Discontinued Operations

3 Months Ended

Mar. 31, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 7—Discontinued Operations

Discontinued operations for March 31, 2013 consist primarily of land from our former Boomtown Reno operations and our Atlantic City operations. A disposal group classified as held for sale should be measured at the lower of its carrying value or the fair value less cost to sell. The fair value of the assets to be sold was determined using a market approach using Level 1 and 2 inputs, as defined in Note 1, Summary of Significant Accounting Policies.

Boomtown Reno: In June 2012, we closed the sale of the Boomtown Reno operations for total proceeds of approximately $12.9 million, resulting in a loss of $1.1 million. Actual net cash proceeds in the sale, at closing, total approximately $10.8 million, net of approximately $2.1 million in cash acquired by the casino-resort buyers in the sale. In March 2013, we agreed to a final working capital adjustment with the casino-resort buyer in which we received an additional $0.5 million in cash proceeds towards the sale. At closing, the casino-resort buyers were granted a one year option to purchase 100% of our membership interest in PNK (Reno), LLC, including 27 acres of additional land adjacent to Boomtown Reno, for incremental consideration of $3.8 million, which amount exceeds the current book value of the land. In addition, Pinnacle continues to hold approximately 783 acres of remaining excess land surrounding Boomtown Reno as a discontinued operation. Other than minimal costs associated with the remaining excess land, we expect no continuing costs from the Boomtown Reno operations.

Atlantic City: During the first quarter of 2013, we entered into an amended definitive agreement to sell our land holdings in Atlantic City, New Jersey for total consideration of approximately $30.6 million, subject to a financing contingency. In connection with the agreement to sell our land holdings, we received a non-refundable deposit from the buyer. The transaction is expected to close by the end of the third quarter of 2013.

Revenue, expense and net loss from discontinued operations are summarized as follows:

	For the three months ended March 31,
	2013		2012
	(in millions)
Revenues	$	0.2	$	8.5
Operating loss	$	—	$	(0.8	)
Income tax benefit	—		0.1
Loss from discontinued operations, net of income taxes	$	—	$	(0.7	)

Net assets for entities and operations included in discontinued operations are summarized as follows:

	March 31, 2013		December 31, 2012
	(in millions)
Assets:
Land	$	36.6	$	36.6
Other assets, net	2.0		2.0
Total assets	$	38.6	$	38.6
Liabilities:
Total liabilities	$	—	$	—
Net assets	$	38.6	$	38.6