Note 9—Consolidating Condensed Financial Information

Our subsidiaries (excluding subsidiaries with approximately $45.6 million in cash and other assets as of June 30, 2013, which includes a subsidiary that owns a minority equity interest in ACDL; a subsidiary that owns a majority interest in the licensee of Retama Park Racetrack; and certain non-material subsidiaries) have fully, unconditionally, jointly, and severally guaranteed the payment of all obligations under our senior and senior subordinated notes, as well as our Credit Facility. Our Atlantic City subsidiaries and the subsidiary that owns our equity interest in Retama Park Racetrack do not guarantee our Credit Facility. Separate financial statements and other disclosures regarding the subsidiary guarantors are not included herein because management has determined that such information is not material to investors. In lieu thereof, we include the following:



	Pinnacle Entertainment, Inc.			Guarantor Subsidiaries(a)			Non- Guarantor Subsidiaries(b)			Consolidating and Eliminating Entries			Pinnacle Entertainment, Inc. Consolidated
	(in millions)
For the three months ended June 30, 2013
Statement of Operations
Revenues:
Gaming	$	—		$	271.9		$	—		$	—		$	271.9
Food and beverage	—			20.4			—			—			20.4
Lodging	—			10.8			—			—			10.8
Retail, entertainment and other	—			12.2			—			—			12.2
	—			315.3			—			—			315.3
Expenses:
Gaming	—			155.4			—			—			155.4
Food and beverage	—			16.9			—			—			16.9
Lodging	—			5.3			—			—			5.3
Retail, entertainment and other	—			6.1			—			—			6.1
General and administrative and other	8.9			53.4			0.2			—			62.5
Pre-opening and development costs	16.6			0.4			0.2			—			17.2
Depreciation and amortization	1.0			26.1			—			—			27.1
Write-downs, reserves and recoveries, net	1.1			0.8			—			—			1.9
	27.6			264.4			0.4			—			292.4
Operating income (loss)	(27.6		)	50.9			(0.4		)	—			22.9
Equity earnings of subsidiaries	48.3			—			—			(48.3		)	—
Interest expense, net	(29.2		)	0.8			—			—			(28.4		)
Income (loss) from continuing operations before inter-company activity and income taxes	(8.5		)	51.7			(0.4		)	(48.3		)	(5.5		)
Management fee & inter-company interest	3.1			(3.1		)	—			—			—
Income tax benefit	0.3			—			—			—			0.3
Income (loss) from continuing operations	(5.1		)	48.6			(0.4		)	(48.3		)	(5.2		)
Income from discontinued operations, net of taxes	—			0.1			—			—			0.1
Net income (loss)	$	(5.1	)	$	48.7		$	(0.4	)	$	(48.3	)	$	(5.1	)



	Pinnacle Entertainment, Inc.			Guarantor Subsidiaries(a)			Non- Guarantor Subsidiaries(b)			Consolidating and Eliminating Entries			Pinnacle Entertainment, Inc. Consolidated
	(in millions)
For the six months ended June 30, 2013
Statement of Operations
Revenues:
Gaming	$	—		$	549.1		$	—		$	—		$	549.1
Food and beverage	—			37.8			—			—			37.8
Lodging	—			18.8			—			—			18.8
Retail, entertainment and other	0.1			22.3			—			—			22.4
	0.1			628.0			—			—			628.1
Expenses:
Gaming	—			311.6			—			—			311.6
Food and beverage	—			32.1			—			—			32.1
Lodging	—			10.2			—			—			10.2
Retail, entertainment and other	—			10.3			—			—			10.3
General and administrative and other	15.2			107.0			0.3			—			122.5
Pre-opening and development costs	23.7			0.8			0.3			—			24.8
Depreciation and amortization	2.6			52.5			—			—			55.1
Write-downs, reserves and recoveries, net	1.1			1.3			(0.1		)	—			2.3
	42.6			525.8			0.5			—			568.9
Operating income (loss)	(42.5		)	102.2			(0.5		)	—			59.2
Equity earnings of subsidiaries	4.9			—			—			(4.9		)	—
Interest expense, net	(58.2		)	1.1			—			—			(57.1		)
Loss from equity method investment	—			—			(92.2		)	—			(92.2		)
Income (loss) from continuing operations before inter-company activity and income taxes	(95.8		)	103.3			(92.7		)	(4.9		)	(90.1		)
Management fee & inter-company interest	5.8			(5.8		)	—			—			—
Income tax expense	(0.4		)	—			—			—			(0.4		)
Income (loss) from continuing operations	(90.4		)	97.5			(92.7		)	(4.9		)	(90.5		)
Income from discontinued operations, net of taxes	—			0.1			—			—			0.1
Net income (loss)	$	(90.4	)	$	97.6		$	(92.7	)	$	(4.9	)	$	(90.4	)



	Pinnacle Entertainment, Inc.			Guarantor Subsidiaries(a)			Non- Guarantor Subsidiaries(b)			Consolidating and Eliminating Entries			Pinnacle Entertainment, Inc. Consolidated
	(in millions)
For the three months ended June 30, 2012
Statement of Operations
Revenues:
Gaming	$	—		$	255.9		$	—		$	—		$	255.9
Food and beverage	—			19.7			—			—			19.7
Lodging	—			11.1			—			—			11.1
Retail, entertainment and other	—			11.6			—			—			11.6
	—			298.3			—			—			298.3
Expenses:
Gaming	—			143.1			—			—			143.1
Food and beverage	—			16.4			—			—			16.4
Lodging	—			5.4			—			—			5.4
Retail, entertainment and other	—			6.9			—			—			6.9
General and administrative and other	7.4			49.0			0.1			—			56.5
Pre-opening and development costs	0.6			3.6			—			—			4.2
Depreciation and amortization	0.7			25.5			—			—			26.2
Write-downs, reserves and recoveries, net	—			0.8			—			—			0.8
	8.7			250.7			0.1			—			259.5
Operating income (loss)	(8.7		)	47.6			(0.1		)	—			38.8
Equity earnings of subsidiaries	42.9			—			—			(42.9		)	—
Interest expense, net	(29.0		)	4.5			2.0			—			(22.5		)
Loss from equity method investment	—			—			(1.2		)	—			(1.2		)
Income (loss) from continuing operations before inter-company activity and income taxes	5.2			52.1			0.7			(42.9		)	15.1
Management fee & inter-company interest	8.9			(6.9		)	(2.0		)	—			—
Income tax expense	(2.2		)	—			—			—			(2.2		)
Income (loss) from continuing operations	11.9			45.2			(1.3		)	(42.9		)	12.9
Loss from discontinued operations, net of taxes	—			(1.0		)	—			—			(1.0		)
Net income (loss)	$	11.9		$	44.2		$	(1.3	)	$	(42.9	)	$	11.9



	Pinnacle Entertainment, Inc.			Guarantor Subsidiaries(a)			Non- Guarantor Subsidiaries(b)			Consolidating and Eliminating Entries			Pinnacle Entertainment, Inc. Consolidated
	(in millions)
For the six months ended June 30, 2012
Statement of Operations
Revenues:
Gaming	$	—		$	515.6		$	—		$	—		$	515.6
Food and beverage	—			35.9			—			—			35.9
Lodging	—			19.6			—			—			19.6
Retail, entertainment and other	0.1			20.1			—			—			20.2
	0.1			591.2			—			—			591.3
Expenses:
Gaming	—			285.9			—			—			285.9
Food and beverage	—			31.0			—			—			31.0
Lodging	—			9.8			—			—			9.8
Retail, entertainment and other	—			11.0			—			—			11.0
General and administrative and other	14.2			96.5			0.3			—			111.0
Pre-opening and development costs	1.3			5.7			—			—			7.0
Depreciation and amortization	1.4			51.1			—			—			52.5
Write-downs, reserves and recoveries, net	—			(1.2		)	2.0			—			0.8
	16.9			489.8			2.3			—			509.0
Operating income (loss)	(16.8		)	101.4			(2.3		)	—			82.3
Equity earnings of subsidiaries	89.8			—			—			(89.8		)	—
Interest expense, net	(56.3		)	7.8			4.1			—			(44.4		)
Loss on early extinguishment of debt	(20.7		)	—			—			—			(20.7		)
Loss from equity method investment	—			—			(2.8		)	—			(2.8		)
Income (loss) from continuing operations before inter-company activity and income taxes	(4.0		)	109.2			(1.0		)	(89.8		)	14.4
Management fee & inter-company interest	16.7			(12.6		)	(4.1		)	—			—
Income tax expense	(1.7		)	—			—			—			(1.7		)
Income (loss) from continuing operations	11.0			96.6			(5.1		)	(89.8		)	12.7
Loss from discontinued operations, net of taxes	—			(1.7		)	—			—			(1.7		)
Net income (loss)	$	11.0		$	94.9		$	(5.1	)	$	(89.8	)	$	11.0



	Pinnacle Entertainment, Inc.			Guarantor Subsidiaries(a)		Non- Guarantor Subsidiaries(b)			Consolidating and Eliminating Entries			Pinnacle Entertainment, Inc. Consolidated
	(in millions)
As of June 30, 2013
Balance Sheet
Current assets	$	16.6		$	108.9	$	9.3		$	—		$	134.8
Property and equipment, net	21.0			1,708.2		6.1			—			1,735.3
Other non-current assets	44.1			78.3		28.0			—			150.4
Investment in subsidiaries	1,820.5			—		—			(1,820.5		)	—
Equity method investment	—			—		1.5			—			1.5
Assets of discontinued operations held for sale	—			38.6		0.7			(0.7		)	38.6
Inter-company	1.2			—		—			(1.2		)	—
Total assets	$	1,903.4		$	1,934.0	$	45.6		$	(1,822.4	)	$	2,060.6
Current liabilities	$	68.9		$	132.9	$	0.1		$	—		$	201.9
Long-term debt (excluding current portion)	1,456.2			—		—			—			1,456.2
Other non-current liabilities	13.9			12.7		—			—			26.6
Inter-company	—			—		1.2			(1.2		)	—
Total liabilities	1,539.0			145.6		1.3			(1.2		)	1,684.7
Additional paid in capital	1,061.7			1,287.3		301.5			(1,588.8		)	1,061.7
Retained deficit	(632.7		)	500.7		(268.7		)	(232.0		)	(632.7		)
Common stock, treasury stock and other	(64.6		)	0.4		—			(0.4		)	(64.6		)
Total Pinnacle stockholders' equity	364.4			1,788.4		32.8			(1,821.2		)	364.4
Non-controlling interest	—			—		11.5			—			11.5
Total equity	364.4			1,788.4		44.3			(1,821.2		)	375.9
Total liabilities and stockholders' equity	$	1,903.4		$	1,934.0	$	45.6		$	(1,822.4	)	$	2,060.6
As of December 31, 2012
Balance Sheet
Current assets	$	17.4		$	106.3	$	23.0		$	—		$	146.7
Property and equipment, net	21.7			1,672.8		1.5			—			1,696.0
Other non-current assets	47.4			74.5		14.4			—			136.3
Investment in subsidiaries	1,861.4			—		—			(1,861.4		)	—
Equity method investment	—			—		91.4			—			91.4
Assets of discontinued operations held for sale	—			38.6		0.7			(0.7		)	38.6
Inter-company	1.2			—		—			(1.2		)	—
Total assets	$	1,949.1		$	1,892.2	$	131.0		$	(1,863.3	)	$	2,109.0
Current liabilities	$	50.9		$	146.3	$	0.6		$	—		$	197.8
Long-term debt (excluding current portion)	1,437.3			—		—			—			1,437.3
Other non-current liabilities	13.8			12.7		0.3			—			26.8
Inter-company	—			—		1.2			(1.2		)	—
Total liabilities	1,502.0			159.0		2.1			(1.2		)	1,661.9
Additional paid in capital	1,053.9			1,328.1		303.4			(1,631.5		)	1,053.9
Retained deficit	(542.2		)	404.5		(174.5		)	(230.1		)	(542.3		)
Common stock, treasury stock and other	(64.6		)	0.6		—			(0.5		)	(64.5		)
Total equity	447.1			1,733.2		128.9			(1,862.1		)	447.1
Total liabilities and stockholders' equity	$	1,949.1		$	1,892.2	$	131.0		$	(1,863.3	)	$	2,109.0



	Pinnacle Entertainment, Inc.			Guarantor Subsidiaries(a)			Non- Guarantor Subsidiaries(b)			Consolidating and Eliminating Entries		Pinnacle Entertainment, Inc. Consolidated
	(in millions)
For the six months ended June 30, 2013
Statement of Cash Flows
Cash provided by (used in) operating activities	$	(22.0	)	$	99.7		$	(1.1	)	$	—	$	76.6
Capital expenditures	(2.9		)	(103.5		)	—			—		(106.4		)
Purchase of held-to-maturity debt securities	—			—			(5.8		)	—		(5.8		)
Proceeds from matured investments	4.4			—			—			—		4.4
Loan receivable, net	—			—			(4.6		)	—		(4.6		)
Other	—			2.5			(2.0		)	—		0.5
Cash provided by (used in) investing activities	1.5			(101.0		)	(12.4		)	—		(111.9		)
Proceeds from Credit Facility	50.0			—			—			—		50.0
Repayments under Credit Facility	(30.0		)	—			—			—		(30.0		)
Repayment of long-term debt	(1.6		)	—			—			—		(1.6		)
Other	1.3			—			—			—		1.3
Cash provided by financing activities	19.7			—			—			—		19.7
Decrease in cash and cash equivalents	(0.8		)	(1.3		)	(13.5		)	—		(15.6		)
Cash and cash equivalents, beginning of period	5.5			73.5			22.8			—		101.8
Cash and cash equivalents, end of period	$	4.7		$	72.2		$	9.3		$	—	$	86.2

For the six months ended June 30, 2012
Statement of Cash Flows
Cash provided by (used in) operating activities	$	(74.8	)	$	143.4		$	39.4		$	—	$	108.0
Capital expenditures	(3.0		)	(153.5		)	(0.5		)	—		(157.0		)
Purchase of held-to-maturity debt securities	(4.5		)	—			(15.5		)	—		(20.0		)
Net proceeds from sale of discontinued operations	—			10.8			—			—		10.8
Loan receivable, net	—			—			(5.8		)	—		(5.8		)
Other	—			3.8			(5.1		)	—		(1.3		)
Cash used in investing activities	(7.5		)	(138.9		)	(26.9		)	—		(173.3		)
Proceeds from Credit Facility	47.5			—			—			—		47.5
Repayment under Credit Facility	(103.5		)	—			—			—		(103.5		)
Proceeds from issuance of long-term debt	646.8			—			—			—		646.8
Repayment of long-term debt	(389.9		)	—			—			—		(389.9		)
Debt issuance and other financing costs	(12.9		)	—			—			—		(12.9		)
Other	—			—			—			—		—
Cash provided by financing activities	188.0			—			—			—		188.0
Increase in cash and cash equivalents	105.7			4.5			12.5			—		122.7
Cash and cash equivalents, beginning of period	17.3			48.0			15.0			—		80.3
Cash and cash equivalents, end of period	$	123.0		$	52.5		$	27.5		$	—	$	203.0

_______________________

(a)

The following material subsidiaries are identified as guarantors of our senior and senior subordinated notes: ACE Gaming, LLC; AREM MLK, LLC; AREP Boardwalk Properties LLC; Belterra Resort Indiana, LLC; Boomtown, LLC; Casino Magic, LLC; Casino One Corporation; Louisiana-I Gaming; Mitre Associates LLC; PNK (Baton Rouge) Partnership; PNK (Biloxi), LLC; PNK (BOSSIER CITY), Inc.; PNK Development 7, LLC; PNK Development 8, LLC; PNK Development 9, LLC; PNK Development 13, LLC; PNK (ES), LLC; PNK (LAKE CHARLES), L.L.C.; PNK (Ohio), LLC; PNK (Ohio) II, LLC; PNK (Ohio) III, LLC; PNK (RENO), LLC; PNK (River City), LLC; PNK (SAM), LLC; PNK (SAZ), LLC; PNK (STLH), LLC; PNK (ST. LOUIS RE), LLC; and PSW Properties LLC. In addition, certain other immaterial subsidiaries are also guarantors of our senior and senior subordinated notes.


(b)	Guarantor subsidiaries of our senior and senior subordinated notes exclude: subsidiaries with approximately $45.6 million in cash and other assets, which represent a subsidiary that owns a minority interest in ACDL; a subsidiary that owns a majority interest in the licensee of Retama Park Racetrack; and certain non-material subsidiaries.