Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 13, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Nevada Property 1 LLC | |
Entity Central Index Key | 1,485,589 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Class A Membership Interests | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 100 | |
Class B Membership Interests | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 100 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash on hand | $ 19,351 | $ 21,138 |
Cash in bank | 101,323 | 32,627 |
Total cash and cash equivalents | 120,674 | 53,765 |
Restricted cash | 4,752 | 877 |
Designated cash | 0 | 31,649 |
Accounts receivable, net | 69,661 | 51,806 |
Inventories | 14,511 | 15,054 |
Prepaid expenses and other assets | 19,871 | 23,186 |
Total current assets | 229,469 | 176,337 |
Property and equipment, net | 1,402,967 | 1,432,298 |
Goodwill | 31,963 | 25,549 |
Intangible assets, net | 182,340 | 214,828 |
Other assets | 15,051 | 34,378 |
Total assets | 1,861,790 | 1,883,390 |
Current Liabilities: | ||
Accounts payable | 10,341 | 7,740 |
Interest payable | 1,169 | 0 |
Accrued and other liabilities | 98,235 | 102,210 |
Total current liabilities | 109,745 | 109,950 |
Debt obligations | 867,077 | 862,617 |
Other liabilities | 6,565 | 4,567 |
Total liabilities | $ 983,387 | $ 977,134 |
Commitments and contingencies | ||
Members' equity | $ 878,403 | $ 906,256 |
Total liabilities and members' equity | $ 1,861,790 | $ 1,883,390 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Casino | $ 55,804 | $ 176,393 | ||
Hotel | 76,630 | 237,508 | ||
Food and beverage | 78,199 | 245,712 | ||
Entertainment, retail and other | 8,191 | 24,331 | ||
Gross revenues | 218,824 | 683,944 | ||
Less -- promotional allowances | (38,982) | (114,687) | ||
Net revenues | 179,842 | 569,257 | ||
Operating expenses: | ||||
Casino | 38,521 | 115,847 | ||
Hotel | 8,884 | 26,203 | ||
Food and beverage | 47,740 | 146,689 | ||
Entertainment, retail and other | 6,828 | 20,035 | ||
Sales and marketing | 8,329 | 35,037 | ||
General and administrative | 28,899 | 84,011 | ||
Corporate | 2,222 | 22,516 | ||
Pre-opening | 34 | 34 | ||
(Gain)/loss on disposal of assets | (101) | (101) | ||
Asset impairment | 0 | 0 | ||
Insurance recoveries, net of deductible charges | (2,321) | $ 0 | (2,321) | $ 0 |
Depreciation and amortization | 27,970 | 82,965 | ||
Total operating expenses | 167,005 | 530,915 | ||
Operating income/(loss) | 12,837 | 38,342 | ||
Other income/(expense): | ||||
Net settlements and default income | 0 | 0 | ||
Interest and other income | 8 | 26 | ||
Interest expense, net of amount capitalized | (8,109) | (23,644) | ||
Total other expense | (8,101) | (23,618) | ||
Income/(loss) before income taxes | 4,736 | 14,724 | ||
Income tax benefit/(expense) | 0 | (10) | ||
Net income/(loss) | $ 4,736 | $ 14,714 | ||
Predecessor | ||||
Revenues: | ||||
Casino | 55,567 | 156,067 | ||
Hotel | 80,346 | 236,886 | ||
Food and beverage | 83,480 | 264,159 | ||
Entertainment, retail and other | 12,200 | 30,784 | ||
Gross revenues | 231,593 | 687,896 | ||
Less -- promotional allowances | (42,630) | (115,957) | ||
Net revenues | 188,963 | 571,939 | ||
Operating expenses: | ||||
Casino | 34,145 | 96,644 | ||
Hotel | 8,602 | 27,151 | ||
Food and beverage | 54,599 | 174,102 | ||
Entertainment, retail and other | 11,424 | 29,826 | ||
Sales and marketing | 12,620 | 50,102 | ||
General and administrative | 27,620 | 79,278 | ||
Corporate | 12,787 | 24,563 | ||
Pre-opening | 0 | 0 | ||
(Gain)/loss on disposal of assets | 2 | 117 | ||
Asset impairment | 0 | 1,506 | ||
Depreciation and amortization | 41,674 | 125,616 | ||
Total operating expenses | 203,473 | 608,905 | ||
Operating income/(loss) | (14,510) | (36,966) | ||
Other income/(expense): | ||||
Net settlements and default income | 0 | 245 | ||
Interest and other income | 8 | 38 | ||
Interest expense, net of amount capitalized | (9,187) | (28,251) | ||
Total other expense | (9,179) | (27,968) | ||
Income/(loss) before income taxes | (23,689) | (64,934) | ||
Income tax benefit/(expense) | 8,340 | 23,305 | ||
Net income/(loss) | $ (15,349) | $ (41,629) |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income/(loss) | $ 14,714 | |
Deferred income taxes | 0 | |
Depreciation and amortization | 82,965 | |
Amortization of debt discount and deferred financing costs | 4,460 | |
Change in value on Interest rate cap | (200) | |
Asset impairment | 0 | |
(Gain)/loss on disposal of assets | (101) | |
Gain on assets destroyed in fire | (2,571) | |
Bad debt provision | 13,924 | |
Changes in operating assets and liabilities: | ||
Restricted cash | (3,876) | |
Designated cash | 31,649 | |
Accounts receivable, net | (31,779) | |
Due from affiliate | 0 | |
Inventories | 544 | |
Prepaid expenses and other assets | 25,067 | |
Accounts payable | 2,602 | |
Accrued and other liabilities | (4,138) | |
Interest payable | 1,169 | |
Net cash provided by operating activities | 134,429 | |
Cash flows from investing activities: | ||
Net cash paid for acquisition | (6,414) | |
Ordinary capital expenditures | (12,794) | |
Capital expenditures for major construction projects | (6,885) | |
Proceeds from sale of property and equipment | 288 | |
Insurance proceeds related to damaged property and equipment | 2,921 | |
Net cash used in investing activities | (22,884) | |
Cash flows from financing activities: | ||
Borrowings under loan payable to affiliate | 0 | |
Principal payments under loan payable to affiliate | 0 | |
Contributions from Members | 6,414 | |
Distributions to Members | (51,050) | |
Net cash used in financing activities | (44,636) | |
Net increase in cash and cash equivalents | 66,909 | |
Cash and cash equivalents at beginning of period | 53,765 | |
Cash and cash equivalents at end of period | 120,674 | |
Supplemental disclosure of cash flow information | ||
Cash paid for interest due to affiliate, net of interest capitalized | 0 | |
Cash paid for interest due on term loan | 17,827 | |
Non-cash transactions: | ||
Change in accrued additions to construction in progress | $ (2,005) | |
Predecessor | ||
Cash flows from operating activities: | ||
Net income/(loss) | $ (41,629) | |
Deferred income taxes | (23,318) | |
Depreciation and amortization | 125,616 | |
Amortization of debt discount and deferred financing costs | 0 | |
Change in value on Interest rate cap | 0 | |
Asset impairment | 1,506 | |
(Gain)/loss on disposal of assets | 117 | |
Gain on assets destroyed in fire | 0 | |
Bad debt provision | 7,606 | |
Changes in operating assets and liabilities: | ||
Restricted cash | 56 | |
Designated cash | 0 | |
Accounts receivable, net | (7,632) | |
Due from affiliate | 56,413 | |
Inventories | 1,223 | |
Prepaid expenses and other assets | 4,391 | |
Accounts payable | 3,341 | |
Accrued and other liabilities | 7,975 | |
Interest payable | (387) | |
Net cash provided by operating activities | 135,278 | |
Cash flows from investing activities: | ||
Net cash paid for acquisition | 0 | |
Ordinary capital expenditures | (14,676) | |
Capital expenditures for major construction projects | (17,908) | |
Proceeds from sale of property and equipment | 0 | |
Insurance proceeds related to damaged property and equipment | 0 | |
Net cash used in investing activities | (32,584) | |
Cash flows from financing activities: | ||
Borrowings under loan payable to affiliate | 9,777 | |
Principal payments under loan payable to affiliate | (81,600) | |
Contributions from Members | 0 | |
Distributions to Members | 0 | |
Net cash used in financing activities | (71,823) | |
Net increase in cash and cash equivalents | 30,871 | |
Cash and cash equivalents at beginning of period | 57,167 | |
Cash and cash equivalents at end of period | 88,038 | |
Supplemental disclosure of cash flow information | ||
Cash paid for interest due to affiliate, net of interest capitalized | 28,839 | |
Cash paid for interest due on term loan | 0 | |
Non-cash transactions: | ||
Change in accrued additions to construction in progress | $ (15,928) |
Organization and Description of
Organization and Description of the Business | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of the Business | Organization and Description of the Business Company Overview Nevada Property 1 LLC, a limited liability company organized in Delaware (“Nevada Property” and, together with its subsidiaries, the “Company,” “we,” “us” or “our”), operates The Cosmopolitan of Las Vegas (the “Property” or “The Cosmopolitan”) which commenced operations on December 15, 2010. On December 19, 2014, ownership of Nevada Property changed upon the sale of 100% of the Class B Membership Interests in Nevada Property (the “Class B Membership Interests”) to BRE Spade Mezz 1 LLC (“Spade Mezz”), an affiliate of Blackstone Real Estate Partners VII L.P. (“Blackstone” or “Parent”), as described more fully below under the heading “Sale or Transfer of Members’ Equity Interests and Corporate Structure.” Nevada Property’s wholly-owned subsidiaries are Nevada Restaurant Venture 1 LLC (“Nevada Restaurant”), which was formed on November 24, 2009 as a limited liability company in Delaware and Nevada Retail Venture 1 LLC (“Nevada Retail”), which was also formed on November 24, 2009 as a limited liability company in Delaware. Nevada Restaurant leases the Property’s restaurants and the nightclub from Nevada Property and has entered into management agreements with third-party restaurant operators and a nightclub operator to manage and operate their respective establishments at the Property. Nevada Retail leases the retail spaces at the Property from the Company and operates certain of the retail spaces within the Property. In addition, Nevada Retail has also entered into lease agreements with third-party retail operators to manage and operate their respective retail businesses at the Property. The Company’s operations, which includes hotel, casino, food and beverage, retail, spa and entertainment and other related operations, are conducted at the Property. Given the integrated nature of these operations, the Company is considered to have one operating segment. The principal executive offices of The Cosmopolitan of Las Vegas are located at 3708 Las Vegas Boulevard South, Las Vegas, Nevada 89109 and the telephone number is (702) 698-7000. The Cosmopolitan’s internet website is located at www.cosmopolitanlasvegas.com. The information on our website is not part of this Quarterly Report on Form 10-Q. Sale or Transfer of Members’ Equity Interests and Corporate Structure On December 18, 2014, BRE Spade Voteco LLC (“Spade Voteco”), received approval from the Nevada Gaming Commission (the “Gaming Commission”) to acquire control of the Company. In connection with such approval, and with the completion of the Class B Sale (as defined below), on December 19, 2014, Nevada Voteco LLC (“Nevada Voteco”) transferred 100% of the Class A Membership Interests in Nevada Property (the “Class A Membership Interests”) to Spade Voteco for nominal consideration (together with the Class B Sale, the “Sale”). On December 19, 2014, Nevada Mezz 1 LLC (“Nevada Mezz”), an affiliate of Deutsche Bank, completed its previously announced sale (the “Class B Sale”) of 100% of the Class B Membership Interests to Spade Mezz, an affiliate of Blackstone, for cash consideration of $1.73 billion plus Nevada Property’s working capital of $49.4 million as determined pursuant to the provisions of the purchase agreement. As a result of the Sale, Spade Voteco has 100% voting control over Nevada Property through its ownership of all of the Class A Membership Interests and Spade Mezz holds 100% economic control over Nevada Property through its ownership of all of the Class B Membership Interests. Except as provided by law, the Class B Membership Interests have no voting rights. In connection with the Sale, the Company completed the following transactions: • Nevada Property acquired all of the membership interests in TCOLV Propco LLC (“Propco”), an affiliate entity of Blackstone, through a contribution of such interests from Spade Mezz. • Nevada Property transferred its fee simple interest in the Property to Propco, its direct subsidiary at the time of such transfer and leased back such Property from Propco (exclusive of the gaming assets and intellectual property to which Nevada Property had retained title) pursuant to a Lease and Operating Agreement (the “Lease”), dated December 19, 2014. • Nevada Property distributed all of the membership interests in Propco to Spade Mezz. • Nevada Property, Propco, Spade Mezz and certain other affiliates of Blackstone entered into the financing arrangements and agreements described within the Quarterly Report on Form 10-Q at March 31, 2015 and our 2014 Annual Report on Form 10-K. Spade Voteco and Spade Mezz are collectively referred to as the “Members” within this Quarterly Report on Form 10-Q. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The Company’s condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The condensed consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which management believes are necessary to present fairly the financial position, results of operations, and cash flows of the Company for the respective periods presented. All intercompany transactions and balances have been eliminated in consolidation. The interim results reflected in these condensed consolidated financial statements are not necessarily indicative of results to be expected for the full fiscal year. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying condensed consolidated financial statements for Nevada Property 1 LLC include TCOLV Propco LLC (“Propco”), which is a variable interest entity for which the Company is the primary beneficiary, NP1 Hong Kong Limited, Nevada Property 1 LLC and Nevada Property 1 LLC’s wholly-owned subsidiaries, Nevada Restaurant and Nevada Retail. During July 2015, NP1 Hong Kong Limited, was created for the purpose of marketing and promoting the resort to the Asia market. There was no material activity for this entity during the three months ended September 30, 2015. The Company is an indirect wholly-owned subsidiary of Blackstone. In the normal course of business, the Company’s operations may include significant transactions conducted with Blackstone or affiliated entities of Blackstone. References in this Quarterly Report on Form 10-Q to “Successor” and “Successor Period” refer to the Company on or after December 19, 2014 and reflect assets and liabilities at fair value determined by allocating the Company’s enterprise value to its assets and liabilities pursuant to accounting guidance related to business combinations. References to “Predecessor” and “Predecessor Period” refer to the Company on or before December 18, 2014 and reflect the historical accounting basis in the Predecessor’s assets and liabilities. Variable Interest Entities A legal entity is referred to as a variable interest entity if, by design (1) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support from other parties, or (2) the entity has equity investors that cannot make significant decisions about the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity. Variable interest entities for which the Company is the primary beneficiary are consolidated. In accordance with the guidance for the consolidation of variable interest entities, the Company analyzes our variable interests to determine if an entity in which we have a variable interest is a variable interest entity and whether we must consolidate that variable interest entity. Our analysis includes both quantitative and qualitative reviews. As discussed in our Annual Report on Form 10-K, Propco leased the hotel and other related property, except for casino-related assets for which Nevada Property retains title (the “Leased Property”), to the Company pursuant to a Lease and Operating Agreement (the “Lease”). The Lease has an initial term expiring on December 31, 2021, subject to two automatic renewals for successive periods of five years each, subject to the Company’s election not to renew. Under the Lease, the Company is obligated to pay to Propco fixed annual rent (“Fixed Rent”) equal to $125 million per year, payable in arrears in equal monthly installments. Each year, during the term of the Lease, the Company is obligated to pay Propco, as percentage rent, an amount equal to the difference, if positive, between (x) 90% of Operating Income, as defined in the Lease, for such year and (y) the Fixed Rent payable with respect to such year. Under the Lease, all costs and expenses incurred in connection with capital expenditure and expenditures for furniture, fixtures and equipment for the Leased Property shall be paid by the Company from amounts funded by Propco to the Company for such purposes. The rent expense recorded for the three and nine months ended September 30, 2015 was $37.1 million and $128.3 million , respectively. These amounts are eliminated upon consolidation. The Company determined that Propco is a variable interest entity and the Company is the primary beneficiary; therefore, the Company has consolidated Propco in the Successor Period. Pushdown Accounting As previously noted, the Company is an indirect wholly-owned subsidiary of Blackstone. As a result of the Sale, the Company elected to apply pushdown accounting to reflect Spade Mezz’s basis of accounting for the acquired assets and assumed liabilities of the Company. As discussed in Note 13, the Company is not a borrower under the two mezzanine loan agreements (the “Mezzanine Loans”) entered into by affiliates of Blackstone with JPMorgan for a total aggregate principal amount of $425 million . However, the amounts payable under such loans are, in each case, secured by a first lien on the direct and indirect equity of Propco and are expected to also include a pledge of the Class B Membership Interests and a call right of the Class A Membership Interests. Further, the Company is required to pay interest on the Mezzanine Loans; however, the Company is not a borrower, nor is the Company jointly and severally liable for the Mezzanine Loans; therefore, in accordance with ASU No. 2014-17, Business Combination (Topic 805): Pushdown Accounting, the Mezzanine Loans are not included as a liability on the condensed consolidated balance sheet of the Company as of September 30, 2015 . Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Although management believes these estimates are based upon reasonable assumptions within the bounds of its knowledge of the Company’s business and operations, actual results could differ materially from those estimates. In the third quarter of 2015, the Company changed its compensated absences policy for certain management employees which impacted the amount estimated for payroll related costs. The effect of this change in estimate was a $1.2 million increase in both operating income and net income for the three and nine months ended September 30, 2015. Cash and Cash Equivalents Cash in banks and deposits with financial institutions that can be liquidated without prior notice or penalty are classified by the Company as cash and cash equivalents. The Company generally considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Pursuant to the terms of the Mortgage Loan agreement, dated December 19, 2014, among Propco, Nevada Property and certain subsidiaries of Nevada Property (collectively, the “Mortgage Borrowers”) and JPMorgan Chase Bank, National Association (“JPMorgan”), pursuant to which the Mortgage Borrowers borrowed $875 million (the “Mortgage Loan”) in connection with the Sale and as discussed in Note 11, the Company is required to establish and maintain certain specified cash accounts through the term of the Mortgage Loan. The amounts funded, and to be funded, to these cash accounts are subject to terms included in the Mortgage Loan and are to be released to us subject to certain conditions specified therein being met. To the extent that an event of default were to occur as determined by the terms of such agreements, there are additional requirements and restrictions placed on the cash accounts. These accounts are held with an independent third party agent (and assuming no event of default has occurred), include: (i) a “lockbox account” which houses certain rents and other revenues from the Property and its operations, with the exception of income from casino or gaming operations; (ii) a “concentration account” which houses certain rents and other revenues from the Property and its operations and which houses all of the amounts transferred from the lockbox account and casino account; and (iii) “casino accounts” which hold all of the income derived from casino operations, less casino operating expenses and any amounts required under gaming liquidity requirements to be maintained on-site at the Property in compliance with gaming regulations. Transfers from the lockbox account are required to be made not less than once every business day throughout the term of the loans. Transfers from the casino account are required to be made not less than two times per week throughout the term of the loans. For the purpose of the operation of the Company, the cash accounts in (i) and (ii) mentioned above have been combined. A separate credit card depository account has also been established as part of the cash account requirements of the Mortgage Loan. Amounts held in the aforementioned accounts may be invested in securities permitted by the loan documents. The Mortgage Loan lender has a first priority security interest in these accounts subject to certain stipulations related to gaming laws for casino related accounts. Cash and cash equivalents are held in checking, savings, and liquid investment accounts at various financial institutions. The combined account balance at any given institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Management believes, based on the quality of the financial institutions, that the risk is not significant. Restricted Cash Restricted cash consists of tokes (tips) earned by our CoStars in the Company’s slot and table games departments, cash account funded by our partners to be used for certain capital expenditures and replacement reserve used for capital expenditures required per the Mortgage Loan agreement. Designated Cash As of December 31, 2014, the Company established a designated cash account which consists primarily of the net working capital as a result of the Sale and amounts funded by the Predecessor to fund payments for certain executives under the various executive incentive award plans. The plans included the Management Exit Award Plan (the “Exit Award Plan”), Management Incentive Plan and Retention Bonus Plan all related to the Sale. Refer to Note 8 for further detail. Accounts Receivable and Credit Risk Accounts receivable, net including casino and hotel receivables, are typically non-interest bearing and are initially recorded at cost. The Company issues credit in the form of “markers” to approved casino customers following investigations of creditworthiness. Accounts are written off when management deems them 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 a percentage of credit drop, a specific review of customer accounts as well as management’s experience with collection trends in the gaming and hospitality industry and current economic and business conditions. Inventories Inventories consist of retail merchandise, food and beverage items which are stated at the lower of cost or market value. Cost is determined by the weighted average identification method. Derivative Financial Instruments The Company has managed its market risk, including interest rate risk associated with variable rate borrowings, with the use of a derivative financial instrument (interest rate cap agreement). The fair value of the derivative financial instrument is recognized as an asset or liability at each balance sheet date, with changes in fair value affecting net loss. The Company’s interest rate cap did not qualify for hedge accounting. Accordingly, changes in the fair value of the interest rate cap are presented as an increase (decrease) in interest expense in the accompanying condensed consolidated statements of operations. Fair Value of Financial Instruments The Company applies the provisions of FASB Topic 820, “Fair Value Measurements” (Topic 820), to its financial assets and liabilities. Fair value is defined as a market-based measurement intended to estimate the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Topic 820 also established a fair value hierarchy, which requires an entity to maximize the use of observable inputs when measuring fair value. These inputs are categorized as follows: • Level 1 — quoted prices in an active market for identical assets or liabilities; • Level 2 — quoted prices in an active market for similar assets or liabilities, inputs other than quoted prices that are observable for similar assets or liabilities, inputs derived principally from or corroborated by observable market data by correlation or other means; and • Level 3 — valuation methodology with unobservable inputs that are significant to the fair value measurement. The carrying values of the Company’s cash and cash equivalents, restricted cash, designated cash, receivables and accounts payable approximate fair value because of the short term maturities of these instruments. The carrying value of the Company’s debt at September 30, 2015 , is consistent with fair value due to the variable interest rates in place. Debt Financing Costs Direct and incremental costs incurred in obtaining loans or in connection with the issuance of long-term debt are amortized using the effective interest method over the terms of the related debt agreements. For the three and nine months ended September 30, 2015 , $1.4 million and $4.7 million , respectively, of debt financing costs and debt discounts were amortized to interest expense. Unamortized debt financing costs of $7.9 million were presented as a direct deduction to the debt obligation at September 30, 2015 . The deferred financing costs previously reported in other assets at December 31, 2014 of $2.1 million were reclassified to a direct deduction to the debt. See below for discussion regarding adoption of Accounting Standard Update 2015-3, Simplifying the Presentation of Debt Issuance Costs. Property and Equipment, Net Property and equipment are stated at the lower of cost or fair value. As part of the purchase accounting in connection with the Sale of the Company, the estimated useful lives of property and equipment were evaluated based on their remaining economic life resulting in modified estimated useful lives. Depreciation is provided over the estimated useful lives of the assets using the straight-line method as follows: Building and improvements 29 years Land improvements 11 years Furniture, fixtures and equipment 4 to 6 years Leasehold improvements are generally amortized on a straight-line basis over the shorter of the estimated useful life of the assets or the lease term. The remaining estimated useful lives of assets are periodically reviewed and adjusted as necessary. Costs related to improvements are capitalized, while costs of repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in operations. Goodwill and Intangibles We have $214.3 million in goodwill and intangible assets in our condensed consolidated balance sheet at September 30, 2015 , resulting from the Sale as discussed in Note 3. Intangible assets determined to have a finite life are amortized on a straight-line basis over the determined useful life of the asset as follows: • Trade name — 30 years • Customer distribution arrangement — 16 years, based on the remaining term of the agreement • Backlog — 2 years • Customer relationships — 3 years • Property easement — 5 years, based on the remaining life of the easement right The Company is required to perform an annual goodwill impairment review, and depending upon the results of that measurement, the recorded goodwill may be written down and charged to income from operations when its carrying amount exceeds its estimated fair value. Goodwill is reviewed for impairment annually on the first day of the Company’s fourth fiscal quarter (October 1) or more frequently whenever events or changes in circumstances indicate that the carrying value may not be recoverable, such as a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition or a loss of key personnel. Reclassifications For the period ended December 31, 2014, we reclassified certain balance sheet accounts on the condensed consolidated balance sheets to conform all periods to the adoption of Accounting Standard Update No. 2015-3. See below for further discussion. In addition, for comparability, certain prior year amounts have been reclassified to conform with the current period presentation. Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-9, (Topic 606): Revenue from Contracts with Customers (“ASU No. 2014-9”). ASU No. 2014-9 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of certain nonfinancial assets. ASU No. 2014-9 is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. Management is currently assessing the impact of the adoption of this accounting pronouncement on the Company’s condensed consolidated financial statements in future periods. In August 2014, the FASB issued ASU No. 2014-15, (Subtopic 205-40): Presentation of Financial Statements — Going Concern — Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU No. 2014-15”). ASU No. 2014-15 requires management to provide an interim and annual assessment concerning an entity’s ability to continue as a going concern and also requires disclosures under certain circumstances. ASU No. 2014-15 is effective for fiscal years beginning after December 15, 2016 and for annual periods and interim periods thereafter. Early application is permitted. It is management’s intent to adopt this accounting pronouncement upon the effective date. In April 2015, the FASB issued ASU No. 2015-3, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30) (“ASU No. 2015-3”), which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU No. 2015-3 is effective for fiscal years beginning after December 15, 2015 and for annual periods and interim periods thereafter. Early application is permitted. The Company adopted ASU No. 2015-3 during the three months ended March 31, 2015. Adoption of ASU No. 2015-3 was applied retrospectively and the December 31, 2014 balances for other assets and debt obligations were adjusted by $2.1 million . At September 30, 2015 , the unamortized debt financing cost included as an offset to debt obligations was $7.9 million . No other new accounting pronouncements issued or effective during this period had or are expected to have a material impact on the Company’s financial position or results of operations. A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of any such proposed or revised standards would have on our condensed consolidated financial statements. |
Purchase Accounting in Connecti
Purchase Accounting in Connection with the Sale of the Company | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Purchase Accounting in Connection with the Sale of the Company | Purchase Accounting in Connection with the Sale of the Company As discussed in Note 1, Nevada Mezz, an affiliate of Deutsche Bank, completed its previously announced sale of the Company to Spade Mezz, an affiliate of Blackstone for cash consideration of $1.73 billion plus the Company’s working capital of $49.4 million as determined pursuant to the provisions of the purchase agreement. On April 21, 2015, Deutsche Bank and Blackstone reached final agreement on the $49.4 million working capital amount and final payment was made to Deutsche Bank on April 27, 2015. The Sale was accounted for in accordance with ASC 805, Business Combination. The Company elected to apply pushdown accounting. In March 2015, Nevada Mezz and Spade Mezz entered into the Second Amendment to the Purchase Agreement (the “Second Amendment”) to amend the agreement to account for the release of $12.3 million to the Company from the owner controlled insurance program as further discussed in Note 9. The Second Amendment specifies that Nevada Mezz would receive a credit in the excess net working capital amount equal to $6.4 million , representing 50% of the released amount plus broker fees. As a result, the net working capital previously estimated at $43.0 million increased to $49.4 million , increasing the aggregate purchase price from $1.77 billion to $1.78 billion . The estimated fair market values of the tangible and intangible assets acquired and liabilities assumed did not change from those recorded at December 19, 2014. The additional excess of the purchase price of $6.4 million was recorded as goodwill at March 31, 2015. The following table reflects the allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill (in thousands). Current and other assets $ 174,703 Property and equipment, net 1,433,898 Goodwill 31,963 Intangible assets, net 216,344 Other non-current assets 34,223 Total assets 1,891,131 Current liabilities (107,152 ) Other long-term liabilities (4,483 ) Total liabilities (111,635 ) Total equity purchase price $ 1,779,496 The following table presents the unaudited pro forma results as if the Sale had occurred at January 1, 2014 (in thousands). Three Months Ended Net revenues $ 188,963 Operating expenses 189,769 Operating loss (806 ) Other expense (8,101 ) Loss before income taxes (8,907 ) Income tax expense — Net loss $ (8,907 ) Nine Months Ended Net revenues $ 571,939 Operating expenses 566,254 Operating income 5,685 Other expense (23,361 ) Loss before income taxes (17,676 ) Income tax expense (10 ) Net loss $ (17,686 ) |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net consists of the following: Successor (In thousands) September 30, December 31, Casino $ 55,270 $ 26,244 Hotel 17,647 16,393 Other 9,973 9,169 82,890 51,806 Less: allowance for doubtful accounts (13,229 ) — $ 69,661 $ 51,806 Accounts receivable, including casino and hotel receivables, are typically non-interest bearing. The Company issues credit to approved casino customers following evaluation of creditworthiness. The allowance is estimated based on a percentage of credit drop, a specific review of customer accounts as well as management’s experience with collection trends in the gaming and hospitality industry and current economic and business conditions. As part of the adoption of purchase accounting related to the Sale of the Company (refer to Note 3), the accounts receivable at December 31, 2014, were recorded at their fair value. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: Successor (In thousands) September 30, December 31, Prepaid expenses $ 12,675 $ 15,754 Other assets 7,196 7,432 $ 19,871 $ 23,186 Prepaid expenses consist primarily of expenses relating to insurance, gaming taxes, marketing, operations, property maintenance and other taxes. Other assets consist primarily of imprest funds relating to our partner restaurants and security deposits. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net are stated at the lower of cost or fair value and consist of the following: Successor (In thousands) September 30, December 31, Land and land improvements $ 107,382 $ 107,352 Buildings and improvements 1,208,695 1,206,191 Furniture, fixtures and equipment 115,476 108,734 Construction in progress 24,140 12,337 Less: accumulated depreciation (52,726 ) (2,316 ) $ 1,402,967 $ 1,432,298 Depreciation expense of $17.1 million was incurred during the three months ended September 30, 2015 for the Successor period and $41.3 million for the three months ended September 30, 2014 for the Predecessor period. Depreciation expense of $50.5 million was incurred during the nine months ended September 30, 2015 for the Successor period and $124.4 million for the nine months ended September 30, 2014 for the Predecessor period. The interest cost associated with major development and construction projects is capitalized and included in the cost of the project. Interest capitalization ceases once a project is substantially complete or no longer undergoing construction activities to prepare it for its intended use. There was no interest expense capitalized for the three months ended September 30, 2015 for the Successor period and interest of $0.3 million was capitalized for the three months ended September 30, 2014 for the Predecessor period. A minimal amount of interest expense was capitalized for the nine months ended September 30, 2015 for the Successor period and interest of $0.3 million was capitalized for the nine months ended September 30, 2014 for the Predecessor period. On July 25, 2015, the Bamboo Pool was damaged by a fire and as result, the Company wrote-off $0.3 million of property and equipment that was damaged or destroyed. The Company filed an insurance claim with its insurance companies to recover the replacement value of these assets destroyed, additional expenses incurred and business interruption. During the three and nine months ended September 30, 2015, the Company received $2.9 million from the insurance claim representing an advance for the replacement value of the assets destroyed, resulting in a gain of $2.6 million . Additional proceeds from our insurance companies may be received in subsequent periods as we continue finalizing the submission of our claim. In addition, we may incur additional costs that may not be reimbursed by our insurance companies. |
Goodwill and Intangibles
Goodwill and Intangibles | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill consists of the following: Successor (In thousands) September 30, December 31, Goodwill $ 31,963 $ 25,549 Less: accumulated impairment — — $ 31,963 $ 25,549 Intangible assets, net consist of the following: Successor (In thousands) September 30, December 31, Trade name $ 100,000 $ 100,000 Customer distribution agreement 21,000 21,000 Backlog 48,000 48,000 Customer relationships 39,000 39,000 Property easement 8,344 8,344 Less: accumulated amortization (34,004 ) (1,516 ) $ 182,340 $ 214,828 Weighted-average life in years 18 17 Intangibles are amortized over the respective useful lives of the assets ranging from two to thirty years. Amortization expense related to intangibles was $10.8 million for the three months ended September 30, 2015 for the Successor period and $0.4 million for the three months ended September 30, 2014 for the Predecessor period and $32.5 million for the nine months ended September 30, 2015 for the Successor period and $1.3 million for the nine months ended September 30, 2014 for the Predecessor period. |
Restricted and Designated Cash
Restricted and Designated Cash | 9 Months Ended |
Sep. 30, 2015 | |
Cash and Cash Equivalents [Abstract] | |
Restricted and Designated Cash | Restricted and Designated Cash As of September 30, 2015 , the Company’s restricted cash account totaled $4.8 million , consisting of $0.7 million of tokes (tips) earned by our CoStars in the Company’s slot and table games departments, $0.6 million from the cash account funded by our partners to be used for certain capital expenditures and $3.5 million of replacement reserve used for capital expenditures as required by the Mortgage Loan agreement. At December 31, 2014, the restricted cash balance was comprised of $0.9 million , consisting of $0.4 million tokes and $0.5 million from the cash account funded by our partners to be used for certain capital expenditures . As of September 30, 2015 , the Company had no designated cash amounts. On July 1, 2015, the Company paid $4.9 million for incentive awards under the Exit Award Plan. On April 27, 2015, the Company paid $29.9 million of excess net working capital to Deutsche Bank out of the designated cash as a final payment related to the Sale of the Company. The payment was treated as a capital distribution to the Members. The designated cash balance at December 31, 2014 was comprised of $23.5 million of estimated excess net working capital and $8.2 million for incentive awards under the Exit Award Plan, Management Incentive Plan and Retention Bonus Plan. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets During the quarter ended March 31, 2015, the Company, Deutsche Bank and National Union Fire Insurance Company of Pittsburgh, PA (“Union Fire Insurance”) entered into a Closeout Agreement whereby the parties agreed to closeout all the general liability and workers compensation insurance policies established under the owner controlled insurance program (“OCIP”). As part of the Closeout Agreement, the parties agreed to a final single payment amount of $7.0 million paid to Union Fire Insurance which represents full and final settlement of all obligations arising from the closeout policies. In return, Union Fire Insurance waived and released the Company with respect to all future obligations and assumed 100% first loss position under and with respect to the closeout policies. The Closeout Agreement provided for the final distribution to the Company of the remaining funds in the cash collateral account of $12.3 million which the Company received in February and March 2015. As a result of the Closeout Agreement, the Company eliminated the reserve for workers' compensation claims and the balance in the OCIP fund and recognized a settlement expense of $3.6 million which is reflected in corporate expense in our condensed consolidated statements of operations for the nine months ended September 30, 2015 . At December 31, 2014, the reserve for workers' compensation claims was $1.5 million and the OCIP fund balance was $19.3 million . |
Accrued and Other Liabilities
Accrued and Other Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued and Other Liabilities | Accrued and Other Liabilities Accrued and other liabilities consist of the following: Successor (In thousands) September 30, December 31, Accrued accounts payable $ 7,220 $ 10,782 Accrued payroll costs 20,161 28,844 Deposits - patrons 5,744 7,272 Advance deposits 18,952 14,422 Chip liability 3,477 5,234 Taxes payable 11,127 6,473 Accrued legal fees 22,018 16,406 Other liabilities 9,536 12,777 $ 98,235 $ 102,210 |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations The components of our long-term debt are as follows: Successor (In thousands) September 30, December 31, Non-current long-term debt Mortgage Loan (term loan) (1) $ 875,000 $ 875,000 Less: unamortized discount and debt financing costs (7,923 ) (12,383 ) Long-term debt $ 867,077 $ 862,617 (1) Certain affiliates of Blackstone have provided a guaranty of certain customary non-recourse carve-out liabilities in connection with the Mortgage Loan. The Company chose early adoption of Accounting Standard Update No. 2015-3 as discussed in Note 2 and retrospectively applied the requirements by presenting deferred financing costs as a direct reduction of the underlying debt. Mortgage Loan Agreement The Company and Propco (collectively, the “Mortgage Borrowers”) entered into a Mortgage Loan agreement, dated December 19, 2014, with JPMorgan, pursuant to which the Mortgage Borrowers borrowed $875 million under a term loan. The proceeds of the Mortgage Loan were used to pay a portion of the purchase price payable in the Sale. The Mortgage Loan has an initial maturity date of January 9, 2017 and the Company has the unilateral right to three successive one -year extensions, subject to customary debt covenant compliance requirements. The Mortgage Loan has an initial interest rate equal to LIBOR plus 2.95% per annum. As of September 30, 2015 , LIBOR was 0.207% and the total rate was 3.00% . The Mortgage Loan is secured by a first lien on the Property and all of the other assets of the Company, including the Mortgage Interest Rate Cap as described in Note 12. Our total capital expenditures for the three months ended September 30, 2015 was less than the required capital expenditures per the Mortgage Loan. Under the terms of the Mortgage Loan, the difference between the required capital expenditure amount and the actual capital expenditures during the quarter should be deposited into a replacement reserve account. As of September 30, 2015, the balance in the replacement reserve account was $3.5 million. The funds are held by our Mortgage Loan Servicer, Wells Fargo. Our capital activity is expected to increase in future quarters and is expected to meet the required capital expenditures per the Mortgage Loan. At that time, the Company intends to request a partial or full distribution of these funds. On March 30, 2015, the Company executed the First Amendment to the Mortgage Loan agreement (“First Amendment”) with JPMorgan. The First Amendment reduced the weighted average interest rate to LIBOR plus 2.80% . Under the First Amendment, the revised interest rate spread was allocated among each Component listed below. In addition, for the purpose of computing interest payable from time to time, the principal amount of the loan and certain other computations, the principal balance of the loan shall be divided into Components A-1through A-6. The principal amounts of the Components are as follows: Component Principal Amount (In thousands) Interest Rate Spread A-1 $ 287,000 1.37 % A-2 78,000 1.92 % A-3 70,000 2.37 % A-4 222,200 3.42 % A-5 146,100 4.07 % A-6 71,700 5.37 % $ 875,000 Pursuant to the terms of the Mortgage Loan, the Company is required to establish and maintain certain specified cash accounts through the term of the Mortgage Loan. Refer to Note 2 for further detail. |
Interest Rate Cap Agreement
Interest Rate Cap Agreement | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Cap Agreement | Interest Rate Cap Agreement In connection with the Sale, Propco entered into an interest rate cap agreement in order to manage interest rate risk relating to its Mortgage Loan. The interest rate cap agreement is intended to hedge a portion of the underlying interest rate risk on borrowings under the Mortgage Loan. Under this interest rate cap agreement, the Company paid $0.4 million for a maximum interest rate of 3.74% on $875 million of borrowings under the Mortgage Loan in exchange for receipts on the same amount at a variable interest rate based on the applicable LIBOR at the time of payment. The Company measured the fair value of its interest rate cap on a recurring basis pursuant to accounting standards for fair value measurements. The Company categorizes this interest rate cap as Level 2, refer to Note 2 for the levels of fair value hierarchy. The fair value of the Company’s interest rate cap agreement was a minimal amount and $0.2 million at September 30, 2015 and December 31, 2014 , respectively and was included in other non-current assets in the accompanying condensed consolidated balance sheets. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company entered into an agreement with Spade Voteco to pay for all expenses relating to Spade Voteco and its members including costs incurred for the services of all advisors and consultants to the extent such costs are reasonable, documented and related to and for the benefit of the Company. For the Successor period, the Company paid $0.2 million and $0.4 million for the three and nine months ended September 30, 2015 for Spade Voteco. For the Predecessor period, the Company paid $0.2 million and $0.6 million for the three and nine months ended September 30, 2014 for expenses incurred by Nevada Voteco on behalf of the Company. Refer to Note 1 “Sale or Transfer of Members’ Equity Interests and Corporate Structure” for further detail. Mezzanine Loans In connection with the Sale, affiliates of Blackstone entered into the Mezzanine Loans with JPMorgan for a total aggregate principal amount of $425 million . The first mezzanine loan (the “Mezzanine A Loan”) was for a principal amount of $295 million , with an interest rate of LIBOR plus 6.5% per annum. The second mezzanine loan (the “Mezzanine B Loan”) was for a principal amount of $130 million , with an interest rate of LIBOR plus 8.75% per annum. The principal amount was borrowed and used, amongst other things, to pay a portion of the purchase price in the Sale. The Company is not a borrower under the Mezzanine Loans; however, the amounts payable under such loans are, in each case, secured by an equity interest in the Company (for the Mezzanine A Loan) and an equity interest in the entity residing directly above the Company (for the Mezzanine B Loan), among other ancillary rights afforded to equity owners. The Mezzanine Loans are also secured by a lien on the assets held in the segregated cash accounts held with JPMorgan. Further, the Company is required to pay interest on the Mezzanine Loans. The Company is not a named borrower under the Mezzanine Loans and as noted in Note 2, the Mezzanine Loans are not included as a liability on the condensed consolidated balance sheet of the Company as of September 30, 2015 . The payments we make for interest on these loans are considered equity distributions to our Members. For the three months ended September 30, 2015 , the total interest paid was $5.0 million and $3.0 million for the Mezzanine A Loan and Mezzanine B Loan, respectively. For the nine months ended September 30, 2015 , the total interest paid was $13.3 million and $7.8 million for the Mezzanine A Loan and Mezzanine B Loan, respectively and is presented as a reduction to members' equity in the condensed consolidated balance sheet at September 30, 2015 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As a result of the Sale, the Company is organized as a limited liability company with one member that holds all of the Class B Membership Interests, which have all the economic interests in the Company, Spade Mezz, an affiliate of Blackstone, as described in Note 1, “Sale or Transfer of Members’ Equity Interests and Corporate Structure.” As a limited liability company, the Company is considered a flow-through entity for U.S. income tax purposes resulting in its owner being obligated for any U.S. federal income taxes resulting from its operations. Accordingly, such taxes are the responsibility of its Members and no provision has been made for U.S. Federal Income Taxes. There was no effective income tax rate for the three and nine months ended September 30, 2015 . The effective income tax rate for the three and nine months ended September 30, 2014 was ( 35.2% ) and ( 35.9% ), respectively. The Company's major tax jurisdiction is the United States and tax years 2011, 2012 and 2013 remain open to examination. Due to the September 2014 opening of a satellite office in Canada, the Company is now subject to income tax filing requirements in Canada for this tax year and forward. For the three and nine months ended September 30, 2015 and 2014, the Company paid a minimal amount of income tax related to the Canadian satellite office. During July 2015, NP1 Hong Kong Limited, was created for the purpose of marketing and promoting the resort to the Asia market. A check the box election was filed and approved by the IRS for NP1 Hong Kong Limited to be treated as a disregarded entity. As such, its operations will be included with that of NP1 for US Federal Income Tax purposes. Additionally, this entity will be subject to Hong Kong tax filing requirements. During the quarter ended June 30, 2013, the IRS notified the Company that its 2011 federal income tax return was selected for examination. As of September 30, 2015 , the IRS has not commenced an audit on the aforementioned tax year period nor have we received any additional correspondence regarding the matter. The Company believes that it has no uncertain tax positions; however, there is no assurance that the taxing authorities will not propose adjustments that are different than the Company’s expected outcome and impact the provision for income taxes. As applicable, we recognize accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes. For the three and nine months ended September 30, 2015 and 2014, there were no accrued penalties and/or interest. |
Commitments, Contingencies and
Commitments, Contingencies and Litigation | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Litigation | Commitments, Contingencies and Litigation Prior to the issuance of any of our quarterly or annual financial results and for the purposes of accrual and/or disclosure, we analyze each of our material legal proceedings and other contingencies to determine whether an estimate of a probable or reasonably possible loss or range of loss can be made based upon the facts and legal assessment of such matters. During such assessment, we consider all factors that may impact this assessment, including, without limitation, (a) the stage of the proceeding; (b) the damages, penalties and costs sought; (c) the factual matters that remain to be resolved; and (d) the legal principles that are the subject of the proceeding. It is often not possible to estimate the loss or a range of possible loss, particularly where (i) the damages sought are unsubstantiated or indeterminate; (ii) the discovery or other material legal proceedings are incomplete; (iii) the proceedings are in the early stages and there is insufficient information available to assess the viability of the stated grounds; (iv) the matters present legal uncertainties; or (v) there are significant facts in dispute. In such cases, there are considerable uncertainties regarding the resolution of the proceeding, which may preclude the determination of the reasonably possible loss or range or loss. Class Action Suits a. Wage and Hour During late 2012, the Company was put on notice and/or served with two separate purported class action lawsuits related to alleged unpaid compensation for time incurred by CoStars while on Property for donning and doffing of the CoStars’ required uniform, alleged improper rounding of time for hours worked and various other claims related to alleged unpaid compensation. One of the purported wage and hour class action lawsuits is pending in the Eighth Judicial District Court for Clark County, Nevada (“Nevada State Court”), and one is pending in the U.S. District Court for the District of Nevada. In early April 2015, the Company commenced arms-length settlement negotiations leading to an agreement in principle to resolve both the Nevada State Court and the U.S. District Court lawsuits. The proposed resolution includes an anticipated total net payment of approximately $7.0 million inclusive of the opposing counsel fees and all costs of administering the settlement. After such expenses are paid, the remaining amount will comprise a settlement fund. Of this amount the Company will pay out only that portion actually claimed by putative class members. The proposed settlement is subject to approval by the courts. The Company recorded the $7.0 million anticipated net settlement amount in the consolidated financial statements during the period ended March 31, 2015. As of September 30, 2015 , a settlement agreement is in place. A final approval hearing is set for December 4, 2015. b. Alleged unlawful taping/recording In September 2012, a purported class action lawsuit against the Company was filed in the Superior Court of the State of California, claiming violation of the California Penal Code regarding the alleged unlawful taping or recording of telephone calls to and from the Company. On August 31, 2012, the Company removed the case to the United States District Court for the Southern District of California. Subsequently, the Company filed a motion to dismiss, or in the alternative, to strike the class allegations. On July 15, 2013, the U.S. District Court issued an order denying these motions. The Company continues to deny all liability to the putative class members but, at a mediation held on February 20, 2015, the Company agreed to settle all of the claims against it in this matter for a total payment of $14.5 million recorded in the period ended December 31, 2014. The amount is inclusive of all attorneys’ fees to the putative class counsel and all costs of administering the settlement. The Company, the plaintiff and the putative class counsel have reached a settlement agreement and presented their settlement agreement for preliminary approval by the U.S. District Court. On August 24, 2015, the Court granted preliminary approval of the settlement and ordered the parties to provide notice to the class. Notice went out on September 23, 2015. Class members have until November 23, 2015 to submit claims, lodge objections or exclude themselves from the settlement. The Court has scheduled a final fairness hearing for January 4, 2016, at which time the Court is expected to determine whether the settlement is fair, reasonable and adequate and whether judgment should be entered. Commitments and Other Legal Proceedings a. Property General Contractor and other purchase obligations During 2015, the Company engaged various contractors for the build-out of our west tower rooms, high limit slots room, Clique a new partner venue and other capital projects. As of September 30, 2015 and September 30, 2014, the Company had total construction commitments of $16.6 million and $1.8 million , respectively. b. Morris Schneider Wittstadt On June 19, 2015, a lawsuit was filed against the Company in the United States District Court for the District of Nevada by Morris Schneider Wittstadt, LLC., a Georgia law firm. Among other facts, the lawsuit alleges that the firm’s managing partner used partnership funds to game at the Company’s casino. The suit asserts various related claims against the Company, including aiding and abetting a breach of fiduciary duty. In the opinion of management, this litigation is not expected to have a material adverse impact on the consolidated financial statements of the Company. The Company believes that it has meritorious defenses with respect to this matter and intends to defend its position vigorously. The Company has filed a motion to dismiss based on a lack of complete diversity, but expects that the litigation will be re-filed in state court. c. Other Matters The Company is also subject to various other ordinary and routine claims and litigation arising in the normal course of business. In the opinion of management, all pending other legal matters including the Condominium Hotel Litigation previously disclosed are either adequately covered by insurance or, if not insured, will not have a material adverse impact on the consolidated financial position, cash flows, or the results of operations of the Company. |
Membership Interests
Membership Interests | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Membership Interests | Membership Interests On December 18, 2014, Spade Voteco received approval from the Gaming Commission to acquire control of the Company. In connection with such approval and with the completion of the Class B Sale, on December 19, 2014, Nevada Voteco transferred 100% of the Class A Membership Interests in Nevada Property to Spade Voteco for nominal consideration. As a result of the Sale, Spade Voteco has 100% voting control over Nevada Property through its ownership of all of the Class A Membership Interests and Spade Mezz holds 100% economic control over Nevada Property through its ownership of all of the Class B Membership Interests. Except as provided by law, the Class B Membership Interests have no voting rights. |
Equity-based Compensation
Equity-based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-based Compensation | Equity-based Compensation On August 6, 2015, the managing member of BRE Spade Parent LLC (“BRE Spade Parent”), an affiliate of the Company's Parent, approved an equity-based compensation plan (the "Promote Plan"), approved grants of Class B units (the “Incentive Units”) in BRE Spade Parent to certain executives of the Company (each a "Promote Participant"), the Incentive Units are intended to constitute a “profits interest” for U.S. tax purposes. During the three months ended September 30, 2015, BRE Spade Parent and the Promote Participants executed Management Subscription Agreements ("Subscription Agreement"), pursuant to which the Promote Participants were granted Incentive Units. All of the Incentive Units granted are subject to a service condition and a performance condition (a Change of Control, as defined in the Subscription Agreement), and subject to a Promote Participant’s continued employment with the Company on such date. Distribution of cash to the Promote Participant for their vested Incentive Units will occur when a Change of Control event occurs, subject to certain distribution targets. Because the performance condition was not considered probable as of September 30, 2015, no compensation expense has been recognized for the fair value of the Incentive Units granted. |
Basis of Presentation and Sum22
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The Company’s condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The condensed consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which management believes are necessary to present fairly the financial position, results of operations, and cash flows of the Company for the respective periods presented. All intercompany transactions and balances have been eliminated in consolidation. The interim results reflected in these condensed consolidated financial statements are not necessarily indicative of results to be expected for the full fiscal year. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying condensed consolidated financial statements for Nevada Property 1 LLC include TCOLV Propco LLC (“Propco”), which is a variable interest entity for which the Company is the primary beneficiary, NP1 Hong Kong Limited, Nevada Property 1 LLC and Nevada Property 1 LLC’s wholly-owned subsidiaries, Nevada Restaurant and Nevada Retail. During July 2015, NP1 Hong Kong Limited, was created for the purpose of marketing and promoting the resort to the Asia market. There was no material activity for this entity during the three months ended September 30, 2015. The Company is an indirect wholly-owned subsidiary of Blackstone. In the normal course of business, the Company’s operations may include significant transactions conducted with Blackstone or affiliated entities of Blackstone. References in this Quarterly Report on Form 10-Q to “Successor” and “Successor Period” refer to the Company on or after December 19, 2014 and reflect assets and liabilities at fair value determined by allocating the Company’s enterprise value to its assets and liabilities pursuant to accounting guidance related to business combinations. References to “Predecessor” and “Predecessor Period” refer to the Company on or before December 18, 2014 and reflect the historical accounting basis in the Predecessor’s assets and liabilities. |
Variable Interest Entities | A legal entity is referred to as a variable interest entity if, by design (1) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support from other parties, or (2) the entity has equity investors that cannot make significant decisions about the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity. Variable interest entities for which the Company is the primary beneficiary are consolidated. In accordance with the guidance for the consolidation of variable interest entities, the Company analyzes our variable interests to determine if an entity in which we have a variable interest is a variable interest entity and whether we must consolidate that variable interest entity. Our analysis includes both quantitative and qualitative reviews. |
Pushdown Accounting | As previously noted, the Company is an indirect wholly-owned subsidiary of Blackstone. As a result of the Sale, the Company elected to apply pushdown accounting to reflect Spade Mezz’s basis of accounting for the acquired assets and assumed liabilities of the Company. As discussed in Note 13, the Company is not a borrower under the two mezzanine loan agreements (the “Mezzanine Loans”) entered into by affiliates of Blackstone with JPMorgan for a total aggregate principal amount of $425 million . However, the amounts payable under such loans are, in each case, secured by a first lien on the direct and indirect equity of Propco and are expected to also include a pledge of the Class B Membership Interests and a call right of the Class A Membership Interests. Further, the Company is required to pay interest on the Mezzanine Loans; however, the Company is not a borrower, nor is the Company jointly and severally liable for the Mezzanine Loans; therefore, in accordance with ASU No. 2014-17, Business Combination (Topic 805): Pushdown Accounting, the Mezzanine Loans are not included as a liability on the condensed consolidated balance sheet of the Company as of September 30, 2015 . |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Although management believes these estimates are based upon reasonable assumptions within the bounds of its knowledge of the Company’s business and operations, actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash in banks and deposits with financial institutions that can be liquidated without prior notice or penalty are classified by the Company as cash and cash equivalents. The Company generally considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Pursuant to the terms of the Mortgage Loan agreement, dated December 19, 2014, among Propco, Nevada Property and certain subsidiaries of Nevada Property (collectively, the “Mortgage Borrowers”) and JPMorgan Chase Bank, National Association (“JPMorgan”), pursuant to which the Mortgage Borrowers borrowed $875 million (the “Mortgage Loan”) in connection with the Sale and as discussed in Note 11, the Company is required to establish and maintain certain specified cash accounts through the term of the Mortgage Loan. The amounts funded, and to be funded, to these cash accounts are subject to terms included in the Mortgage Loan and are to be released to us subject to certain conditions specified therein being met. To the extent that an event of default were to occur as determined by the terms of such agreements, there are additional requirements and restrictions placed on the cash accounts. These accounts are held with an independent third party agent (and assuming no event of default has occurred), include: (i) a “lockbox account” which houses certain rents and other revenues from the Property and its operations, with the exception of income from casino or gaming operations; (ii) a “concentration account” which houses certain rents and other revenues from the Property and its operations and which houses all of the amounts transferred from the lockbox account and casino account; and (iii) “casino accounts” which hold all of the income derived from casino operations, less casino operating expenses and any amounts required under gaming liquidity requirements to be maintained on-site at the Property in compliance with gaming regulations. Transfers from the lockbox account are required to be made not less than once every business day throughout the term of the loans. Transfers from the casino account are required to be made not less than two times per week throughout the term of the loans. For the purpose of the operation of the Company, the cash accounts in (i) and (ii) mentioned above have been combined. A separate credit card depository account has also been established as part of the cash account requirements of the Mortgage Loan. Amounts held in the aforementioned accounts may be invested in securities permitted by the loan documents. The Mortgage Loan lender has a first priority security interest in these accounts subject to certain stipulations related to gaming laws for casino related accounts. Cash and cash equivalents are held in checking, savings, and liquid investment accounts at various financial institutions. The combined account balance at any given institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Management believes, based on the quality of the financial institutions, that the risk is not significant. |
Restricted Cash | Restricted cash consists of tokes (tips) earned by our CoStars in the Company’s slot and table games departments, cash account funded by our partners to be used for certain capital expenditures and replacement reserve used for capital expenditures required per the Mortgage Loan agreement. |
Designated Cash | As of December 31, 2014, the Company established a designated cash account which consists primarily of the net working capital as a result of the Sale and amounts funded by the Predecessor to fund payments for certain executives under the various executive incentive award plans. The plans included the Management Exit Award Plan (the “Exit Award Plan”), Management Incentive Plan and Retention Bonus Plan all related to the Sale. Refer to Note 8 for further detail. |
Accounts Receivable and Credit Risk | Accounts receivable, net including casino and hotel receivables, are typically non-interest bearing and are initially recorded at cost. The Company issues credit in the form of “markers” to approved casino customers following investigations of creditworthiness. Accounts are written off when management deems them 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 a percentage of credit drop, a specific review of customer accounts as well as management’s experience with collection trends in the gaming and hospitality industry and current economic and business conditions. |
Inventories | Inventories consist of retail merchandise, food and beverage items which are stated at the lower of cost or market value. Cost is determined by the weighted average identification method. |
Derivative Financial Instruments | The Company has managed its market risk, including interest rate risk associated with variable rate borrowings, with the use of a derivative financial instrument (interest rate cap agreement). The fair value of the derivative financial instrument is recognized as an asset or liability at each balance sheet date, with changes in fair value affecting net loss. The Company’s interest rate cap did not qualify for hedge accounting. Accordingly, changes in the fair value of the interest rate cap are presented as an increase (decrease) in interest expense in the accompanying condensed consolidated statements of operations. |
Fair Value of Financial Instruments | The Company applies the provisions of FASB Topic 820, “Fair Value Measurements” (Topic 820), to its financial assets and liabilities. Fair value is defined as a market-based measurement intended to estimate the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Topic 820 also established a fair value hierarchy, which requires an entity to maximize the use of observable inputs when measuring fair value. These inputs are categorized as follows: • Level 1 — quoted prices in an active market for identical assets or liabilities; • Level 2 — quoted prices in an active market for similar assets or liabilities, inputs other than quoted prices that are observable for similar assets or liabilities, inputs derived principally from or corroborated by observable market data by correlation or other means; and • Level 3 — valuation methodology with unobservable inputs that are significant to the fair value measurement. The carrying values of the Company’s cash and cash equivalents, restricted cash, designated cash, receivables and accounts payable approximate fair value because of the short term maturities of these instruments. The carrying value of the Company’s debt at September 30, 2015 , is consistent with fair value due to the variable interest rates in place. |
Debt Financing Costs | Direct and incremental costs incurred in obtaining loans or in connection with the issuance of long-term debt are amortized using the effective interest method over the terms of the related debt agreements. |
Property and Equipment, Net | Property and equipment are stated at the lower of cost or fair value. As part of the purchase accounting in connection with the Sale of the Company, the estimated useful lives of property and equipment were evaluated based on their remaining economic life resulting in modified estimated useful lives. Depreciation is provided over the estimated useful lives of the assets using the straight-line method as follows: Building and improvements 29 years Land improvements 11 years Furniture, fixtures and equipment 4 to 6 years Leasehold improvements are generally amortized on a straight-line basis over the shorter of the estimated useful life of the assets or the lease term. The remaining estimated useful lives of assets are periodically reviewed and adjusted as necessary. Costs related to improvements are capitalized, while costs of repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in operations. |
Goodwill and Intangibles | We have $214.3 million in goodwill and intangible assets in our condensed consolidated balance sheet at September 30, 2015 , resulting from the Sale as discussed in Note 3. Intangible assets determined to have a finite life are amortized on a straight-line basis over the determined useful life of the asset as follows: • Trade name — 30 years • Customer distribution arrangement — 16 years, based on the remaining term of the agreement • Backlog — 2 years • Customer relationships — 3 years • Property easement — 5 years, based on the remaining life of the easement right The Company is required to perform an annual goodwill impairment review, and depending upon the results of that measurement, the recorded goodwill may be written down and charged to income from operations when its carrying amount exceeds its estimated fair value. Goodwill is reviewed for impairment annually on the first day of the Company’s fourth fiscal quarter (October 1) or more frequently whenever events or changes in circumstances indicate that the carrying value may not be recoverable, such as a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition or a loss of key personnel. |
Reclassifications | For the period ended December 31, 2014, we reclassified certain balance sheet accounts on the condensed consolidated balance sheets to conform all periods to the adoption of Accounting Standard Update No. 2015-3. See below for further discussion. In addition, for comparability, certain prior year amounts have been reclassified to conform with the current period presentation. |
Recently Issued Accounting Pronouncements | In May 2014, the FASB issued ASU No. 2014-9, (Topic 606): Revenue from Contracts with Customers (“ASU No. 2014-9”). ASU No. 2014-9 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of certain nonfinancial assets. ASU No. 2014-9 is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. Management is currently assessing the impact of the adoption of this accounting pronouncement on the Company’s condensed consolidated financial statements in future periods. In August 2014, the FASB issued ASU No. 2014-15, (Subtopic 205-40): Presentation of Financial Statements — Going Concern — Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU No. 2014-15”). ASU No. 2014-15 requires management to provide an interim and annual assessment concerning an entity’s ability to continue as a going concern and also requires disclosures under certain circumstances. ASU No. 2014-15 is effective for fiscal years beginning after December 15, 2016 and for annual periods and interim periods thereafter. Early application is permitted. It is management’s intent to adopt this accounting pronouncement upon the effective date. In April 2015, the FASB issued ASU No. 2015-3, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30) (“ASU No. 2015-3”), which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU No. 2015-3 is effective for fiscal years beginning after December 15, 2015 and for annual periods and interim periods thereafter. Early application is permitted. The Company adopted ASU No. 2015-3 during the three months ended March 31, 2015. Adoption of ASU No. 2015-3 was applied retrospectively and the December 31, 2014 balances for other assets and debt obligations were adjusted by $2.1 million . At September 30, 2015 , the unamortized debt financing cost included as an offset to debt obligations was $7.9 million . No other new accounting pronouncements issued or effective during this period had or are expected to have a material impact on the Company’s financial position or results of operations. A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of any such proposed or revised standards would have on our condensed consolidated financial statements. |
Basis of Presentation and Sum23
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Depreciation Over Estimated Useful Lives | Depreciation is provided over the estimated useful lives of the assets using the straight-line method as follows: Building and improvements 29 years Land improvements 11 years Furniture, fixtures and equipment 4 to 6 years |
Purchase Accounting in Connec24
Purchase Accounting in Connection with the Sale of the Company (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Allocation of Purchase Price to Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed | The following table reflects the allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill (in thousands). Current and other assets $ 174,703 Property and equipment, net 1,433,898 Goodwill 31,963 Intangible assets, net 216,344 Other non-current assets 34,223 Total assets 1,891,131 Current liabilities (107,152 ) Other long-term liabilities (4,483 ) Total liabilities (111,635 ) Total equity purchase price $ 1,779,496 |
Pro Forma Consolidated Financial Information from the Sale | The following table presents the unaudited pro forma results as if the Sale had occurred at January 1, 2014 (in thousands). Three Months Ended Net revenues $ 188,963 Operating expenses 189,769 Operating loss (806 ) Other expense (8,101 ) Loss before income taxes (8,907 ) Income tax expense — Net loss $ (8,907 ) Nine Months Ended Net revenues $ 571,939 Operating expenses 566,254 Operating income 5,685 Other expense (23,361 ) Loss before income taxes (17,676 ) Income tax expense (10 ) Net loss $ (17,686 ) |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts receivable, net consists of the following: Successor (In thousands) September 30, December 31, Casino $ 55,270 $ 26,244 Hotel 17,647 16,393 Other 9,973 9,169 82,890 51,806 Less: allowance for doubtful accounts (13,229 ) — $ 69,661 $ 51,806 |
Prepaid Expenses and Other Cu26
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: Successor (In thousands) September 30, December 31, Prepaid expenses $ 12,675 $ 15,754 Other assets 7,196 7,432 $ 19,871 $ 23,186 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net are stated at the lower of cost or fair value and consist of the following: Successor (In thousands) September 30, December 31, Land and land improvements $ 107,382 $ 107,352 Buildings and improvements 1,208,695 1,206,191 Furniture, fixtures and equipment 115,476 108,734 Construction in progress 24,140 12,337 Less: accumulated depreciation (52,726 ) (2,316 ) $ 1,402,967 $ 1,432,298 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill consists of the following: Successor (In thousands) September 30, December 31, Goodwill $ 31,963 $ 25,549 Less: accumulated impairment — — $ 31,963 $ 25,549 |
Intangible Assets, Net | Intangible assets, net consist of the following: Successor (In thousands) September 30, December 31, Trade name $ 100,000 $ 100,000 Customer distribution agreement 21,000 21,000 Backlog 48,000 48,000 Customer relationships 39,000 39,000 Property easement 8,344 8,344 Less: accumulated amortization (34,004 ) (1,516 ) $ 182,340 $ 214,828 Weighted-average life in years 18 17 |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued and Other Liabilities | Accrued and other liabilities consist of the following: Successor (In thousands) September 30, December 31, Accrued accounts payable $ 7,220 $ 10,782 Accrued payroll costs 20,161 28,844 Deposits - patrons 5,744 7,272 Advance deposits 18,952 14,422 Chip liability 3,477 5,234 Taxes payable 11,127 6,473 Accrued legal fees 22,018 16,406 Other liabilities 9,536 12,777 $ 98,235 $ 102,210 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Components of Long-term Debt | The components of our long-term debt are as follows: Successor (In thousands) September 30, December 31, Non-current long-term debt Mortgage Loan (term loan) (1) $ 875,000 $ 875,000 Less: unamortized discount and debt financing costs (7,923 ) (12,383 ) Long-term debt $ 867,077 $ 862,617 (1) Certain affiliates of Blackstone have provided a guaranty of certain customary non-recourse carve-out liabilities in connection with the Mortgage Loan. |
Components of Mortgage Loan | The principal amounts of the Components are as follows: Component Principal Amount (In thousands) Interest Rate Spread A-1 $ 287,000 1.37 % A-2 78,000 1.92 % A-3 70,000 2.37 % A-4 222,200 3.42 % A-5 146,100 4.07 % A-6 71,700 5.37 % $ 875,000 |
Organization and Description 31
Organization and Description of the Business - Additional Information (Detail) $ in Millions | Dec. 19, 2014USD ($) | Sep. 30, 2015segment | Apr. 21, 2015USD ($) | Mar. 31, 2015USD ($) |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Increase in working capital | $ 49.4 | $ 49.4 | $ 43 | |
Nevada Mezz | Common Class B | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||
Common stock membership interests sold | 100.00% | |||
Spade Voteco | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||
Membership interests transfer, cash consideration | $ 1,730 | |||
Spade Voteco | Common Class B | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||
Common stock membership interests held | 100.00% | |||
Spade Voteco | Common Class A | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||
Common stock membership interests held | 100.00% | |||
Spade Mezz | Common Class B | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||
Common stock membership interests held | 100.00% | |||
Nevada Voteco | Spade Voteco | Common Class A | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ||||
Common stock membership interests held | 100.00% |
Basis of Presentation and Sum32
Basis of Presentation and Summary of Significant Accounting Policies - (Details) | Dec. 19, 2014USD ($)renewal_period | Sep. 30, 2015USD ($)Loan | Sep. 30, 2015USD ($)Loan | Dec. 31, 2014USD ($) |
Basis of Presentation [Line Items] | ||||
Effect of change in estimate on operating and net income | $ 1,200,000 | $ 1,200,000 | ||
Number of lease renewable periods | renewal_period | 2 | |||
Lease arrangement, term of contract | 5 years | |||
Fixed annual rent | $ 125,000,000 | |||
Percentage of rent obliged pay from operating income | 90.00% | |||
Payments for rent | 37,100,000 | $ 128,300,000 | ||
Description of lease arrangement | Each year, during the term of the Lease, the Company is obligated to pay Propco, as percentage rent, an amount equal to the difference, if positive, between (x) 90% of Operating Income, as defined in the Lease, for such year and (y) the Fixed Rent payable with respect to such year. | |||
Original maturity of cash equivalents (or less) | 3 months | |||
Amortization of financing costs | 1,400,000 | $ 4,700,000 | ||
Unamortized deferred financing cost | 7,900,000 | 7,900,000 | ||
Deferred financing costs reclassified as direct deduction to debt | $ 2,100,000 | |||
Goodwill and other intangible assets | $ 214,300,000 | 214,300,000 | ||
Other assets and debt obligations | $ 2,100,000 | |||
Minimum | ||||
Basis of Presentation [Line Items] | ||||
Remaining amortization period for finite lived asset | 2 years | |||
Maximum | ||||
Basis of Presentation [Line Items] | ||||
Remaining amortization period for finite lived asset | 30 years | |||
Building and improvements | ||||
Basis of Presentation [Line Items] | ||||
Useful life | 29 years | |||
Land improvements | ||||
Basis of Presentation [Line Items] | ||||
Useful life | 11 years | |||
Furniture, fixtures and equipment | Minimum | ||||
Basis of Presentation [Line Items] | ||||
Useful life | 4 years | |||
Furniture, fixtures and equipment | Maximum | ||||
Basis of Presentation [Line Items] | ||||
Useful life | 6 years | |||
Trade Names | ||||
Basis of Presentation [Line Items] | ||||
Remaining amortization period for finite lived asset | 30 years | |||
Customer Distribution Agreement | ||||
Basis of Presentation [Line Items] | ||||
Remaining amortization period for finite lived asset | 16 years | |||
Backlog | ||||
Basis of Presentation [Line Items] | ||||
Remaining amortization period for finite lived asset | 2 years | |||
Customer Relationships | ||||
Basis of Presentation [Line Items] | ||||
Remaining amortization period for finite lived asset | 3 years | |||
Property Easement | ||||
Basis of Presentation [Line Items] | ||||
Remaining amortization period for finite lived asset | 5 years | |||
Mortgage Loan | ||||
Basis of Presentation [Line Items] | ||||
Borrowing under term loan | $ 875,000,000 | |||
Mezzanine Loan | ||||
Basis of Presentation [Line Items] | ||||
Number of loan agreements | Loan | 2 | 2 | ||
Borrowing under term loan | $ 425,000,000 | $ 425,000,000 |
Purchase Accounting in Connec33
Purchase Accounting in Connection with the Sale of the Company - Additional Information (Details) - USD ($) $ in Thousands | Dec. 19, 2014 | Mar. 31, 2015 | Sep. 30, 2015 | Apr. 21, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Increase in working capital | $ 49,400 | $ 43,000 | $ 49,400 | ||
Percentage of amount released | 50.00% | ||||
Aggregate purchase price | $ 1,770,000 | ||||
Goodwill | 31,963 | $ 31,963 | $ 25,549 | ||
Second Amendment | |||||
Business Acquisition [Line Items] | |||||
Increase in working capital | 49,400 | ||||
Distribution earned from loss payout account for owner controlled insurance program | 12,300 | ||||
Working capital adjustment | 6,400 | ||||
Aggregate purchase price | 1,780,000 | ||||
Goodwill | $ 6,400 | ||||
Spade Voteco | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | $ 1,730,000 |
Purchase Accounting in Connec34
Purchase Accounting in Connection with the Sale of the Company - Allocation of Purchase Price to Tangible and Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 19, 2014 |
Business Combinations [Abstract] | |||
Current and other assets | $ 174,703 | ||
Property and equipment, net | 1,433,898 | ||
Goodwill | $ 31,963 | $ 25,549 | 31,963 |
Intangible assets, net | 216,344 | ||
Other non-current assets | 34,223 | ||
Total assets | 1,891,131 | ||
Current liabilities | (107,152) | ||
Other long-term liabilities | (4,483) | ||
Total liabilities | (111,635) | ||
Total equity purchase price | $ 1,779,496 |
Purchase Accounting in Connec35
Purchase Accounting in Connection with the Sale of the Company - Unaudited Proforma Consolidated Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net revenues | $ 179,842 | $ 569,257 | ||
Operating income/(loss) | 12,837 | 38,342 | ||
Other expense | (8,101) | (23,618) | ||
Income/(loss) before income taxes | 4,736 | 14,724 | ||
Income tax expense | 0 | (10) | ||
Net income/(loss) | $ 4,736 | $ 14,714 | ||
Pro Forma | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net revenues | $ 188,963 | $ 571,939 | ||
Operating expenses | 189,769 | 566,254 | ||
Operating income/(loss) | (806) | 5,685 | ||
Other expense | (8,101) | (23,361) | ||
Income/(loss) before income taxes | (8,907) | (17,676) | ||
Income tax expense | 0 | (10) | ||
Net income/(loss) | $ (8,907) | $ (17,686) |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 82,890 | $ 51,806 |
Less: allowance for doubtful accounts | (13,229) | 0 |
Accounts receivable, net | 69,661 | 51,806 |
Casino | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 55,270 | 26,244 |
Hotel | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 17,647 | 16,393 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 9,973 | $ 9,169 |
Prepaid Expenses and Other Cu37
Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 12,675 | $ 15,754 |
Other assets | 7,196 | 7,432 |
Prepaid expenses and other assets | $ 19,871 | $ 23,186 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (52,726) | $ (2,316) |
Property and equipment, net | 1,402,967 | 1,432,298 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 107,382 | 107,352 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,208,695 | 1,206,191 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 115,476 | 108,734 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 24,140 | $ 12,337 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) | Jul. 25, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Property, Plant and Equipment [Line Items] | |||||
Depreciation | $ 17,100,000 | $ 50,500,000 | |||
Interest costs capitalized | 0 | $ 0 | |||
Write-off of property and equipment | $ 300,000 | ||||
Insurance recoveries | 2,900,000 | 2,900,000 | |||
Gain on assets destroyed | $ 2,600,000 | $ 2,600,000 | |||
Predecessor | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation | 41,300,000 | $ 124,400,000 | |||
Interest costs capitalized | $ 300,000 | $ 300,000 |
Goodwill and Intangibles - Good
Goodwill and Intangibles - Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 19, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 31,963 | $ 25,549 | |
Less: accumulated impairment | 0 | 0 | |
Intangible asset, net | $ 31,963 | $ 25,549 | $ 31,963 |
Goodwill and Intangibles - Inta
Goodwill and Intangibles - Intangible Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Trade name | $ 100,000 | $ 100,000 |
Customer distribution agreement | 21,000 | 21,000 |
Backlog | 48,000 | 48,000 |
Customer relationships | 39,000 | 39,000 |
Property easement | 8,344 | 8,344 |
Less: accumulated amortization | (34,004) | (1,516) |
Intangible assets, net | $ 182,340 | $ 214,828 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 18 years | 17 years |
Goodwill and Intangibles - Addi
Goodwill and Intangibles - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Finite-Lived Intangible Liabilities [Line Items] | ||||
Amortization of intangible assets | $ 10.8 | $ 32.5 | $ 1.3 | |
Minimum | ||||
Finite-Lived Intangible Liabilities [Line Items] | ||||
Remaining amortization period for finite lived asset | 2 years | |||
Maximum | ||||
Finite-Lived Intangible Liabilities [Line Items] | ||||
Remaining amortization period for finite lived asset | 30 years | |||
Predecessor | ||||
Finite-Lived Intangible Liabilities [Line Items] | ||||
Amortization of intangible assets | $ 0.4 |
Restricted and Designated Cash
Restricted and Designated Cash - Additional Information (Detail) - USD ($) $ in Thousands | Apr. 27, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash, current | $ 4,752 | $ 877 | |
Replacement reserve | 3,500 | ||
Designated cash | 0 | 31,649 | |
Final payment of net working capital related to Sale of the Company | $ 29,900 | ||
Tokes | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | 700 | 400 | |
Partner's restaurants capital expenditures | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | 600 | ||
Replacement reserve for capital expenditures | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | 500 | ||
Exit Award Plan | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Designated cash | $ 4,900 | 8,200 | |
Net working capital | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Designated cash | $ 23,500 |
Other Assets - Additional Infor
Other Assets - Additional Information (Detail) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Insurance [Abstract] | ||||
OCIP fund obligation, full and final payment | $ 7 | |||
Other Assets [Line Items] | ||||
Distribution earned from loss payout account for owner controlled insurance program | $ 12.3 | |||
Settlement expense | $ 3.6 | |||
Reserve for workers' compensation claims incurred but not reported | $ 1.5 | |||
Existing balance in the loss payout account | $ 19.3 | |||
Union Fire Insurance | ||||
Other Assets [Line Items] | ||||
Percentage of first loss position assumed | 100.00% |
Accrued and Other Liabilities45
Accrued and Other Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued accounts payable | $ 7,220 | $ 10,782 |
Accrued payroll costs | 20,161 | 28,844 |
Deposits - patrons | 5,744 | 7,272 |
Advance deposits | 18,952 | 14,422 |
Chip liability | 3,477 | 5,234 |
Taxes payable | 11,127 | 6,473 |
Accrued legal fees | 22,018 | 16,406 |
Other liabilities | 9,536 | 12,777 |
Accrued and other liabilities | $ 98,235 | $ 102,210 |
Debt Obligations - Components o
Debt Obligations - Components of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
Mortgage Loan (term loan) | $ 875,000 | $ 875,000 |
Less: unamortized discount and debt financing costs | (7,923) | (12,383) |
Long-term debt | $ 867,077 | $ 862,617 |
Debt Obligations - Additional I
Debt Obligations - Additional Information (Detail) | Dec. 19, 2014USD ($) | Sep. 30, 2015 | Jul. 01, 2015USD ($) | Mar. 30, 2015 |
Debt Instrument [Line Items] | ||||
Number of extension options | 3 | |||
Term of extension option | 1 year | |||
Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Borrowing under term loan | $ 875,000,000 | |||
Debt instrument, maturity date | Jan. 9, 2017 | |||
Initial interest rate | 2.95% | |||
Variable interest rate | 3.00% | |||
Mortgage Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate | 0.207% | |||
Weighted average interest rate | 2.80% | |||
Restricted Cash | Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Replacement reserve deposit for capital expenditures | $ 3,500,000 |
Debt Obligations - Components48
Debt Obligations - Components of Mortgage Loans (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||
Principal Amount | $ 875,000 | $ 875,000 |
A1 | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 287,000 | |
Interest Rate Spread | 1.37% | |
A2 | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 78,000 | |
Interest Rate Spread | 1.92% | |
A3 | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 70,000 | |
Interest Rate Spread | 2.37% | |
A4 | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 222,200 | |
Interest Rate Spread | 3.42% | |
A5 | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 146,100 | |
Interest Rate Spread | 4.07% | |
A6 | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 71,700 | |
Interest Rate Spread | 5.37% |
Interest Rate Cap Agreement - A
Interest Rate Cap Agreement - Additional Information (Detail) - Interest Rate Cap - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Interest and debt expense | $ 0.4 | |
Secured debt | $ 875 | |
Maximum | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Maximum interest rate | 3.74% | |
Other Assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fair value of interest rate cap agreement | $ 0.2 | $ 0.2 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Arrangements with third parties for payment of expenses of affiliates | $ 200,000 | |||
Interest paid | $ 17,827,000 | |||
Mezzanine Loan | ||||
Related Party Transaction [Line Items] | ||||
Principal amount of loan | $ 425,000,000 | 425,000,000 | ||
Mezzanine Loan | Mezzanine A Loan | ||||
Related Party Transaction [Line Items] | ||||
Principal amount of loan | $ 295,000,000 | $ 295,000,000 | ||
Interest rate on loan | 6.50% | 6.50% | ||
Interest paid | $ 5,000,000 | $ 13,300,000 | ||
Mezzanine Loan | Mezzanine B Loan | ||||
Related Party Transaction [Line Items] | ||||
Principal amount of loan | $ 130,000,000 | $ 130,000,000 | ||
Interest rate on loan | 8.75% | 8.75% | ||
Interest paid | $ 3,000,000 | $ 7,800,000 | ||
Successor | ||||
Related Party Transaction [Line Items] | ||||
Arrangements with third parties for payment of expenses of affiliates | $ 200,000 | $ 400,000 | ||
Predecessor | ||||
Related Party Transaction [Line Items] | ||||
Arrangements with third parties for payment of expenses of affiliates | $ 200,000 | $ 600,000 | ||
Interest paid | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rates | 0.00% | 35.20% | 0.00% | 35.90% |
Income tax year under examination | 2,011 | |||
Accrued penalties and interest | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments, Contingencies an52
Commitments, Contingencies and Litigation - Additional Information (Detail) $ in Millions | Feb. 20, 2015USD ($) | Apr. 30, 2015USD ($) | Dec. 31, 2012class_action_lawsuit | Sep. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2014USD ($) |
Commitments and Contingencies Disclosure [Line Items] | ||||||
Number of class action lawsuits | class_action_lawsuit | 2 | |||||
Legislation settlement | $ 14.5 | $ 7 | ||||
Contractual obligation | $ 16.6 | $ 1.8 | ||||
Accrued and Other Liabilities | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Accrued legislation fee | $ 7 |
Membership Interests - Addition
Membership Interests - Additional Information (Detail) | Dec. 19, 2014 |
Spade Voteco | Common Class A | |
Class of Stock [Line Items] | |
Common stock membership interests held | 100.00% |
Spade Voteco | Common Class B | |
Class of Stock [Line Items] | |
Common stock membership interests held | 100.00% |
Spade Mezz | Common Class B | |
Class of Stock [Line Items] | |
Common stock membership interests held | 100.00% |
Equity-based Compensation (Deta
Equity-based Compensation (Details) | Sep. 30, 2015USD ($) |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Compensation expense for fair value of Incentive Units | $ 0 |