NOTE 4—INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED AFFILIATE

Miami Valley Gaming

During March 2012, the Company entered into a 50% joint venture with Delaware North Companies Gaming & Entertainment Inc. (“DNC”) to develop a new harness racetrack and video lottery terminal (“VLT”) gaming facility in Lebanon, Ohio. Through the joint venture agreement, the Company and DNC formed a new company, Miami Valley Gaming, LLC (“MVG”), to manage both the Company’s and DNC’s interests in the development and operation of the racetrack and VLT gaming facility. On December 21, 2012, MVG completed the purchase of the harness racing licenses and certain assets held by Lebanon Trotting Club Inc. and Miami Valley Trotting Inc. ("MVG Sellers") for total consideration of $60.0 million, of which $10.0 million was funded at closing with the remainder funded through a $50.0 million note payable with a six year term effective upon the commencement of gaming operations. In addition, there is a potential contingent consideration payment of $10.0 million based on the financial performance of the facility during the seven-year period after gaming operations commence.

On December 12, 2013, the new facility opened in Lebanon, Ohio on a 120-acre site. The facility includes a 5/8-mile harness racing track and an 186,000-square-foot gaming facility with approximately 1,600 VLTs. MVG will invest approximately $212.0 million in the new facility, including a $50.0 million license fee to the Ohio Lottery Commission. One-half of the license fee was funded during 2012 and 2013, and the remaining $25 million license fee will be funded during the fourth quarter of 2014. During the nine months ended September 30, 2014, the Company funded $6.5 million in capital contributions to the joint venture. During the fourth quarter of 2014, the Company anticipates funding approximately $8.5 million in additional capital contributions to the joint venture to fund the remaining portion of the license fee.

Since both DNC and the Company have participating rights over MVG, and both must consent to MVG's operating, investing and financing decisions, the Company accounts for MVG using the equity method. Summarized financial information for MVG is comprised of the following (in thousands):



	September 30, 2014		December 31, 2013
Assets
Current assets	$	25,882	$	18,002
Property and equipment, net	133,021		151,434
Other assets, net	80,407		80,665
Total assets	$	239,310	$	250,101

Liabilities and Members' Equity
Current liabilities	$	14,468	$	46,966
Current portion of long-term debt	8,332		8,332
Long-term debt, excluding current portion	28,039		32,426
Other liabilities	75		75
Members' equity	188,396		162,302
Total liabilities and members' equity	$	239,310	$	250,101

The joint venture's long-term debt consists of a $50 million secured note payable from MVG to the MVG Sellers payable quarterly over 6 years through August 2019 at a 5.0% interest rate.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Gaming revenue	$	33,365		$	—		$	98,928		$	—
Non-gaming revenue	1,289			1,305			4,833			4,509
Net revenues	34,654			1,305			103,761			4,509
Operating and SG&A expenses	26,123			1,347			76,387			4,703
Depreciation & amortization expenses	3,474			101			10,315			114
Pre-opening expenses	—			1,001			54			2,422
Operating income (loss)	5,057			(1,144		)	17,005			(2,730		)
Interest (expense) income, net	(1,380		)	—			(3,654		)	—
Net income (loss)	$	3,677		$	(1,144	)	$	13,351		$	(2,730	)

The Company's 50% share of MVG's results has been included in our accompanying condensed consolidated financial statements for the three and nine months ended September 30, 2014 and 2013, as follows (in thousands):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014		2013
Equity in gains (losses) of unconsolidated investments	$	1,839	$	(572	)	$	6,676	$	(1,365	)