eldorado resorts llc annual report

Transcription

ELDORADO RESORTS LLC
(an indirect wholly owned subsidiary of Eldorado Resorts, Inc.)
ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2014
100 West Liberty Street, Suite 1150, Reno, NV 89501
(Address of principal executive offices, including zip code)
(775) 328-0100
(Telephone number, including area code)
Eldorado Resorts LLC (“Resorts”), and Resorts’ wholly owned subsidiary, Eldorado Capital Corp.
(“Capital” and along with Resorts, the “Issuers”), are providing this report to U.S. Bank National
Association, as Trustee, under that certain Indenture dated June 1, 2011 by and among Resorts and
Capital, as issuers, and U.S. Bank National Association, as Trustee, and Capital One, N.A., as
Collateral Trustee (the “Indenture”).
Basis of Presentation. The audited consolidated financial statements included herein include the
accounts of the Issuers and their respective consolidated subsidiaries, including the subsidiaries that
are “restricted” as well as those that are “unrestricted” under the provisions of the Indenture. In
accordance with Section 4.03 of the Indenture, also included in Item 7 to this Annual Report is an
unaudited presentation of consolidated Adjusted Earnings before Interest, Taxes, Depreciation and
Amortization (“EBITDA”) as derived from the audited consolidated financial statements.
1
(AN INDIRECT WHOLLY OWNED SUBSIDIARY OF ELDORADO RESORTS, INC.)
ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014
TABLE OF CONTENTS
Page
PART I
Item 1.
Business.
3
Item 1A.
Risk Factors.
3
Item 2.
Properties.
3
Item 3.
Legal Proceedings.
3
Item 4.
Mine Safety Disclosures.
4
Market for Registrants’ Common Equity and Related Stockholder
Matters and Issuer Purchases of Equity Securities.
4
Item 6.
Selected Financial Data.
4
Item 7.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations.
6
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.
23
Item 8.
Financial Statements and Supplementary Data.
23
Item 9.
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
23
Item 9A.
Controls and Procedures.
24
Item 9B.
Other Information.
24
Item 10.
Directors, Executive Officers and Corporate Governance.
25
Item 11.
Executive Compensation.
28
Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
30
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
31
Item 14.
Principal Accounting Fees and Services.
34
Financial Statement Schedules.
35
PART II
Item 5.
PART III
PART IV
Item 15.
SIGNATURES
36
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF ELDORADO RESORTS LLC
37
2
PART I
Eldorado Resorts LLC (“Resorts” or the “Company”), a Nevada limited liability company, was formed in 1996
and became the successor to a predecessor partnership that constructed the Eldorado Hotel and Casino, a premier
hotel/casino and entertainment facility centrally located in downtown Reno, Nevada (the “Eldorado Reno”), which
opened for business in 1973. Resorts owns and operates the Eldorado Reno. Eldorado Reno is easily accessible both
to vehicular traffic from Interstate 80, the principal highway linking Reno to its primary visitor markets in northern
California, and to pedestrian traffic from nearby casinos.
Eldorado Capital Corp. (“Capital”), a Nevada Corporation that is a wholly owned subsidiary of Resorts was
incorporated with the sole purpose of serving as co-issuer of certain debt co-issued by Resorts and Capital. Capital
holds no significant assets and conducts no business activity.
Resorts indirectly owns 100% of the partnership interests of Eldorado Casino Shreveport Joint Venture, a
Louisiana general partnership (“Eldorado Shreveport”), which owns a 403-room all suite art deco-style hotel and a
tri-level riverboat dockside casino complex situated on the Red River in Shreveport, Louisiana.
Resorts also owns a 48.1% interest in the Silver Legacy Resort Casino Joint Venture (the “Silver Legacy”),
which owns a major themed hotel and casino situated between, and seamlessly connected at the mezzanine level to,
the Eldorado Reno and Circus Circus-Reno, a hotel/casino owned and operated by Galleon, Inc. (“Galleon”), an
indirect, wholly owned subsidiary of MGM Resorts International that owns a 50% interest in the Silver Legacy.
Pursuant to a Retained Interest Agreement, Resorts has the right to acquire the remaining 1.9% interest in the Silver
Legacy on the terms and conditions set forth in such agreements.
Effective upon the consummation of the merger on September 19, 2014, (the “Merger Date”), through a series
of mergers Eldorado HoldCo, LLC (“HoldCo”), the direct parent of the Company, became a direct wholly owned
subsidiary of Eldorado Resorts, Inc. (“ERI”), a Nevada corporation formed in September 2013. As a result of such
transactions, Resorts became an indirect wholly owned subsidiary of ERI. ERI was formed to be the parent
company of HoldCo following the merger of HoldCo and MTR Gaming Group, Inc. (“MTR Gaming”), a Delaware
corporation incorporated in March 1988 (such transactions are referred to herein as the “Merger”). Each of the
Company and MTR Gaming continue to operate as a separate entity and the accompanying consolidated financial
statements of the Company do not include the operations or assets and liabilities of MTR Gaming.
Resorts previously owned a 21.3% interest in Tamarack Crossing, LLC (“Tamarack”), a Nevada limited
liability company that owned and operated Tamarack Junction, a casino in south Reno which commenced operations
on September 4, 2001. On September 1, 2014, and as a condition to closing the Merger, Resorts distributed to
HoldCo, and HoldCo subsequently distributed to its members on a pro rata basis, Resorts’ interest in Tamarack.
Item 1. Business.
The information required by this Item is hereby incorporated by reference to the information contained in the
corresponding Item in the Annual Report on Form 10-K of ERI for the year ended December 31, 2014 as filed with
the Securities and Exchange Commission and attached hereto as Exhibit A.
Item 1A. Risk Factors.
Item 2. Properties.
Item 3. Legal Proceedings.
3
Item 4. Mine Safety Disclosures.
Not applicable.
Part II
Item 5. Market for Registrants’ Common Equity and Related Stockholder Matters and Issuer Purchases of
Equity Securities.
The Company is an indirect wholly-owned subsidiary of ERI. As a result, there is no public trading market for
the outstanding membership interests of the Company.
In 2013 and 2014, the Company distributed $6.1 million and $0.6 million to HoldCo, its sole member, in
respect of tax liabilities incurred by members of HoldCo arising as a result of income of the Company and its
subsidiaries.
In 2014, and as a condition to closing the Merger, the Company distributed to HoldCo, and HoldCo
subsequently distributed to its member on a pro rata basis, Resorts’ interest in Tamarack Crossing, LLC, a Nevada
limited liability company. The noncash distribution totaled $5.5 million and equaled Resorts’ carrying value.
In connection with the Merger, the Company advanced $5.0 million to MTR Gaming which was used to
repurchase MTR Gaming common stock.
During the year ended December 31, 2014, the Company did not issue any equity securities and, during that
period, neither Resorts, nor any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities
Exchange Act of 1934), purchased any of the equity securities of Resorts.
Resorts does not have any equity compensation plans.
Item 6. Selected Financial Data.
The following table sets forth selected consolidated financial data of the Company for each of the five years
ended December 31, 2014. This information should be read in conjunction with the audited consolidated financial
statements contained elsewhere in this report. Operating results for the periods presented below are not necessarily
indicative of the results that may be expected for future years.
4
SELECTED CONSOLIDATED FINANCIAL DATA
(dollars in thousands)
Consolidated Statement of Operations Data:
Operating revenues:
Casino
Food and beverage
Hotel
Other
Less promotional allowances
Net operating revenues
Operating expenses:
Casino
Food and beverage
Hotel
Other
Marketing and promotions
General and administrative
Depreciation and amortization
Operating expenses
2013
$ 185,174
59,124
26,647
9,240
280,185
(42,530)
237,655
$ 192,379
60,556
26,934
10,384
290,253
(43,067)
247,186
99,991
29,082
7,666
7,255
17,556
45,469
16,354
223,373
101,913
28,982
7,891
7,290
17,740
43,713
17,031
224,560
Loss on sale or disposal of property
Acquisition charges (1)
Equity in income (losses) of unconsolidated affiliates (2)
Impairment of investment in joint venture (3)
Operating income (loss)
Other income (expense):
Interest income
Interest expense
Gain on extinguishment of debt of unconsolidated
affiliate
Gain on termination of supplemental executive
retirement plan of unconsolidated affiliate
(Loss) gain on early retirement of debt, net
Loss on property donation
Total other expense
Operating Data (7):
Number of hotel rooms (8)
Average hotel occupancy rate (9)
Number of slot machines (8)
Number of table games (8)
104,044
29,095
8,020
7,279
18,724
44,936
17,651
229,749
$ 203,537
57,649
26,291
9,549
297,026
(42,168)
254,858
104,057
29,238
7,866
7,764
18,743
44,817
19,780
232,265
105,671
27,653
7,489
7,219
20,007
45,337
22,440
235,816
(198)
–
(8,952)
–
15,841
(120)
–
(3,695)
(33,066)
(13,074)
(266)
–
(3,899)
–
14,877
15
(15,441)
16
(15,681)
14
(16,069)
12
(18,457)
1
(21,065)
–
11,980
715
–
–
(14,711)
–
–
–
(3,685)
(4,156)
(1,054)
(5,210)
(103)
18,897
–
18,897
–
(5,313)
$ 18,897
$
$ 10,152
(9,711)
(3,300)
6,748
0.7x
$ 23,619
(7,643)
(11,466)
7,413
2.1x
1,217
84.6%
2,721
101
1,217
85.1%
2,738
100
$
$ 201,253
58,915
26,547
10,754
297,469
(41,397)
256,072
(226)
(3,173)
3,355
–
22,582
2014
Consolidated Balance Sheet Data:
Cash and cash equivalents
Total assets
Total debt
Members’ equity
$ 200,292
59,317
26,203
10,458
296,270
(41,530)
254,740
2010
(84)
(6,348)
2,705
–
10,555
–
Net (loss) income before income taxes
Provision for income taxes (4)
Net (loss) income
Non-controlling interest (3,5)
Net (loss) income attributable to the Company (4)
Other Data:
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Capital expenditures
Ratio of earnings to fixed charges (6)
Year Ended December 31,
2012
2011
2014
2013
$ 26,954
258,621
168,035
62,539
$ 29,813
270,182
170,760
75,575
–
–
(22)
(755)
(16,832)
–
2,499
–
(15,946)
–
–
–
(21,064)
(991)
–
(991)
–
(29,020)
–
(29,020)
4,807
(6,187)
–
(6,187)
183
(991)
$ (24,213)
$
$ 28,366
(21,832)
(11,381)
9,181
0.9x
$ 21,171
(7,715)
(31,439)
7,889
–
$ 25,216
(8,422)
19
8,270
0.7x
1,217
84.1%
2,779
97
At December 31,
2012
$ 25,303
262,525
176,102
61,003
1,217
86.3%
2,751
99
2011
$ 30,150
272,662
183,502
66,023
See footnotes to Selected Consolidated Financial Data which appear on the next page.
5
–
(6,004)
1,217
86.4%
2,766
97
2010
$ 48,133
333,643
209,620
95,905
(1)
During 2014 and 2013, the Company incurred $6.3 million and $3.2 million, respectively, in acquisition charges in
connection with the Merger.
(2)
Except as explained in note (3) below, equity in income (losses) of unconsolidated affiliates represents (1) the
Company’s 48.1% joint venture interest in Silver Legacy (or, prior to the Merger, its 50% interest in ELLC) and (2) for
periods prior to September 1, 2014, the Company’s 21.3% interest in Tamarack. Since the Company operates in the
same line of business as the Silver Legacy and Tamarack, each with casino and/or hotel operations, the Company’s
equity in the income (losses) of such affiliates is included in operating income (loss).
(3)
The Company recognized non-cash impairment charges of $33.1 million in 2011 for its investment in Silver Legacy,
which is included in the consolidated statement of operations and comprehensive (loss) income. Such impairment
charge eliminated the Company’s remaining investment in Silver Legacy. Non-controlling interests in Silver Legacy
were allocated $4.8 million of the non-cash impairments, eliminating the remaining non-controlling interest.
Assumptions used in the 2011 analysis were impacted by the default in the payment of principal and interest on the
Silver Legacy’s debt obligations on March 1, 2012, the current cash flow forecasts and market conditions for the Silver
Legacy. As a result of the elimination of the Company's remaining investment in the Silver Legacy as of December 31,
2011, we discontinued the equity method of accounting for our investment in the Silver Legacy until the fourth quarter
of 2012 when additional investments in the Silver Legacy were made. At such time, the Company recognized its share
of the Silver Legacy’s suspended net losses not recognized during the period the equity method of accounting was
discontinued and resumed the equity method of accounting for its investment.
(4)
Prior to September 19, 2014, the Company was taxed as a partnership under the Internal Revenue Code pursuant to
which income taxes were primarily the responsibility of the partners. On September 18, 2014, as part of the Merger,
ERI became a C Corporation subject to the federal and state corporate-level income taxes at prevailing corporate tax
rates. While taxed as a partnership, the Company was not subject to federal income tax liability. Because holders of
membership interests in the Company were required to include their respective shares of the Company’s taxable income
(loss) in their individual income tax returns, the Company made distributions to its members to cover such liabilities.
(5)
Non-controlling interest represented the minority partners’ share of the Company’s equity interest in the Silver Legacy
or, for periods prior to the Merger, the minority partners’ share of ELLC’s 50% joint venture interest in the Silver
Legacy. The non-controlling interest in the Silver Legacy is approximately 1.9%. The non-controlling interest in ELLC
was owned by certain of the Company’s equity holders and was approximately 4%.
(6)
The ratio of earnings to fixed charges has been computed as earnings divided by fixed charges. Earnings represent net
income (loss) plus fixed charges. Fixed charges represent interest expense, whether expensed or capitalized, the interest
component of rent expense and amortization of debt issuance costs. Net loss for the year ended December 31, 2011
resulted in a coverage deficiency of $5.3 million.
(7)
Excludes the operating data of the Silver Legacy and Tamarack Junction.
(8)
As of the end of each period presented.
(9)
For each period presented.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General
Eldorado Resorts LLC (“Resorts”) owns and operates Eldorado Shreveport, a hotel and riverboat gaming
complex that includes a 403-room, all suite, art deco-style hotel and a tri-level riverboat dockside casino situated on
the Red River in Shreveport, Louisiana and Eldorado Reno, a premier hotel, casino and entertainment facility in
Reno, Nevada. Resorts owns the Eldorado Shreveport indirectly through two wholly owned subsidiaries which own
100% of the Louisiana Partnership. In addition, Resorts owns a 48.1% interest in the Silver Legacy Joint Venture
(“Silver Legacy”) which owns the Silver Legacy Resort Casino, a major, themed hotel and casino connected via a
skywalk to the Eldorado Reno. Resorts also previously owned a 21.3% interest in Tamarack Junction, a small
casino in south Reno. On September 1, 2014, and as a condition to closing the Merger, Resorts distributed to
Holdco, and HoldCo subsequently distributed to its members on a pro rata basis, all of Resorts’ interest in
Tamarack. The distribution resulted in no gain or loss being recognized in the accompanying consolidated financial
statements because the distribution was in the amount of the book value of Tamarack. Resorts, the Louisiana
Partnership and Capital, a wholly owned subsidiary of Resorts which holds no significant assets and conducts no
business activity, are collectively referred to as “we,” “us,” “our” or the “Company.”
6
Effective upon the consummation of the Merger on September 19, 2014, HoldCo became a wholly owned
subsidiary of ERI, a Nevada corporation formed in September 2013. ERI was formed to be the parent company of
HoldCo following the merger of HoldCo and MTR Gaming, a Delaware corporation incorporated in March 1988
with subsidiaries of ERI. Each of HoldCo and MTR Gaming will continue to operate as separate entities and the
accompanying consolidated financial statements of Resorts do not include the operations or assets and liabilities of
MTR Gaming.
The Company accounts for its investment in the Silver Legacy and, prior to its disposition, Tamarack utilizing
the equity method of accounting. Except as discussed below, the Company’s consolidated net (loss) income
includes our proportional share of the net income before taxes of the Silver Legacy and Tamarack.
Significant Factors Impacting Operating Trends
Key Performance Metrics
Our operating results are highly dependent on the volume of customers visiting and staying at our resorts. Key
performance metrics include volume indicators such as table games drop and slot handle, which refer to amounts
wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as
casino revenues and is referred to as our win or hold. In addition, hotel occupancy and price per room designated by
average daily rate (“ADR”) are key indicators for our hotel business. Our calculation of ADR consists of the
average price of occupied rooms per day including the impact of complimentary rooms. Complimentary room rates
are determined based on an analysis of retail or cash rates for each customer segment and each type of room product
to estimate complimentary rates which are consistent with retail rates. Complimentary rates are reviewed at least
annually and on an interim basis if there are significant changes in market conditions. Complimentary rooms are
treated as occupied rooms in our calculation of hotel occupancy.
Our marketing strategy is designed to take advantage of our proximity to the large population base of the greater
San Francisco area, Sacramento and Dallas/Ft. Worth metropolitan areas and other major markets by targeting the
local day-trip market and by utilizing our hotel rooms to expand our patron mix to include overnight visitors. We
also coordinate our restaurant and entertainment promotions to encourage overnight stays. By utilizing the data in
our casino information systems, we are able to identify our premium patrons, encourage their participation in our
casino player’s card program and design promotions and special events to target this market.
Economic Impact
The economic downturn and the uneven recovery from the downturn, especially in Nevada and California,
continue to adversely influence consumers’ confidence, discretionary spending levels and travel patterns. High
unemployment and the record number of home foreclosures experienced in the economic downturn, increased
competition and volatility of the economy have had, and continue to have, a significant negative impact on the
gaming and tourism industries, and, as a result, our operating performance over the past several years. In response
to the impact of the economic down turn, increased competition and other market factors on our business, our
management has implemented cost savings measures and will continue to review our operations to look for
opportunities to further reduce expenses and maximize cash flows. While there has been some improvement in the
economy, we believe the impact of the economic downturn and the continuing uneven recovery may continue to
negatively affect our operating results for some period of time. We remain uncertain as to the duration and
magnitude of the impact of such factors on our operations and the length and sustainability of the recovery from the
economic downturn.
Expansion of Native American Gaming and Regional Gaming
A significant portion of our revenues and operating income are generated from patrons who are residents of
northern California and northeastern Texas, and as such, our operations have been adversely impacted by the growth
in Native American gaming in northern California and Oklahoma.
Many existing Native American gaming facilities in northern California are modest compared to Eldorado
Reno. However, a number of Native American tribes have established large-scale gaming facilities in California
and some Native American tribes have announced that they are in the process of expanding, developing, or are
considering establishing, large-scale hotel and gaming facilities in northern California. As northern California
Native American gaming operations have expanded, we believe the increasing competition generated by these
gaming operations has had a negative impact, principally on drive-in, day-trip visitor traffic from our main feeder
markets in northern California. A new 320,000 square foot gaming facility located in Sonoma County, California
opened on November 5, 2013.
7
Under their current compacts, most Native American tribes in California may operate up to 2,000 slot machines
and up to two gaming facilities on any one reservation. However, under action taken by the National Indian Gaming
Commission, gaming devices similar in appearance to slot machines, but which are deemed to be technological
enhancements to bingo style gaming, are not subject to such limits and may be used by tribes without state
permission. The number of slot machines the tribes may be allowed to operate could increase as a result of any new
or amended compacts the tribes may enter into with the State of California that receive the requisite approvals. Such
increases have occurred with respect to a number of new or amended compacts which have been executed and
approved.
Casino gaming is currently prohibited in several jurisdictions from which the Shreveport/Bossier City market
draws customers, primarily Texas. Although casino gaming is currently not permitted in Texas, the Texas
legislature has from time to time considered proposals to authorize casino gaming and there can be no assurance that
casino gaming will not be approved in Texas in the future, which would have a material adverse effect on our
business. Eldorado Shreveport competes with several Native American casinos located in Oklahoma, certain of
which are located near our core Texas markets. We draw a significant amount of our customers from the
Dallas/Fort Worth area which is approximately 190 miles from the Eldorado Shreveport. We believe we will
continue to face increased competition from gaming operations in Oklahoma, including the WinStar and Choctaw
casinos, which are located approximately 80 miles and 91 miles, respectively, from the Dallas/Fort Worth area.
In June 2013, construction was completed on a new 30,000 square foot casino and 400-room hotel project in
Bossier City across the Red River from Eldorado Shreveport. The facility, which also includes several restaurants
and a 950-seat entertainment arena, received final approval from the Louisiana Gaming Control Board and opened
on June 15, 2013. In December 2014, a new luxury, land-based casino with 1,600 slot machines, 70 gaming tables,
a poker room, and a 740-room hotel with a ballroom and spa, opened in Lake Charles, Louisiana approximately 200
miles south of Eldorado Shreveport, but closer to the Houston, Texas market.
We believe any future growth of Native American and regional gaming establishments, including the addition
of hotel rooms and other amenities, could place additional competitive pressure on our operations. While we cannot
predict the extent of any future impact, it could be significant.
Severe Weather
Eldorado Reno’s operations are subject to seasonal variation, with the weakest results generally occurring
during the winter months. Eldorado Shreveport’s operations were negatively impacted during the first quarter of
2014 due to poor weather conditions during this period. Periods of severe weather could negatively impact our
future operating results.
Major Bowling Tournaments in the Reno Market
The National Bowling Stadium, located one block from Eldorado Reno, is one of the largest bowling complexes
in North America and has been selected to host multi-month tournaments in Reno every year through 2018 except
for 2017. It has also been selected to host ten United States Bowling Congress (“USBC”) tournaments from 2019
through 2026. During this period, two of the ten USBC Tournaments may be held in the same year. Through a onetime agreement, the National Bowling Stadium hosted the USBC Open Tournament in Reno in 2014; usually an offyear for Reno. Historically, these multi-month bowling tournaments have attracted a significant number of visitors
to the Reno market and have benefited business in the downtown area, including Eldorado Reno. The USBC
Tournaments brought approximately 73,000 bowlers to the Reno area during the 2013 tournament period which
began on March 1st and continued through July 7th. Both tournaments returned to Reno in 2014 and brought
approximately 62,000 bowlers to the Reno area during the 2014 tournament period which began on February 28th
and continued through July 12th.
8
Summary Financial Results
Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013
The following table highlights the results of our operations (dollars in thousands):
Operating expenses
Equity in income of unconsolidated affiliates
Operating income
Net (loss) income
2014
2013
$ 237,655
$ 247,186
223,373
224,560
2,705
3,355
10,555
22,582
(5,210)
18,897
Percent Change
(3.9%)
(0.5%)
(19.4%)
(53.3%)
(127.6%)
Net Operating Revenues. Net operating revenues decreased 3.9% for the year ended December 31, 2014
compared to the prior year as both Eldorado Reno and Eldorado Shreveport experienced decreases in all components
of operating revenues.
Equity in Income of Unconsolidated Affiliates. Income from the Company’s unconsolidated affiliate, the Silver
Legacy and its former unconsolidated affiliate, Tamarack, decreased $0.7 million for the year ended December 31,
2014 compared to the prior year. Our equity in the income of the Silver Legacy for the years ended December 31,
2014 and 2013 amounted to $2.0 million and $2.3 million, respectively. Equity in the income of Tamarack for the
2014 period prior to its distribution on September 1, 2014 and for 2013 amounted to $0.7 million and $1.1 million,
respectively.
Operating Income and Net (Loss) Income Attributable to the Company. For the year ended December 31, 2014
compared to the prior year, operating income decreased $12.0 million primarily due to declines in departmental
operating margins, increased general and administrative payroll and professional services associated with the
Merger, a decline in equity income of unconsolidated affiliates, and the absence of a $12.0 million gain in 2013 for
the extinguishment of debt of Silver Legacy. Operating income was also impacted by an increase in acquisition
charges of $3.2 million during the year ended December 31, 2014 compared to the prior year. Net (loss) income
decreased $24.1 million during the year ended December 31, 2014 compared to the prior year due to the same
factors negatively impacting operating income, combined with the aforementioned $12.0 million gain in 2013
related to Silver Legacy and a tax provision of $1.1 million. This decrease during the year ended December 31,
2014 compared to 2013 was partially offset by a $0.7 million gain resulting from the termination of Silver Legacy’s
supplemental executive retirement plan and a $0.2 million decrease in interest expense.
Revenues
The following table highlights our sources of net operating revenues (dollars in thousands):
2014
2013
Casino:
Eldorado Reno
Eldorado Shreveport
Total
Food and beverage:
Eldorado Reno
Eldorado Shreveport
Total
Hotel:
Eldorado Reno
Eldorado Shreveport
Total
Other:
Percent Change
$ 61,946
123,228
185,174
$ 63,002
129,377
192,379
(1.7%)
(4.8%)
(3.7%)
33,500
25,624
59,124
34,307
26,249
60,556
(2.4%)
(2.4%)
(2.4%)
18,149
8,498
26,647
18,287
8,647
26,934
(0.8%)
(1.7%)
(1.1%)
9
Eldorado Reno
Eldorado Shreveport
Total
Promotional allowances:
Eldorado Reno
Eldorado Shreveport
Total
5,976
3,264
9,240
6,832
3,552
10,384
(12.5%)
(8.1%)
(11.0%)
(15,876)
(26,654)
(42,530)
(15,737)
(27,330)
(43,067)
0.9%
(2.5%)
(1.2%)
Casino Revenues. Consolidated casino revenues decreased 3.7% for the year ended December 31, 2014
compared to the prior year. The decrease in casino revenues at Eldorado Reno of 1.7% was primarily due to declines
in slot handle and revenues. Table games drop and revenues remained flat at Eldorado Reno for the year ended
December 31, 2014 compared to the prior year. Casino revenues decreased 4.8% at Eldorado Shreveport for the year
ended December 31, 2014 compared to the prior year due to lower slot handle and revenues. The decrease in slot
revenues was partially offset by an increase in table games revenues resulting from a higher table games hold
percentage, which more than offset a decrease in table games drop for the year ended December 31, 2014 compared
to the prior year. The results of operations of Eldorado Shreveport have been negatively impacted by the addition of
a new competitor in the Shreveport/Bossier City market in June of 2013 that reduced the market share of all of the
other casino operators in the market for the year ended December 31, 2014, including Eldorado Shreveport.
Food and Beverage Revenues. Consolidated food and beverage revenues decreased 2.4% for the year ended
December 31, 2014 compared to the prior year due to declines in food and beverage revenues of 2.4% at both
Eldorado Reno and Eldorado Shreveport. Food revenues at Eldorado Reno remained flat for the year ended
December 31, 2014 compared to the prior year period. Declines in customer counts of 2.5% were offset by an
increase in the average check as a result of selective price increases in Eldorado Reno’s restaurants. Beverage
revenues decreased primarily due to lower complimentary sales and the closure of the BuBinga nightclub in May
2014. The decline in food and beverage revenues at Eldorado Shreveport for the year ended December 31, 2014
compared to the prior year was primarily due to the decrease in customer volume as evidenced by a 1.7% decline in
customer counts.
Hotel Revenues. Consolidated hotel revenues decreased 1.1% for the year ended December 31, 2014 compared
to the prior year. Hotel revenues at Eldorado Reno decreased 0.8% due to declines in hotel occupancy and ADR to
82.0% and $64.62, respectively, for the year ended December 31, 2014 from 82.9% and $65.34, respectively, for the
year ended December 31, 2013. These declines were partially offset by growth in hotel revenues associated with an
increase in our resort fee from $6 to $8 in August of 2013. Hotel revenues at Eldorado Shreveport decreased 1.7%
due to a decline in the ADR to $64.50 during the year ended December 31, 2014 from $65.72 during 2013, which
more than offset the slight increase in occupancy to 89.6% during 2014 from 89.4% during 2013.
Other Revenues. Other revenues are comprised of revenues generated by our retail outlets, entertainment
venues and other miscellaneous items. Other revenues at Eldorado Reno decreased 12.5% for the year ended
December 31, 2014 compared to the prior year primarily due to declines in entertainment revenues associated with
lower attendance at the Eldorado Reno theater, and to a lesser extent, decreased retail revenues. Other revenues
decreased 8.1% at Eldorado Shreveport for the year ended December 31, 2014 compared to the prior year due to
lower ATM commission revenues and retail sales which were partially offset by improved spa revenues.
Promotional Allowances. Consolidated promotional allowances, as a percentage of casino revenues, increased
to 23.0% for the year ended December 31, 2014 compared to 22.4% for the year ended December 31, 2013.
Promotional allowances at Eldorado Reno increased slightly for the year ended December 31, 2014 compared to the
prior year reflecting an increase in our casino direct mail program. Promotional allowances decreased 2.5% at
Eldorado Shreveport in association with the 4.8% decrease in casino revenues. Management actively reviews the
effectiveness of its promotions and direct mail programs to expand successful promotions while eliminating or
reducing less profitable promotions. Promotional activities reflect our efforts to maintain the Eldorado’s share of the
gaming markets in which it operates in an effort to mitigate the impact of increasing competition.
10
Operating Expenses
The following table highlights our operating expenses (dollars in thousands):
2014
2013
Casino:
Eldorado Reno
Eldorado Shreveport
Total
Food and beverage:
Eldorado Reno
Eldorado Shreveport
Total
Hotel:
Eldorado Reno
Eldorado Shreveport
Total
Other:
Eldorado Reno
Eldorado Shreveport
Total
Percent Change
$27,840
72,151
99,991
$ 28,339
73,574
101,913
(1.8%)
(1.9%)
(1.9%)
23,460
5,622
29,082
23,485
5,497
28,982
(0.1%)
2.3%
0.3%
6,474
1,192
7,666
6,725
1,166
7,891
(3.7%)
2.2%
(2.9%)
5,752
1,503
7,255
5,791
1,499
7,290
(0.7%)
0.3%
(0.5%)
17,556
45,019
450
16,354
17,740
43,113
600
17,031
(1.0%)
4.4%
(25.0%)
(4.0%)
Management fee
Casino Expenses. Casino expenses at Eldorado Reno decreased 1.8% for the year ended December 31, 2014
compared to the prior year due to lower gaming taxes and declines in bad debt expense. Casino expenses at
Eldorado Shreveport decreased 1.9% for the year ended December 31, 2014 compared to the prior year primarily as
a result of lower gaming taxes and payroll costs reflecting the decrease in visitor volume.
Food and Beverage Expenses. For the year ended December 31, 2014 compared to the prior year, food and
beverage expenses at Eldorado Reno remained flat despite a decrease of 2.4% in food and beverage revenues.
Increases in food costs associated with higher product costs were offset by decreases in beverage costs in
conjunction with lower beverage revenues associated with the closure of the BuBinga nightclub in May of 2014.
Despite a 2.4% decrease in food and beverage revenues, food and beverage expenses increased slightly at Eldorado
Shreveport for the year ended December 31, 2014 compared to the prior year due to increased food costs related to
quality improvements and the addition of new menu items.
Hotel Expenses. Hotel expenses at Eldorado Reno decreased 3.7% reflecting the decrease in occupancy for the
year ended December 31, 2014 compared to the prior year in addition to decreased expenses associated with lower
convention sales. For the year ended December 31, 2014 compared to the prior year, hotel expenses at Eldorado
Shreveport increased slightly due to increases in payroll and benefits combined with higher supplies costs associated
with improved amenities.
Other Expenses. Other expenses at Eldorado Reno decreased slightly for the year ended December 31, 2014
compared to the prior year despite a 12.5% decrease in other revenues. The higher proportion of expenses was due
to fixed production and contract costs associated with the theater. Other expenses at Eldorado Shreveport did not
change significantly despite an 8.1% decrease in other revenues due to higher retail costs, as a percentage of retail
revenues.
Marketing and Promotional Expenses. Marketing and promotional expenses did not change significantly for
the year ended December 31, 2014 compared to the prior year.
General and Administrative Expenses and Management Fees. For the year ended December 31, 2014
compared to the prior year, general and administrative expenses increased 4.4% due to increases in professional
11
services and additional payroll associated with the Merger in addition to higher property taxes and the absence of a
sales tax refund received in the third quarter of 2013 at Eldorado Shreveport.
Historically, we have paid management fees to Recreational Enterprises, Inc. (“REI”) and Hotel Casino
Management, Inc. (“HCM”), affiliates of the Company. For the years ended December 31, 2014 and 2013, we paid
$0.5 million and $0.6 million, respectively, in management fees to REI and HCM. Management fees were not paid
subsequent to the consummation of the Merger. Subsequent to the consummation of the Merger, Donald L. Carano
and Raymond J. Poncia received remuneration in the amount of $0.3 million and $0.2 million, respectively, for their
services as consultants to ERI and its subsidiaries in lieu of the management fees previously paid under the terms of
the Eldorado Management Agreement.
Depreciation and Amortization Expense. Depreciation expense decreased 4.0% for the year ended December
31, 2014 compared to the prior year as more assets became fully depreciated.
Acquisition Charges
For the years ended December 31, 2014 and 2013, we incurred $6.3 million and $3.2 million, respectively, in
acquisition charges in connection with the Merger.
Interest Expense
For the year ended December 31, 2014 compared to the prior year, interest expense decreased $0.2 million, or
1.5%, due to principal reductions on our credit facility which matured on May 30, 2014 and was not renewed.
Gain on Extinguishment of Debt of Unconsolidated Affiliate
During 2013, we recognized a $12.0 million gain on extinguishment of debt of Silver Legacy, an
unconsolidated affiliate, as a result of its reorganization.
Gain on Termination of Supplemental Retirement Plan of Unconsolidated Affiliate
During 2014, we recognized a $0.7 million gain on termination of the supplemental retirement plan of
unconsolidated affiliate at Silver Legacy.
Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012
The following table highlights the results of our operations (dollars in thousands):
Operating expenses
Equity in income (losses) of unconsolidated
affiliates
Operating income
Net income (loss)
2013
2012
$ 247,186
$ 254,740
224,560
229,749
3,355
22,582
18,897
(8,952)
15,841
(991)
Percent Change
(3.0%)
(2.3%)
137.5%
42.6%
2,006.9%
Net Operating Revenues. Net operating revenues decreased 3.0% for the year ended December 31, 2013
compared to the prior year primarily as a result of decreases in casino revenues and increases in promotional
activities at both Eldorado Shreveport and Eldorado Reno. In addition, decreases in hotel and other revenues at
Eldorado Shreveport were only partially offset by increases in food and beverage revenues at both facilities and in
hotel and other revenues at Eldorado Reno. As more fully explained below, the decrease in casino revenues at
Eldorado Reno resulted primarily from a decrease in the table games hold percentage. The decrease in casino
revenues at Eldorado Shreveport primarily reflects reductions in slot machine wagering in 2013 compared to the
prior year.
Operating Expenses. Operating expenses decreased 2.3% for the year ended December 31, 2013 compared to
the prior year primarily as a result of decreases in casino expenses reflecting the decline in the associated revenues at
both Eldorado Shreveport and Eldorado Reno. Also contributing to the decrease were reductions in selling, general
and administrative expenses and depreciation and amortization.
12
Equity in Income (Losses) of Unconsolidated Affiliates. Income from the Company’s unconsolidated affiliates,
the Silver Legacy and Tamarack, increased approximately $12.3 million for year ended December 31, 2013 to the
prior year. Following its reorganization, equity in the income of the Silver Legacy for 2013 amounted to $2.3
million compared with a loss of $9.7 million in 2012. Equity in the income of Tamarack for the year ended
December 31, 2013 increased by $0.4 million due to an increase in Tamarack’s net operating revenues.
Operating Income and Net Income (Loss). During 2013, we experienced an increase in operating income of
$6.7 million compared to the prior year due primarily to the $12.3 million improvement in our equity in income of
unconsolidated affiliates. Operating margins decreased during 2013 as consolidated net operating revenues
decreased approximately $2.4 million more than the decrease in consolidated operating expenses. Also offsetting the
improvement from our unconsolidated affiliates were $3.2 million of acquisition charges incurred during 2013 in
connection with the Merger. Net income increased approximately $19.9 million during 2013 compared to the prior
year due to the factors positively impacting operating income previously noted combined with the recognition in
2013 of $12.0 million of gain on the extinguishment of debt of the Silver Legacy as a result of its reorganization, the
absence of an $0.8 million loss on property donation incurred in the 2012 period and a $0.4 million reduction in
interest expense.
Revenues
The following table highlights our sources of net operating revenues (dollars in thousands):
2013
2012
Casino:
Eldorado Reno
Eldorado Shreveport
Total
Food and beverage:
Eldorado Reno
Eldorado Shreveport
Total
Hotel:
Eldorado Reno
Eldorado Shreveport
Total
Other:
Eldorado Reno
Eldorado Shreveport
Total
Promotional allowances:
Eldorado Reno
Eldorado Shreveport
Total
Percent Change
$ 63,002
129,377
192,379
$ 64,014
136,278
200,292
(1.6%)
(5.1%)
(4.0%)
34,307
26,249
60,556
33,210
26,107
59,317
3.3%
0.5%
2.1%
18,287
8,647
26,934
17,081
9,122
26,203
7.1%
(5.2%)
2.8%
6,832
3,552
10,384
6,667
3,791
10,458
2.5%
(6.3%)
(0.7%)
(15,737)
(27,330)
(43,067)
(14,882)
(26,648)
(41,530)
(5.7%)
(2.6%)
(3.7%)
Casino Revenues. Consolidated casino revenues decreased 4.0% for the year ended December 31, 2013
compared to the prior year. The decrease in such revenues at Eldorado Reno of 1.6% was due to a decrease in the
table games hold percentage during 2013 compared to 2012, in which we held higher than normal. This decrease in
table games revenue was partially offset by an increase in slot revenue for the year ended December 31, 2013.
Casino revenues at Eldorado Shreveport decreased in 2013 by 5.1% compared to 2012 due primarily to a decrease in
slot handle. Table game revenues at Eldorado Shreveport did not change significantly in 2013 compared to the prior
year.
Food and Beverage Revenues. Consolidated food and beverage revenues increased by 2.1% for the year ended
December 31, 2012 compared to the prior year. Food and beverage revenues at Eldorado Reno increased 3.3% in
2013 compared to 2012 primarily due to an increase in the average check price as a result of selective price
increases in our restaurants along with a 0.8% increase in customer counts. Food and beverage revenues increased
by 0.5% at Eldorado Shreveport in 2013 compared to 2012 primarily due to an increase in the average food revenue
per customer resulting from selective increases in menu prices.
13
Hotel Revenues. Consolidated hotel revenues increased 2.8% for the year ended December 31, 2013 compared
to the prior year. Hotel revenues at Eldorado Reno increased by 7.1% due to an increased hotel occupancy rate of
approximately 82.9% in 2013 compared to 80.6% in 2012 and an increased hotel ADR of $65 in 2013 compared to
$63 in 2012. Other hotel revenues at Eldorado Reno increased as we increased our resort fee in August 2013. Hotel
revenues at Eldorado Shreveport decreased by 5.2% due to a decline in the occupancy rate to 89.4% in 2013 from
91.1% in 2012 and a decrease in the ADR to $66 in 2013 from $68 in 2012. Hotel room capacity in the
Shreveport/Bossier City market increased during June 2013 with the opening of a 400-room hotel across the Red
River from Eldorado Shreveport.
Other Revenues. Other revenues are comprised of revenues generated by our retail outlets, entertainment
venues and other miscellaneous items. Other revenues at Eldorado Reno increased 2.5% for the year ended
December 31, 2013 compared to the prior year due to an increase in retail sales. Other revenues decreased by 6.3%
at Eldorado Shreveport during 2013 compared to 2012 due to lower ATM commission revenues and retail sales and
to the absence of rental revenue from certain retail space located across the street from Eldorado Shreveport which
we donated to the City of Shreveport during the third quarter of 2012.
Promotional Allowances. Consolidated promotional allowances, as a percentage of casino revenues, increased
to 22.4% in for the year ended December 31, 2013 compared to 20.7% for the year ended December 31, 2012. Such
costs at Eldorado Reno increased 5.7%, whereas such costs increased 2.6% at Eldorado Shreveport. Management
actively reviews the effectiveness of its promotions and direct mail programs to expand successful promotions while
eliminating or reducing less profitable promotions. Promotional activities at Eldorado Shreveport reflect, in part,
our efforts to maintain our property’s share of the overall Shreveport/Bossier City gaming market, which added a
new competitor during June 2013.
Operating Expenses
The following table highlights our operating expenses (dollars in thousands):
2013
2012
Casino:
Eldorado Reno
Eldorado Shreveport
Total
Food and beverage:
Eldorado Reno
Eldorado Shreveport
Total
Hotel:
Eldorado Reno
Eldorado Shreveport
Total
Other:
Eldorado Reno
Eldorado Shreveport
Total
Percent Change
$ 28,339
73,574
101,913
$ 28,061
75,983
104,044
1.0%
(3.2%)
(2.0%)
23,485
5,497
28,982
22,992
6,103
29,095
2.1%
(9.9%)
(0.4%)
6,725
1,166
7,891
6,749
1,271
8,020
(0.4%)
(8.3%)
(1.6%)
5,791
1,499
7,290
5,572
1,707
7,279
3.9%
(12.2%)
0.2%
17,740
43,113
600
17,031
18,724
44,336
600
17,651
(5.3%)
(2.8%)
—%
(3.5%)
Management fee
Casino Expenses. Casino expenses at Eldorado Reno increased 1.0% during the year ended December 31, 2013
compared to the prior year primarily due to an increase in bad debt expense and increased promotional allowances
related to the cost of rooms, food and retail complimentaries allocated to the casino department. Casino expenses at
Eldorado Shreveport decreased during 2013 compared to 2012 as a result of lower gaming taxes.
14
Food and Beverage Expenses. For the year ended December 31, 2013, food and beverage expenses at
Eldorado Reno increased 2.1% compared to the prior year due to increases in food and beverage cost of sales and
direct payroll associated with the aforementioned increased revenues. Food and beverage expenses decreased 9.9%
at Eldorado Shreveport during 2013 compared to 2012 despite an insignificant increase in the associated revenues
due primarily to reductions in food and beverage cost of goods sold and in labor and overhead charges as a result of
management’s cost control efforts.
Hotel Expenses. Hotel expenses at Eldorado Reno did not change significantly for the year ended December
31, 2013 compared to the prior year despite a 7.1% increase in the associated revenues as increased direct payroll
associated with the higher occupancy levels was offset by lower group insurance costs and decreased maintenance
expenses as a result of our hotel remodel. For the year ended December 31, 2013, hotel expenses at Eldorado
Shreveport decreased 8.3% compared to 2012 due to decreases in payroll expenditures associated with the lower
occupancy levels as reflected by the decrease in its occupancy percentage from 91.1% in the 2012 period to 89.4%
in the 2013 period.
Other Expenses. Other expenses increased 3.9% at Eldorado Reno for the year ended December 31, 2013
compared to the prior year primarily as a result of increased retail cost of sales associated with the aforementioned
increased revenues, higher credit card discounts and increased show production costs in our theatre. Other expenses
at Eldorado Shreveport decreased $0.2 million, or 12.2%, for the year ended December 31, 2013 compared to the
prior year primarily due to decreases in cost of goods sold associated with reduced retail sales and reduced labor and
overhead charges due to management’s cost control efforts.
Marketing and Promotions Expenses. Marketing and promotions expenses decreased 5.3% for the year ended
December 31, 2013 compared to the prior year due to efforts to strategically reduce promotional marketing and
special events costs at both Eldorado Reno and Shreveport.
General and Administrative Expenses and Management Fees. For the year ended December 31, 2013, as
compared to the prior year, selling, general and administrative expenses decreased primarily due to Eldorado
Shreveport experiencing decreases in professional fees and real property taxes.
We have paid management fees to REI and HCM, affiliates of the Company. In each of the years ended
December 31, 2013 and 2012, we paid an aggregate of $0.6 million in management fees to REI and HCM.
Depreciation and Amortization Expense. Depreciation expense decreased $0.6 million, or 3.5%, during 2013 as
compared to 2012 as more assets became fully depreciated.
Acquisition Charges
For the year ended December 31, 2013, we incurred $3.2 million in acquisition charges in connection with the
Merger.
Interest Expense
For the year ended December 31, 2013, interest expense decreased by approximately $0.4 million, or 2.4%
compared to the prior year, due to principal reductions in our long-term debt obligations.
Gain on Extinguishment of Debt of Unconsolidated Affiliate
For the year ended December 31, 2013, we recognized $12.0 million of gain on extinguishment of debt of
Silver Legacy, an unconsolidated affiliate, as a result of its reorganization.
Loss on Property Donation
For the year ended December 31, 2012, Eldorado Shreveport donated certain of its property with an appraised
value of approximately $2.0 million to the City of Shreveport. The property had a recorded net value of $0.8
million, which was written off in connection with the donation.
Loss on Early Retirement of Debt
During the third quarter of 2012, we purchased and retired $2.0 million principal amount of our 8.625% Senior
Secured Notes due June 15, 2019 (the “Senior Secured Notes”) utilizing available excess cash. The total purchase
15
price of the Senior Secured Notes was $2.0 million plus accrued interest which, after the write off of the associated
bond offering costs of $0.1 million, resulted in a net loss on early retirement of debt in the amount of $22,000.
Supplemental Unaudited Presentation of Adjusted Consolidated Earnings before Interest, Taxes,
Depreciation and Amortization (“EBITDA”) for the Years Ended December 31, 2014, 2013 and 2012
In accordance with Section 4.03 of the Indenture, the following is an unaudited presentation of consolidated
Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA and Adjusted EBITDA of the Company
as derived from its audited consolidated financial statements. EBITDA is defined as earnings before interest, taxes,
depreciation and amortization. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation,
amortization, and other non-operating income (expense), such as acquisition charges, equity in income of
unconsolidated affiliates and gain or loss on the disposition of assets. EBITDA and Adjusted EBITDA are
presented solely as supplemental disclosure because we believe that it is widely utilized by, and are presented to
assist, investors in understanding our performance and operating results. Adjusted EBITDA is not intended to
represent cash flow from operations as defined by U.S. generally accepted accounting principles (“GAAP”), and is
not necessarily indicative of cash available to fund cash flow needs. While we believe certain items excluded from
Adjusted EBITDA may be recurring in nature and should not be disregarded in evaluation of our performance, it is
useful to exclude such items when analyzing current results and trends compared to other periods because these
items can vary significantly depending on specific underlying transactions or events that may not be comparable
between the periods presented. Also, we believe excluded items may not relate specifically to current operating
trends or be indicative of future results. Furthermore, Adjusted EBITDA should not be considered as an alternative
to net income under GAAP for purposes of evaluating our results of operations. Our calculation of Adjusted
EBITDA may be different from the calculation methods used by other companies and may not be comparable to
similar non-GAAP financials measures presented by other issuers. Therefore, comparability may be limited.
The reconciliation between net income, EBITDA and Adjusted EBITDA for the Company’s reporting segments
and on a consolidated basis is as follows for the periods indicated (dollars in thousands):
2014
Eldorado Reno:
Net (loss) income attributable to the Company (1)
Interest expense, net of interest income
Provision for income taxes
EBITDA
Equity in (income) losses of unconsolidated affiliates
Loss (gain) on sale or disposal of property
affiliate
Acquisition charges
Loss on early retirement of debt, net
$
Eldorado Shreveport:
Net income (1)
EBITDA
(8,655)
4,772
1,054
7,951
5,122
(2,705)
—
$
—
6,298
—
Gain on termination of supplemental retirement plan
of unconsolidated affiliate
Adjusted EBITDA
2013
2012
(unaudited, dollars in thousands)
8,971
4,865
—
8,318
22,154
(3,355)
14
$ (13,665)
5,101
—
9,215
651
8,952
(4)
—
—
6
(11,980)
3,173
—
—
(715)
—
$
8,000
$
10,006
$
9,605
$
5,001
10,654
—
8,403
24,058
84
—
—
$
9,926
10,800
—
8,713
29,439
212
—
—
$
12,674
10,954
—
8,436
32,064
202
16
755
16
Adjusted EBITDA
Corporate:
Net loss (2)
Acquisition charges
Provision (benefit) for income taxes
Adjusted EBITDA
Eldorado Consolidated:
Net (loss) income attributable to the Company
EBITDA
affiliate
Acquisition charges
Gain on termination of supplemental executive
retirement plan of unconsolidated affiliate
(Gain) loss on property donations
Adjusted EBITDA
_________________
$
24,142
$
29,651
$
(1,659)
50
—
(1,609)
$
—
—
—
—
(5,313)
15,426
1,054
16,354
27,521
(2,705)
84
$
$
$
—
6,348
—
(715)
$
$
18,897
15,665
—
17,031
51,593
(3,355)
226
$ 33,037
$
$
$
—
30,533
$ 39,657
(991)
16,055
—
17,651
32,715
8,952
198
—
—
22
—
(11,980)
3,173
—
—
—
—
—
—
—
755
$
42,642
(1) Excludes intercompany management fees revenues earned by Eldorado Reno and expensed by Eldorado Shreveport
amounting to $2.3 million, $3.0 million and $3.0 million, respectively, for each of the years ended December 31, 2014,
2013 and 2012.
(2) Comprises expenses incurred subsequent to the Merger Date net of a $1.5 million allocated reimbursement paid by
MTR Gaming in December 2014.
Liquidity and Capital Resources
Our primary sources of liquidity and capital resources have been through cash flow from operations, borrowings
under various credit agreements and, where necessary, the issuance of debt obligations.
We expect that our primary capital requirements going forward will relate to the operation and maintenance of
our properties in Reno and Shreveport and servicing our outstanding indebtedness. We plan to spend approximately
$9.0 million on capital expenditures in 2015, comprised of approximately $4.5 million each at Eldorado Reno and
Eldorado Shreveport, and approximately $14.5 million to pay interest on our 8.625% Senior Secured Notes due
2019 (the “Senior Secured Notes”). We expect that cash generated from operations will be sufficient to fund our
operations and capital requirements and service our outstanding indebtedness for the foreseeable future; however,
we cannot provide assurance that operating cash flows will be sufficient to do so and we cannot be sure that we will
be able to refinance our outstanding debt prior to its maturity in 2019 on terms that we find acceptable, or at all.
Cash Flows
At December 31, 2014, we had $27.0 million of cash and cash equivalents. For the year ended December 31,
2014, we generated cash flows from operating activities of $10.2 million compared to $23.6 million for the prior
year. This decrease was primarily due to the decline in net income and various changes in balance sheet accounts
which occurred in the normal course of business.
Net cash flows used in investing activities totaled $9.7 million for the year ended December 31, 2014 compared
to $7.6 million for the prior year. Net cash flows used in investing activities in 2014 consisted primarily of $6.7
million for capital expenditures for various renovation projects and equipment purchases and an advance to MTR
Gaming in the amount of $5.0 million. Offsetting these uses of cash was a reduction in restricted cash in the amount
17
of $2.5 million related to the return of $2.5 million of the $5.0 million of cash collateral that we provided as credit
support for Silver Legacy’s obligations under its credit agreement.
Net cash flows used in financing activities for the year ended December 31, 2014 totaled $3.3 million compared
to $11.5 million for the prior year period. Net repayments on our Secured Credit Facility (see below) amounted to
$2.5 million. Other financing activities included the repayment of capital lease obligations of $0.2 million and cash
distributions to our members totaling $0.6 million. Cash distributions to our members totaled $6.1 million for the
year ended December 31, 2013 and contributed to the decline in net cash flows used in financing activities compared
to the prior year.
Silver Legacy Loan
Under the Plan of Reorganization, each of ELLC and Galleon retained its 50% interest in the Silver Legacy, but
was required to advance $7.5 million to the Silver Legacy pursuant to a subordinated loan and provide credit support
by depositing $5.0 million of cash into bank accounts that are subject to a security interest in favor of the lender
under the Silver Legacy credit agreement. The $7.5 million note receivable from ELLC to the Silver Legacy was
issued on November 16, 2012 with a stated interest rate of 5% per annum and a maturity date of May 16, 2018.
Payment of any interest or principal under the loan is subordinate to the senior indebtedness of the Silver Legacy.
Accrued interest under the loan will be added to the principal amount of the loan and may not be paid unless
principal of the loan may be paid in compliance with the terms of the senior indebtedness outstanding or at maturity.
In December 2014, Silver Legacy deposited $5.0 million of cash into a cash collateral account securing its
obligations under its credit agreement, which reduced the credit support obligation of each of ELLC and Galleon to
$2.5 million each and resulted in the return of $2.5 million of the $5.0 million of cash collateral that Resorts
previously provided as credit support for Silver Legacy’s obligations under its credit agreement.
Senior Secured Notes
On June 1, 2011, Resorts and Capital completed the issuance of $180 million Senior Secured Notes. Interest on
the Senior Secured Notes is payable semiannually each June 15th and December 15th to holders of record on the
preceding June 1st or December 1st, respectively.
The indenture relating to the Senior Secured Notes contains various restrictive covenants including, restricted
payments and investments, additional liens, transactions with affiliates, covenants imposing limitations on additional
debt, dispositions of property, mergers and similar transactions. As of December 31, 2014, we were in compliance
with all of the covenants under the indenture relating to the Senior Secured Notes.
The Senior Secured Notes are unconditionally guaranteed, jointly and severally, by all of Resorts’ current and
future domestic restricted subsidiaries other than Capital (collectively, the “Guarantors”). The Silver Legacy is not a
subsidiary and did not guarantee the Senior Secured Notes. The Senior Secured Notes are secured by a first priority
security interest on substantially all of Resorts’ current and future assets (other than certain excluded assets,
including gaming licenses and Resorts’ interest in the Silver Legacy). Such security interests are junior to the
security interests with respect to obligations of Resorts and the Guarantors under the Secured Credit Facility. In
addition, all of the membership interests in Resorts and equity interests in the Guarantors are subject to a pledge for
the benefit of the holders of the Senior Secured Notes.
We may redeem some or all of the Senior Secured Notes prior to June 15, 2015 at a redemption price of 100%
of the principal amount thereof plus a “make whole premium” together with accrued and unpaid interest thereon.
On or after June 15, 2015, we may redeem the Senior Secured Notes at the following redemption prices (expressed
as a percentage of principal amount) plus any accrued and unpaid interest thereon:
Year beginning June 15,
2015
2016
2017 and thereafter
Percentage
104.313%
102.156%
100.000%
On June 1, 2011, Resorts entered into a new $30 million senior secured revolving credit facility (the “Secured
Credit Facility”) available until May 30, 2014 consisting of a $15 million term loan and a $15 million revolving
credit facility. The Term Loan was repaid during the second quarter of 2014. At December 31, 2013, the
18
outstanding principal amount under on the Term Loan was $2.5 million. Resorts did not renew the Secured Credit
Facility when it matured on May 30, 2014.
Contractual Commitments
The following table summarizes our estimated contractual payment obligations as of December 31, 2014 (in
thousands).
Payment Due by Period
2015
2016
2017
2018
2019
Thereafter
Total
Type of Contractual Obligation
Interest
Long-Term
Payments
Debt
on LongCapital
Instruments
term Debt
Leases
$
—
$ 14,490
$ 32
—
14,490
4
—
14,490
—
—
14,490
—
168,000
7,245
—
—
—
—
$ 168,000
$ 65,205
$ 36
Operating
Leases
$ 1,167
1,059
1,032
997
933
23,449
$ 28,637
Total
$ 15,689
15,553
15,522
15,487
176,178
23,449
$ 261,878
The repayment of our long-term debt, which consists of indebtedness evidenced by the Senior Secured Notes, is
subject to acceleration upon the occurrence of an event of default under the indenture governing the Senior Secured
Notes.
We routinely enter into operational contracts in the ordinary course of our business, including construction
contracts for minor projects that are not material to our business or financial condition as a whole. Our
commitments relating to these contracts are recognized as liabilities in our consolidated balance sheets when
services are provided with respect to such contracts.
We do not currently have any off-balance sheet arrangements.
Critical Accounting Policies
Our discussion and analysis of our results of operations and financial condition that follows is based upon the
information in the consolidated financial statements of Resorts and its subsidiaries. The preparation of the
accompanying consolidated financial statements requires that we apply significant judgment in defining the
appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an
inherent degree of uncertainty. Our judgments are based on our historical experience, terms of existing contracts,
observance of trends in the industry, information provided by our customers and information available from other
outside sources, as appropriate. Because of the uncertainty inherent in these matters, there is no assurance that
actual results will not differ from our estimates used in applying the following critical accounting policies.
Accounting for Unconsolidated Affiliates
The consolidated financial statements include the accounts of Resorts and its subsidiaries. Investments in
unconsolidated affiliates which are 50% or less owned and do not meet the consolidation criteria of Accounting
Codification Standards (“ASC”) Topic 810, “Consolidation” (“ASC 810”) are accounted for under the equity
method. All intercompany balances and transactions have been eliminated in consolidation. Certain amendments of
ASC 810 became effective for us beginning January 1, 2010. Such amendments include changes to the quantitative
approach to determine the primary beneficiary of a variable interest entity (“VIE”). An enterprise must determine if
its variable interest or interests give it a controlling financial interest in a VIE by evaluating whether 1) the
enterprise has the power to direct activities of the VIE that have a significant effect on economic performance, and
2) the enterprise has an obligation to absorb losses or the right to receive benefits from the entity that could
potentially be significant to the VIE. The amendments to ASC 810 also require ongoing reassessments of whether
an enterprise is the primary beneficiary of a VIE. We believe the adoption of these amendments did not have a
material effect on our consolidated financial statements.
We consider whether the fair values of any of its equity method investments have declined below their carrying
value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If
19
we consider any such decline to be other than temporary, a write-down is recorded to the estimated fair value.
Estimated fair value is determined using a discounted cash flow analysis based on estimated future results of the
investee and market indicators of terminal year capitalization rate. There were no impairments of our equity method
investments in 2014, 2013 or 2012.
Income Taxes
Prior to September 19, 2014, the Company was taxed as a partnership under the Internal Revenue Code
pursuant to which income taxes were primarily the responsibility of the partners. On September 18, 2014, as part of
the merger with MTR Gaming, ERI became a C Corporation subject to federal, state, and local corporate-level
income taxes at prevailing corporate tax rates. While taxed as a partnership, Resorts was not subject to federal
income tax liability. Because holders of membership interests in HoldCo were required to include their respective
shares of HoldCo’s taxable income (including that of Resorts) in their individual income tax returns, distributions
were made to their respective member(s) to cover such tax liabilities. Such distributions were subject to limitation
in accordance with the provisions of their respective operating agreements. ES#2 has elected as a single member
limited liability company to be taxed as a C Corporation. Current and deferred income taxes associated with ES#2
were not material.
The Company accounts for income taxes under the asset and liability method. This approach requires the
recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the enactment date. The Company establishes
a valuation allowance to reduce deferred tax assets if it is more-likely-than-not that a portion or all of the asset will
not be realized on future tax returns.
Under the applicable accounting standards, we may recognize the tax benefit from an uncertain tax position
only if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities
based on the technical merits of the position. The tax benefits recognized in the financial statements from such a
position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon
ultimate settlement. The accounting standards also provide guidance on de-recognition, classification, interest and
penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions. As
of December 31, 2014 and 2013, we have recorded no liability associated with uncertain tax positions.
Property and Equipment and Other Long-Lived Assets
Property and equipment is recorded at cost and is depreciated over its estimated useful life or lease term.
Judgments are made in determining estimated useful lives and salvage values of these assets. The accuracy of these
estimates affects the amount of depreciation expense recognized in our financial results and whether we have a gain
or loss on the disposal of assets. We review depreciation estimates and methods as new events occur, more
experience is acquired, and additional information is obtained that would possibly change our current estimates.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. We then compared the estimated future cash flows of the asset,
on an undiscounted basis, to the carrying amount of the asset. If the undiscounted cash flows exceed the carrying
value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying amount then an
impairment is recorded based on the fair value of the asset, typically measured using a discounted cash flow model.
If the asset is still under development, future cash flows include remaining construction costs. We use an estimate of
undiscounted future cash flows produced by the asset as compared to its carrying value to determine whether an
impairment exists. If it is determined that the asset is impaired based on expected future cash flows, a loss,
measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset, is recognized.
At December 31, 2014 and 2013, no events or changes in circumstances indicated that the carrying values of our
long-lived assets may not be recoverable.
We have assigned a value of $20.6 million to our gaming license in Louisiana. Our operations are dependent on
continued licensing by the applicable gaming authorities. In assessing the recoverability of the carrying value of our
license, we must make assumptions regarding future cash flows, gaming taxes and the costs of continued licensing.
If these estimates or the related assumptions change in the future, we may be required to record impairment losses
with respect to this asset. Such impairment loss would be recognized as a non-cash component of operating income.
20
We do not believe that the value of the gaming license has been impaired and no impairment has been recorded
during any of the periods presented. The value assigned to our gaming license does not diminish with the passage of
time; accordingly, the recorded value of the gaming license is not currently being amortized.
We have recorded deferred financing costs of $6.9 million, which are being amortized on a straight-line basis,
which approximates the effective interest method over the remaining term of the underlying debt obligations. In
assessing the recoverability of the carrying value of our deferred financing costs, we must make assumptions
regarding future cash flows. If these estimates or the related assumptions change in the future, we may be required
to record impairment losses with respect to this asset. Such impairment loss would be recognized as a non-cash
component of operating income.
Reserve for Uncollectible Accounts Receivable
We reserve an estimated amount for receivables that may not be collected. Methodologies for estimating bad
debt reserves range from specific reserves to various percentages applied to aged receivables. Historical collection
rates are considered, as are customer relationships, in determining specific reserves. As with many estimates,
management must make judgments about potential actions by third parties in establishing and evaluating our
reserves for bad debts.
Self-Insurance Reserves
Eldorado Reno and Eldorado Shreveport are self-insured for their group health programs and Eldorado Reno is
self-insured for its workmen’s compensation program. We utilize historical claims information provided by our
third party administrators to make estimates for known pending claims as well as claims that have been incurred, but
not reported as of the balance sheet date. In order to mitigate our potential exposure, we have an individual claim
stop loss policy on our group health claims and a specific claim stop loss policy on our workmen’s compensation
claims. If we become aware of significant claims or material changes affecting our estimates, we would increase
our reserves in the period in which we made such a determination and record the additional expense. At December
31, 2014 and 2013, $1.3 million was accrued for insurance and workmen’s compensation medical claims reserves
and is included in accrued and other liabilities on our consolidated balance sheets.
Players’ Club Point Liability
Our players’ club allows customers to earn “points” based on the volume of their gaming activity. Under the
terms of our program, these points are redeemable for certain complimentary services, at their discretion, including
rooms, food, beverage, retail and entertainment tickets. We accrue the expense for unredeemed complimentaries,
after consideration of estimated breakage, as they are earned. The value of the cost to provide the complimentaries
is expensed as redeemed and is included in casino expense on our consolidated statements of operations and
comprehensive (loss) income. To arrive at the estimated cost associated with our players’ club, estimates and
assumptions are made regarding incremental marginal costs of the benefits, breakage rates and the mix of goods and
services for which the points will be redeemed. We use historical data to assist in the determination of estimated
accruals. If we become aware of significant claims or material changes affecting our estimates, we increase our
reserves in the period in which we made such a determination and record the additional expense.
Litigation, Claims and Assessments
We utilize estimates for litigation, claims and assessments. These estimates are based on our knowledge and
experience regarding current and past events, as well as assumptions about future events. If our assessment of such
a matter should change, we may have to change the estimates, which may have an adverse effect on our financial
position, results of operations or cash flows. Actual results could differ from these estimates.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update
No. 2014-9 (“ASU” 2014-9), “Revenues from Contracts with Customers” (ASC Topic 606). The standard requires
revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects
the consideration that is expected to be received for those goods and services. Qualitative and quantitative
disclosures are also required regarding customer contracts, significant judgments and changes in judgments, and
assets recognized from the costs to obtain or fulfill a contract. ASU 2014-09 supersedes and replaces nearly all
existing revenue recognition guidance under US GAAP. This accounting guidance is effective for fiscal years, and
interim periods within those years, beginning after December 15, 2016. Early adoption is not permitted. We are
21
currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements and related
disclosures.
In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern”
(ASC Subtopic 205-40) which amends the current guidance in ASC Topic 205 by adding Subtopic 40. Subtopic 40
requires management to evaluate whether there are conditions or events that in aggregate would raise substantial
doubt about an entity’s ability to continue as a going concern for one year from the date the financial statements are
issued or available to be issued. If substantial doubt existed, management would be required to make certain
disclosures related to nature of the substantial doubt and under certain circumstances, how that substantial doubt
would be mitigated. This amendment is effective for annual periods ending after December 15, 2016 and for
subsequent interim and annual periods thereafter. Early adoption is permitted. We are currently evaluating the
effects, if any, adoption of this guidance will have on our consolidated financial statements.
In January 2015, the FASB issued ASU No. 2015-1, “Income Statement—Extraordinary and Unusual Items”
(ASC Subtopic 225-20) which eliminates the concept of accounting of Extraordinary Items, previously defined as
items that are both unusual and infrequent, which were reported as a separate item on the income statement, net of
tax, after income from continuing operations. The elimination of this concept is intended to simplify accounting for
unusual items and more closely align with international accounting practices. This amendment is effective for
annual periods ending after December 15, 2015 and for subsequent interim and annual periods thereafter. Early
adoption is permitted. We are currently evaluating the effects, if any, adoption of this guidance will have on our
consolidated financial statements and do not expect it to have a material impact.
Factors that May Affect the Company’s Future Results
Certain information included in this report (as well as information included in oral statements or other written
statements made or to be made by the Company) contains or may contain forward-looking statements which can be
identified by the fact that they do not relate strictly to historical or current facts. The Company has based these
forward-looking statements on its current expectations about future events. These forward-looking statements
include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations,
intentions, financial condition, results of operations, future performance and business, including:
 current and future operations; and

statements that include the words “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,”
“estimate,” “intend,” “plan” or similar expressions.
Such statements include information relating to capital spending, financing sources and the effects of regulation
(including gaming and tax regulation) and competition.
Any or all of the forward-looking statements in this report and in any other public statements we might make
may turn out to be wrong. This can occur as a result of inaccurate assumptions or as a consequence of known or
unknown risks and uncertainties, including the following risks:

Our substantial indebtedness and significant financial commitments could adversely affect our results of
operations and our ability to service such obligations;

We may not be able to refinance our substantial outstanding indebtedness on terms that are satisfactory to
us, or at all;

Restrictions and limitations in agreements governing our debt could significantly affect our ability to
operate our business and our liquidity;

Our facilities operate in very competitive environments and we face increasing competition;

Our operations are highly regulated by governmental authorities in Nevada and Louisiana and the cost of
complying with or failing to comply with such regulations can be significant;

The concentration of all of our operations in Reno and Shreveport/Bossier City poses a risk that is not
22
applicable to a geographically diversified gaming company;

Our ability to realize expense reductions and operating efficiencies or implement integration plans,
including reductions and efficiencies resulting from the Merger;

Changes in applicable gaming or other laws or regulations could have a significant effect on the
operations of Eldorado Reno, Silver Legacy and Eldorado Shreveport;

Our operations are particularly sensitive to reductions in discretionary consumer spending and are
affected by changes in general economic and market conditions;

The highway between Reno and northern California, where a large number of Eldorado Reno’s and Silver
Legacy’s customers reside, experience winter weather conditions from time to time that limit the number
of customers who visit Reno during such periods;

Increases in gaming taxes and fees in jurisdictions in which we operate;

Risks relating to pending claims or future claims that may be brought against us;

Changes in interest rates and capital and credit markets;

Our ability to comply with certain covenants in our debt documents;

The effect of disruptions to our information technology and other systems and infrastructure;

Construction factors relating to maintenance and expansion of operations;

Our ability to attract and retain customers;

Weather or road conditions limiting access to our properties;

The effect of war, terrorist activity, natural disasters and other catastrophic events;

The intense competition to attract and retain management and key employees in the gaming industry;

Other factors incorporated by reference under “Item 1A. Risk Factors.”
As a result of the foregoing risks and other risks and uncertainties, actual result may differ materially from
those that might be anticipated from forward-looking statements. We undertake no obligation to update any
forward-looking statements, whether as a result of new information, future events or otherwise.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates,
foreign currency exchange rates and commodity prices. We are exposed to market risk in the form of fluctuations in
interest rates and their potential impact on our variable rate debt outstanding, of which we have none outstanding at
December 31, 2014. We evaluate our exposure to market risk by monitoring interest rates in the marketplace and
has, on occasion, utilized derivative financial instruments to help manage this risk. We do not utilize derivative
financial instruments for trading purposes. There were no material quantitative changes in our market risk exposure,
or how such risks are managed, for the year ended December 31, 2014.
Item 8. Financial Statements and Supplementary Data.
Reference is made to the report of Ernst & Young LLP, dated March 16, 2015 and the consolidated financial
statements of Eldorado Resorts LLC appearing on pages 38 through 61 of this report which are incorporated in this
Item 8 by such reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
23
None.
Item 9A. Controls and Procedures.
Not applicable.
Item 9B. Other Information.
Not applicable.
24
Part III
Item 10. Directors, Executive Officers and Corporate Governance.
The Company is member managed by its sole member HoldCo, which is, in turn, member managed by its sole
member, ERI. As a result, the Company is effectively managed by the board of directors of ERI. The ERI board of
directors is comprised of seven directors. The board of directors of ERI is not classified, and directors serve
one-year terms in accordance with ERI’s bylaws. Biographical information about each of the individuals that serve
on ERI’s board of directors and the executive officers of ERI and the Company is set forth below.
Name
Age
Position and Office Held
Gary L. Carano
62
Chief Executive Officer and Chairman of the Board
Frank J. Fahrenkopf,
Jr.(1)(2)
74
Director
James B. Hawkins (3)(4)
58
Director
Michael E. Pegram
(2)(3)(4)
62
Director
David P. Tomick (1)(3)
62
Director
Roger P. Wagner (1)(4)
66
Director
Thomas Reeg
43
Director and President
Robert M. Jones
72
Executive Vice President and Chief Financial Other
Joseph L. Billhimer, Jr.
50
Executive Vice President and Chief Operating Officer
Anthony Carano
33
Executive Vice President, General Counsel and Secretary
(1) Member of the Nominating and Governance Committee
(2) Member of the Compliance Committee
(3) Member of the Audit Committee
(4) Member of the Compensation Committee
Gary Carano, 62, has served as the chairman of the board of directors of ERI and the Chief Executive Officer
of ERI and its subsidiaries, including the Company, since September 2014. Previously, Mr. Carano served as
President and Chief Operating Officer of the Company from 2004 to September 2014 and as President and Chief
Operating Officer of HoldCo from 2009 to September 2014. Mr. Carano served as the General Manager and Chief
Executive Officer of the Silver Legacy from its opening in 1995 to September 2014. Mr. Carano is an active
philanthropist, serving on a number of charitable boards and foundations in the state of Nevada. Mr. Carano holds a
Bachelor’s degree in Business Administration from the University of Nevada, Reno. In May 2012, Silver Legacy
filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the District of Nevada. Silver Legacy emerged from its Chapter 11 reorganization proceedings in
November 2012. Mr. Carano has been selected to serve as a director because of his extensive experience in the
gaming and hospitality industry and because of his familiarity with the business of Eldorado. Gary L. Carano is
Anthony Carano’s father.
Frank J. Fahrenkopf, Jr., 74, has served as a director of ERI since September 2014. Mr. Fahrenkopf serves
as the chair of the Nominating and Governance Committee of the board of directors of ERI and a member of the
Compliance Committee of ERI. He served as President and Chief Executive Officer of the American Gaming
25
Association (“AGA”), an organization that represents the commercial casino-entertainment industry by addressing
federal legislation and regulatory issues, from 1995 until June 2013. At the AGA, Mr. Fahrenkopf was the national
advocate for the commercial casino industry and was responsible for positioning the AGA to address regulatory,
political and educational issues affecting the gaming industry. Mr. Fahrenkopf is currently co-chairman of the
Commission on Presidential Debates, which he founded and which conducts debates among presidential candidates.
He serves as a board member of the International Republican Institute, which he founded. He also founded the
National Endowment for Democracy, where he served as Vice Chairman and a board member from 1983 to 1992.
Mr. Fahrenkopf served as chairman of the Republican National Committee from 1983 to 1989. Prior to his role at
AGA, Mr. Fahrenkopf was a partner at Hogan & Hartson, where he regularly represented clients before the Nevada
gaming regulatory authorities. Mr. Fahrenkopf served as the first Chairman of the American Bar Association
Committee on Gaming Law and was a founding Trustee and President of the International Association of Gaming
Attorneys. Mr. Fahrenkopf also sits on the board of directors of six NYSE-listed public companies: First Republic
Bank, Gabelli Equity Trust, Inc., Gabelli Utility Trust, Gabelli Global Multimedia Trust, Gabelli Dividend and
Income Trust, and Gabelli Gold and Natural Resources. He is a graduate of the University of Nevada, Reno and
holds a Juris Doctor from the University of California Berkeley School of Law. Mr. Fahrenkopf has been selected to
serve as a director because of his extensive knowledge of gaming regulatory matters, his relevant legal experience
and his experience as a director of many organizations.
James B. Hawkins, 58, has served as a director of ERI since September 2014. Mr. Hawkins is a member of
the Audit Committee and Compensation Committee of the board of directors of ERI. Mr. Hawkins has served as
Chief Executive Officer and on the board of directors of Natus Medical Inc. (“Natus”) since April 2004 and as
President of Natus since June 2013. He also previously served as President of Natus from April 2004 to January
2011. Mr. Hawkins currently serves as the chairman of the board of directors of Iradimed Corporation, a publicly
traded company that provides non-magnetic intravenous infusion pump systems and as a director of Digirad
Corporation, a publicly traded company that provides diagnostic solutions in the science of imaging. Prior to joining
Natus, Mr. Hawkins was President, Chief Executive Officer and on the board of directors of Invivo Corporation, a
developer and manufacturer of vital sign monitoring equipment, and its predecessor, from 1985 until 2004, and as
Secretary from 1986 until 2004. Mr. Hawkins earned a Bachelor’s degree in Business Commerce from Santa Clara
University and an MBA from San Francisco State University. Mr. Hawkins has been selected to serve as a director
because of his extensive experience in executive management oversight and as a director of multiple publicly traded
companies.
Michael E. Pegram, 62, has served as a director of ERI since September 2014. Mr. Pengram is a member
of the Audit Committee, Compensation Committee and Compliance Committee of the board of directors of ERI.
Mr. Pegram has been a partner in the Carson Valley Inn in Minden, Nevada since June 2009 and a partner in the
Bodines Casino in Carson City, Nevada since January 2007. Mr. Pegram has more than thirty years of experience
owning and operating twenty-five successful McDonald’s franchises. Mr. Pegram currently serves as Chairman of
the Thoroughbred Owners of California and has been the owner of a number of racehorses, including 1998
Kentucky Derby and Preakness Stakes winner, Real Quiet, 2010 Preakness Stakes winner, Lookin at Lucky, 1998
Breeders’ Cup Juvenile Fillies winner and 1999 Kentucky Oaks winner, Silverbulletday, 2001 Dubai World Cup
winner, Captain Steve, and the 2007 and 2008 Breeders’ Cup Sprint winner, Midnight Lute. Additionally,
Mr. Pegram has served as a director of Skagit State Bancorp since 1996. Mr. Pegram has been selected to serve as a
director because of his extensive experience in the horse racing industry and as an investor, business owner, and
director of various companies.
David P. Tomick, 62, has served as a director of ERI since September 2014. Mr. Tomick is the chair of the
Audit Committee and a member of the Nominating and Governance Committee of the board of directors of ERI.
From 2008 until 2010, Mr. Tomick served as Chief Financial Officer of Securus. From 1997 to 2004 Mr. Tomick
was the Chief Financial Officer of SpectraSite, Inc., a NYSE-listed, publicly traded wireless tower. Mr. Tomick was,
from 1994 to 1997, the Chief Financial Officer of Masada Security, a company involved in the security monitoring
business and, from 1988 to 1994, the Vice President-Finance of Falcon Cable TV, where he was responsible for debt
management, mergers and acquisitions, equity origination and investor relations. Prior to 1988, he managed a team
of corporate finance professionals focusing on the communications industry for The First National Bank of Chicago.
Mr. Tomick has served on the board of directors of the following organizations: Autocam Corporation, Autocam
Medical, First Choice Packaging, NuLink Digital and TransLoc, Inc. Mr. Tomick received his bachelor’s degree
from Denison University and a masters of business administration from The Kellogg School of Management at
Northwestern University. Mr. Tomick has been selected to serve as a director because of his financial and
26
management expertise and his extensive experience with respect to raising capital, mergers and acquisitions,
corporate governance and investor relations.
Roger P. Wagner, 66, has served as a director of ERI since September 2014 and was a member of the board
of directors of MTR from July 2010 to September 2014. Mr. Wagner is the chair of the Compensation Committee
and a member of the Nominating and Governance Committee of the board of directors of ERI. Mr. Wagner has
over forty years of experience in the gaming and hotel management industry. Mr. Wagner was a founding partner of
House Advantage, LLC, a gaming consulting group that focuses on assisting gaming companies in improving
market share and bottom line profits. Mr. Wagner served as Chief Operating Officer for Binion Enterprises LLC
from 2008 to 2010, assisting Jack Binion in identifying gaming opportunities. From 2005 to 2007, Mr. Wagner
served as Chief Operating Officer of Resorts International Holdings. Mr. Wagner served as President of Horseshoe
Gaming Holding Corp. from 2001 until its sale in 2004 and as its Senior Vice President and Chief Operating Officer
from 1998 to 2001. Prior to joining Horseshoe, Mr. Wagner served as President of the development company for
Trump Hotels & Casino Resorts from 1996 to 1998, President and Chief Operating Officer of Trump Castle Casino
Resort from 1991 to 1996 and President and Chief Operating Officer of Claridge Casino Hotel from 1983 to 1991.
Prior to his employment by Claridge Casino Hotel, he was employed in various capacities by the Edgewater Hotel
Casino, Sands Hotel Casino, MGM Grand Casino—Reno, Frontier Hotel Casino and Dunes Hotel Casino.
Mr. Wagner holds a Bachelor of Science from the University of Nevada Las Vegas in Hotel Administration.
Mr. Wagner has been selected to serve as a director because of his extensive experience in the gaming and
hospitality industry and because of his familiarity with the business of MTR.
Thomas Reeg, 43, has served as a director of ERI since September 2014 and served as a member of
Eldorado Resorts’ board of managers from December 2007 to September 2014. Mr. Reeg has served as President of
ERI and its subsidiaries, including the Company, since September 2014 and served as Senior Vice President of
Strategic Development for the Company from January 2011 to September 2014. From September 2005 to November
2010, Mr. Reeg was a Senior Managing Director and founding partner of Newport Global Advisors L.P., which is an
indirect stockholder of ERI. Mr. Reeg has been a member of the executive committee of Silver Legacy (which is the
governing body of Silver Legacy) since August 2011. Mr. Reeg was a member of the board of managers of NGA
HoldCo, LLC, which is a stockholder of ERI, from 2007 through 2011 and served on the board of directors of
Autocam Corporation from 2007 to 2010. From 2002 to 2005 Mr. Reeg was a Managing Director and portfolio
manager at AIG Global Investment Group (“AIG”), where he was responsible for co-management of the high-yield
mutual fund portfolios. Prior to his role at AIG, Mr. Reeg was a senior high-yield research analyst covering various
sectors, including the casino, lodging and leisure sectors, at Bank One Capital Markets. Mr. Reeg holds a Bachelor
of Business Administration in Finance from the University of Notre Dame and is a Chartered Financial Analyst.
Mr. Reeg has been selected to serve as a director because of his extensive financial experience and his familiarity
with the Eldorado business.
Joseph L. Billhimer Jr., 50, has served as Executive Vice President and Chief Operating Officer of ERI and
Resorts since September 2014. Mr. Billhimer joined MTR in April 2011 and has served as Chief Operating Officer
of MTR from 2012 and served as President of MTR from September 2013 to September 2014. Mr. Billhimer served
as Executive Vice President of MTR from 2012 to 2013 and Senior Vice President of Operations & Development at
MTR and President and General Manager of Mountaineer since 2012. Mr. Billhimer was a principal of Foundation
Gaming Group, an advisory and management services firm for the gaming industry, which among other
engagements, managed Harlow’s Casino & Resort in Greenville, Mississippi from 2009 to 2010 and marketed its
sale to Churchill Downs. Prior to Foundation Gaming Group, Mr. Billhimer served as president of Trilliant Gaming
Illinois, LLC, a gaming development company, from 2008 to 2009. From 2003 to 2008, he was president and chief
executive officer of Premier Entertainment LLC, the developer and parent of the Hard Rock Hotel and Casino in
Biloxi, Mississippi. While at Premier Entertainment, he was named Casino Journal’s Executive of the Year in 2007
for his efforts in re-developing the Hard Rock Hotel and Casino after being destroyed by Hurricane Katrina and
filing bankruptcy. Prior to Premier Entertainment, Mr. Billhimer spent three years as President and General Manager
of Caesars Entertainment’s Grand Casino Resort in Gulfport, Mississippi, and prior to that experience, eight years
with Pinnacle Entertainment where he was Executive Vice President and General Manager of Casino Magic in Bay
St. Louis, Mississippi.
Robert M. Jones, 72, has served as the Executive Vice President and Chief Financial Officer of ERI since
September 2014 and the Chief Financial Officer of the Company for over twenty-nine years. Mr. Jones earned a
bachelor’s degree in accounting from the University of Arizona and a MBA in business administration from Golden
Gate University.
27
Anthony Carano, 33, has served as Executive Vice-President, General Counsel and Secretary of ERI since
September 2014. Prior to joining ERI, Mr. Carano was an attorney at the Nevada law firm of McDonald Carano
Wilson, LLP, where his practice was devoted primarily to transactional, gaming and regulatory law. Mr. Carano
holds a B.A. from the University of Nevada, his J.D. from the University of San Francisco, School of Law and his
M.B.A. in Finance from the University of San Francisco, School of Business. Anthony Carano is Gary L. Carano’s
son.
Item 11. Executive Compensation.
Summary Compensation Table
The following table summarizes the total compensation paid to or earned by each of the named executive
officers of ERI for the fiscal year ended December 31, 2014. Total compensation paid to or earned by listed named
executive officers of ERI under their capacity as employees of Resorts or MTR, as applicable, during the years
ended December 31, 2014, 2013 and 2012 are also included. Following the Merger Date, each of the named
executive officers of ERI has also served as a named executive officer of Resorts and MTR. The compensation
reported in the table below for 2014 reflects the total compensation that the applicable named executive officer
received following the Merger Date for services performed for serving as a named executive officer of each of ERI,
Resorts and MTR. During the fiscal years ended December 31, 2014, 2013 and 2012, none of the directors or
officers of Capital received any remuneration for their services in those capacities.
(a)
Name and
Principal Position
(b)
(c)
Year
(d)
Salary
$
Bonus
(h)
All Other
Compensation
(3)
Total
Stock Awards
Non-Equity
Incentive Plan
Compensation
2014
2013
-
-
-
-
-
-
2012
-
-
-
-
-
-
250,000 (2)
$
-
$
-
$
-
-
-
24,074
383,689
2012
350,000
-
-
-
24,649
374,649
2014
427,423
$ 1,725,000 (2)
President
2013
364,000
100,000 (4)
-
-
12,889
476,889
2012
364,000
100,000
-
-
8,224
472,224
2014
Chief Operating Officer
2013
$
2014
2013
2012
$
-
2012
Anthony Carano
523,846
$
127,088
-
$
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
$
$
55,695
(8)
$
2,183,393
$ 156,748 (6)
$
522,000 (7)
$
100,000 (5)
200,000 (2)
$
30,970
660,612
Thomas Reeg
Joseph Billhimer, Jr.
$
$
455,286
359,615
-
17,054
$
2013
$
$
3,747
2014
-
-
$
Chief Financial Officer
$
$
-
Robert M. Jones
$
$
200,000 (2)
(g)
Chief Executive Officer
393,558
$
(f)
Gary Carano (1)
$
251,539
(e)
$
1,358,289
327,088
-
-
-
-
(1)
Prior to August 1, 2014, Mr. Gary L. Carano served as the President and Chief Operating Officer of the Company and
HoldCo and General Manager and Chief Executive Officer of Silver Legacy. Mr. Carano received no remuneration
from the Company or HoldCo for services provided prior to August 1, 2014. See “Item 13. Certain Relationships and
Related Transactions and Director Independence” for a discussion of remuneration received by Mr. Carano in respect
of his services as General Manager and Chief Executive Officer of Silver Legacy prior to August 1, 2014.
(2)
Represents bonus amounts paid to Mr. Gary L. Carano, Mr. Jones, Mr. Reeg and Mr. Anthony Carano in 2014 in
conjunction with the Merger.
28
(3)
All other compensation for 2014 consists of the following:
Name
Insurance
Premiums and
Medical
Reimbursement
401(k) Match
Tax Services
Club Memberships
Gary L. Carano
$
1,860
$
1,887
Robert M. Jones
$
3,476
$
2,600
-
-
-
-
8,708
-
-
Thomas Reeg
$
1,309
$
2,600
-
-
$
27,061
-
Joseph L. Billhimer, Jr.
$ 34,036
$
2,059
-
-
$
10,000
$
2,270
$
Travel Reimbursement
and Relocation Expenses
Car Allowance
$
9,600
(4) Represents a bonus payment to Mr. Reeg in 2013 by Silver Legacy in connection with its restructuring in 2012.
(5) Bonus amount was paid upon completion of the Merger in accordance with Mr. Billhimer’s contract.
(6) The restricted stock unit (“RSU”) awards represent the aggregate grant date fair value computed in accordance with
ASC 718-Compensatin-Stock Compensation. The RSUs granted in 2014 vested upon consummation of the Merger.
(7) As to 2014, amount represents the annual incentive compensation (bonus plan) earned but not paid in 2014, and the
vesting of cash-based performance awards granted in 2013 and 2014 that had previously not bee reported as the
amounts had not been earned. The 2014 cash-based performance awards granted in 2014 relate to the achievement of
differing levels of performance and are measured by the level of ERI’s corporate free cash flow over a two-year
performance period, which is defined as calendar years 2014 and 2015. Once the performance awards are earned, they
will vest and become payable at the end of the vesting period, which is defined as a one-calendar year following the
performance period. The vesting of these cash-based performance awards was a result of the change-in-control
provision triggered as a result of the Merger.
(8) Mr. Anthony Carano received no other compensation payments in 2014.
Employment Agreements
On September 29, 2014, ERI entered into employment agreements (the “Employment Agreements”) with
each of the named executive officers. The Employment Agreement between ERI and Gary L. Carano provides for a
minimum annual base salary of $700,000, an annual incentive bonus opportunity with a target established at 80% of
his base salary, and that Mr. Gary L. Carano will be considered for long-term incentive awards equal to 90% of his
base salary. The Employment Agreements between ERI and Thomas Reeg, Joseph L. Billhimer, Jr., Robert M.
Jones, and Anthony Carano provide for a minimum annual base salary of $550,000, $525,000, $400,000 and
$300,000, respectively, an annual incentive bonus opportunity with a target established at 50% of the applicable
executive’s base salary, and each of the applicable Executives will be considered for long-term incentive awards
equal to 60% of the applicable executive’s base salary. Each executive is entitled to three weeks paid vacation and
reimbursement of certain expenses, including up to a maximum of $3,000 for an annual executive physical program
and reasonable financial planning, estate planning and tax preparation fees up to an annual maximum of $10,000 for
Gary L. Carano and up to an annual maximum of $6,750 for the other executives.
Each Employment Agreement is for a term of three years, with automatic one year renewals unless a notice
of non-renewal is provided by either party at least three months before the scheduled renewal date. If a “change of
control” (as defined in the applicable Employment Agreement) occurs during the term of an Employment
Agreement, the term of such Employment Agreement will be extended to the second year following such change of
control, subject to automatic renewal for subsequent periods.
In the event of a termination of Gary L. Carano’s employment without “cause” or if Gary L. Carano
terminates his employment for “good reason” (each as defined in Mr. Carano’s Employment Agreement), Gary L.
Carano would be entitled to receive (a) a lump-sum payment equal to 1.5 times the sum of his base salary and
annual incentive award target, or 2.0 times such amount in the event of such a termination within two years
following a change of control, (b) lump-sum payment of a prorated portion of his actual annual incentive award, if
any, or a prorated portion of his annual incentive award target in the event of such a termination within two years
29
following a change of control, (c) a lump-sum payment equal to 18 months of health benefits coverage, or 24
months if such a termination is within two years following a change of control, and (d) outplacement services for no
more than 18 months and in an amount not to exceed $15,000, or for no more than 24 months and in an amount not
to exceed $20,000 if such a termination is within two years following a change of control.
With respect to each of the other named executive officers, in the event that ERI terminates the executive’s
employment without “cause” or such executive terminates his employment for “good reason” (each as defined in the
applicable Employment Agreement), such executive would be entitled to receive (i) a lump-sum payment equal to
1.0 times the sum of such executive’s base salary and annual incentive award target, or 1.5 times such amount in the
event of such a termination within two years following a change of control, (ii) lump-sum payment of a prorated
portion of such executive’s actual annual incentive award for the calendar year that includes the date of the
termination, if any, or a prorated portion of such executive’s annual incentive award target in the event of such a
termination within two years following a change of control, (iii) a lump-sum payment equal to 12 months of health
benefits coverage, or 18 months if such a termination is within two years following a change of control, and (iv)
outplacement services and for no more than 12 months and in an amount not to exceed $10,000, or for no more than
18 months and in an amount not to exceed $15,000 if such a termination is within two years following a change of
control. In addition, Mr. Billhimer’s severance payments will be made consistent with his prior employment
agreement, and he will be eligible to receive the change in control severance benefits described above if his
employment is terminated by ERI without cause or if he terminates his employment for good reason, in either case,
on or before September 29, 2015.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
The Company is an indirect wholly-owned subsidiary of ERI. The following table sets forth certain information
regarding the beneficial ownership of ERI’s outstanding common stock by (i) each person known by ERI s to be a
beneficial owner of 5% or more of the outstanding shares of common stock of ERI, (ii) each member of the ERI
board of directors, (iii) each of ERI’s named executive officers and (iv) all of the members of ERI’s board of
directors and ERI’s executive officers as a group.
Eldorado Resorts, Inc.
Name and Address of Beneficial Owner
Membership
Interest %
Recreational Enterprises, Inc. (1)
23.44%
Hotel Casino Management, Inc. (2)
12.37%
Newport Global Opportunities Fund, LP (3)
8.68%
Par Investment Partners, L.P.
5.57%
Lafitte Capital Management LP
5.07%
Gary L. Carano* (4)(5)
2.80%
—
Frank J. Fahrenkopf, Jr. (4)
—
James B. Hawkins (4)
—
Michael E. Pegram (4)
—
Thomas Reeg (4)
—
David P. Tomick (4)
30
—
Roger P. Wagner (4)
Robert M. Jones (3)
—
Joseph L. Billhimer, Jr. (3)
—
Anthony Carano (3)
All Board Members and executive officers as a group
—
2.80%
* Member of ERI’s Board of Directors
1)
The voting stock of REI is beneficially owned by the following members of the Carano family in the following
percentages: Donald L. Carano-49.5%; Gene R. Carano-10.1%; Gregg R. Carano-10.1%; Gary L. Carano-10.1%;
Cindy L. Carano-10.1% and Glenn T. Carano-10.1%. The voting power and dispositive power with respect to REI's
23.44% interest in ERI is controlled by REI's board of directors that is elected by the family members (voting in
proportion to the percentages above). Gary holds his interest in REI directly and indirectly through various trusts. Gary
L. Carano disclaims beneficial ownership of REI's 23.44% interest in ERI except to the extent of any pecuniary interest
therein. The address of REI is P.O. Box 2540, Reno, Nevada 89505.
(2) The voting stock of Hotel Casino Management, Inc. ("HCM") is beneficially owned by the following members of the
Poncia family in the following percentages: Raymond J. Poncia, Jr.-49.712%; Cathy L. Poncia-Vigen-12.572%; Linda
R. Poncia Ybarra-12.572%; Michelle L. Poncia Staunton-12.572% and Tammy R. Poncia-12.572%. The voting power
and dispositive power with respect to HCM's 12.37% interest in ERI is controlled by HCM's board of directors that is
elected by the family members (voting in proportion to the percentages above). Cathy, Linda, Michelle and Tammy
each hold all of their respective interests in HCM through various trusts. Cathy, Linda, Michelle and Tammy each
disclaim beneficial ownership of HCM's 12.37% interest in ERI except to the extent of any pecuniary interest therein.
The address of HCM is P.O. Box 429, Verdi, Nevada 89439.
(3) Includes NGA VoteCo, LLC ("NGA VoteCo"), which controls NGA AcquisitionCo, LLC ("NGA AcquisitionCo"),
including NGA AcquisitionCo's voting and dispositive power with regard to its 8.68% interest in ERI, and also
includes Timothy T. Janszen, Ryan Langdon and Roger May, who are the managers of NGA VoteCo and who
beneficially own NGA VoteCo in the following percentages: Mr. Janszen–42.86%; Ryan Langdon–42.86% and Roger
May–14.28%. The address of NGA AcquisitionCo, NGA VoteCo is 21 Waterway Avenue, Suite 150, The Woodlands,
Texas 77380.
(4) The address of Messrs. Gary Carano, Fahrenkopf, Hawkins, Pegram, Tomick, Wagner, Reeg, Jones, Billhimer and
Anthony Carano is c/o Eldorado Resorts, Inc., 100 West Liberty Street, 11th Floor, Reno, Nevada 89501.
(5) Gary L. Carano holds a 0.17% interest in ERI through the Gary L. Carano S Corporation Trust, with respect to which
he is a settlor, co-trustee and beneficiary. He directly and indirectly, through various trusts, holds a 10.1% ownership
interest in REI and a 10% ownership interest in HCR. He does not hold voting power or dispositive power with respect
to REI's 23.4% interest or HCR's 2.62% interest in ERI, and he disclaims beneficial ownership of REI's 23.4% interest
and HCR's 2.62% interest in ERI, in each case, except to the extent of any pecuniary interest therein.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Management Agreement and payments to affiliates of REI and HCM. Prior to the consummation of the Merger,
Resorts was party to a management agreement (the “Eldorado Management Agreement”) with REI and HCM,
pursuant to which REI and HCM (collectively, the “Managers”) agreed to (a) develop strategic plans for Resorts’
business, including preparing annual budgets and capital expenditure plans, (b) provide advice and oversight with
respect to financial matters of Resorts, (c) establish and oversee the operation of financial accounting systems and
controls and regularly review Resorts’ financial reports, (d) provide planning, design and architectural services to
Resorts and (e) furnish advice and recommendations with respect to certain other aspects of Resorts’ operations. In
consideration for such services, Resorts agreed to pay the Managers a management fee not to exceed 1.5% of
Resorts’ annual net revenues, not to exceed $0.6 million per year. In 2014, Resorts paid management fees to REI
and HCM in the aggregate amount of $0.5 million. REI is beneficially owned by members of the Carano family and
HCM is beneficially owned by members of the Poncia family. The Carano family and Poncia family hold
significant ownership interests in ERI. See Item 12 of this report. Management fees were not paid subsequent to the
consummation of the Merger. Subsequent to the consummation of the Merger, Donald L. Carano and Raymond J.
Poncia received remuneration in the amount of $0.3 million and $0.2 million, respectively, for their services as
31
consultants to ERI and its subsidiaries in lieu of the management fees previously paid under the terms of the
Eldorado Management Agreement.
Leased property. Resorts owns the parcel on which Eldorado Reno is located, except for approximately 30,000
square feet which is leased from C. S. & Y. Associates, a general partnership of which Donald Carano is a general
partner (the “CSY Lease”). The CSY Lease expires on June 30, 2027. Annual rent is payable in an amount equal to
the greater of (i) $400,000 or (ii) an amount based on a decreasing percentage of Eldorado Reno’s gross gaming
revenues for the year ranging from 3% of the first $6.5 million of gross gaming revenues to 0.1% of gross gaming
revenues in excess of $75 million. Rent pursuant to the CSY Lease amounted to approximately $0.6 million in
2014. In the opinion of Resorts’ management, the terms of the CSY Lease are at least as favorable to Resorts as
could have been obtained from unaffiliated third parties. On May 30, 2011, Resorts and C. S. & Y Associates
entered into a fourth amendment to the CSY Lease. C. S & Y Associates agreed to execute and deliver the deeds of
trust encumbering the approximately 30,000 square feet leased from C. S. & Y Associates on which a portion of
Eldorado Reno is located as security for Senior Secured Notes and the Secured Credit Facility. In exchange for this
subordination, a fee of $0.1 million will be paid annually during the term of the Indenture. In 2014 Resorts paid
$0.1 million to C. S. & Y Associates for this subordination.
Legal Services. The Company currently retains the firm of McDonald Carano Wilson LLP (“McDonald
Carano”) in connection with a variety of legal matters, including in connection with the mergers. Donald Carano
was an attorney with McDonald Carano from 1961 until 1980. Mr. Carano maintains an “of counsel” relationship
with McDonald Carano, but is not involved in the active practice of law or in the representation of the Company or
any of its affiliates as an attorney. Mr. Carano receives no compensation from McDonald Carano. In addition,
Anthony Carano, the Company’s general counsel and grandson of Donald L. Carano, served as an associate at
McDonald Carano and was involved in matters related to the Company prior to the time he began his employment
with ERI in August 2014. During the year ending December 31, 2014, total fees and costs paid to McDonald
Carano by the Company were approximately $0.7 million.
Compensation Paid to Related Parties. For the period beginning January 1, 2014 to March 1, 2015, members of
the Carano family who are related to Gary L. Carano, Anthony Carano and Donald L. Carano were paid
compensation in connection with their positions at Eldorado Reno and ERI as follows:
Name
Relationship
Position
Entity
Compensation
Including
Perquisites
Gene Carano
Brother of Gary L.
Carano and son of
Donald L. Carano
Senior Vice President
Operations – ERI and
General Manager –
Eldorado Reno
ERI and
Eldorado Reno
$
464,937
Gregg Carano
Brother of Gary L.
Carano and son of
Donald L. Carano
Senior Vice President Food
and Beverage
ERI
$
480,699
Rhonda Carano
Wife of Donald L.
Carano
Senior Vice President of
Creative and Brand
Strategies
ERI
$
242,455
Cindy Carano
Sister of Gary L. Carano
and daughter of Donald
L. Carano
Executive Director of
Hotel Operations
Eldorado Reno
$
256,973
In addition, Glenn T. Carano, brother of Gary L. Carano and son of Donald L. Carano, was named as the
General Manager of Silver Legacy effective August 1, 2014 and served as the Executive Director of Marketing of
Silver Legacy prior to such date. From January 1, 2014 to March 15, 2015, Glenn T. Carano received $452,666 in
compensation from the Silver Legacy in addition to a $1.7 million lump-sum payment in connection with the
termination of Silver Legacy’s supplemental executive retirement program. Gary L. Carano was the Chief
Executive Officer and General Manager prior to the time he was named the Chief Executive Officer of ERI in
September 2014. From January 1, 2014 to July 31, 2014, Gary L. Carano received $226,333 in compensation from
the Silver Legacy in addition to a $2.5 million lump-sum payment in connection with the termination of Silver
Legacy’s supplemental executive retirement program.
32
Transactions with MTR. In connection with the Merger, the Company advanced $5.0 million to MTR Gaming
which was used to repurchase MTR Gaming common stock. The advance is included in investment in and advances
to unconsolidated affiliates on the accompanying consolidated balance sheet at December 31, 2014. Additionally,
MTR Gaming reimbursed Resorts $1.5 million in December 2014 for allocated corporate general and administrative
costs incurred subsequent to the consummation of the Merger through December 31, 2014.
Aircraft and Yacht Lease; Purchases from Related Parties. Resorts from time to time leases aircraft and yachts
owned by REI or its affiliates, for use in operating Resorts’ business. In 2014 lease payments for the aircraft and
yachts totaled approximately $0.6 million. No lease payments have been made in 2015.
The Company occasionally purchases wine directly from the Ferrari Carano Winery, which is owned by REI
and Don Carano. Wine purchases are sent directly to customers in appreciation of their patronage. In 2014, the
Company spent approximately $35,000 for these products. No purchases have been made in 2015.
Distributions. In 2014 distributions of $0.6 million were made by Resorts to HoldCo and, in turn, by HoldCo to
its members, including Donald L. Carano, Raymond J. Poncia and members of their immediate families.
HoldCo, and HoldCo subsequently distributed to its members on a pro rata basis, Resorts’ interest in Tamarack
totaling $5.5 million.
Retained Interest Agreement. As part of the Merger, REI, HCM, Resorts, ELLC and ERI entered into a
Retained Interest Agreement (the “Retained Interest Agreement”), pursuant to which the following transactions
occurred, effective as of the Merger Date:

REI and HCM agreed to waive their rights to receive an aggregate of 373,136 shares of ERI common stock,
par value $0.00001 per share (“ERI Stock”), that otherwise would have been issued to them under terms of
the Merger Agreement as consideration for the consummation of the Merger (the “Retained
Consideration”).

ELLC redeemed all of Resorts’ interest in ELLC in exchange for a distribution to Resorts of a 48.1%
interest in Silver Legacy, such that, as of the Merger Date, REI and HCM held an indirect 1.9% interest in
Silver Legacy.

HCM and REI granted Resorts a right, exercisable for three months commencing on the first business day
after the first anniversary of the Merger Date, to acquire from HCM and REI all of their interests in ELLC
in exchange for the issuance to HCM and REI of their respective portions of the Retained Consideration.

Resorts granted each of HCM and REI a right, exercisable for three months commencing on the first
business day after the second anniversary of the Merger Date, to put to Resorts all of their indirect interests
in Silver Legacy in exchange for the issuance to HCM and REI of their respective portions of the Retained
Consideration.
Approval of Related Party Transactions
The Code of Ethics and Business Conduct of ERI (the "Code") requires that any proposed transaction between
ERI and its subsidiaries, including the Company, on the one hand, and a related party, on the other, or in which a
related party would have a direct or indirect material interest, be promptly disclosed to the Compliance Committee
of ERI. The Compliance Committee is required to disclose such proposed transactions promptly to ERI’s Audit
Committee.
ERI’s Audit Committee Charter requires the Audit Committee of ERI to review and approve all related party
transactions of ERI and its subsidiaries, including the Company. Any director having an interest in the transaction is
not permitted to vote on such transaction. The Audit Committee will determine whether or not to approve any such
transaction on a case-by-case basis and in accordance with the provisions of the Audit Committee Charter and the
Code, including the standards set forth in the Conflicts of Interest Policy contained in the Code. Under the Code, a
"related party" is any of the following:
33
• an executive officer of the Company;
• a director (or director nominee) of the Company;
• an immediate family member of any executive officer or director (or director nominee);
• a beneficial owner of five percent or more of any class of the Company's voting securities;
• an entity in which one of the above described persons has a substantial ownership interest or control of such
entity; or
• any other person or entity that would be deemed to be a related person under Item 404 of SEC Regulation S-K
or applicable NASDAQ rules and regulations.
Director Independence
The Company is a member-managed limited liability company and, as a result, is indirectly managed by the
board of directors of ERI. For a director of ERI to be considered independent, the director must meet the bright-line
independence standards under the listing standards of NASDAQ and the board of directors of ERI must
affirmatively determine that the director has no material relationship with us, directly, or as a partner, stockholder or
officer of an organization that has a relationship with us. The board of directors of ERI determines director
independence based on an analysis of the independence requirements of the NASDAQ listing standards. In addition,
the board of directors will consider all relevant facts and circumstances in making an independence determination.
The board of directors also considers all commercial, industrial, banking, consulting, legal, accounting, charitable,
familial, or other business relationships any director may have with us. The board of directors has determined that
the following five directors satisfy the independence requirements of NASDAQ: Frank J. Fahrenkopf, Jr., James B.
Hawkins, Michael E. Pegram, David P. Tomick and Roger P. Wager.
Item 14. Principal Accounting Fees and Services.
The following table presents fees billed for professional services rendered by Ernst & Young LLP to ERI during
the year ended December 31, 2014 and Resorts during the year ended December 31, 2013.
Audit fees (a)
Audit-related fees(b)
Tax fees
Other fees
Total fees
2014
$ 2,747,167
797,101
275,122
—
$ 3,819,390
$
$
2013
453,123
691,943
5,000
—
1,150,066
a)
Audit fees for 2014 and 2013 represent audit fees and related expenses for professional services rendered for the audit
of ERI’s and Resort’s annual consolidated financial statements, the review of our quarterly financial statements
included in ERI’s Quarterly Report on Form 10-Q or reports provided by Resorts to the trustee and holders of Senior
Secured Notes, and the audit of our internal control over financial reporting. Audit fees also represent fees for
professional services rendered for statutory and subsidiary audits.
b)
Audit-related fees for 2014 and 2013 represent fees related to various purchase accounting matters associated with the
Merger including the filing of registration statements.
c)
The tax fees for 2014 and 2013 represent fees for tax compliance and other services related to the Merger.
The services provided by Ernst & Young LLP subsequent to September 19, 2014 for the fiscal year 2014 were
approved in advance by ERI’s Audit Committee.
34
Part IV
Item 15. Financial Statement Schedules.
Financial Statements
Incorporated by reference in Item 8 of this report, and included on pages __ through __ hereof, are the
following consolidated financial statements of Eldorado Resorts LLC:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2014 and 2013
Consolidated Statements of Operations and Comprehensive (Loss) Income for the Years Ended
December 31, 2014, 2013 and 2012
Consolidated Statements of Member’s Equity for the Years Ended December 31, 2014, 2013 and 2012
Consolidated Statements of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012
Notes to Consolidated Financial Statements
35
SIGNATURES
Eldorado Resorts LLC and Eldorado Capital Corp. have duly caused this report to be signed on their behalf by
the undersigned thereunto duly authorized.
Date: March 16, 2015
By:
/s/ Gary L. Carano
Gary L. Carano
Chief Executive Officer
Date: March 16, 2015
By:
/s/ Robert M. Jones
Robert M. Jones
Chief Financial Officer (Principal
Financial and Accounting Officer)
36
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF ELDORADO RESORTS LLC
Page
Report of Independent Registered Public Accounting Firm ............................................
38
Consolidated Balance Sheets ..........................................................................................
39
Consolidated Statements of Operations and Comprehensive (Loss) Income ..................
40
Consolidated Statements of Member’s Equity ...............................................................
41
Consolidated Statements of Cash Flows ..........................................................................
42
Notes to Consolidated Financial Statements ..................................................................
43
37
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Member
Eldorado Resorts, Inc.
We have audited the accompanying consolidated balance sheets of Eldorado Resorts LLC as of December 31, 2014
and 2013, and the related consolidated statements of operations and comprehensive (loss) income, member’s equity,
and cash flows for each of the three years in the period ended December 31, 2014. These financial statements are
the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the
Company’s internal control over financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Eldorado Resorts LLC at December 31, 2014 and 2013, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with
U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Las Vegas, Nevada
March 16, 2015
38
CONSOLIDATED BALANCE SHEETS
December 31,
2014
December 31,
2013
ASSETS
CURRENT ASSETS:
Restricted cash
Accounts receivable, net
Due from affiliates
Inventories
Prepaid expenses
$
Total current assets
RESTRICTED CASH
INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED
AFFILIATES
PROPERTY AND EQUIPMENT, NET
GAMING LICENSE
OTHER ASSETS, NET
Total assets
26,954
321
4,215
364
3,323
2,332
$
29,813
305
3,240
430
3,109
2,532
37,509
39,429
2,500
5,000
19,009
18,349
172,948
180,342
20,574
20,574
6,081
6,488
$
258,621
$
270,182
$
—
32
10,062
604
2,652
4,656
535
7,133
302
$
2,500
225
6,762
633
2,447
4,568
—
7,764
248
LIABILITIES AND MEMBER’S EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt
Current portion of capital lease obligations
Accounts payable
Interest payable
Accrued gaming taxes and assessments
Accrued payroll and related
Accrued income taxes
Accrued other liabilities
Due to affiliates
Total current liabilities
LONG-TERM DEBT, less current portion
CAPITAL LEASE OBLIGATIONS, less current portion
DEFERRED INCOME TAXES
OTHER LIABILITIES
Total liabilities
25,976
25,147
168,000
168,000
3
35
519
—
1,584
1,425
196,082
194,607
62,436
103
75,575
—
62,539
75,575
COMMITMENTS AND CONTINGENCIES (Note 10)
EQUITY:
Member’s equity
Non-controlling interest
Total equity
Total liabilities and member’s equity
$
258,621
The accompanying notes are an integral part of these consolidated financial statements.
39
$
270,182
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the Year Ended December 31,
2014
2013
2012
OPERATING REVENUES:
Casino
Food and beverage
Hotel
Other
$ 185,174
59,124
26,647
9,240
280,185
(42,530)
Less—promotional allowances
OPERATING EXPENSES:
Casino
Food and beverage
Hotel
Other
Total operating expenses
LOSS ON SALE OR DISPOSAL OF PROPERTY
ACQUISITION CHARGES
EQUITY IN INCOME (LOSSES) OF UNCONSOLIDATED
AFFILIATES
OPERATING INCOME
OTHER INCOME (EXPENSE):
Interest income
Interest expense
Gain on extinguishment of debt of unconsolidated affiliate
Gain on termination of supplemental executive retirement plan
assets of unconsolidated affiliate
$ 192,379
60,556
26,934
10,384
,
290,253
(43,067)
296,270
(41,530)
237,655
247,186
254,740
99,991
29,082
7,666
7,255
17,556
45,469
16,354
101,913
28,982
7,891
7,290
17,740
43,713
17,031
104,044
29,095
8,020
7,279
18,724
44,936
17,651
223,373
(84)
224,560
(226)
229,749
(198)
(6,348)
(3,173)
2,705
3,355
(8,952)
10,555
22,582
15,841
15
(15,441)
—
16
(15,681)
11,980
14
(16,069)
—
—
—
—
—
715
—
—
Total other expense
$ 200,292
59,317
26,203
10,458
—
(755)
(22)
(14,711)
(3,685)
NET (LOSS) INCOME BEFORE INCOME TAXES
PROVISION FOR INCOME TAXES
(4,156)
(1,054)
18,897
—
(991)
—
NET (LOSS) INCOME
(5,210)
18,897
(991)
(103)
—
NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY
(5,313)
18,897
(991)
OTHER COMPREHENSIVE (LOSS) INCOME —
Minimum Pension Liability Adjustment of
Unconsolidated Affiliate
(1,772)
1,772
—
NON-CONTROLLING INTEREST
COMPREHENSIVE NET (LOSS) INCOME
$
(7,085)
$
20,669
40
(16,832)
—
$
(991)
CONSOLIDATED STATEMENT OF MEMBER’S EQUITY
Eldorado
Resorts
$
BALANCES, January 1, 2012
Net loss
Cash contributions
Cash distributions
BALANCES, December 31, 2012
Net income
Other comprehensive income - Minimum pension
liability adjustment of unconsolidated affiliate
Cash distributions
66,023
NonControlling
Interest
$
—
Total
$ 66,023
(991)
106
(4,135)
—
—
—
(991)
106
(4,135)
61,003
—
61,003
18,897
—
18,897
1,772
—
1,772
(6,097)
(6,097)
75,575
—
75,575
Net loss
Other comprehensive loss - Minimum pension
(5,313)
103
(5,210)
(1,772)
—
(1,772)
Noncash distribution of investment in Tamarack
Cash
distributions
Crossing,
LLC
(5,479)
(575)
—
—
(5,479)
(575)
$
62,436
$
103
41
$ 62,539
CONSOLIDATED STATEMENTS OF CASH FLOWS
2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Amortization of debt issuance costs
Gain on termination of supplemental executive retirement plan of
unconsolidated affiliate
Distributions from unconsolidated affiliate
Provision for bad debt expense
Deferred income tax provision
Change in operating assets and liabilities:
Accounts receivable
Inventories
Prepaid expenses
Accounts payable
Income taxes payable
Interest payable
Accrued and other liabilities and due to affiliates
Net cash provided by operating activities
$
(5,210)
2013
$ 18,897
2012
$
(991)
16,354
854
(2,705)
17,031
854
(3,355)
17,651
1,006
8,952
(715)
—
—
—
509
84
1,092
519
—
—
(11,980)
—
1,626
226
847
—
—
755
—
22
893
198
271
—
(2,001)
(214)
200
1,004
535
(29)
(125)
10,152
(454)
(264)
(37)
400
—
—
(172)
23,619
(213)
284
(129)
(1,473)
—
(62)
1,202
28,366
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
Investment in and loans to unconsolidated affiliate
Proceeds from sale of property and equipment
Decrease (increase) in restricted cash related to credit support deposit
Increase in restricted cash
Increase in other assets, net
Net cash used in investing activities
(6,748)
(5,000)
—
2,500
(16)
(447)
(9,711)
(7,413)
—
19
—
(83)
(166)
(7,643)
(9,181)
(7,500)
10
(5,000)
(62)
(99)
(21,832)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt
Principal payments on capital leases
Cash contributions
Cash distributions
Net cash used in financing activities
(2,500)
(225)
—
(575)
(3,300)
(5,000)
(369)
—
(6,097)
(11,466)
(6,952)
(400)
106
(4,135)
(11,381)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(2,859)
4,510
(4,847)
29,813
25,303
30,150
$ 26,954
$ 29,813
$ 25,303
$ 14,602
5,479
2,296
—
—
$ 14,827
—
397
68
95
$ 15,125
—
418
—
—
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid
Noncash distribution of Tamarack investment
Payables for purchase of capital expenditures
Capital lease obligations settled through deposits
Equipment acquired under capital leases
42
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
1.
Organization, Basis of Presentation and Summary of Significant Accounting Policies
Organization
The accompanying consolidated financial statements include the accounts of (1) Eldorado Resorts LLC
(“Resorts”), a Nevada limited liability company that is an indirect wholly owned subsidiary of Eldorado Resorts,
Inc.; (2) Eldorado Capital Corp. (“Capital”), a Nevada corporation that is a wholly owned subsidiary of Resorts; (3)
Eldorado Shreveport #1, LLC (“ES#1”) and Eldorado Shreveport #2, LLC (“ES#2”), two Nevada limited liability
companies that are wholly owned subsidiaries of Resorts; (4) Eldorado Casino Shreveport Joint Venture, a
Louisiana general partnership (the “Louisiana Partnership”) in which ES#1 and ES#2 own all of the partnership
interests; (5) Shreveport Capital Corp. (“Shreveport Capital”), a Louisiana corporation that is a wholly owned
subsidiary of the Louisiana Partnership; and, (6) for periods prior to September 19, 2014, Eldorado Limited Liability
Company, a Nevada limited liability company that was an approximately 96% owned subsidiary of Resorts prior to
such date (“ELLC” and, collectively with Resorts, Capital, ES#1, ES#2, the Louisiana Partnership and Shreveport
Capital, the “Company”). Intercompany accounts and transactions have been eliminated in consolidation.
On September 19, 2014 (the “Merger Date”), through a series of mergers, Eldorado HoldCo LLC (“HoldCo”),
the direct parent of the Company, became a direct wholly owned subsidiary of Eldorado Resorts, Inc. (“ERI”), a
Nevada corporation formed in September 2013. As a result of such transactions, Resorts became an indirect wholly
owned subsidiary of ERI. ERI was formed to be the parent company of HoldCo following the merger of HoldCo
and MTR Gaming Group, Inc. (“MTR Gaming”), a Delaware corporation incorporated in March 1988 (such
transactions are referred to herein as the “Merger”). Each of the Company and MTR Gaming continue to operate as
a separate entity and the accompanying consolidated financial statements of the Company do not include the
operations or assets and liabilities of MTR Gaming. For the years ended December 31, 2014 and 2013, the
Company incurred $6.3 million and $3.2 million, respectively, in acquisition charges in connection with the Merger.
Resorts was formed in 1996 and became the successor to a predecessor partnership that constructed the
Eldorado Hotel and Casino, a premier hotel/casino and entertainment facility centrally located in downtown Reno,
Nevada (the “Eldorado Reno”), which opened for business in 1973. Resorts owns and operates the Eldorado Reno.
Eldorado Reno is easily accessible both to vehicular traffic from Interstate 80, the principal highway linking Reno to
its primary visitor markets in northern California, and to pedestrian traffic from nearby casinos.
Capital was incorporated with the sole purpose of serving as co-issuer of certain debt co-issued by Resorts and
Capital. Capital holds no significant assets and conducts no business activity.
Resorts indirectly owns 100% of the partnership interests of the Louisiana Partnership. The Louisiana
Partnership owns, and Resorts manages, a 403-room all suite art deco-style hotel and a tri-level riverboat dockside
casino complex situated on the Red River in Shreveport, Louisiana, which commenced operations under its previous
owners in December 2000. Resorts acquired a majority ownership interest in the hotel and riverboat casino complex
in July 2005, began operating it as the Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) on October 26,
2005 and acquired the remaining minority interest in March 2008. Each of ES#1, ES#2, the Louisiana Partnership
and its subsidiaries, including Shreveport Capital, is a “guarantor”, as defined in the Indenture, dated as of June 1,
2011, by and among Resorts and Capital, as issuers, and U.S. Bank National Association, as Trustee, and Capital
One, N.A., as Collateral Trustee (the “Indenture”).
Resorts also owns a 48.1% interest in a joint venture (the “Silver Legacy Joint Venture”) which owns the Silver
Legacy Resort Casino (the “Silver Legacy”), a major themed hotel and casino situated between and seamlessly
connected at the mezzanine level to the Eldorado Reno and Circus Circus-Reno, a hotel and casino owned and
operated by Galleon, Inc. (“Galleon”), an indirect, wholly owned subsidiary of MGM Resorts International. Galleon
owns 50% of the interests of the Silver Legacy Joint Venture. Pursuant to a Retained Interest Agreement entered
into in connection with the Merger (see Note 3), Resorts has the right to acquire the remaining 1.9% interest in the
Silver Legacy from Eldorado Limited Liability Company (“ELLC”), a Nevada limited liability company that was an
approximately 96% owned subsidiary of Resorts prior to the Merger, on the terms and conditions described therein.
43
HoldCo, and HoldCo subsequently distributed to its members on a pro rata basis, Resorts’ interest in Tamarack. No
gain or loss was recognized in the accompanying consolidated financial statements as a result of such distribution
because the distribution was in the amount of the book value of Tamarack and totaled $5.5 million.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates
incorporated into the Company’s consolidated financial statements include estimated useful lives for depreciable and
amortizable assets, estimated allowance for doubtful accounts receivable, estimated cash flows in assessing the
recoverability of long-lived assets, self-insurance reserves, players’ club liabilities, contingencies and litigation,
claims and assessments and fair value measurements related to the Company’s long-term debt. Actual results could
differ from these estimates.
Cash and Cash Equivalents
Cash and cash equivalents include investments purchased with a maturity at the day of purchase of 90 days or
less.
Restricted Cash
The Company has a certificate of deposit, which is used for security with the Nevada Department of Insurance
for its self-insured workers compensation. The certificate of deposit matured on August 2, 2014 at which time it was
renewed and increased in amount to $321,000 and the maturity date was extended to February 2, 2015. It was
subsequently renewed and extended to August 5, 2015.
Additionally, in connection with the Plan of Reorganization of the Silver Legacy (Note 3), each of ELLC and
Galleon were required, among other things, to deposit $5.0 million of cash into a bank account as collateral in favor
of the lender under the Silver Legacy credit agreement. In December 2014, Silver Legacy deposited $5.0 million of
cash into a cash collateral account securing its obligations under its credit agreement, which reduced the credit
support obligation of each of ELLC and Galleon to $2.5 million and resulted in the return of $2.5 million of the $5.0
million of cash collateral that Resorts previously provided as credit support for Silver Legacy’s obligations under its
credit agreement.
Accounts Receivable and Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of
casino accounts receivable. The Company issues markers to approved casino customers following background
checks and assessments of creditworthiness. Trade receivables, including casino and hotel receivables, are typically
non-interest bearing. Accounts are written off when management deems the account to be uncollectible. Recoveries
of accounts previously written off are recorded when received. An estimated allowance for doubtful accounts is
maintained to reduce the Company’s receivables to their carrying amount, which approximates fair value. The
allowance is estimated based on specific review of customer accounts as well as historical collection experience and
current economic and business conditions. Management believes that as of December 31, 2014 and 2013, no
significant concentrations of credit risk existed.
Certain Concentrations of Risk
The Company’s operations are in Reno, Nevada and Shreveport, Louisiana. Therefore, the Company is subject
to risks inherent within the Reno and Shreveport markets. To the extent that new casinos enter into the markets or
hotel room capacity is expanded, competition will increase. The Company may also be affected by economic
conditions in the United States and globally affecting the markets or trends in visitation or spending in the Reno and
Shreveport markets.
Inventories
Inventories are stated at the lower of average cost, using a first-in, first-out basis, or market. Inventories consist
primarily of food and beverage, retail merchandise and operating supplies. Cost is determined primarily by the
44
average cost method for food and beverage and operating supplies. Cost for retail merchandise is determined using
the specific identification method.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the
estimated useful life of the asset or the term of the capitalized lease, whichever is less. Costs of major improvements
are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred.
Investment in Unconsolidated Affiliates
The Company accounts for its 48.1% interest in the Silver Legacy and accounted for its 21.3% interest in
Tamarack, affiliates that it does not control, but over which it does exert significant influence, using the equity
method of accounting. Since Resorts operates in the same line of business as Silver Legacy and Tamarack Junction,
each with casino and/or hotel operations, Resorts’ equity in the income of such joint ventures is included in
operating income.
The Company considers whether the fair values of any of its equity method investments have declined below
their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be
recoverable. Estimated fair value is determined using a discounted cash flow analysis based on estimated future
results of the investee and market indicators of terminal year capitalization rate. If the Company considered any
such decline to be other than temporary, then a write-down would be recorded to estimated fair value. There were
no impairments of the Company’s equity method investments during 2014, 2013 or 2012.
Long-Lived and Finite-Lived Intangible Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company then compares the estimated future cash flows
of the asset, on an undiscounted basis, to the carrying amount of the asset. If the undiscounted cash flows exceed the
carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying amount, an
If the asset is still under development, future cash flows include remaining construction costs. An estimate of
undiscounted future cash flows produced by the asset is compared to its carrying value to determine whether an
impairment exists. An impairment loss is recognized only if the carrying amount of a long-lived asset is not
recoverable and exceeds its fair value. If the undiscounted cash flows do not exceed the carrying amount, an
That assessment is based on the carrying amount of the asset at the date it is tested for recoverability, whether in use
or under development. An impairment loss is measured as the amount by which the carrying amount of a long-lived
asset exceeds its fair value.
Losses on the sale or disposal of long-lived assets of $0.1 million, $0.2 million and $0.2 million during the
years ended December 31, 2014, 2013 and 2012, respectively, resulted from the sale or write off of property and
equipment replaced as part of the updating and remodeling of our Eldorado Reno and Eldorado Shreveport
properties.
Indefinite-Lived Intangible Assets
Indefinite-lived intangible assets include the gaming license rights. Indefinite-lived intangible assets are not
subject to amortization, but are subject to an annual impairment test each year. The Eldorado Shreveport gaming
license is tested for impairment using the relief-from-royalty method. If the fair value of an indefinite-lived
intangible asset is less than its carrying amount, an impairment loss is recognized equal to the difference between the
calculated fair value and the carrying amount.
Self-Insurance Reserves
Eldorado Reno and Eldorado Shreveport are self-insured for their group health programs and Eldorado Reno is
self-insured for its workmen’s compensation program. We utilize historical claims information provided by our
third party administrators to make estimates for known pending claims as well as claims that have been incurred, but
not reported as of the balance sheet date. In order to mitigate our potential exposure, we have an individual claim
stop loss policy on our group health claims and a specific claim stop loss policy on our workmen’s compensation
claims. If we become aware of significant claims or material changes affecting our estimates, we increase our
reserves in the period in which we made such a determination and record the additional expense. At December 31,
45
2014 and 2013, $1.3 million was accrued for insurance and workmen’s compensation medical claims reserves and is
included in accrued other liabilities on the accompanying consolidated balance sheets.
Outstanding Chip Liability
The Company recognizes the impact on gaming revenues on an annual basis to reflect an estimate of the change
in the value of outstanding chips that are not expected to be redeemed. This estimate is determined by measuring
the difference between the total value of chips placed in service less the value of chips in the inventory of chips
under our control. This measurement is performed on an annual basis utilizing a methodology in which a consistent
formula is applied to estimate the percentage value of chips not in custody that are not expected to be redeemed. In
addition to the formula, certain judgments are made with regard to various denominations and souvenir chips.
Casino Revenue and Promotional Allowances
The Company recognizes as casino revenue the net win from gaming activities, which is the difference between
gaming wins and losses. Hotel, food and beverage, and other operating revenues are recognized as services are
performed. Advance deposits on rooms and advance ticket sales are recorded as accrued liabilities until services are
provided to the customer. Gaming revenues are recognized net of certain cash and free play incentives. The retail
value of food, beverage, rooms and other services furnished to customers on a complimentary basis is included in
gross revenues and then deducted as promotional allowances. The Company rewards customers, through the use of
our loyalty programs, with complimentaries based on amounts wagered or won that can be redeemed for a specified
time period.
The retail value of complimentaries included in promotional allowances is as follows (in thousands):
For the year ended December 31,
2014
2013
2012
Food and beverage
Hotel
Other
$ 28,487
11,797
2,246
$ 42,530
$ 29,356
11,386
2,325
$ 43,067
$ 28,246
11,095
2,189
$ 41,530
The estimated cost of providing such complimentary services is charged to operating expenses in the casino
department. Such costs of providing complimentary services are as follows (in thousands):
2014
2013
2012
Food and beverage
Hotel
Other
$ 22,709
4,795
1,623
$ 29,127
$ 22,873
4,438
1,608
$ 28,919
$ 22,288
4,300
1,539
$ 28,127
Advertising
Advertising costs are expensed in the period the advertising initially takes place. Advertising costs included in
marketing and promotion expenses were $17.6 million, $17.7 million and $18.7 million for the years ended
December 31, 2014, 2013 and 2012, respectively.
Income Taxes
Effective September 19, 2014, the Company will be included in the consolidated federal, state and local tax
returns of ERI. Income taxes are provided for in the accompanying consolidated financial statements as if the
Company filed separate returns. Prior to the Merger, the Company was taxed as a partnership under the Internal
Revenue Code pursuant to which income taxes were primarily the responsibility of the partners.
The Company accounts for income taxes under the asset and liability method. This approach requires the
recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and
46
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the enactment date. The Company establishes
a valuation allowance to reduce deferred tax assets if it is more-likely-than-not that a portion or all of the asset will
not be realized on future tax returns.
Under the applicable accounting standards, the Company may recognize the tax benefit from an uncertain tax
position only if it is more-likely-than-not that the tax position will be sustained on examination by the taxing
authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from
such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized
upon ultimate settlement. The accounting standards also provide guidance on de-recognition, classification, interest
and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions.
As of December 31, 2014 and 2103, the Company had recorded no liability associated with uncertain tax positions.
Fair Value Measurements
Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants. Accordingly, fair value is a market based
measurement that is determined based on assumptions that market participants would use in pricing an asset or
liability. As a basis for considering such assumptions, there is a three-tier fair value hierarchy, which prioritizes the
inputs used in measuring fair values as follows:
• Level 1: Quoted market prices in active markets for identical assets or liabilities.
• Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
• Level 3: Unobservable inputs that are not corroborated by market data.
The following methods and assumptions are used to estimate the fair value of each class of financial
instruments for which it is practical to estimate fair value:
Cash and Cash Equivalents: The carrying amounts approximate the fair values given its characteristics.
Restricted Cash: The credit support deposit is classified as Level 1 as its carrying value approximates market
prices.
Advance to Silver Legacy: The $7.5 million note receivable due to ELLC from the Silver Legacy (see Note 3)
is classified as Level 2 based upon market-based inputs.
Long-term Debt: The 8.625% Senior Secured Notes due 2019 (the “Senior Secured Notes,” see Note 7) are
classified as Level 2 based upon market-based inputs. The fair values of the Company’s long-term debt have
been calculated based on management’s estimates of the borrowing rates available as of December 31, 2014 and
2013 for debt with similar terms and maturities.
Term Loan: Our term loan under the credit facility (see Note 7) was classified as Level 2 as it was tied to
market rates of interest and its carrying value approximated market value.
The estimated fair values of the Company’s financial instruments are as follows (amounts in thousands):
December 31, 2014
Carrying
Fair
Amount
Value
December 31, 2013
Carrying
Fair
Amount
Value
Financial assets:
Restricted cash
Advance to Silver Legacy
$ 26,954
2,821
—
$ 26,954
2,821
4,911
$
Financial liabilities:
Long-term debt
Term loan
168,000
—
174,720
—
47
29,813
5,305
—
$ 29,813
5,305
4,004
168,000
2,500
178,080
2,500
Property Donations
During the third quarter of 2012, Eldorado Shreveport donated certain of its property to the City of Shreveport
and recorded a charge of $755,000, which represented the net book value of the property as of the donation date.
Segment Reporting
The executive decision makers of our Company review operating results, assess performance and make
decisions on a property-by-property basis. We, therefore, consider the Eldorado Reno and Eldorado Shreveport
properties to be operating segments.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update
No. 2014-9 (“ASU” 2014-9), “Revenues from Contracts with Customers” (Accounting Standards Codification
Topic 606 (“ASC” Topic 606)). The standard requires revenue to be recognized when promised goods or services
are transferred to customers in an amount that reflects the consideration that is expected to be received for those
goods and services. Qualitative and quantitative disclosures are also required regarding customer contracts,
significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract.
ASU 2014-09 supersedes and replaces nearly all existing revenue recognition guidance under US GAAP. This
accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December
15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of ASU
2014-09 on its consolidated financial statements and related disclosures.
In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern”
(ASC Subtopic 205-40) which amends the current guidance in ASC Topic 205 by adding Subtopic 40. Subtopic 40
requires management to evaluate whether there are conditions or events that in aggregate would raise substantial
doubt about an entity’s ability to continue as a going concern for one year from the date the financial statements are
issued or available to be issued. If substantial doubt existed, management would be required to make certain
disclosures related to nature of the substantial doubt and under certain circumstances, how that substantial doubt
would be mitigated. This amendment is effective for annual periods ending after December 15, 2016 and for
subsequent interim and annual periods thereafter. Early adoption is permitted. The Company is currently evaluating
the effects, if any, adoption of this guidance will have on its consolidated financial statements.
In January 2015, the FASB issued ASU No. 2015-1, “Income Statement—Extraordinary and Unusual Items”
(ASC Subtopic 225-20) which eliminates the concept of accounting of Extraordinary Items, previously defined as
items that are both unusual and infrequent, which were reported as a separate item on the income statement, net of
tax, after income from continuing operations. The elimination of this concept is intended to simplify accounting for
unusual items and more closely align with international accounting practices. This amendment is effective for
annual periods ending after December 15, 2015 and for subsequent interim and annual periods thereafter. Early
adoption is permitted. The Company is currently evaluating the effects, if any, adoption of this guidance will have
on its consolidated financial statements and does not expect it to be material.
Reclassifications
Certain reclassifications, which have no effect on previously reported net income, have been made to the 2013
consolidated balance sheet and to the 2013 and 2012 consolidated statements of operations and comprehensive (loss)
income to conform to Resorts’ 2014 financial statement presentation. “Accrued Other Liabilities” at December 31,
2013 has been reduced by $7.0 million to disclose “Accrued Gaming Taxes and Assessments” ($2.4 million) and
“Accrued Payroll and Related” ($4.6 million) as separate balance sheet line item categories. Entertainment revenues
($3.6 million during each of 2013 and 2012) and entertainment expenses ($2.5 million during each of 2013 and
2012) have been reclassified from what was previously “Food, Beverage and Entertainment Revenues” and “Food,
Beverage and Entertainment Expenses” to “Other Revenues” and “Other Expenses”, respectively. Marketing and
promotions costs have been reclassified to a separate line item from “Casino Expenses” ($15.4 million and $16.5
million for 2013 and 2012, respectively) and from “General and Administrative Expenses” ($2.3 million and $2.2
million for 2013 and 2012, respectively). Valet related expenses ($0.9 million during each of 2013 and 2012) have
been reclassified to “Other Expenses” from “General and Administrative Expenses”.
48
Subsequent Events
The Company has evaluated subsequent events through March 16, 2015 and determined there was no
subsequent event identified during the evaluation.
2.
Accounts Receivable and Due From Affiliates
Components of accounts receivable, net are as follows (in thousands):
December 31,
2014
2013
$ 6,630
$ 4,619
364
430
6,994
5,049
(2,415)
(1,379)
$ 4,579
$ 3,670
Accounts receivable
Due from affiliates
Accounts receivable and due from affiliates
Allowance for doubtful accounts
Total
The provision for bad debt expense was $1.1 million, $0.8 million and $0.3 million for the years ended
December 31, 2014, 2013 and 2012, respectively. Write-offs of accounts receivable were $0.2 million, $1.1 million
and $1.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. Recoveries of accounts
receivable previously written off during the year ended December 31, 2014 amounted to $0.2 million and were less
than $0.1 million during each of the years ended December 31, 2013 and 2012.
3.
Investment in Unconsolidated Affiliates
MTR Gaming
In connection with the Merger, the Company advanced $5.0 million to MTR Gaming which was used to
repurchase MTR Gaming common stock. The advance is included in investment in and advances to unconsolidated
affiliates on the accompanying consolidated balance sheets at December 31, 2014.
Silver Legacy
Effective March 1, 1994, ELLC and Galleon, (each a “Partner” and, together, the “Partners”), entered into a
joint venture agreement (the “Original Joint Venture Agreement” and, as amended to date, the “Joint Venture
Agreement”) to develop the Silver Legacy. The Silver Legacy consists of a casino and hotel located in Reno,
Nevada, which began operations on July 28, 1995. Each partner owned a 50% interest in the Silver Legacy. Prior to
the Merger Date, the Company owned a 48.1% interest in the Silver Legacy by means of its 96.2% ownership of
ELLC, which owned a 50% interest in the Silver Legacy. Subsequent to the Merger Date, the Company owns a
direct 48.1% interest in the Silver Legacy. The remaining 1.9% noncontrolling interest is owned by ELLC. The
noncontrolling interest’s share of $103,000 in income is reflected in the consolidated statements of operations.
On May 17, 2012, the Silver Legacy and Silver Legacy Capital Corp. (the “Silver Legacy Debtors”) filed
voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code and on June 1, 2012 the Silver
Legacy Debtors filed a joint plan of reorganization, which was subsequently amended on June 29, 2012 and August
8, 2012 (the “Plan of Reorganization”). On October 23, 2012, an order of confirmation relating to the Plan of
Reorganization was entered by the bankruptcy court. The effective date, as defined in the Plan of Reorganization,
occurred on November 16, 2012. Concurrently, the Silver Legacy closed on its new debt facilities and issued its
new subordinated debt owed to its partners. All creditors were paid under the terms of the Plan of Reorganization
(with the exception of the quarterly installment payments to certain general unsecured creditors which were paid in
full by November 16, 2013) and the Silver Legacy emerged from bankruptcy. A final hearing was held and the
Chapter 11 case closed on March 20, 2013.
Under the Plan of Reorganization, each of ELLC and Galleon retained its 50% interest in the Silver Legacy, but
was required to advance $7.5 million to the Silver Legacy pursuant to a subordinated loan and provide credit support
by depositing $5.0 million of cash into a bank account as collateral in favor of the lender under the Silver Legacy
credit agreement. The $7.5 million note receivable from ELLC to the Silver Legacy was issued on November 16,
2012 with a stated interest rate of 5% per annum and a maturity date of May 16, 2018 and is included on the
accompanying consolidated balance sheets in Investment in and Advances to Unconsolidated Affiliates at December
49
31, 2014 and 2013. Payment of any interest or principal under the loan is subordinate to the senior indebtedness of
the Silver Legacy. Accrued interest under the loan will be added to the principal amount of the loan and may not be
paid unless principal of the loan may be paid in compliance with the terms of the senior indebtedness outstanding or
at maturity. In December 2014, Silver Legacy deposited $5.0 million of cash into a cash collateral account securing
its obligations under its credit agreement, which reduced the credit support obligation of each of ELLC and Galleon
to $2.5 million each and resulted in the return of $2.5 million of the $5.0 million of cash collateral that Resorts
previously provided as credit support for Silver Legacy’s obligations under its credit agreement. The collateral
deposit is included as noncurrent restricted cash in the amounts of $2.5 million and $5.0 million, respectively, in the
accompanying consolidated balance sheets at December 31, 2014 and 2013.
On December 16, 2013, the Silver Legacy entered into a new senior secured term loan facility totaling $90.5
million (the “New Silver Legacy Credit Facility”) to refinance its indebtedness under its then existing senior secured
term loan and Silver Legacy Second Lien Notes. The proceeds from the New Silver Legacy Credit Facility, in
addition to $7.0 million of operating cash flows, were used to repay $63.8 million representing principal and interest
outstanding under the Silver Legacy Credit Facility, $31.7 million representing principal and interest related to the
extinguishment of the Silver Legacy Second Lien Notes and $2.0 million in fees and expenses associated with the
transactions. The New Silver Legacy Credit Facility consists of a $60.5 million first-out tranche term loan and a
$30.0 million last-out tranche term loan. The New Silver Legacy Credit Facility matures on November 16, 2017,
which was the maturity date of the original Silver Legacy credit facility.
Equity in income (losses) related to the Silver Legacy for the years ended December 31, 2014, 2013 and 2012
amounted to $2.0 million, $2.3 million and ($9.7) million, respectively. During the year ended December 31, 2014,
a $1.8 million change in other comprehensive (loss) income was recorded resulting from the termination of Silver
Legacy’s supplemental executive retirement plan.
Summarized information for the Company’s investment in and advances to the Silver Legacy is as follows (in
thousands):
Beginning balance
$
Investment in joint venture
Equity in income (losses) of unconsolidated affiliate
Gain on early extinguishment of debt of
Gain on termination of supplemental executive retirement
plan of unconsolidated affiliate
Other comprehensive (loss) income - minimum pension
Member’s distribution
Ending balance
$
2014
2013
2012
13,081
$
(2,198)
$
—
—
—
7,500
1,985
2,261
(9,698)
—
11,980
—
715
—
—
(1,772)
—
14,009
$
1,772
(734)
13,081
Summarized balance sheet information for the Silver Legacy is as follows (in thousands):
December 31,
2014
$ 30,563
190,592
6,412
$ 227,567
Current assets
Property and equipment, net
Other assets, net
Total assets
Current liabilities
Long-term liabilities
Partners’ equity
Total liabilities and partners’ equity
$
18,707
89,322
119,538
$ 227,567
50
$
$
$
$
2013
29,565
198,150
8,201
235,916
27,475
92,541
115,900
235,916
$
—
—
(2,198)
Summarized results of operations for the Silver Legacy are as follows (in thousands):
2014
2013
2012
$ 127,095
$ 125,841
$ 114,800
(112,086)
(112,558)
(113,387)
15,009
13,283
1,413
(9,607)
15,606
(12,188)
—
(407)
(8,621)
$ 5,402
$ 28,482
$ (19,396)
Net revenues
Operating expenses
Operating income
Other income (expense)
Reorganization items
Net income (loss)
Tamarack
Prior to the Merger, Resorts owned a 21.3% interest in Tamarack, which owned and operated Tamarack
Junction, a small casino in south Reno, Nevada. Donald L. Carano (“Carano”), who was the presiding member of
Resorts’ Board of Managers and the Chief Executive Officer of Resorts, owned a 26.3% interest in Tamarack. Four
members of Tamarack, including Resorts and three unaffiliated third parties, managed the business and affairs of
Tamarack Junction. At December 31, 2013, Resorts’ financial investment in Tamarack was $5.3 million. Resorts’
investment in Tamarack was accounted for using the equity method of accounting. Equity in income related to
Tamarack for the period prior to its disposition in 2014 and for the years ended December 31, 2013 and 2012 of $0.7
million, $1.1 million and $0.7 million, respectively, is included as a component of operating income.
On September 1, 2014, and as a condition to closing the Merger, Resorts distributed to HoldCo, and HoldCo
subsequently distributed to its members on a pro rata basis, Resorts’ interest in Tamarack. No gain or loss was
recognized in the accompanying consolidated financial statements as a result of such distribution because the
distribution was in the amount of the book value of Tamarack. The distributed interests in Tamarack had a carrying
amount of $5.5 million.
Summarized information for the Company’s equity in Tamarack for 2014 prior to its disposition and for the
years ended December 31, 2013 and 2012 is as follows (in thousands):
Beginning balance
Member’s distribution
Equity in net income of unconsolidated affiliate
Distribution of investment
Ending balance
Period from
January 1, 2014
through
September 1, 2014
$
5,268
(509)
720
(5,479)
$
—
For the year ended
December 31,
2013
2012
$ 5,066
$ 5,213
(892)
(893)
1,094
746
—
—
$ 5,268
$ 5,066
Summarized balance sheet information for Tamarack at December 31, 2013 is as follows (in thousands):
$
Current assets
Other assets
Total assets
$
Current liabilities
Notes payable and capital lease obligations
Partners’ equity
Total liabilities and partners’ equity
$
$
51
6,165
22,065
19
28,249
2,020
1,443
24,786
28,249
Summarized unaudited results of operations for Tamarack are as follows (in thousands):
Net revenues
Operating expenses
Operating income
Other expense
Net income
4.
Period from
January 1, 2014
through
September 1, 2014
$ 12,908
(9,431)
3,477
(45)
$
3,432
For the year ended
December 31,
2013
2012
$ 21,548
$ 17,845
(16,172)
(14,284)
5,376
3,561
(97)
(182)
$ 5,279
$ 3,379
Property and Equipment, net
Property and equipment consist of the following (in thousands):
Estimated
Service Life
(years)
—
10-45
25
3-15
Land and improvements
Buildings and other leasehold improvements
Riverboat
Furniture, fixtures and equipment
Furniture, fixtures and equipment held under
capital leases (Note 11)
Construction in progress
3-15
Less—Accumulated depreciation and amortization
December 31,
2014
$ 29,660
249,862
39,023
122,332
2013
$ 29,660
250,429
39,023
119,286
3,592
1,858
446,327
(273,379)
$ 172,948
3,592
496
442,486
(262,144)
$ 180,342
Substantially all property and equipment is pledged as collateral under our long-term debt (see Note 8).
Depreciation expense, including amortization expense on capital leases, was $16.4 million, $17.0 million and
$17.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. At December 31, 2014 and
2013, accumulated depreciation and amortization includes $3.4 million and $3.3 million, respectively, related to
assets acquired under capital leases.
5.
Other and Intangible Assets, net
Other and intangible assets, net, include the following amounts (in thousands):
December 31,
2014
2013
Gaming license (Indefinite-lived)
$ 20,574
$ 20,574
Land held for development
Bond offering costs, 8.625% Senior Secured Notes
Other
$
$
Accumulated amortization bond costs 8.625% Senior Secured Notes
Total Other Assets, net
52
906
6,851
1,404
9,161
(3,080)
$ 6,081
906
6,851
957
8,714
(2,226)
$ 6,488
Amortization of bond and loan costs is computed using the straight-line method, which approximates the
effective interest method, over the term of the bonds or loans, respectively, and is included in interest expense on the
accompanying consolidated statements of operations and comprehensive (loss) income. Amortization expense with
respect to deferred financing costs amounted to $0.9 million for each of the years ended December 31, 2014 and
2013 and $1.0 million for the year months ended December 31, 2012. Such amortization expense is expected to be
$0.9 million during each of the years ended December 31, 2015 through 2018 and $0.4 million during 2019.
The Eldorado Shreveport gaming license, recorded at $20.6 million at both December 31, 2014 and 2013, is an
intangible asset acquired from the purchase of a gaming entity located in a gaming jurisdiction where competition is
limited, such as when only a limited number of gaming operators are allowed to operate. Gaming license rights are
not subject to amortization as the Company has determined that they have an indefinite useful life.
6.
Accrued and Other Liabilities
Accrued and other liabilities consist of the following (in thousands):
December 31,
Accrued insurance and medical claims
Unclaimed chips
Progressive slot liability and accrued gaming promotions
Other
7.
2014
2013
$ 1,273
938
2,823
2,100
$ 7,134
$ 1,285
1,482
3,044
1,953
$ 7,764
Long-Term Debt
Long-term debt consists of the following (in thousands):
December 31,
8.625% Senior Secured Notes
Term Loan under Secured Credit Facility
Less—Current portion
2014
2013
$ 168,000
—
168,000
—
$ 168,000
$ 168,000
2,500
170,500
2,500
$ 168,000
Scheduled maturities of long-term debt are $168.0 million in 2019.
On June 1, 2011, Resorts and Capital completed the issuance of $180 million of 8.625% Senior Secured Notes
due June 15, 2019 (the “Senior Secured Notes”). Interest on the Senior Secured Notes is payable semiannually each
June 15 and December 15 to holders of record on the preceding June 1 or December 1, respectively.
The indenture relating to the Senior Secured Notes contains various restrictive covenants including, restricted
payments and investments, additional liens, transactions with affiliates, covenants imposing limitations on additional
debt, dispositions of property, mergers and similar transactions. As of December 31, 2014, the Company was in
compliance with all of the covenants under the indenture relating to the Senior Secured Notes.
The Senior Secured Notes are unconditionally guaranteed, jointly and severally, by all of the Company’s
current and future domestic restricted subsidiaries other than Capital (collectively, the “Guarantors”). ELLC was the
only unrestricted subsidiary as of the closing date. The Senior Secured Notes are secured by a first priority security
interest on substantially all of the Company’s current and future assets (other than certain excluded assets, including
gaming licenses and the Company’s interests in ELLC and the Silver Legacy). Such security interests are junior to
the security interests with respect to obligations of Resorts and the Guarantors under the Secured Credit Facility. In
addition, all of the membership interests in Resorts and equity interests in the Guarantors are subject to a pledge for
the benefit of the holders of the Senior Secured Notes.
The Company may redeem some or all of the Senior Secured Notes prior to June 15, 2015 at a redemption price
of 100% of the principal amount thereof plus a “make whole premium” together with accrued and unpaid interest
53
thereon. On or after June 15, 2015, the Company may redeem the Senior Secured Notes at the following redemption
prices (expressed as a percentage of principal amount) plus any accrued and unpaid interest thereon:
Year beginning June 15,
2015
2016
2017 and thereafter
Percentage
104.313%
102.156%
100.000%
On June 1, 2011, Resorts entered into a new $30 million senior secured revolving credit facility (the “Secured
Credit Facility”) available until May 30, 2014 consisting of a $15 million term loan requiring principal payments of
$1.25 million each quarter beginning September 30, 2011 (the “Term Loan”) and a $15 million revolving credit
facility. The Term Loan was repaid during the second quarter of 2014. At December 31, 2013, the outstanding
principal amount under on the Term Loan was $2.5 million. Resorts did not renew the Secured Credit Facility when
it matured on May 30, 2014.
8.
Income Taxes
The Company, as a subsidiary of Eldorado Resorts, Inc. (ERI), files its US income tax return as part of a
consolidated group. The allocation of the Company’s share of the consolidated income tax expense is determined
under the separate return method. Under this method, the Company determines its income tax provision as it filed a
separate income tax return. The Company is a single member limited liability company, and therefore is a
disregarded entity for tax purposes. However, because ERI is a corporation for financial statement purposes the
Company is treated as a division of a corporation and therefore recognizes the current and deferred tax impacts in its
separate financial statements. The Company does not have tax sharing agreements with the other members within
the consolidated ERI group.
The components of the Company’s provision for income taxes for the year ended December 31, 2014 are
presented below (amounts in thousands). For the years ended December 31, 2013 and 2012, the Company was
treated as partnership for income tax purposes.
Current:
Federal
State
Total current
Deferred:
Federal
State
Total deferred
Income tax provision
$
401
134
535
—
519
519
$ 1,054
The following is a reconciliation of the statutory federal income tax rate (benefit) to the Company’s
effective tax rate for the year ended December 31, 2014:
Statutory federal income tax federal rate (benefit)
Increase (decrease) in rate resulting from:
State and local taxes
Permanent items
Valuation allowance
Minority interest
Change in tax status
Credits and other
Effective tax rate
(35.0%)
(1.7%)
1.3%
43.0%
3.5%
17.1%
(2.8%)
25.4%
The difference between the effective rate and the statutory rate is primarily due to the federal and state valuation
allowances on deferred tax assets and the change in tax status described below. As a result of operating losses, the
54
Company expects to continue to provide a full valuation allowance against its federal and state deferred tax assets in
future periods.
Prior to September 19, 2014, the Company was taxed as a partnership under the Internal Revenue Code
pursuant to which income taxes were primarily the responsibility of its partners. On September 18, 2014, as part of
the Merger, ERI became a C Corporation subject to federal, state and local corporate-level income taxes at
prevailing corporate tax rates. Accordingly, the Company is treated in a similar manner subsequent to September
18, 2014 and will be included in the consolidated federal, state and local income tax returns filed by ERI.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant
components of our net deferred taxes related to continuing operations at December 31, are as follows (amounts in
thousands):
Deferred tax assets:
Accrued expenses
Investment in partnerships
Other
$ 1,968
5,845
52
7,865
Deferred tax liabilities:
Fixed assets
Prepaid expenses
Valuation allowance
(1,454)
(321)
(1,775)
(6,609)
Net deferred tax liabilities
$ (519)
At December 31, 2014, the Company determined it was not more-likely-than-not that the Company will realize
its federal and state deferred tax assets, with the exception of Louisiana. Therefore, a full valuation allowance has
been recognized against these deferred tax assets.
At December 31, 2014, there are no unrecognized tax benefits and the Company does not expect a significant
increase or decrease to the total amounts of unrecognized tax benefits within the next twelve months.
9.
Employee Benefit Plans
The Company participates in a multi-employer savings plan (the “401(k) Plan”) qualified under Sections 401(a)
and 401(k) of the Internal Revenue Code of 1986, as amended. The 401(k) Plan in which Resorts participates
functions as an aggregation of several single-employer plans in order to enable the participating employers to pool
plan assets for investment purposes and to reduce the costs of plan administration. The 401(k) Plan maintains
separate accounts for each employer so that each employer’s contributions provide benefits only for its employees.
Generally, all employees of the Company who are 21 years of age or older, who have completed six months and
1,000 hours of service and who are not covered by collective bargaining agreements, including the named executive
officers, are eligible to participate in the 401(k) Plan. Employees who elect to participate in the 401(k) Plan may
defer up to 100% but not less than 1% of their annual compensation, subject to statutory and certain other limits.
Through February 15, 2009, Resorts made matching contributions of 25% of the employees’ contributions, up to a
maximum of 0.75% of the employees’ annual compensation and subject to certain other limitations, at which point
Resorts ceased making matching contributions. Effective February 1, 2014, Eldorado Reno reinstated an employer
matching contribution up to 25 percent of the first four percent of each participating employee’s compensation. The
Louisiana Partnership also participates in the Company’s 401(k) Plan. The Louisiana Partnership plan allows for an
employer contribution up to 50 percent of the first 6 percent of each participating employee’s contribution, subject
to statutory and certain other limits. The Company’s matching contributions to the Plans were $0.4 million, $0.2
million and $0.3 million, respectively, for the years ended December 31, 2014, 2013 and 2012.
55
10. Commitments and Contingencies
Capital Leases
The Company leases certain equipment under agreements classified as capital leases. In 2013, the Company
entered into two lease agreements in the original amounts of $70,000 and $25,000 with third party lessors to acquire
network equipment and maintenance equipment at Eldorado Reno at 2.799% per annum and 8.453% per annum,
respectively. The first lease has an original term of three annual payments of $24,000 per year and the second lease
has an original term of 36 months with monthly payments of $714. In 2010, the Company entered into a lease
agreement in the original amounts of $552,000 with a third party lessor to acquire a hotel video on demand system at
Eldorado Reno at 6.132% per annum. The lease has an original term of 48 months with monthly payments of
$12,875. During 2006, Eldorado Reno entered into a lease agreement in the original amount of $690,000 with a
third party lessor to acquire mini-bars for hotel rooms at Eldorado Reno at 9.875% per annum with a 96 month term.
The leases are treated as capital leases for financial reporting purposes. The future minimum lease payments,
including interest, at December 31, 2014 are $32,000 in 2015 and $4,000 in 2016. After reducing these amounts for
interest of $1,000, the present value of the minimum lease payments at December 31, 2014 is $35,000.
Operating Leases
The Company leases land and equipment under operating leases. Future minimum payments under noncancellable operating leases with initial terms of one year or more consisted of the following at December 31, 2014
(in thousands):
Ground
Other
Lease
Leases
2015
$
404
$
763
2016
463
596
2017
463
569
2018
463
534
2019
463
470
Thereafter
20,249
3,200
$ 22,505
$
6,132
Total rental expense under operating leases (exclusive of the ground lease described below) was $1.5 million,
$1.6 million and $1.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. Additional rent
for land upon which the Eldorado Hotel Casino resides of $0.6 million in each of the years ended December 31,
2014, 2013 and 2012 was paid to C. S. & Y. Associates, a general partnership of which Carano is a general partner,
based on gross gaming receipts. This rental agreement expires June 30, 2027.
Eldorado Shreveport is party to a ground lease with the City of Shreveport for the land on which the casino was
built. The lease had an initial term which ended December 20, 2010 with subsequent renewals for up to an additional
40 years. The base rental amount during the initial ten-year lease term was $450,000 per year. The Louisiana
Partnership has extended the lease for the first five-year renewal term during which the base annual rental is
$402,500. The annual base rental payment will increase by 15% during each of the second, third, fourth and fifth
five-year renewal terms with no further increases. The base rental portion of the ground lease is being amortized on
a straight-line basis. In addition to the base rent, the lease requires percentage rent based on adjusted gross receipts
to the City of Shreveport and payments in lieu of admission fees to the City of Shreveport and the Bossier Parish
School Board. Expenses under the terms of the ground lease are as follows (in thousands):
2014
2013
2012
Ground lease:
Base rent
Percentage rent
$
585
1,336
$ 1,921
$
585
1,400
$ 1,985
$
Payment in lieu of admissions fees and school taxes
$ 5,908
$ 6,154
$ 6,490
56
585
1,483
$ 2,068
Eldorado Shreveport previously leased retail space located across the street from the casino/hotel complex to
unrelated retail tenants. Rental revenue for the year ended December 31, 2012 amounted to $72,000 and is included
in other operating revenues on the accompanying consolidated statement of operations and comprehensive (loss)
income. During the third quarter of 2012, Eldorado Shreveport donated this property to the City of Shreveport and
recorded a charge of $755,000, which represented the net book value of the property as of the donation date.
Legal Matters
The Company is subject to various legal and administrative proceedings relating to personal injuries, employee
actions and employment matters, commercial transactions and other matters arising in the normal course of business.
In addition, the Company maintains what it believes is adequate insurance coverage to further mitigate the risks of
such proceedings. However, such proceedings can be costly, time consuming and unpredictable and, therefore, no
assurance can be given that the final outcome of such proceedings may not materially impact its consolidated
financial position, results of operations or cash flows. Further, no assurance can be given that the amount or scope of
existing insurance coverage will be sufficient to cover expenses arising from such matters. The Company does not
believe that the final outcome of these matters will have a material adverse effect on its consolidated financial
position, results of operations or cash flows.
11. Related Parties
Prior to the consummation of the Merger Resorts was party to a management agreement (the “Eldorado
Management Agreement”) with REI and HCM, pursuant to which REI and HCM (collectively, the “Managers”)
agreed to (a) develop strategic plans for Resorts’ business, including preparing annual budgets and capital
expenditure plans, (b) provide advice and oversight with respect to financial matters of Resorts, (c) establish and
oversee the operation of financial accounting systems and controls and regularly review Resorts’ financial reports,
(d) provide planning, design and architectural services to Resorts and (e) furnish advice and recommendations with
respect to certain other aspects of Resorts’ operations. In consideration for such services, Resorts agreed to pay the
Managers a management fee not to exceed 1.5% of Resorts’ annual net revenues, not to exceed $600,000 per year.
The current term of the Eldorado Management Agreement continues in effect until July 1, 2017, and the term will
continue to be automatically extended for additional three-year periods until it is terminated by one of the parties.
During each of the years 2014, 2013 and 2012, the Company paid management fees to REI and HCM in the
aggregate amount of $0.5 million, $0.6 million, and $0.6 million, respectively. REI is beneficially owned by
members of the Carano family and HCM is beneficially owned by members of the Poncia family. The Carano
family and Poncia family hold significant ownership interests in ERI. Management fees were not paid subsequent to
the consummation of the Merger. Subsequent to the consummation of the Merger, amounts totaling $0.2 million
were paid to Donald L. Carano and Raymond J. Poncia, who have a significant ownership interest in REI and HCM,
respectively, in lieu of the management fees and are included in general and administrative expenses.
As of December 31, 2014 and 2013, the Company’s receivables from related parties amounted to $0.5 million
$0.4 million, respectively. As of December 31, 2014 and 2013, the Company’s payables to related parties amounted
to $0.4 million and $0.2 million, respectively.
MTR Gaming reimbursed the Company $1.5 million in December 2014 for allocated corporate general and
administrative costs incurred subsequent to the consummation of the Merger through December 31, 2014.
Subsequent to the Merger, the MTR Gaming properties began purchasing Eldorado Reno homemade pasta and
other products for use in their restaurants. During the year ended December 31, 2014, MTR Gaming paid Eldorado
Reno $29,000 for these products. Additionally, several Eldorado Reno restaurant chefs traveled to the MTR
Gaming properties to provide services. Payroll and costs associated with these services were charged to the MTR
Gaming properties and totaled $78,000 during the period from the Merger Date through December 31, 2014.
Additional reimbursements, in the ordinary course of business, were also charged between Eldorado Reno and MTR
Gaming as a result of the Merger.
The Company owns the entire parcel on which Eldorado Reno is located, except for approximately 30,000
square feet which is leased from C. S. & Y. Associates, a general partnership of which Carano is a general partner
(the “CSY Lease”). The CSY Lease expires on June 30, 2027. Annual rent is equal to the greater of (1) $400,000 or
(2) an amount based on a decreasing percentage of the Eldorado's gross gaming revenues ranging from 3% of the
first $6.5 million of gross gaming revenues to 0.1% of gross gaming revenues in excess of $75 million. Rent
pursuant to the CSY Lease amounted to approximately $0.6 million in each of the years ended December 31, 2014,
57
2013 and 2012. On May 30, 2011, the Company and C. S. & Y Associates entered into a fourth amendment to the
CSY Lease. C. S & Y Associates agreed to execute and deliver the deeds of trust encumbering the approximately
30,000 square feet leased from C. S. & Y Associates on which a portion of Eldorado Reno is located as security for
the Senior Secured Notes and the Secured Credit Facility. In exchange for this subordination, a fee of $0.1 million
will be paid annually during the term of the Indenture. In each of the years 2014, 2013 and 2012, the Company paid
$0.1 million to C. S. & Y Associates for this subordination.
The Company from time to time leases an aircraft owned by REI, which indirectly owns 47% of Resorts, for
use in operating the Company’s business. In 2014, 2013 and 2012, lease payments for the aircraft totaled $0.6
million, $0.8 million and $0.8 million, respectively.
The Company from time to time leases a yacht owned by Sierra Adventure Equipment, Inc., a limited liability
company beneficially owned by REI, for use in operating the Company’s business. In 2014, 2013 and 2012, lease
payments for the yacht totaled approximately $2,500, $13,000 and $8,000, respectively.
The Company occasionally purchases wine directly from the Ferrari Carano Winery, which is owned by REI
and Carano. Wine purchases are sent directly to customers in appreciation of their patronage. In 2014, 2013 and
2012, the Company spent approximately $35,000, $1,000 and $23,000, respectively, for these products.
Resorts owns the skywalk that connects the Silver Legacy with Eldorado Reno. The charges from the service
provider for the utilities associated with this skywalk are billed to the Silver Legacy together with the charges for the
utilities associated with the Silver Legacy. Such charges are paid to the service provider by Silver Legacy, and the
Silver Legacy is reimbursed by Eldorado Reno for the portion of the charges allocable to the utilities provided to the
skywalk. The charges for the utilities provided to the skywalk during each year ended December 31, 2014, 2013 and
2012 totaled $0.1 million.
In October 2005, the Silver Legacy began providing on-site laundry services for Eldorado Reno related to the
cleaning of certain types of linens. Although there is no agreement obligating Eldorado Reno to utilize this service,
it is anticipated that the Silver Legacy will continue to provide these laundry services in the future. The Silver
Legacy charges Eldorado Reno for labor and laundry supplies on a per unit basis which totaled $0.2 million, $0.1
million and $0.1 million, respectively, during the years ended December 31, 2014, 2013 and 2012.
Since 1998, the Silver Legacy has purchased from Eldorado Reno homemade pasta and other products for use
in the restaurants at Silver Legacy and it is anticipated that Silver Legacy will continue to make similar purchases in
the future. For purchases of these products during each year ended December 31, 2014, 2013 and 2012, which are
billed to Silver Legacy at cost plus associated labor, the Silver Legacy paid Eldorado Reno $0.1 million.
In April 2008, the Silver Legacy and Eldorado Reno began combining certain back-of-the-house and
administrative departmental operations, including purchasing, advertising, information systems, surveillance, retail
and engineering, of Eldorado Reno and Silver Legacy in an effort to achieve payroll cost savings synergies at both
properties. Payroll costs associated with the combined operations are shared equally and are billed at cost plus an
estimated allocation for related benefits and taxes. During 2014, 2013 and 2012, the Silver Legacy reimbursed
Eldorado Reno $0.5 million, $0.6 million and $0.7 million, respectively, for Silver Legacy’s allocable portion of the
shared administrative services costs associated with the operations performed at Eldorado Reno and Eldorado Reno
reimbursed the Silver Legacy $0.3 million in each year for Eldorado Reno’s allocable portion of the shared
administrative services costs associated with the operations performed at Silver Legacy.
13. Segment Information
The following table sets forth, for the period indicated, certain operating data for our reportable segments.
Management reviews our operations by our geographic gaming market segments: Eldorado Reno and Eldorado
Shreveport.
2014
2013
2012
(in thousands)
Eldorado Reno and Corporate
Net operating revenues (a)
$ 105,945
58
$ 109,691
$ 109,090
Expenses, excluding depreciation and corporate expenses (b)
Corporate expenses (b)
(Loss) gain on sale or disposal of property
Equity in income (losses) of unconsolidated affiliates
Acquisition charges
Depreciation
(95,592)
(1,609)
—
2,705
(6,348)
(7,951)
(96,685)
(96,485)
(14)
3,355
(3,173)
(8,318)
4
(8,952)
—
(9,215)
Operating (loss) income – Eldorado Reno including corporate
$
Eldorado Shreveport
Expenses, excluding depreciation, amortization (a)
$ 133,960
(112,068)
(84)
(8,403)
$ 140,495
(113,844)
(212)
(8,713)
$ 148,650
(118,613)
(202)
(8,436)
Operating income – Eldorado Shreveport
$
$
$ 21,399
Total Reportable Segments
Net operating revenues (a)
Expenses, excluding depreciation, amortization (a)
Equity in income (losses) of unconsolidated affiliates
Acquisition charges
$ 239,905
(209,269)
(84)
2,705
(6,348)
(16,354)
$ 250,186
(210,529)
(226)
3,355
(3,173)
(17,031)
$ 257,740
(215,098)
(198)
(8,952)
—
(17,651)
Operating income – Total Reportable Segments
$ 10,555
$
22,582
$ 15,841
$ 10,555
$
22,582
$ 15,841
Reconciliations to Consolidated Net Income:
Operating Income — Total Reportable Segments
Unallocated income and expenses:
Interest income
Interest expense
Loss on early retirement of debt
Non-controlling interest
Gain on termination of supplemental executive plan assets of
Loss on property donations
Net (loss) income attributable to the Company
a)
b)
(2,850)
$
13,405
15
(15,441)
—
—
(103)
$
4,856
17,726
$ (5,558)
16
(15,681)
11,980
—
—
715
—
(1,054)
—
—
—
(5,313)
$ 18,897
14
(16,069)
—
(22)
—
—
(755)
—
$
(991)
Before the elimination of $2.3 million, $3.0 million and $3.0 million of management and incentive fees to Eldorado Reno and
expense to Eldorado Shreveport for 2014, 2013 and 2012, respectively.
Corporate expenses incurred and allocated to Eldorado Reno subsequent to the Merger Date totaled $1.6 million. This amount is
net of the management fee reimbursement from MTR Gaming of $1.5 million.
2014
2013
2012
(in thousands)
Capital Expenditures
Eldorado Reno
Eldorado Shreveport
Total
$ 3,475
3,273
$ 6,748
$ 3,520
3,893
$ 7,413
$ 3,177
6,004
$ 9,181
As of December 31,
2014
59
2013
(in thousands)
Total Assets
Eldorado Reno
Eldorado Shreveport
Eliminating entries (a)
Total
$ 236,330
143,928
(121,637)
$ 258,621
(a) Reflects the following eliminations for the periods indicated:
Proceeds from Senior Secured Notes loaned to Eldorado Shreveport
Accrued interest on the above intercompany loan
Intercompany receivables/payables
Net investment in and advances to Eldorado Shreveport
60
$
116,308
418
113
4,798
$ 121,637
$
252,066
150,766
(132,650)
$ 270,182
$ 118,038
418
91
14,103
$ 132,650

eldorado resorts llc annual report

Transcription

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