Discontinued Operations

9 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Discontinued operations consists of disposal groups classified as held for sale and measured at the lower of their carrying values 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 2 inputs, as defined in Note 1, “Summary of Significant Accounting Policies.”

Lumiere Place Casino and Hotels: In August 2013, we entered into an Equity Interest Purchase Agreement to sell the ownership interests in certain of our subsidiaries, which own and operate the Lumiére Place Casino and Hotels. During the third quarter of 2013, we recorded an impairment charge totaling $144.6 million, to reduce the carrying value of the assets to their net realizable value, less costs to sell. In April 2014, we completed the sale of the ownership interests in these subsidiaries for net cash consideration of $252.3 million, net of approximately $11.0 million in cash acquired by the buyer, subject to a net working capital adjustment. In July 2014, we agreed to a final working capital adjustment in which we refunded approximately $2.0 million in cash proceeds back to the buyer.

Ameristar Casino Lake Charles: In July 2013, we entered into an agreement to sell all of the equity interests of our subsidiary, which was developing the Ameristar Lake Charles development project. In November 2013, we closed the sale of the equity interests of our subsidiary. At closing, we received approximately $180.0 million in cash that excludes $35.0 million of deferred consideration, of which $25.0 million is restricted cash subject to release by the Louisiana Gaming Control Board and $10.0 million is in the form of a note receivable from the buyer, due in July 2016. In April 2014, the Louisiana Gaming Control Board approved a resolution releasing us from the requirement to hold the $25.0 million of restricted cash. In August 2014, we entered into a settlement agreement with the buyer in which we received $4.8 million from escrow. The recovery of these proceeds and adjustments to our cost to sell estimates resulted in the recognition of an approximate $2.3 million gain during the three months ended September 30, 2014.

Boomtown Reno: In August 2014, we closed the sale of the membership interest of PNK (Reno), LLC, which owns 27 acres of the excess land surrounding Boomtown Reno. At closing, we received approximately $3.5 million in cash, resulting in a gain of $2.4 million. As of September 30, 2014, we continue to hold 783 acres of excess land surrounding Boomtown Reno. During the third quarter of 2014, we entered into agreement to sell this land, subject to a due diligence period.

Atlantic City: During the third quarter of 2013, we completed the sale of our land holdings in Atlantic City, New Jersey for total consideration of approximately $29.5 million. We expect no material ongoing financial impact from Atlantic City.

Springfield, Massachusetts: We own approximately 40 acres of land in Springfield, Massachusetts, originally purchased by Ameristar for a possible future casino resort. During the first quarter of 2014, we entered into an option agreement to sell this land. As of September 30, 2014, this option has not been exercised.

Total discontinued operations:Revenues and net income (loss) from discontinued operations are summarized as follows:

	For the three months ended September 30,						For the nine months ended, September 30,
	2014			2013			2014			2013
	(in millions)
Revenues	$	—		$	44.2		$	41.0		$	139.2
Income (loss) before income taxes	4.9			(140.9		)	5.2			(131.8		)
Income tax benefit (expense)	(0.1		)	7.6			(0.1		)	2.9
Income (loss) from discontinued operations, net of taxes	$	4.8		$	(133.3	)	$	5.1		$	(128.9	)

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

	September 30, 2014		December 31, 2013
	(in millions)
Assets:
Land, buildings, vessels and equipment, net	$	11.8	$	275.3
Other assets, net	8.9		47.2
Total assets	$	20.7	$	322.5
Liabilities:
Total liabilities	$	0.3	$	26.1
Net assets	$	20.4	$	296.4