NOTE 4 — INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

Maryland Joint Venture

In August 2016, we signed a limited liability company operating agreement to form a 50% joint venture with SCH to purchase all of the equity interests of Ocean Enterprise 589 LLC, Ocean Downs LLC and Racing Services LLC (“Ocean Downs”). Ocean Downs, located near Ocean City, Maryland owns and operates video lottery terminals ("VLT") at the Casino at Ocean Downs and conducts harness racing at Ocean Downs Racetrack.

The new joint venture, Old Bay Gaming and Racing LLC (“Old Bay”), will manage both our and SCH’s interests in the operation of the gaming facility and racetrack. Old Bay has entered into a definitive purchase agreement through which it will acquire equity interests in entities holding the Maryland casino gaming and harness racing licenses and certain assets held by Ocean Downs. The expected completion of the purchase transaction is subject to regulatory approvals and other customary closing conditions.

Miami Valley Gaming Joint Venture

In March 2012, we entered into a 50% joint venture with Delaware North Companies Gaming & Entertainment Inc. ("DNC") to develop a new harness racetrack and VLT gaming facility in Lebanon, Ohio. Through the joint venture agreement, we formed a new company, MVG, to manage both our 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. 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 casino operations commence.

On December 12, 2013, the facility opened in Lebanon, Ohio on a 120-acre site. The facility includes a 5/8-mile harness racing track and a 186,000-square-foot casino facility with approximately 1,680 VLTs.

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



(in millions)	September 30, 2016		December 31, 2015
Assets
Current assets	$	15.0	$	24.5
Property and equipment, net	112.1		119.7
Other assets, net	107.3		106.6
Total assets	$	234.4	$	250.8

Liabilities and Members' Equity
Current liabilities	$	11.3	$	21.6
Current portion of long-term debt	8.3		8.3
Long-term debt, excluding current portion	15.7		20.5
Other liabilities	0.1		0.1
Members' equity	199.0		200.3
Total liabilities and members' equity	$	234.4	$	250.8



	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2016			2015			2016			2015
Casino revenue	$	36.1		$	32.1		$	108.7		$	97.2
Non-casino revenue	1.2			1.5			5.2			5.3
Net revenue	37.3			33.6			113.9			102.5
Operating and SG&A expense	26.4			24.6			79.7			74.2
Depreciation & amortization expense	3.4			3.3			9.9			9.6
Operating income	7.5			5.7			24.3			18.7
Interest and other expense, net	(0.8		)	(1.0		)	(2.6		)	(3.2		)
Net income	$	6.7		$	4.7		$	21.7		$	15.5

The joint venture's long-term debt consists of a $50.0 million amortizing secured note payable from MVG to the MVG Sellers payable quarterly over 6 years through November 2019 at a 5.0% interest rate. We received distributions from MVG totaling $3.8 million for the three months ended September 30, 2016 and $11.5 million for the nine months ended September 30, 2016.

Our Condensed Consolidated Statements of Comprehensive Income include our 50% share of MVG's results as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2016		2015		2016		2015
Equity in income of unconsolidated investments	$	3.4	$	2.3	$	10.9	$	7.7