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Discontinued Operations
9 Months Ended
Sep. 30, 2011
Discontinued Operations and Disposal Groups [Abstract] 
Discontinued Operations
Discontinued Operations
Discontinued operations as of September 30, 2011 consist of our Boomtown Reno operations, Atlantic City operations, our former President Casino operations, our former Casino Magic Argentina operations, our former Casino Magic Biloxi operations and our former operations at The Casino at Emerald Bay in The Bahamas.
Boomtown Reno: In the third quarter of 2011, we made the decision to sell our Boomtown Reno operations. We have reflected the business as discontinued operations and the related assets and liabilities as held for sale. According to authoritative guidance, a disposal group classified as held for sale shall be measured at the lower of its carrying value or the fair value less cost to sell. As the fair value less cost to sell was less than the carrying value of our Boomtown Reno disposal group, an impairment of $11.9 million was taken in the third quarter of 2011.
Atlantic City: In the first quarter of 2010, we made the decision to sell our Atlantic City operations. During the twelve months following our decision to sell, we have actively marketed our Atlantic City operations, however, events and circumstances beyond our control have extended the period to complete the sale of this operation beyond one year. We have continued to reflect our Atlantic City operations as discontinued operations and the related assets and liabilities as held for sale, as we expect to sell our operations within the next year.
During the second quarter of 2011, we determined that a triggering event had occurred due to the extended time frame in which the operation has been listed for sale and the market conditions in Atlantic City. We reviewed the carrying value of both our land and our New Jersey Casino Reinvestment Development Authority investments and recorded impairment charges of $4.9 million and $9.4 million, respectively. In addition, during the second quarter of 2011, we increased our legal accruals by $6.0 million.
President Casino: We closed the President Casino on June 24, 2010, and have reflected the entity in discontinued operations and the remaining assets and liabilities as held for sale. In October 2010, we sold The Admiral Riverboat, on which the President Casino formerly operated.
Casino Magic Argentina: On April 29, 2010, we entered into an agreement to sell our Argentina operations. On June 30, 2010, we completed the sale of our Argentina operations for approximately $40.0 million.
Casino Magic Biloxi: Casino Magic Biloxi closed after significant damage from Hurricane Katrina in 2005. In February 2010, we settled all remaining insurance claims in exchange for a final payment of approximately $23.4 million. We received payments totaling approximately $215 million from our insurers related to this asset. Prior insurance advances that exceeded the book value of destroyed assets and certain insured expenses were recorded as a deferred gain of $18.3 million. As a result of this final settlement, we recognized this deferred gain in February 2010 in addition to the gain associated with the proceeds.
The Casino at Emerald Bay: The Casino at Emerald Bay in The Bahamas was closed during the first quarter of 2009. In February 2011, we completed the sale of the final asset and we recorded a gain on sale of $0.1 million.
Revenue, expense and net income for entities and operations included in discontinued operations are summarized as follows:
 
For the three months ended September 30,
 
For the nine months ended September 30,
 
2011
 
2010
 
2011
 
2010
 
(in millions)
Revenues
$
12.6

 
$
12.6

 
$
30.7

 
$
60.2

Operating loss
$
(12.8
)
 
$
(1.4
)
 
$
(40.2
)
 
$
(12.9
)
Non-operating income
—

 
—

 
—

 
41.5

Income (loss) before income taxes
(12.8
)
 
(1.4
)
 
(40.2
)
 
28.6

Income tax expense
0.2

 
(0.4
)
 
0.2

 
(4.6
)
Income (loss) from discontinued operations
$
(12.6
)
 
$
(1.8
)
 
$
(40.0
)
 
$
24.0

Net assets for entities and operations included in discontinued operations are summarized as follows:
 
September 30,
2011
 
December 31,
2010
 
(in millions)
Assets:
 
 
 
Property and equipment, net
$
54.3

 
$
72.1

Other assets, net
12.6

 
25.0

Total assets
$
66.9

 
$
97.1

Liabilities:
 
 
 
Total liabilities
11.5

 
6.9

Net assets
$
55.4

 
$
90.2