Acquisitions And New Ventures Acquisition And New Ventures (Notes)

3 Months Ended

Mar. 31, 2013

Acquisitions and Joint Ventures [Abstract]

Acquisitions And New Ventures

NOTE 2 — ACQUISITIONS AND NEW VENTURES

Oxford Casino Acquisition

On March 29, 2013, the Company announced that it had entered into a definitive purchase agreement to acquire Oxford Casino (“Oxford”) in Oxford, Maine in a transaction valued at approximately $160.0 million. The Company expects to finance the purchase price with borrowings under its revolving credit facility. The transaction is subject to receipt of all regulatory approvals, including securing a gaming license in Maine and other customary closing conditions. If certain closing conditions are not satisfied, the Company could be obligated to pay an $8.0 million termination fee. Closing is expected to occur during the fourth quarter of 2013.

Riverwalk Casino Hotel Acquisition

On October 23, 2012, the Company completed its acquisition of Riverwalk Casino Hotel ("Riverwalk") in Vicksburg, Mississippi for cash consideration of approximately $145.6 million. The transaction includes the acquisition of a 25,000-square-foot casino, an 80-room hotel, a 5,600-square-foot event center and dining facilities on approximately 22 acres of land. The acquisition continues the Company's diversification and growth strategies to invest in assets with an expected yield on investment to enhance shareholder value. The Company financed the acquisition with borrowings under its revolving credit facility. The fair value of the assets acquired and liabilities assumed has been included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012. In accordance with accounting standards, the Company expects to complete the purchase price allocation no later than one year from the acquisition date.

Miami Valley Gaming & Racing Joint Venture

During March 2012, the Company announced an agreement to enter into a 50% joint venture with Delaware North Companies Gaming & Entertainment Inc. (“DNC”) to develop a new harness racetrack and video lottery terminal (“VLT”) gaming facility in Monroe, Ohio. 

Through the joint venture agreement, the Company and DNC have formed a new company, Miami Valley Gaming & Racing LLC (“MVG”), which will manage both the Company’s and DNC’s interests in the development and operation of the racetrack and VLT gaming facility.  The Company and DNC will contribute up to $80.0 million in equity contributions to MVG, with the remaining additional funding of approximately $132 million to be provided under each of the parties' existing credit facilities. On December 21, 2012, MVG completed the purchase of the harness racing licenses and certain assets held by Lebanon Trotting Club Inc. and Miami Valley Trotting Inc. for total consideration of $60.0 million, of which $10.0 million was funded at closing with the remainder funded through a $50.0 million note payable with a six year term effective upon the commencement of gaming operations. In addition, there is a potential contingent consideration payment of $10.0 million based on the financial performance of the facility during the seven year period after gaming operations commence or if a new gaming facility does not open within a 50 mile radius during the five year period from the closing date.

Construction began in December 2012 on the new gaming and racing facility in Monroe, Ohio on a 120-acre site. The new facility is expected to open during the first quarter of 2014, and will include a 5/8-mile harness racing track and a 186,000-square-foot gaming facility, and approximately 1,600 VLTs, which the joint venture may increase to 1,800 VLTs, dependent on customer demand. MVG will invest approximately $212.0 million in the new facility, which includes a $50.0 million license fee payable to the Ohio Lottery Commission. During the three months ended March 31, 2013, the Company funded $3.5 million in capital contributions to the joint venture.

Pro Forma

The following table illustrates the effect on net revenues, earnings from continuing operations and earnings from continuing operations per common share as if the Company had acquired Riverwalk as of the beginning of 2012. The pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations that would have occurred had the merger with Riverwalk been consummated at the beginning of 2012.

	Three Months Ended March 31,
	2012
Net revenues	$	152,905
Earnings from continuing operations	$	6,445
Earnings from continuing operations per common share
Basic:
Earnings from continuing operations	$	0.23
Diluted:
Earnings from continuing operations	$	0.22
Shares used in computing earnings from continuing operations per common share:
Basic	16,903
Diluted	17,433