Investment in and Advances to Unconsolidated Affiliates

3 Months Ended

Mar. 31, 2019

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

Investments in and Advances to Unconsolidated Affiliates

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

Midwest Gaming

On March 5, 2019, the Company completed the Sale Transaction to acquire approximately 42% of Midwest Gaming for aggregate cash consideration of approximately $406.6 million. Following the closing of the Sale Transaction, the parties entered into a

Recapitalization pursuant to which Midwest Gaming used approximately $300.0 million in proceeds from new credit facilities to redeem, on a pro rata basis, additional Midwest Gaming units held by High Plaines and Casino Investors. As a result of the Recapitalization, the Company's ownership of Midwest Gaming increased to 61.3%.

The total aggregate cash consideration paid at closing of the Sale Transaction was $409.8 million, which included $3.2 million for certain transaction costs of the Sellers. We recognized a $109.6 million deferred tax liability and a corresponding increase in our investment in unconsolidated affiliates related to an entity we acquired in conjunction with our acquisition of the Clairvest ownership.

High Plaines retained ownership of 36% and Casino Investors retained ownership of 2.7%. A new LLC agreement was entered into by all members as a result of the change in ownership structure. Under the new LLC agreement, both the Company and High Plaines have participating rights over Midwest Gaming, and both must consent to Midwest Gaming's operating, investing and financing decisions. As a result, we account for Midwest Gaming using the equity method.

Summarized Financial Results for our Unconsolidated Affiliates

Summarized below are the financial results for our unconsolidated affiliates. The three months ended March 31, 2019 summarized income statement information and March 31, 2019 summarized balance sheet information includes the following equity investments: MVG, Midwest Gaming from the transaction date of March 5, 2019, and two other immaterial joint ventures. The three months ended March 31, 2018 summarized income statement information includes the following equity investments: MVG, Saratoga New York, Saratoga Colorado, Ocean Downs, and two other immaterial joint ventures. December 31, 2018 summarized balance sheet information included MVG and two other immaterial joint ventures.

	Three Months Ended March 31,
(in millions)	2019			2018
Net revenue	$	89.5		$	107.4
Operating and SG&A expense	61.0			84.1
Depreciation and amortization	2.2			6.6
Total operating expense	63.2			90.7
Operating income	26.3			16.7
Interest and other, net	(17.0		)	(2.9		)
Net income	$	9.3		$	13.8

(in millions)	March 31, 2019			December 31, 2018
Assets
Current assets	$	67.1		$	24.0
Property and equipment, net	243.6			95.7
Other assets, net	235.4			106.7
Total assets	$	546.1		$	226.4
Liabilities and Members' Equity
Current liabilities	$	87.2		$	21.2
Long-term debt	752.3			—
Other liabilities	7.5			—
Members' equity	(300.9		)	205.2
Total liabilities and members' equity	$	546.1		$	226.4