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Note 4 - Intangible Assets | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Intangible Assets Disclosure [Text Block] | NOTE 4. INTANGIBLE ASSETS Intangible assets consist of the following:
|  | December 31, 2019 |
|  | Weighted |  |  | Gross |  |  |  |  |  |  | Cumulative |  |  |  |  |
|  | Average Life |  |  | Carrying |  |  | Cumulative |  |  | Impairment |  |  | Intangible |
(In thousands) |  | Remaining (in years) |  |  | Value |  |  | Amortization |  |  | Losses |  |  | Assets, Net |
Amortizing intangibles |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | 3.5 |  |  | $ | 68,100 |  |  | $ | (39,598 | ) |  | $ | — |  |  | $ | 28,502 |
Host agreements |  | 13.4 |  |  |  | 58,000 |  |  |  | (6,122 | ) |  |  | — |  |  |  | 51,878 |
Development agreement |  | — |  |  |  | 21,373 |  |  |  | — |  |  |  | — |  |  |  | 21,373 |
|  |  |  |  |  | 147,473 |  |  |  | (45,720 | ) |  |  | — |  |  |  | 101,753 |
Indefinite lived intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trademarks |  | Indefinite |  |  |  | 206,687 |  |  |  | — |  |  |  | (4,300 | ) |  |  | 202,387 |
Gaming license rights |  | Indefinite |  |  |  | 1,376,685 |  |  |  | (33,960 | ) |  |  | (179,974 | ) |  |  | 1,162,751 |
|  |  |  |  |  | 1,583,372 |  |  |  | (33,960 | ) |  |  | (184,274 | ) |  |  | 1,365,138 |
Balances, December 31, 2019 |  |  |  |  | $ | 1,730,845 |  |  | $ | (79,680 | ) |  | $ | (184,274 | ) |  | $ | 1,466,891 |
|  | December 31, 2018 |
|  | Weighted |  |  | Gross |  |  |  |  |  |  | Cumulative |  |  |  |  |
|  | Average Life |  |  | Carrying |  |  | Cumulative |  |  | Impairment |  |  | Intangible |
(In thousands) |  | Remaining (in years) |  |  | Value |  |  | Amortization |  |  | Losses |  |  | Assets, Net |
Amortizing intangibles |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | 7.3 |  |  | $ | 65,400 |  |  | $ | (15,113 | ) |  | $ | — |  |  | $ | 50,287 |
Host agreements |  | 14.4 |  |  |  | 58,000 |  |  |  | (2,256 | ) |  |  | — |  |  |  | 55,744 |
Favorable lease rates |  | 37.0 |  |  |  | 11,730 |  |  |  | (3,302 | ) |  |  | — |  |  |  | 8,428 |
Development agreement |  | — |  |  |  | 21,373 |  |  |  | — |  |  |  | — |  |  |  | 21,373 |
|  |  |  |  |  | 156,503 |  |  |  | (20,671 | ) |  |  | — |  |  |  | 135,832 |
Indefinite lived intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trademarks |  | Indefinite |  |  |  | 207,387 |  |  |  | — |  |  |  | (4,300 | ) |  |  | 203,087 |
Gaming license rights |  | Indefinite |  |  |  | 1,341,685 |  |  |  | (33,960 | ) |  |  | (179,974 | ) |  |  | 1,127,751 |
|  |  |  |  |  | 1,549,072 |  |  |  | (33,960 | ) |  |  | (184,274 | ) |  |  | 1,330,838 |
Balances, December 31, 2018 |  |  |  |  | $ | 1,705,575 |  |  | $ | (54,631 | ) |  | $ | (184,274 | ) |  | $ | 1,466,670 |
Amortizing Intangible Assets Customer Relationships Customer relationships represent the value of repeat business associated with our customer loyalty programs. The value of customer relationships is determined using a multi-period excess earnings method, which is a specific discounted cash flow model. The value is determined at an amount equal to the present value of the incremental after-tax cash flows attributable only to these customers, discounted to present value at a risk-adjusted rate of return. With respect to the application of this methodology, we used the following significant projections and assumptions: revenue of our rated customers, based on expected level of play; promotional allowances provided to these existing customers; attrition rate related to these customers; operating expenses; general and administrative expenses; trademark expense; discount rate; and the present value of tax benefit. Host Agreements Host agreements represent the value associated with our host establishment relationships. The value of host agreements is determined using a multi-period excess earnings method, which is a specific discounted cash flow model. The value is determined at an amount equal to the present value of the incremental after-tax cash flows attributable only to these establishments, discounted to present value at a risk-adjusted rate of return. Favorable Lease Rates Favorable lease rates represent the rental rates for assumed land leases that are favorable to comparable market rates. The fair value is determined on a technique whereby the difference between the lease rate and the then current market rate for the remaining contractual term is discounted to present value. The assumptions underlying this computation include the actual lease rates, the expected remaining lease term, including renewal options, based on the existing lease; current rates of rent for leases on comparable properties with similar terms obtained from market data and analysis; and an assumed discount rate. The estimates underlying the result covered a term of 41 to 52 years. This asset was reclassified and added to the operating lease right-of-use asset upon the adoption of the Lease Standard effective January 1, 2019. Development Agreement Development agreement is an acquired contract with a Native American tribe (the "Tribe") under which the Company has the right to assist the Tribe in the development and management of a gaming facility on the Tribe's land. This asset although amortizable, is not amortized until development is completed. We are in the process of finalizing project design and construction planning. In the interim, this asset is subject to periodic impairment reviews. Indefinite Lived Intangible Assets Trademarks Trademarks are based on the value of our brands, which reflect the level of service and quality we provide and from which we generate repeat business. Trademarks are valued using the relief from royalty method, which presumes that without ownership of such trademark, we would have to make a stream of payments to a brand or franchise owner in return for the right to use their name. By virtue of this asset, we avoid any such payments and record the related intangible value of our ownership of the trade name. We used the following significant projections and assumptions to determine value under the relief from royalty method: revenue from gaming and hotel activities; royalty rate; tax expense; terminal growth rate; discount rate; and the present value of tax benefit. Gaming License Rights Gaming license rights represent the value of the license to conduct gaming in certain jurisdictions, which is subject to highly extensive regulatory oversight, and a limitation on the number of licenses available for issuance therein. In the majority of cases, the value of our gaming licenses is determined using a multi-period excess earnings method, which is a specific discounted cash flow model. The value is determined at an amount equal to the present value of the incremental after-tax cash flows attributable only to future gaming revenue, discounted to present value at a risk-adjusted rate of return. With respect to the application of this methodology, we used the following significant projections and assumptions: gaming revenues; gaming operating expenses; general and administrative expenses; tax expense; terminal value; and discount rate. In two instances, we determine the value of our gaming licenses by applying a cost approach. Our primary consideration in the application of this methodology is the initial statutory fee associated with acquiring a gaming license in the jurisdiction. Activity for the Years Ended December 31, 2019, 2018 and 2017 The following table sets forth the changes in these intangible assets:
(In thousands) |  | Customer Relationships |  |  | Host Agreements |  |  | Favorable Lease Rates |  |  | Development Agreements |  |  | Trademarks |  |  | Gaming License Rights |  |  | Intangible Assets, Net |
Balance, January 1, 2017 |  | $ | 19,462 |  |  | $ | — |  |  | $ | 32,331 |  |  | $ | 21,373 |  |  | $ | 149,387 |  |  | $ | 659,401 |  |  | $ | 881,954 |
Additions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Purchase price adjustments |  |  | 920 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,800 | ) |  |  | — |  |  |  | (880 | )
Impairments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Amortization |  |  | (14,452 | ) |  |  | — |  |  |  | (228 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (14,680 | )
Other (1) |  |  | — |  |  |  | — |  |  |  | (23,448 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (23,448 | )
Balance, December 31, 2017 |  |  | 5,930 |  |  |  | — |  |  |  | 8,655 |  |  |  | 21,373 |  |  |  | 147,587 |  |  |  | 659,401 |  |  |  | 842,946 |
Additions |  |  | 56,000 |  |  |  | 58,000 |  |  |  | — |  |  |  | — |  |  |  | 55,500 |  |  |  | 468,350 |  |  |  | 637,850 |
Impairments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Amortization |  |  | (11,643 | ) |  |  | (2,256 | ) |  |  | (227 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (14,126 | )
Balance, December 31, 2018 |  |  | 50,287 |  |  |  | 55,744 |  |  |  | 8,428 |  |  |  | 21,373 |  |  |  | 203,087 |  |  |  | 1,127,751 |  |  |  | 1,466,670 |
Additions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Purchase price adjustments |  |  | 2,700 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (700 | ) |  |  | 35,000 |  |  |  | 37,000 |
Impairments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Amortization |  |  | (24,485 | ) |  |  | (3,866 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (28,351 | )
Other (2) |  |  | — |  |  |  | — |  |  |  | (8,428 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (8,428 | )
Balance, December 31, 2019 |  | $ | 28,502 |  |  | $ | 51,878 |  |  | $ | — |  |  | $ | 21,373 |  |  | $ | 202,387 |  |  | $ | 1,162,751 |  |  | $ | 1,466,891 |
(1) In March 2017, The Orleans Hotel and Casino exercised an option in its lease agreement to terminate the existing lease and purchase the land subject to the lease therefore combining the remaining unamortized favorable lease rate asset into the cost of the land asset. (2) The remaining balance of the favorable lease rates intangible asset was reclassified and added to the operating lease right-of-use asset upon the adoption of the Lease Standard effective January 1, 2019. Future Amortization Customer relationships are being amortized on an accelerated basis over a weighted average original life of five years. Host agreements are being amortized on a straight-line basis over an original life of 15 years. Future amortization is as follows:
(In thousands) |  | Customer Relationships |  |  | Host Agreements |  |  | Total |
For the year ending December 31, |  |  |  |  |  |  |  |  |  |  |  |
2020 |  | $ | 15,465 |  |  | $ | 3,867 |  |  | $ | 19,332 |
2021 |  |  | 8,737 |  |  |  | 3,867 |  |  |  | 12,604 |
2022 |  |  | 3,322 |  |  |  | 3,867 |  |  |  | 7,189 |
2023 |  |  | 939 |  |  |  | 3,867 |  |  |  | 4,806 |
2024 |  |  | 39 |  |  |  | 3,867 |  |  |  | 3,906 |
Thereafter |  |  | — |  |  |  | 32,543 |  |  |  | 32,543 |
Total future amortization |  | $ | 28,502 |  |  | $ | 51,878 |  |  | $ | 80,380 |
Trademarks and gaming license rights are not subject to amortization, as we have determined that they have an indefinite useful life; however, these assets are subject to an annual impairment test each year and between annual test dates in certain circumstances. Impairment Considerations No impairment charges resulted from our quarterly reviews or annual tests of intangible assets for impairment in 2019, 2018 and 2017.

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- Definition The entire disclosure for all or part of the information related to intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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