Note 3. Investment in Unconsolidated Affiliates

Effective March 1, 1994, ELLC and Galleon, (each a "Partner" and, together, the "Partners"), entered into the Silver Legacy Joint Venture pursuant to a joint venture agreement (the "Original Joint Venture Agreement" and, as amended to date, the "Joint Venture Agreement") to develop the Silver Legacy. The Silver Legacy consists of a casino and hotel located in Reno, Nevada, which began operations on July 28, 1995. Each Partner owns a 50% interest in the Silver Legacy Joint Venture. The Company owns an indirect 48.1% interest in the Silver Legacy Joint Venture. The Company has entered into an agreement to purchase the 50% interest in the Silver Legacy Joint Venture owned by Galleon and, in connection with such acquisition, the Company expects to acquire the 1.9% indirect interest in the Silver Legacy Joint Venture held by ELLC in September 2015. See Note 13—Subsequent Event—Pending Acquisitions and Refinancing.

Under the Plan of Reorganization, each of, Resorts through ELLC, and Galleon retained its 50% interest in the Silver Legacy, but was required to advance $7.5 million to the Silver Legacy pursuant to a subordinated loan and provide credit support by depositing $5.0 million of cash into a bank account as collateral in favor of the lender under the Silver Legacy credit agreement. The $7.5 million note receivable from Resorts to the Silver Legacy was issued on November 16, 2012 with a stated interest rate of 5% per annum and a maturity date of May 16, 2018 and is included on the accompanying consolidated balance sheets in Investment in and Advances to Unconsolidated Affiliates at June 30, 2015 and December 31, 2014. In connection with the Circus Reno/Silver Legacy Purchase, we expect to acquire the note evidencing the $7.5 million loan made by Galleon and that all amounts under the subordinated loans advanced by ELLC and Galleon, Inc. will be contributed to the equity capital of the Silver Legacy Joint Venture.

In December 2014, Silver Legacy deposited $5.0 million of cash into a cash collateral account securing its obligations under its credit agreement, which reduced the credit support obligation of ELLC and Galleon to $2.5 million each and resulted in the return of $2.5 million of the $5.0 million of collateral that Resorts previously provided as credit support for Silver Legacy's obligations under its credit agreement. The collateral deposit is included as noncurrent restricted cash in the amount of $2.5 million in the accompanying consolidated balance sheets at June 30, 2015 and December 31, 2014.

On December 16, 2013, the Silver Legacy Joint Venture entered into a new senior secured term loan facility totaling $90.5 million (the "Silver Legacy Credit Facility") to refinance its indebtedness under its then existing senior secured term loan and Silver Legacy Second Lien Notes. The Silver Legacy Credit Facility matures on November 16, 2017. In connection with the Circus Reno/Silver Legacy Purchase, we expect that all amounts outstanding under the Silver Legacy Credit Facility will be paid in full and the cash collateral securing such obligations will be released.

Equity in income related to the Silver Legacy Joint Venture for the three and six months ended June 30, 2015 amounted to $1.1 million and $0.6 million, respectively. Equity in income for the three and six months ended June 30, 2014 amounted to $1.9 million and $1.3 million, respectively.

Summarized information for the Company's investment in and advances to the Silver Legacy Joint Venture as of and for the six months ended June 30, 2015 and 2014 is as follows (in thousands):

	June 30, 2015		June 30, 2014
	(unaudited)
Beginning balance	$	14,009	$	13,081
Equity in income of unconsolidated affiliate		588		1,289
Other comprehensive income—minimum pension liability adjustment of unconsolidated affiliate		—		(111	)

Ending balance	$	14,597	$	14,259

Summarized balance sheet information for the Silver Legacy Joint Venture is as follows (in thousands):

	June 30, 2015		December 31, 2014
	(unaudited)
Current assets	$	35,977	$	30,563
Property and equipment, net		186,406		190,592
Other assets, net		5,382		6,412

Total assets	$	227,765	$	227,567


Current liabilities	$	19,126	$	18,707
Long-term liabilities		87,881		89,322
Partners' equity		120,758		119,538

Total liabilities and partners' equity	$	227,765	$	227,567

Summarized results of operations for the Silver Legacy Joint Venture are as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(unaudited)
Net revenues	$	31,984		$	35,516		$	59,635		$	63,093
Operating expenses		(26,421	)		(28,876	)		(52,916	)		(55,022	)

Operating income		5,563			6,640			6,719			8,071
Other expense		(2,761	)		(2,758	)		(5,499	)		(5,495	)

Net income	$	2,802		$	3,882		$	1,220		$	2,576