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Acquisitions And New Ventures | 12 Months Ended
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Dec. 31, 2011
Acquisitions And New Ventures [Abstract] |
Acquisitions And New Ventures | NOTE 2—ACQUISITIONS AND NEW VENTURES Harlow's Casino Resort & Hotel Acquisition On December 16, 2010, the Company completed its acquisition of Harlow's in Greenville, Mississippi for cash consideration of approximately $140.4 million. The transaction included the acquisition of a 33,000-square foot casino, a 105-room hotel, a 2,600-seat entertainment center and dining facilities. The primary reason for the acquisition was to continue the Company's diversification and growth strategies and invest in assets with an expected yield on investment to enhance shareholder value. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of the acquisition.
|  | Total |
Restricted cash |  | $ | 703 |
Accounts receivable |  |  | 164 |
Prepaid expenses |  |  | 696 |
Inventory |  |  | 95 |
Other assets |  |  | 17 |
Property and equipment |  |  | 47,120 |
Deferred income taxes |  |  | 118 |
Goodwill |  |  | 31,562 |
Other intangible assets |  |  | 59,005 |
Total assets acquired |  |  | 139,480 |
Accounts payable |  |  | 465 |
Accrued expenses |  |  | 3,104 |
Other liabilities |  |  | 62 |
Total liabilities acquired |  |  | 3,631 |
Purchase price, net of cash acquired |  | $ | 135,849 |
The fair value of other intangible assets consists of the following (in thousands):
Slot gaming rights |  | $ | 33,880 |
Customer relationships |  |  | 13,580 |
Tradename |  |  | 7,980 |
Other intangible assets |  |  | 3,565 |
Total intangible assets |  | $ | 59,005 |
Depreciation of property and equipment acquired is calculated using the straight-line method over the estimated remaining useful lives of the related assets as follows: 3 to 5 years for computer hardware and software, 5 to 10 years for equipment, 7 years for furniture and fixtures, 35 years for buildings and 22 years for building improvements. Amortization of other intangible assets acquired is calculated using the straight-line method over the estimated useful life of the related intangible asset. Intangible assets include two segments of customer relationships valued at $10.8 million and $2.8 million with lives of 6 years and 3 years, respectively. Other intangible assets consist of a non-compete agreement valued at $0.4 million and leasehold interests valued at $3.2 million, with lives of 3 years and 30 years, respectively. Slot gaming rights and tradename are determined to have indefinite lives and are not being amortized. During the year ended December 31, 2011, the Company reduced goodwill by $0.4 million related to the resolution of the working capital calculation and to the adjustment of certain deferred income tax assets and liabilities. YouBet.com Merger On June 2, 2010, the Company completed its acquisition of Youbet pursuant to an Agreement and Plan of Merger dated as of November 11, 2009, for an aggregate purchase price of $131.8 million, which consisted of $45.3 million of cash and approximately 2.7 million shares of the Company's common stock valued at $86.5 million based on the closing price of the Company's common stock on June 1, 2010 of $32.04 per share. The transaction included the acquisition of the account wagering platform of Youbet and the operations of United Tote Company and United Tote Canada (collectively "United Tote"), which manufactures and operates pari-mutuel wagering systems for approximately 100 racetracks, off-track betting facilities ("OTBs") and other pari-mutuel wagering businesses. The primary reason for the acquisition was to invest in assets with an expected yield on investment and continue the Company's growth in one of the fastest growing segments of the pari-mutuel industry. The acquisition of Youbet was accounted for under the purchase method. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of the acquisition.
|  | Total |
Restricted cash |  | $ | 5,544 |
Accounts receivable |  |  | 2,761 |
Prepaid expenses |  |  | 984 |
Inventory |  |  | 1,020 |
Other assets |  |  | 103 |
Property and equipment |  |  | 9,063 |
Deferred income taxes |  |  | 31,667 |
Goodwill |  |  | 66,801 |
Other intangible assets |  |  | 27,300 |
Total assets acquired |  |  | 145,243 |
Accounts payable |  |  | 11,140 |
Accrued expenses |  |  | 4,609 |
Deferred revenue |  |  | 299 |
Income taxes payable |  |  | (941 | )
Deferred income taxes |  |  | 11,654 |
Total liabilities acquired |  |  | 26,761 |
Purchase price, net of cash acquired |  | $ | 118,482 |
Depreciation of property and equipment acquired is calculated using the straight-line method over the estimated useful lives of the related assets as follows: 3 to 5 years for computer hardware and software, 5 to 10 years for equipment, 7 years for furniture and fixtures and 1 to 7 years for leasehold improvements. Amortization of other intangible assets acquired is calculated using the straight-line method over the estimated useful life of the related intangible asset. Other intangible assets primarily consist of three segments of customer relationships valued at $15.1 million, $4.6 million and $7.0 million with lives of 7 years, 6 years and 5 years, respectively. The entire balance of goodwill, which includes expected synergies from combining the operations of Youbet and the Company, has been allocated to the Online Business segment. The Company does not expect to deduct any portion of goodwill for income tax purposes. During the year ended December 31, 2011, the Company reduced goodwill by $0.4 million related to the adjustment of certain deferred income tax assets and liabilities. During 2010 and 2011, the Company terminated approximately 64 employees. These employee separations were prompted by the identification of redundancies in the Company's Online Business as a result of the Company's merger with Youbet. During the year ended December 31, 2010, in accordance with the terms of a historic, ongoing benefit arrangement, the Company recognized $2.9 million of severance and other benefits costs related to these terminations. These expenses are included within selling, general and administrative expenses in the Consolidated Statement of Net Earnings and Comprehensive Earnings. Pro Forma The following table illustrates the effect on net revenues, earnings from continuing operations and earnings from continuing operations per common share as if the Company had consummated the merger with Harlow's and Youbet as of the beginning of each period presented. The pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations that would have occurred had the merger with Harlow's and Youbet been consummated at the beginning of the respective periods.
|  | Year Ended December 31, |
|  | 2010 |  |  | 2009 |
Net revenues |  | $ | 688,440 |  |  | $ | 638,560 |
Earnings from continuing operations |  | $ | 22,060 |  |  | $ | 22,795 |
Earnings from continuing operations per common share |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |
Earnings from continuing operations |  | $ | 1.32 |  |  | $ | 1.36 |
Diluted: |  |  |  |  |  |  |  |
Earnings from continuing operations |  | $ | 1.31 |  |  | $ | 1.36 |
Shares used in computing earnings from continuing operations per common share: |  |  |  |  |  |  |  |
Basic |  |  | 16,318 |  |  |  | 16,282 |
Diluted |  |  | 16,796 |  |  |  | 16,740 |

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- Definition Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Appendix F -Paragraph F4 -Subparagraph e Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6909870&loc=d3e1392-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141 -Paragraph 51 -Subparagraph a -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6909870&loc=d3e1486-128463 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141 -Paragraph 52 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph 68 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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