and other covenants, including a total leverage ratio and a minimum interest coverage ratio in each case with testing beginning with the fiscal quarter ending December 31, 2012. The Propco Credit Agreement also limits capital expenditures. The Company is in compliance with all Propco Credit Agreement covenants as of December 31, 2011. The Company is not required to make principal payments prior to maturity of the Propco Credit Agreement other than (a) quarterly payments of an amount equal to 0.25% of the aggregate principal amount of the Tranche B-1 and Tranche B-2 loans outstanding on the Effective Date, (b) prepayments of the Tranche B-1 loans (and Tranche B-2 loans after Tranche B-1 has been paid in full) of 75% of excess cash flow, net of a credit for payments made pursuant to (a) above, if the total leverage ratio is equal to or greater than 6.00:1.00, 50% of excess cash flow if the total leverage ratio is less than 6.00:1.00 but greater than or equal to 4.00:1.00, or 25% if the total leverage ratio is less than 4.00:1.00; (c) prepayments with proceeds of certain asset sales, events of loss, incurrence of debt and equity issuances, and (d) prepayments of the Propco Revolver of unrestricted cash in excess of $15 million (which do not permanently reduce the revolving loan commitment) .

The Propco Credit Agreement is guaranteed by all subsidiaries of the Company except its unrestricted subsidiaries. The Propco Credit Agreement is secured by a pledge of the Company's equity (including equity held by Station Holdco and Station Voteco in the Company), together with all tangible and intangible assets of the Company and its restricted subsidiaries, including a pledge by the Company of the stock of NP Opco Holdings LLC, GVR Holdco 3 LLC, CV PropCo, LLC, and NP Landco Holdco LLC.

Senior Notes

Effective January 3, 2012, the Mortgage Lenders elected (a) to fix the interest rate on the Tranche B-3 loan, and (b) to exchange all of such fixed rate Tranche B-3 loan for the Senior Notes. Interest accrues on the Senior Notes at an initial annual rate of 3.65%, increasing to 3.66% on June 16, 2012, 3.67% on June 16, 2013, 4.87% on June 16, 2014, 7.2% on June 16, 2016 and 9.54% on June 16, 2017. To the extent the Company has not repaid the Senior Notes, it will be required to pay a duration fee equal to 1% of the then outstanding aggregate principal amount of the Senior Notes on June 17, 2016 and June 19, 2017. The Senior Notes are guaranteed by the Company's restricted subsidiaries that are guarantors under the Propco Credit Agreement, which are the Company's subsidiaries that own Red Rock, Palace Station, Boulder Station and Sunset Station, and NP Development LLC and NP Losee Elkhorn Holdings LLC. The Senior Notes are redeemable at any time after December 31, 2012 at a price equal to 100% of the principal amount plus accrued and unpaid interest, if any, and the Company is required to offer to purchase the notes at 100% of the principal amount plus accrued interest thereon in the event of certain change of control transactions and with certain proceeds of asset sales.

The indenture governing the Senior Notes contains certain financial and other covenants that, among other things, limit the ability of the Company and its restricted subsidiaries to make restricted payments or investments, incur additional indebtedness or issue disqualified stock or create subordinated indebtedness that is not subordinated to the Senior Notes or the guarantees, create liens, transfer and sell assets, merge, consolidate or dispose of substantially all of their assets, enter into certain transactions with affiliates, engage in lines of business other than their core business and related businesses, and create restrictions on dividends and other payments by the restricted subsidiaries.

Opco Credit Agreement

As of the Effective Date, a subsidiary of the Company, NP Opco LLC (“Opco”), as borrower, entered into the Opco Credit Agreement consisting of (a) a term loan facility in the principal amount of approximately $435.7 million (the “Opco Term Loan”), and (b) a revolving credit facility in the maximum amount of $25 million, the availability of which is subject to standard continuing conditions (the “Opco Revolver”). Opco has the option, after the first anniversary of the Effective Date, to solicit lending commitments to increase the amount of the Opco Revolver by up to an additional $25 million. The initial maturity date is the fifth anniversary of the Effective Date but may be extended for two additional one-year periods, subject to the absence of defaults, accuracy of representations and warranties, payment of a 1% extension fee for each extension, and pro forma compliance with total leverage and interest coverage ratios. Interest accrues on the principal balance of loans at the rate per annum, as selected by Opco, of not more than LIBOR plus 3.00% or base rate plus 2.00% for the first three years of the term; LIBOR plus 3.50% or base rate plus 2.50% for the fourth and fifth year; LIBOR plus 4.50% or base rate plus 3.50% for the sixth year if Opco elects to exercise the first optional extension of the maturity of the loans; and LIBOR plus 5.50% or base rate plus 4.50% for the seventh year if Opco elects to exercise the second optional extension of the maturity of the loans. The base rate is subject to a floor equal to one-month LIBOR plus 1.00%. Additionally, Opco is subject to a fee of 0.50% for the unfunded portion of the Opco Revolver. Opco is required to hedge 50% of the outstanding principal balance of its term loan for a period no less than three years from the date of entry into the applicable swap. Pursuant to this requirement, Opco entered into a floating-to-fixed interest rate swap with a notional amount of $260.5 million (such notional amount reducing over the life of the arrangement), terminating July 1, 2015, which effectively converts a portion of its floating-rate debt to a fixed rate. Under the terms of the interest rate swap, Opco pays a fixed rate of approximately 1.34% and receive one-month LIBOR (See Note 16—Derivative Instruments).

The Opco Credit Agreement contains certain financial and other covenants. These include a maximum total leverage ratio and a minimum interest coverage ratio, which covenants commence on the earlier of 18 months after the Effective Date or the date on which aggregate investments by Opco deemed to have been made due to the designation of restricted subsidiaries as unrestricted subsidiaries exceed $10 million. The Opco Credit Agreement also limits capital expenditures. The Company is in compliance with all Opco Credit Agreement covenants as of December 31, 2011. Opco is not required to make principal payments prior to the maturity of the Opco Credit Agreement other than (a) quarterly payments of $663,768 for application to the Opco Term Loan, (b) commencing with the fiscal year ended December 31, 2011, annual prepayments of 75% of excess cash flow, net of a credit for payments made pursuant to (a) above, if the total leverage ratio is equal to or greater than 3.50:1.00, 50% of excess cash flow if the total leverage ratio is less than 3.50:1.00 but greater than or equal to 2.50:1.00, or 25% if the total leverage ratio is less than 2.50:1.00; (c) prepayments with proceeds of certain asset sales, reimbursements of investments, events of loss, incurrence of debt and equity issuances; and (d) prepayments of the Opco Revolver of unrestricted cash in excess of $7.5 million (which do not permanently reduce the revolving loan commitment).

The Opco Credit Agreement is guaranteed by NP Opco Holdings LLC (“Opco Holdings”) and all subsidiaries of Opco except unrestricted subsidiaries. The Opco Credit Agreement is secured by a pledge of Opco equity, together with all tangible and intangible assets of Opco Holdings, Opco and its subsidiaries (other than property of unrestricted subsidiaries and subject to limitations required by applicable gaming laws).

Restructured Land Loan

As of the Effective Date, an indirect wholly owned subsidiary of the Company, CV PropCo, LLC (“CV Propco”), as borrower, entered into the Restructured Land Loan in the principal amount of $105 million. The initial maturity date of the Restructured Land Loan is June 16, 2016. Interest accrues on the principal balance at the rate per annum, at the option of the Company of LIBOR plus 3.50% or base rate plus 2.50% for the first five years; LIBOR plus 4.50% or base rate plus 3.50% for the sixth year if CV Propco elects to exercise the first optional extension of the maturity of the loans; and LIBOR plus 5.50% or base rate plus 4.50% in the seventh year if CV Propco elects to exercise the second optional extension of the maturity of the loans. All interest on the Restructured Land Loan will be paid in kind for the first five years. CV Propco has two options to extend the maturity date for an additional year to be available subject to absence of default, payment of up to 1.00% extension fee for each year, a step-up in interest rate to not more than LIBOR plus 4.50% or base rate plus 3.50% in the sixth year and not more than LIBOR plus 5.50% or base rate plus 4.50% in the seventh year. Interest accruing in the sixth and seventh years shall be paid in cash. There is no scheduled minimum amortization prior to final stated maturity, but the Restructured Land Loan is subject to mandatory prepayments with excess cash and, subject to certain exceptions, with casualty or condemnation proceeds. The Restructured Land Loan is guaranteed by NP Tropicana LLC (an indirect subsidiary of the Company), NP Landco Holdco LLC (a subsidiary of the Company and parent of CV Propco and NP Tropicana LLC) and all subsidiaries of CV Propco and secured by a pledge of CV Propco and NP Tropicana LLC equity and all tangible and intangible assets of NP Tropicana LLC, NP Landco Holdco LLC and CV Propco and its subsidiaries, principally consisting of land located on the southern end of Las Vegas Boulevard at Cactus Avenue and land surrounding the Wild Wild West Gambling Hall and Hotel (“Wild Wild West”), and the leasehold interest in the land on which the Wild Wild West is located. The land carry costs of CV Propco are supported by the Company under a limited support agreement and recourse guaranty (the “Limited Support Agreement”) that provides for a guarantee from the Company to the Land Loan Lenders of: (a) the net operating costs of CV Propco and NP Tropicana LLC, including (i) timely payment of all capital expenditures, taxes, insurance premiums, other land carry costs and indebtedness (excluding debt service for the Restructured Land Loan) payable by CV Propco and (ii) rent, capital expenditures, taxes, management fees, franchise fees, maintenance, operations and ownership payable by NP Tropicana LLC; and (b) certain recourse liabilities of CV Propco and NP Tropicana LLC under the Restructured Land Loan, including, without limitation, payment and performance of the Restructured Land Loan in the event any of CV Propco, NP Landco Holdco LLC or NP Tropicana LLC files or acquiesces in the filing of a bankruptcy petition or similar legal proceeding. As part of the consideration for the Land Loan Lenders' agreement to enter into the Restructured Land Loan, CV Propco and NP Tropicana LLC issued warrants to the Land Loan Lenders (or their designees) for up to 60% of the outstanding equity interests of each of CV Propco and NP Tropicana LLC exercisable for a nominal exercise price commencing on the earlier of (i) the date that the Restructured Land Loan is repaid, (ii) the date CV Propco sells any land to a third party, and (iii) the fifth anniversary of the Restructured Land Loan.

GVR Credit Agreements

As of the Effective Date, Station GVR Acquisition, LLC, as borrower (“GVR Borrower”), entered into the GVR First Lien Credit Agreement which consists of a $10 million revolving credit facility (the “GVR Revolver”) and a $215 million term loan (the “GVR First Lien Term Loan” and together with the GVR Revolver, the “GVR First Lien Loan”) and the GVR Second Lien Credit Agreement consisting of a $90 million term loan (the “GVR Second Lien Loan” and together with the GVR First Lien Loan, the “GVR Loans”). The maturity date of the GVR First Lien Loan is the fifth anniversary of the Effective Date and the maturity date of the GVR Second Lien Loan is the sixth anniversary of the Effective Date. The GVR First Lien Term Loan has scheduled quarterly minimum amortization payments in the amount of 1% per annum. There are no scheduled minimum amortization payments of the second lien term loan prior to final stated maturity. The GVR Loans are subject to customary mandatory prepayments, including sale of equity or issuance of debt and commencing with the fiscal year ended December 31, 2011, annual prepayments of 75% of excess cash flow if the total leverage ratio is equal to or greater than 4.50:1.00, 50% of excess cash flow if the total leverage ratio is less than 4.50:1.00, in each case, to maintenance of minimum liquidity of $3 million. Interest accrues on the GVR First Lien Loan at the rate per annum, at the option of the Company of LIBOR plus 4.75% with a 1.50% LIBOR floor or base rate plus 3.75% with a 2.50% base rate floor and interest accrues on the GVR Second Lien Loan at the rate per annum, at the option of the Company of LIBOR plus 8.50% with a 1.50% LIBOR floor or a base rate plus 7.50% with a 2.50% base rate floor. The GVR Borrower is required to hedge 50% of the outstanding principal balance of its term loan for a period no less than two years from the date of entry into the applicable swap. Pursuant to this requirement, the GVR Borrower entered into a floating-to-fixed interest rate swap with a notional amount of $228.5 million (such notional amount reducing over the life of the arrangement), terminating July 1, 2015, which effectively converts a portion of its floating-rate debt to a fixed rate. Under the terms of the interest rate swap, the GVR Borrower pays a fixed rate of approximately 2.03% and receives one-month LIBOR, subject to a minimum of 1.50% (See Note 16—Derivative Instruments).

The GVR Credit Agreements contain certain financial and other covenants including a maximum total leverage ratio and a fixed charge coverage ratio. The GVR Credit Agreements also limits capital expenditures. The GVR Loans are guaranteed by all subsidiaries of GVR Borrower and its immediate parent company, GVR Holdco 1 LLC (“GVR Holdco”) and is secured by first lien and second lien pledges of GVR Borrower equity, together with first and second priority liens on all tangible and intangible assets of GVR Holdco and its subsidiaries that may be pledged as collateral pursuant to applicable law. At December 31, 2011, the GVR Borrower is in compliance with all covenants related to the GVR Credit Agreements.

Corporate Office Lease

On the Effective Date, we assumed STN's lease agreement related to the corporate office building, which STN had entered into in 2007 pursuant to a sale-leaseback arrangement with a third-party real estate investment firm. The lease had an initial term of 20 years with four options to extend the lease, each option for an extension of five years. The lease also contains two options for the Company to repurchase the corporate office building, one option at the end of the fifth year of the original lease term and a second option at the end of the tenth year of the original lease term, which is considered continuing involvement under the authoritative guidance for accounting for sale-leaseback transactions involving real estate. Because of this continuing involvement, the sale-leaseback transaction is being accounted for as a financing transaction,. Upon the adoption of fresh-start reporting, the estimated fair value of the corporate office building was recorded within property and equipment, net on the Company's consolidated balance sheet, and an offsetting liability was recorded as a component of other long-term debt. The corporate office building is being depreciated according to Station's policy, and the lease payments are recognized as principal and interest payments on the long-term debt. The lease payment in effect during the Successor period June 17, 2011 through December 31, 2011 was $2.9 million on an annualized basis, which will increase by approximately 1.25% annually to approximately $3.8 million in the final year of the original term. Minimum lease payments related to this lease for the years ended December 31, 2012, 2013, 2014, 2015 and 2016, respectively, are approximately, $3.0 million, $3.1 million, $3.2 million, $3.3 million and and $3.3 million. During the Successor period June 17, 2011 through December 31, 2011, the Company recorded interest expense of $0.8 million related to this lease.

Scheduled principal maturities of the Company’s long-term debt for each of the next five years and thereafter as of December 31, 2011 are as follows (amounts in thousands):



Years ending December 31,
2012	$	16,380
2013	16,827
2014	16,802
2015	16,962
2016	2,388,788
Thereafter	33,871
	$	2,489,630

Borrowing Availability

At December 31, 2011, the Company's borrowing availability was $38.0 million under the Propco Credit Agreement, $17.9 million under the Opco Credit Agreement, and $5.8 million under the GVR Credit Agreement.

STN Predecessor



	STN Predecessor
	Station Casinos, Inc.
	December 31, 2010
CMBS mortgage loan and related mezzanine financings, due November 12, 2009, interest at a margin above LIBOR (5.8% at December 31, 2010) (a)	$	2,475,000
Land Loan, due February 7, 2011, interest at a margin above LIBOR or the Alternate Base Rate (8.5% at December 31, 2010)	242,032
Revolver, due August 7, 2012, interest at a margin above the Alternate Base Rate or the Eurodollar Rate (5.2% at December 31, 2010) (a)	631,107
Term Loan, due August 7, 2012, interest at a margin above the Alternate Base Rate or the Eurodollar Rate (4.9% at December 31, 2010) (a)	242,500
6% senior notes, interest payable semi-annually, principal due April 1, 2012, callable April 1, 2009 (a)	450,000
7³/₄% senior notes, interest payable semi-annually, principal due August 15, 2016, callable August 15, 2011 (a)	400,000
6¹/₂% senior subordinated notes, interest payable semi-annually, principal due February 1, 2014, callable February 1, 2010 (a)	442,000
6⁷/₈% senior subordinated notes, interest payable semi-annually, principal due March 1, 2016, callable March 1, 2010 (a)	660,000
6⁵/₈% senior subordinated notes, interest payable semi-annually, principal due March 15, 2018, callable March 15, 2011 (a)	300,000
Other long-term debt, weighted-average interest of 5.7% at December 31, 2010, maturity dates ranging from 2010 to 2027 (a)	79,116
Total long-term debt	5,921,755
Current portion of long-term debt	(242,366		)
Long-term debt subject to compromise (a)	(5,670,730		)
Total long-term debt, net	$	8,659

______________________________


(a)	Certain long-term debt was subject to compromise as a result of the Chapter 11 Case and was classified as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2010 as described below.

CMBS Loans

In connection with STN's merger transaction, on November 7, 2007, a number of wholly owned unrestricted direct and indirect subsidiaries of Predecessor (collectively, the “CMBS Borrower”) entered into a mortgage loan and related mezzanine financings in the aggregate principal amount of $2.475 billion (the “CMBS Loans”), for the purpose of financing the merger consideration payable to Predecessor's stockholders upon consummation of the merger and paying fees and expenses incurred in connection with the merger. The CMBS Loans were secured by substantially all fee and leasehold real property comprising Palace Station, Boulder Station, Sunset Station and Red Rock (collectively, the “CMBS Property”).

Land Loan

On February 7, 2008, CV Propco, a wholly owned, indirect unrestricted subsidiary of STN Predecessor, as borrower, entered into a $250 million delay-draw term loan which was collateralized by land located on the southern end of Las Vegas Boulevard at Cactus Avenue and land surrounding Wild Wild West in Las Vegas, Nevada (the “Land Loan”). The Land Loan contains no principal amortization and matured on February 7, 2011. At closing, $200 million was drawn with the remaining $50 million drawn in June 2008. The proceeds were used to fund a distribution to Predecessor, establish an interest reserve and pay transaction expenses. Borrowings under the Land Loan bore interest at LIBOR plus 5.5% per annum or at the Alternate Base Rate (as defined in the Land Loan) plus 3.5% per annum, which included an additional 2% default rate, at the borrower's election. The borrower was required to hedge the interest rate such that LIBOR would not exceed 6.5%. As a result, the borrower entered into two interest rate swap agreements with notional amounts of $200 million and $50 million in which the borrower paid a fixed LIBOR rate of 3.0% and 3.7%, respectively, and received one-month LIBOR. These interest rate swaps were early terminated in November 2009.

Credit Facility

In connection with its merger transaction in November 2007, STN, as borrower, entered into a $900 million senior secured credit agreement (the “Credit Facility”) consisting of a $650 million revolving facility (the “Revolver”) and a $250 million term loan (the “Term Loan”). The maturity date for both the Term Loan and the Revolver was August 7, 2012 subject to a single 15-month extension (as further defined in the Credit Facility). The Term Loan required quarterly principal payments of $625,000. The Revolver contained no principal amortization. Borrowings under the Credit Facility bore interest at a margin above the Alternate Base Rate or the Eurodollar Rate (each as defined in the Credit Facility), as selected by STN. The margin above such rates, and the fee on the unfunded portions of the Revolver, varied quarterly based on STN's total debt to Adjusted EBITDA (as defined in the Credit Facility).

Senior and Senior Subordinated Notes

The indentures (the “Indentures”) governing STN's $2.3 billion in aggregate principal amount of Senior and Senior Subordinated Notes contained certain customary financial and other covenants, which limited STN's ability to incur additional debt.

Beginning on February 1, 2009, STN ceased making schedule interest payments on the Senior and Senior Subordinated Notes, resulting in an event of default under the indentures governing such indebtedness. As a result of the filing of the Chapter 11 Case, the Senior and Senior Subordinated Notes were accelerated and were due and payable, subject to the bankruptcy stay.

Liabilities Subject to Compromise

Under bankruptcy law, actions by creditors to collect upon liabilities of the Debtors incurred prior to the Petition Date are stayed and certain other pre-petition contractual obligations were not be enforceable against the Debtors without approval of the Bankruptcy Court. In accordance with ASC Topic 852, these liabilities were classified as liabilities subject to compromise in the Predecessor's consolidated balance sheet as of December 31, 2010, and were adjusted to the expected amount of the allowed claims. The expected amount of the allowed claims for certain liabilities subject to compromise differed from their prepetition carrying amounts mainly as a result of the write-off of approximately $185.7 million in debt discounts during the year ended December 31, 2009 and the reversal of approximately $88.6 million in nonperformance risk adjustments that had previously been included in the pre-petition fair values of the interest rate swap liabilities in accordance with ASC Topic 820. Adjustments to the claims may result from negotiations, payments authorized by the Bankruptcy Court, interest accruals, or other events. As of December 31, 2010, certain pre-petition liabilities included in liabilities subject to compromise had been reduced or increased as a result of the payment of certain accounts payable and notes payable as allowed by the court, and as a result of non-cash adjustments of the expected amount of the allowed claims related to interest rate swap liabilities. In addition, during the year ended December 31, 2010, a $6.2 million settlement liability related to a pre-petition litigation matter was recorded. Liabilities subject to compromise were subject to the treatment set forth in the SCI Plan and are classified separately from long-term obligations and current liabilities on the accompanying consolidated balance sheet as of December 31, 2010.

At December 31, 2010, liabilities subject to compromise consisted of the following (in thousands):



	STN Predecessor
	Station Casinos, Inc.
	December 31, 2010
CMBS mortgage loan and related mezzanine financings	$	2,475,000
Revolver and term loan	873,607
6% senior notes	450,000
7³/₄% senior notes	400,000
6¹/₂% senior subordinated notes	442,000
6⁷/₈% senior subordinated notes	660,000
6⁵/₈% senior subordinated notes	300,000
Other long-term debt	70,123
Interest rate swaps	144,003
Accrued interest	143,854
Payroll and related liabilities	30,258
Accounts payable and other liabilities	8,976
Total liabilities subject to compromise	$	5,997,821

Interest Expense

In accordance with ASC Topic 852, interest expense was recognized only to the extent that it was expected to be paid during the bankruptcy proceeding or that it was probable that it would be an allowed claim. Prior to the Effective Date, Predecessor did not accrue interest for the senior notes, the senior subordinated notes or the mezzanine financings. As a result, post-petition interest expense was lower than pre-petition interest expense. The write-off of debt discounts and deferred debt issue costs related to liabilities subject to compromise also reduced post-petition interest expense as there were no longer any non-cash amortization charges related to those items.

GVR Predecessor

Long-term debt of GVR Predecessor consists of the following (amounts in thousands):



	GVR Predecessor
	Green Valley Ranch Gaming, LLC
	December 31, 2010
Senior secured first lien term loan, interest at a margin above the Base Rate or LIBOR (6.0% at December 31, 2010) (a)	$	514,875
Senior secured second lien term loan, interest at a margin above the Base Rate or LIBOR (7.25% at December 31, 2010) (a)	250,000
Note payable to City of Henderson for local improvement taxes, payable semi-annually through August 1, 2018, interest at 6.65%	1,867
Total long-term debt	766,742
Current portion of long-term debt	(765,047		)
Total long-term debt, net	$	1,695

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(a)	Interest rates include an additional 2.0% default rate.

GVR Predecessor's long-term debt includes a first lien term loan due February 2014 (the “First Lien”) and a second lien term loan due August 2014 (the “Second Lien”), collectively, the “GVR Credit Facility”. The First Lien provided for quarterly principal payments of approximately $1.4 million, which began on June 30, 2007, and contained certain financial and other covenants, including the maintenance of Consolidated Coverage Ratios and Leverage Ratios, as defined. Borrowings under the First Lien and Second Lien bear interest at a margin above the Base Rate or LIBOR, as defined. The Credit Facility was secured by substantially all of the assets of GVR Predecessor.

In February 2010, GVR Predecessor did not make a required payment on its interest rate swap and as a result, an event of default occurred under the First Lien and Second Lien components of the GVR Credit Facility. In addition, as a consequence of GVR Predecessor's failure to timely make the required payment on the swap, the counterparty terminated such swap effective March 16, 2010, which resulted in an additional event of default under the First Lien and Second Lien components of the GVR Credit Facility on such date. Moreover, during 2010 GVR Predecessor failed to make required principal and interest payments in the amount of $5.5 million and $43.0 million, respectively on the First Lien and Second Lien components of the GVR Credit Facility. As a result, additional events of default occurred under the First Lien and Second Lien components of the GVR Credit Facility. The foregoing events of default had not been cured as of December 31, 2010 and as a result of the foregoing, GVR Predecessor was in default under the GVR Credit Facility and, accordingly, classified the debt thereunder as current in its balance sheet at December 31, 2010.