| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Organization. Pinnacle Entertainment, Inc. is an owner, operator and developer of casinos and related hospitality and entertainment facilities. References in these footnotes to “Pinnacle,” the “Company,” “we,” “our” or “us” refer to Pinnacle Entertainment, Inc. and its subsidiaries, except where stated or the context otherwise indicates. We own and operate 15 gaming entertainment properties, located in Colorado, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, and Ohio. We also hold a majority interest in the racing license owner, and we are a party to a management contract, for Retama Park Racetrack located outside of San Antonio, Texas. In addition to these properties, we own and operate a live and televised poker tournament series under the trade name Heartland Poker Tour (“HPT”). We view each of our operating properties as an operating segment with the exception of our two properties in Jackpot, Nevada, which we view as one operating segment. For financial reporting purposes, we aggregate our operating segments into the following reportable segments: Midwest segment, which includes: Location Ameristar Council Bluffs Council Bluffs, Iowa Ameristar East Chicago East Chicago, Indiana Ameristar Kansas City Kansas City, Missouri Ameristar St. Charles St. Charles, Missouri River City St. Louis, Missouri Belterra Florence, Indiana Belterra Park Cincinnati, Ohio South segment, which includes: Location Ameristar Vicksburg Vicksburg, Mississippi Boomtown Bossier City Bossier City, Louisiana Boomtown New Orleans New Orleans, Louisiana L'Auberge Baton Rouge Baton Rouge, Louisiana L'Auberge Lake Charles Lake Charles, Louisiana West segment, which includes: Location Ameristar Black Hawk Black Hawk, Colorado Cactus Petes and Horseshu Jackpot, Nevada The operating results of Lumière Place Casino, HoteLumière, the Four Seasons Hotel St. Louis, and related excess land parcels (collectively, the “Lumière Place Casino and Hotels”) and excess land associated with our former Boomtown Reno property have been classified as discontinued operations in our unaudited Condensed Consolidated Statements of Operations. In April 2014, we completed the sale of the ownership interests in the Lumière Place Casino and Hotels. We completed the sale of our excess land in Reno associated with our former Boomtown Reno operations in April 2015. For further information, see Note 7, “Discontinued Operations and Assets Held for Sale.” Our unaudited Condensed Consolidated Statements of Cash Flows have not been adjusted for discontinued operations. On July 20, 2015, we entered into a definitive agreement with Gaming and Leisure Properties, Inc. (“GLPI”), a real estate investment trust, whereby GLPI will acquire substantially all of our real estate assets, excluding our Belterra Park property and excess land at certain locations. For more information regarding the GLPI transaction, see Note 6, “Investment, Restructuring and Acquisition Activities.” Principles of Consolidation. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions of the Securities and Exchange Commission (the “SEC”) to the Quarterly Report on Form 10-Q and, therefore, do not include all information and notes necessary for complete financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). The results for the periods indicated are unaudited, but reflect all adjustments, which are of a normal recurring nature, that management considers necessary for a fair presentation of operating results. The unaudited Condensed Consolidated Financial Statements include the accounts of Pinnacle Entertainment, Inc. and its subsidiaries. Investments in the common stock of unconsolidated affiliates in which we have the ability to exercise significant influence are accounted for under the equity method. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for interim periods are not indicative of a full year of operations. These unaudited Condensed Consolidated Financial Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2014. Use of Estimates. The preparation of unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Estimates used by us include, among other things, the estimated useful lives for depreciable and amortizable assets, the estimated allowance for doubtful accounts receivable, estimated income tax provisions, the evaluation of the future realization of deferred tax assets, determining the adequacy of reserves for self-insured liabilities and our customer loyalty programs, estimated cash flows in assessing the recoverability of long-lived assets, asset impairments, goodwill and intangible assets, contingencies and litigation, and estimates of the forfeiture rate and expected life of share-based awards and stock price volatility when computing share-based compensation expense. Actual results may differ from those estimates. Fair Value. Fair value measurements affect our accounting and impairment assessments of our long-lived assets, investments in unconsolidated affiliates, assets acquired in an acquisition, goodwill, and other intangible assets. Fair value measurements also affect our accounting for certain financial assets and liabilities. Fair value is defined as 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 and is measured according to a hierarchy that includes: “Level 1” inputs, such as quoted prices in an active market for identical assets or liabilities; “Level 2” inputs, which are observable inputs for similar assets; or “Level 3” inputs, which are unobservable inputs. The following table presents a summary of fair value measurements by level for certain liabilities measured at fair value on a recurring basis in the unaudited Condensed Consolidated Balance Sheets: Fair Value Measurements Using: Total Fair Value Level 1 Level 2 Level 3 (in millions) As of September 30, 2015 Liabilities: Deferred compensation $ 0.4 $ 0.4 $ — $ — As of December 31, 2014 Liabilities: Deferred compensation $ 0.6 $ 0.6 $ — $ — The following table presents a summary of fair value measurements by level for certain financial instruments not measured at fair value on a recurring basis in the unaudited Condensed Consolidated Balance Sheets for which it is practicable to estimate fair value: Fair Value Measurements Using: Total Carrying Amount Total Fair Value Level 1 Level 2 Level 3 (in millions) As of September 30, 2015 Assets: Held-to-maturity securities $ 14.4 $ 15.0 $ — $ 11.9 $ 3.1 Promissory notes $ 13.6 $ 19.1 $ — $ 19.1 $ — Liabilities: Long-term debt $ 3,676.9 $ 3,788.7 $ — $ 3,788.7 $ — As of December 31, 2014 Assets: Held-to-maturity securities $ 14.8 $ 21.7 $ — $ 18.5 $ 3.2 Promissory notes $ 12.0 $ 16.8 $ — $ 16.8 $ — Liabilities: Long-term debt $ 3,986.6 $ 4,029.9 $ — $ 4,029.9 $ — The estimated fair values for certain of our long-term held-to-maturity securities and our long-term promissory notes were based on Level 2 inputs using observable market data for comparable instruments in establishing prices. The estimated fair values for certain of our long-term held-to-maturity securities were based on Level 3 inputs using a present value of future cash flow valuation technique that relies on management assumptions and qualitative observations. Key significant unobservable inputs in this technique include discount rate risk premiums and probability-weighted cash flow scenarios. The estimated fair values of our long-term debt, which includes the fair value of our senior notes, senior subordinated notes, senior secured credit facility and term loans, were based on Level 2 inputs of observable market data on comparable debt instruments on or about September 30, 2015 and December 31, 2014 . The fair values of our short-term financial instruments approximate the carrying amounts due to their short-term nature. Land, Buildings, Vessels and Equipment. Land, buildings, vessels and equipment are stated at cost. Land includes land not currently being used in our operations, which totaled $34.6 million as of September 30, 2015 . We capitalize the costs of improvements that extend the life of the asset. We expense repair and maintenance costs as incurred. Gains or losses on the disposition of land, buildings, vessels and equipment are included in the determination of income. We review the carrying amounts of our land, buildings, vessels and equipment used in our operations whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable from estimated future undiscounted cash flows expected to result from its use and eventual disposition. If the undiscounted cash flows exceed the carrying amount, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying amount, then an impairment charge is recorded based on the fair value of the asset. Development costs directly associated with the acquisition, development, and construction of a project are capitalized as a cost of the project, during the periods in which activities necessary to get the property ready for its intended use are in progress. The costs incurred for development projects are carried at cost. Interest costs associated with development projects are capitalized as part of the cost of the constructed asset. When no debt is incurred specifically for a project, interest is capitalized on amounts expended for the project using our weighted-average cost of borrowing. Capitalization of interest ceases when the project, or discernible portion of the project, is substantially complete. If substantially all of the construction activities of a project are suspended, capitalization of interest will cease until such activities are resumed. For further discussion, see Note 2, “Long-Term Debt.” The following table presents a summary of our land, buildings, vessels and equipment: September 30, December 31, (in millions) Land, buildings, vessels and equipment: Land and land improvements $ 422.5 $ 401.9 Buildings, vessels and improvements 2,676.3 2,677.8 Furniture, fixtures and equipment 784.0 721.9 Construction in progress 22.7 75.6 Land, buildings, vessels and equipment, gross 3,905.5 3,877.2 Less: accumulated depreciation (1,020.2 ) (860.2 ) Land, buildings, vessels and equipment, net $ 2,885.3 $ 3,017.0 On July 20, 2015, we entered into a definitive agreement with GLPI, whereby GLPI will acquire substantially all of our real estate assets. For more information regarding the GLPI transaction, see Note 6, “Investment, Restructuring and Acquisition Activities.” Equity Method Investments. We apply equity method accounting for investments when we do not control the investee, but have the ability to exercise significant influence over its operating and finance policies. Equity method investments are recorded at cost, with the allocable portion of the investee's income or loss reported in earnings, and adjusted for capital contributions to and distributions from the investee. Distributions in excess of equity method earnings, if any, are recognized as a return of investment and recorded as investing cash flows in the unaudited Condensed Consolidated Statements of Cash Flows. We review our equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of our investment may have experienced an other-than-temporary decline in value. Goodwill and Other Intangible Assets. Goodwill consists of the excess of the acquisition cost over the fair value of the net assets acquired in business combinations. Indefinite-lived intangible assets include gaming licenses and trade names. Goodwill and other indefinite-lived intangible assets are subject to an annual assessment for impairment during the fourth quarter, or more frequently if there are indications of possible impairment. Amortizing intangible assets include customer relationships and favorable leasehold interests. We review amortizing intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We recorded impairments to goodwill and other intangible assets at Pinnacle Retama Partners, LLC (“PRP”) and HPT during the nine months ended September 30, 2015 . During the third quarter of 2015, we determined that there was an indication of impairment on the assets of HPT due to its operating performance. As a result, we recognized non-cash impairments on its goodwill, trade name, and customer relationship intangible assets, of $1.4 million , $0.2 million , and $0.7 million , respectively. The impairments were measured using discounted cash flow models, which utilized Level 3 inputs. During the second quarter of 2015, we determined that there was an indication of impairment on the assets of PRP due to the lack of legislative progress and on-going negative operating results at Retama Park Racetrack. As a result, we recognized non-cash impairments of the goodwill of PRP and the Retama Park Racetrack license of $3.3 million and $5.0 million , respectively, which fully impaired these intangible assets. The impairments were measured using probability-weighted discounted cash flow models, which utilized Level 3 inputs. PRP and HPT impairment charges are included in “Write-downs, reserves and recoveries, net” in our unaudited Condensed Consolidated Statements of Operations. See Note 5, “Write-downs, Reserves and Recoveries, Net,” and Note 6, “Investment, Restructuring and Acquisition Activities.” There were no impairments to goodwill or other intangible assets recognized during the three months or nine months ended September 30, 2014 . In April 2015, we made our final installment payment of $25.0 million for Belterra Park's video lottery terminal license, which we had accrued as of December 31, 2014 in “Other accrued liabilities” in our unaudited Condensed Consolidated Balance Sheets. Customer Loyalty Programs. We offer incentives to our customers through our my choice customer loyalty program. Under the my choice customer loyalty program, customers earn points based on their level of play that may be redeemed for various benefits, such as cash back, dining, or hotel stays, among others. The reward credit balance under the plan will be forfeited if the customer does not earn or use any reward credits over the prior six-month period. In addition, based on their level of play, customers can earn additional benefits without redeeming points, such as a car lease, among other items. We accrue a liability for the estimated cost of providing these benefits as the benefits are earned. Estimates and assumptions are made regarding cost of providing the benefits, breakage rates, and the mix of goods and services customers will choose. We use historical data to assist in the determination of estimated accruals. Changes in estimates or customer redemption habits could produce significantly different results. As of September 30, 2015 and December 31, 2014 , we had accrued $22.8 million and $26.6 million , respectively, for the estimated cost of providing my choice benefits. Such amounts are included in “Other accrued liabilities” in our unaudited Condensed Consolidated Balance Sheets. Revenue Recognition. Gaming revenues consist of the net win from gaming activities, which is the difference between amounts wagered and amounts paid to winning patrons. Cash discounts and other cash incentives to customers related to gaming play are recorded as a reduction to gaming revenue. Food and beverage, lodging, retail, entertainment, and other operating revenues are recognized as products are delivered or services are performed. Advance deposits on lodging are recorded as accrued liabilities until services are provided to the customer. The retail value of food and beverage, lodging and other services furnished to guests on a complimentary basis is included in revenues and then deducted as promotional allowances in calculating total revenues. The estimated cost of providing such promotional allowances is primarily included in gaming expenses. Complimentary revenues that have been excluded from the accompanying unaudited Condensed Consolidated Statements of Operations were as follows: For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 (in millions) Food and beverage $ 34.1 $ 35.2 $ 104.1 $ 102.1 Lodging 16.2 15.4 47.4 46.6 Other 4.6 4.9 13.7 13.0 Total promotional allowances $ 54.9 $ 55.5 $ 165.2 $ 161.7 The costs to provide such complimentary benefits were as follows: For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 (in millions) Promotional allowance costs included in gaming expense $ 42.3 $ 42.1 $ 125.6 $ 119.4 Gaming Taxes. We are subject to taxes based on gross gaming revenues in the jurisdictions in which we operate, subject to applicable jurisdictional adjustments. These gaming taxes are an assessment on our gaming revenues and are recorded as a gaming expense in our unaudited Condensed Consolidated Statements of Operations. These taxes were as follows: For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 (in millions) Gaming taxes $ 145.8 $ 142.1 $ 438.9 $ 416.4 Pre-opening, Development and Other Costs. Pre-opening, development and other costs consist of payroll costs to hire, employ and train the workforce prior to opening an operating facility; marketing campaigns prior to and in connection with the opening; legal and professional fees related to the project but not otherwise attributable to depreciable assets; lease payments; real estate taxes; acquisition costs; restructuring costs; and other costs prior to the opening of an operating facility. Pre-opening, development and other costs are expensed as incurred. Pre-opening, development and other costs consist of the following: For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 (in millions) Restructuring costs (1) $ 3.7 $ 0.9 $ 10.0 $ 0.9 Belterra Park (2) — 0.8 — 8.2 Other (3) 0.3 (0.1 ) 1.7 2.8 Total pre-opening, development and other costs $ 4.0 $ 1.6 $ 11.7 $ 11.9 (1) Amounts comprised of cost associated with the separation of our real estate assets from our operating assets. See Note 6, “Investment, Restructuring and Acquisition Activities.” (2) Belterra Park opened on May 1, 2014. (3) Amounts principally comprised of legal and advisory expenses, severance charges and other costs and expenses, including those related to the financing and integration of the acquisition of Ameristar Casinos, Inc. (“Ameristar”). Earnings Per Share. The computation of basic and diluted earnings per share (“EPS”) is based on net income attributable to Pinnacle Entertainment, Inc. divided by the basic weighted average number of common shares and diluted weighted average number of common shares, respectively. Diluted earnings per share reflect the addition of potentially dilutive securities, which include in-the-money stock options and restricted stocks units. A total of 0.1 million and 0.2 million out-of-the-money stock options were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2015 , respectively, as compared to a total of 1.8 million and 1.5 million out-of-the-money stock options excluded from the calculation of diluted earnings per share, respectively, for the corresponding prior-year periods, because including them would have been anti-dilutive. Reclassifications. The unaudited Condensed Consolidated Financial Statements reflect certain reclassifications to prior year amounts to conform to classification in the current period. These reclassifications had no effect on the previously reported net income amounts. Recently Issued Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update in connection with reporting discontinued operations and disclosures of disposals of components of entities. The accounting standards update changes the criteria for reporting discontinued operations. Under the amendment, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when any of the following occurs: (i) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (ii) the component of an entity or group of components of an entity is disposed of by sale; and (iii) the component of an entity or group of components of an entity is disposed of other than by sale. This new guidance is effective prospectively for all disposals (or classifications as held for sale) of components of an entity and all business activities, on acquisition, that are classified as held for sale that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. We adopted this guidance during the first quarter of 2015 and it did not have a material impact on our unaudited Condensed Consolidated Financial Statements. In May 2014, as part of its ongoing efforts to assist in the convergence of GAAP and International Financial Reporting Standards, the FASB issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. In July 2015, the FASB approved the deferral of this new standard to be effective for fiscal years beginning after December 15, 2017. We are currently evaluating the impact of adopting this accounting standard on our unaudited Condensed Consolidated Financial Statements. In June 2014, the FASB issued an accounting standards update with respect to performance share awards. This accounting standards update requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period or periods for which the requisite service has already been rendered. The effective date for this update is for the annual and interim periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on our unaudited Condensed Consolidated Financial Statements. In April 2015, the FASB issued an accounting standards update which changes the presentation of debt issuance costs in financial statements. Under the new standard, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. The amortization of the costs is reported as interest expense. In August 2015, the FASB issued an accounting standards update which clarifies that companies may continue to present unamortized debt issuance costs associated with line of credit arrangements as an asset. The new guidance should be applied on a retrospective basis, wherein the balance sheet of each individual period should be adjusted to reflect the period-specific effects of applying the new guidance. The effective dates for these updates are for the annual and interim periods beginning after December 15, 2015. Early adoption is permitted. We intend to early adopt these standards, which are not expected to have a material impact on our unaudited Condensed Consolidated Financial Statements, effective December 31, 2015. A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Given 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 unaudited Condensed Consolidated Financial Statements. |
