XML 29 R16.htm IDEA: XBRL DOCUMENT
v3.20.2

Note 8 - Fair Value Measurements | 9 Months Ended
--- | ---
Sep. 30, 2020
Notes to Financial Statements |
Fair Value Disclosures [Text Block] | NOTE 8. FAIR VALUE MEASUREMENTS The authoritative accounting guidance for fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These inputs create the following fair value hierarchy: Level 1: Quoted prices for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Thus, assets and liabilities categorized as Level 3 may be measured at fair value using inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Management's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels. Balances Measured at Fair Value The following tables show the fair values of certain of our financial instruments:
|  | September 30, 2020 |
(In thousands) |  | Balance |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 506,046 |  |  | $ | 506,046 |  |  | $ | — |  |  | $ | — |
Restricted cash |  |  | 15,024 |  |  |  | 15,024 |  |  |  | — |  |  |  | — |
Investment available for sale |  |  | 17,227 |  |  |  | — |  |  |  | — |  |  |  | 17,227 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent payments |  | $ | 1,146 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,146 |
|  | December 31, 2019 |
(In thousands) |  | Balance |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 249,977 |  |  | $ | 249,977 |  |  | $ | — |  |  | $ | — |
Restricted cash |  |  | 20,471 |  |  |  | 20,471 |  |  |  | — |  |  |  | — |
Investment available for sale |  |  | 16,151 |  |  |  | — |  |  |  | — |  |  |  | 16,151 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent payments |  | $ | 1,712 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,712 |
Cash and Cash Equivalents and Restricted Cash The fair values of our cash and cash equivalents and restricted cash, classified in the fair value hierarchy as Level 1, are based on statements received from our banks at September 30, 2020 and December 31, 2019. Investment Available for Sale We have an investment in a single municipal bond issuance of $19.0 million aggregate principal amount of 7.5% Urban Renewal Tax Increment Revenue Bonds, Taxable Series 2007 with a maturity date of June 1, 2037 that is classified as available for sale. We are the only holder of this instrument and there is no quoted market price for this instrument. As such, the fair value of this investment is classified as Level 3 in the fair value hierarchy. The fair value of the instrument is estimated using a discounted cash flows approach and the significant unobservable input used in the valuation at September 30, 2020 and December 31, 2019 is a discount rate of 9.4% and 10.5%, respectively. Unrealized gains and losses on this instrument resulting from changes in the fair value of the instrument are not charged to earnings, but rather are recorded as other comprehensive income (loss) in the stockholders' equity section of the condensed consolidated balance sheets. At both September 30, 2020 and December 31, 2019, $0.6 million of the carrying value of the investment available for sale is included as a current asset in prepaid expenses and other current assets, and at September 30, 2020 and December 31, 2019, $16.6 million and $15.6 million, respectively, is included in other assets on the condensed consolidated balance sheets. The discount associated with this investment of $2.5 million and $2.7 million, as of September 30, 2020 and December 31, 2019, respectively, is netted with the investment balance and is being accreted over the life of the investment using the effective interest method. The accretion of such discount is included in interest income on the condensed consolidated statements of operations. Contingent Payments In connection with the development of the Kansas Star Casino ("Kansas Star"), Kansas Star agreed to pay a former casino project promoter 1% of Kansas Star's EBITDA each month for a period of ten years commencing on December 20, 2011. The liability is recorded at the estimated fair value of the contingent payments using a discounted cash flows approach and the significant unobservable input used in the valuation at both September 30, 2020 and December 31, 2019, is a discount rate of 6.2%. At both September 30, 2020 and December 31, 2019, there was a current liability of $0.9 million, related to this agreement, which is recorded in accrued liabilities on the respective condensed consolidated balance sheets, and long-term obligation at September 30, 2020 and December 31, 2019, of $0.2 million and $0.8 million, respectively, which is included in other liabilities on the respective condensed consolidated balance sheets. The following tables summarize the changes in fair value of the Company's Level 3 assets and liabilities:
|  | Three Months Ended |
|  | September 30, 2020 |  |  | September 30, 2019 |
|  | Assets |  |  | Liability |  |  | Assets |  |  | Liability |
(In thousands) |  | Investment Available for Sale |  |  | Contingent Payments |  |  | Investment Available for Sale |  |  | Contingent Payments |
Balance at beginning of reporting period |  | $ | 16,867 |  |  | $ | (1,275 | ) |  | $ | 15,963 |  |  | $ | (2,072 | )
Total gains (losses) (realized or unrealized): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in interest income (expense) |  |  | 38 |  |  |  | (18 | ) |  |  | 37 |  |  |  | (33 | )
Included in other comprehensive income (loss) |  |  | 322 |  |  |  | — |  |  |  | 751 |  |  |  | — |
Included in other items, net |  |  | — |  |  |  | (59 | ) |  |  | — |  |  |  | 40 |
Purchases, sales, issuances and settlements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Settlements |  |  | — |  |  |  | 206 |  |  |  | — |  |  |  | 207 |
Balance at end of reporting period |  | $ | 17,227 |  |  | $ | (1,146 | ) |  | $ | 16,751 |  |  | $ | (1,858 | )
|  | Nine Months Ended |
|  | September 30, 2020 |  |  | September 30, 2019 |
|  | Assets |  |  | Liability |  |  | Assets |  |  | Liability |
(In thousands) |  | Investment Available for Sale |  |  | Contingent Payments |  |  | Investment Available for Sale |  |  | Contingent Payments |
Balance at beginning of reporting period |  | $ | 16,151 |  |  | $ | (1,712 | ) |  | $ | 15,772 |  |  | $ | (2,407 | )
Total gains (losses) (realized or unrealized): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in interest income (expense) |  |  | 116 |  |  |  | (66 | ) |  |  | 112 |  |  |  | (109 | )
Included in other comprehensive income (loss) |  |  | 1,510 |  |  |  | — |  |  |  | 1,377 |  |  |  | — |
Included in other items, net |  |  | — |  |  |  | 162 |  |  |  | — |  |  |  | (21 | )
Purchases, sales, issuances and settlements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Settlements |  |  | (550 | ) |  |  | 470 |  |  |  | (510 | ) |  |  | 679 |
Balance at end of reporting period |  | $ | 17,227 |  |  | $ | (1,146 | ) |  | $ | 16,751 |  |  | $ | (1,858 | )
We are exposed to valuation risk on our Level 3 financial instruments. We estimate our risk exposure using a sensitivity analysis of potential changes in the significant unobservable inputs of our fair value measurements. Our Level 3 financial instruments are most susceptible to valuation risk caused by changes in the discount rate. If the discount in our fair value measurements increased or decreased by 100 basis points, the change would not cause the value of our fair value measurements to change significantly. Balances Disclosed at Fair Value The following tables provide the fair value measurement information about our obligation under minimum assessment agreements and other financial instruments:
|  | September 30, 2020
(In thousands) |  | Outstanding Face Amount |  |  | Carrying Value |  |  | Estimated Fair Value |  | Fair Value Hierarchy
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |
Obligation under assessment arrangements |  | $ | 26,654 |  |  | $ | 22,310 |  |  | $ | 27,087 |  | Level 3
|  | December 31, 2019
(In thousands) |  | Outstanding Face Amount |  |  | Carrying Value |  |  | Estimated Fair Value |  | Fair Value Hierarchy
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |
Obligation under assessment arrangements |  | $ | 28,118 |  |  | $ | 23,300 |  |  | $ | 28,780 |  | Level 3
The following tables provide the fair value measurement information about our long-term debt:
|  | September 30, 2020
(In thousands) |  | Outstanding Face Amount |  |  | Carrying Value |  |  | Estimated Fair Value |  | Fair Value Hierarchy
Bank credit facility |  | $ | 989,313 |  |  | $ | 974,093 |  |  | $ | 962,990 |  | Level 2
6.375% senior notes due 2026 |  |  | 750,000 |  |  |  | 742,722 |  |  |  | 778,125 |  | Level 1
6.000% senior notes due 2026 |  |  | 700,000 |  |  |  | 691,803 |  |  |  | 722,750 |  | Level 1
4.750% senior notes due 2027 |  |  | 1,000,000 |  |  |  | 985,877 |  |  |  | 978,750 |  | Level 1
8.625% senior notes due 2025 |  |  | 600,000 |  |  |  | 588,892 |  |  |  | 655,500 |  | Level 1
Other |  |  | 4,145 |  |  |  | 4,145 |  |  |  | 4,145 |  | Level 3
Total debt |  | $ | 4,043,458 |  |  | $ | 3,987,532 |  |  | $ | 4,102,260 |  |
|  | December 31, 2019
(In thousands) |  | Outstanding Face Amount |  |  | Carrying Value |  |  | Estimated Fair Value |  | Fair Value Hierarchy
Bank credit facility |  | $ | 1,305,634 |  |  | $ | 1,290,708 |  |  | $ | 1,308,846 |  | Level 2
6.375% senior notes due 2026 |  |  | 750,000 |  |  |  | 741,729 |  |  |  | 806,250 |  | Level 1
6.000% senior notes due 2026 |  |  | 700,000 |  |  |  | 690,756 |  |  |  | 750,750 |  | Level 1
4.750% senior notes due 2027 |  |  | 1,000,000 |  |  |  | 984,416 |  |  |  | 1,038,750 |  | Level 1
Other |  |  | 58,322 |  |  |  | 58,322 |  |  |  | 58,322 |  | Level 3
Total debt |  | $ | 3,813,956 |  |  | $ | 3,765,931 |  |  | $ | 3,962,918 |  |
The estimated fair value of our bank credit facility is based on a relative value analysis performed on or about September 30, 2020 and December 31, 2019. The estimated fair values of our Senior Notes are based on quoted market prices as of September 30, 2020 and December 31, 2019. The other debt is fixed-rate debt consisting of the following: (i) Belterra Park Mortgage payable in 96 monthly installments, of which began in 2018 and was extinguished in May 2020; (2) finance leases with various maturity dates from 2020 to 2026; and (3) a purchase obligation with quarterly payments maturing in July 2022. The other debt is not traded and does not have an observable market input; therefore, we have estimated its fair value to be equal to the carrying value. There were no transfers between Level 1, Level 2 and Level 3 measurements during the nine months ended September 30, 2020 and 2019.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration