STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2017

NOTE 2. STOCK-BASED COMPENSATION

On January 1, 2017, the Company adopted accounting standard update (“ASU”) No. 2016-09, which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Subsequent to the adoption, the Company records any excess tax benefits or deficiencies from its equity awards in its Consolidated Statements of Income in the reporting periods in which vesting occurs. As a result, the Company's income tax expense and associated effective tax rate are impacted by fluctuations in stock price between the grant dates and vesting dates of equity awards. This guidance of requiring recognition of excess tax benefits and deficits in the income statement was applied prospectively with the adoption of ASU No. 2016-09.

For the three months ended March 31, 2017, the effect of the adoption of the ASU No.2016-09 was a decrease of tax expense by $64 thousand, an increase of net income by $42 thousand and a decrease of basic and diluted earnings per share by less than $0.01.

The Company has elected to keep the accounting policy of estimated forfeitures, rather than account for forfeitures as they occur. The amendments in the guidance that require application using a modified retrospective transition method did not impact the Company. Therefore, there was no cumulative-effect adjustment to retained earnings recognized as of January 1, 2017.

ASU No. 2016-09 also changes the classification and presentation of the excess tax benefit from stock-based compensation in the statement of cash flows. The Company applied the amendments in this guidance relating to classification on its consolidated statement of cash flows prospectively.

Reported stock-based compensation expense was classified as follows (in thousands):


	Three months ended
	March 31,
		2017				2016
Casino	$		32	$	21
Food and beverage			34		25
Hotel			8		11
Selling, general and administrative			391		70
Total stock-based compensation, before taxes			465		127
Tax benefit			(163)		(45)
Total stock-based compensation, net of tax	$		302	$	82

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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