Acquisition and Purchase Accounting (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of calculation of the purchase consideration calculation


Purchase consideration calculation (dollars in thousands)	Silver Legacy		Circus Reno		Total
Cash consideration paid by ERI for MGM’s 50% equity interest and MGM’s member note	$	56,500	$	16,000	$	72,500
Fair value of ERI’s preexisting 50% equity interest		56,500		—		56,500
Settlement of Silver Legacy’s long term debt(1)		87,854		—		87,854
Closing Silver Legacy and Circus Reno net working capital(2)		6,124		1,916		8,040
Purchase consideration	$	206,978	$	17,916	$	224,894

(1) Represents $5.0 million of short-term debt, $75.5 million of long-term debt, the remaining 50% of the $11.5 million of member notes (net of discount), and accrued interest.

(2) Per the Purchase and Sale Agreement, the purchase price was $72.5 million plus the Final Closing Circus Reno Net Working Capital (as defined in the Purchase and Sale Agreement). The preliminary working capital adjustment was $8.0 million and is subject to final approval and possible adjustment.

Schedule of prelimnary purchase price allocation

The following table summarizes the preliminary purchase price allocation of the acquired assets and assumed liabilities as of December 31, 2015 (dollars in thousands):


	Silver Legacy		Circus Reno		Total
Current and other assets, net	$	21,625	$	2,115	$	23,740
Property and equipment		169,544		14,801		184,345
Intangible assets(1)		5,000		1,000		6,000
Other noncurrent assets		10,809		—		10,809
Net assets acquired	$	206,978	$	17,916	$	224,894

Schedule of unaudited pro forma financial results

The following unaudited pro forma information presents the results of operations of the Company for the years ended December 31, 2015 and 2014, as if the Merger and Acquisition had both occurred on January 1, 2014 (in thousands except per share data).


	For the years ended December 31,
	2015		2014
Net revenues	$	901,455	$	908,415
Net income		97,783		40,552
Net income per common share:
Basic	$	2.10	$	0.87
Diluted	$	2.08	$	0.87
Weighted shares outstanding:
Basic		46,550,042		46,426,714
Diluted		47,008,980		46,509,008

Summary of the final purchase price allocation of the assets acquired and liabilities assumed at the Merger Date

The following table summarizes the final purchase price allocation of the acquired assets and assumed liabilities as recorded at fair value on the Merger Date (in thousands):


Current and other assets	$	75,031
Property and equipment		289,211
Goodwill		66,826
Intangible assets (1)		473,000
Other noncurrent assets		20,381
Total assets		924,449
Current liabilities		46,446
Long-term debt (2)		624,877
Deferred income taxes (3)		143,104
Other noncurrent liabilities		7,011
Total liabilities assumed		821,438
Net assets acquired	$	103,011

(1)

Intangible assets consist of gaming licenses, trade names and loyalty programs.

(2)

Long-term debt was comprised of MTR Second Lien Notes totaling $570.7 million.

(3)

Deferred tax liabilities were derived based on fair value adjustments for property and equipment, identified intangibles, deferred financing costs, certain long term liabilities and long-term debt.