INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

Miami Valley Gaming Joint Venture

During March 2012, we entered into a 50% joint venture with Delaware North Companies Gaming & Entertainment Inc. ("DNC") to develop a new harness racetrack and video lottery terminal ("VLT") gaming facility in Lebanon, Ohio. Through the joint venture agreement, we formed a new company with DNC, MVG, to manage both our and DNC’s interests in the development and operation of the racetrack and VLT gaming facility. On December 21, 2012, MVG completed the purchase of the harness racing licenses and certain assets held by Lebanon Trotting Club Inc. and Miami Valley Trotting Inc. ("MVG Sellers") for total consideration of $60.0 million, of which $10.0 million was funded at closing with the remainder funded through a $50.0 million note payable with a six year term effective upon the commencement of gaming operations. There is a potential contingent consideration payment of $10.0 million based on the financial performance of the facility during the seven-year period after gaming operations commence.

On December 12, 2013, the new facility opened in Lebanon, Ohio on a 120-acre site. The facility includes a 5/8-mile harness racing track and an 186,000-square-foot gaming facility with approximately 1,590 VLTs.

Since both DNC and ourselves have participating rights over MVG, and both must consent to MVG's operating, investing and financing decisions, we account for MVG using the equity method. Summarized financial information for MVG is comprised of the following:



	December 31,
(in thousands)	2015		2014
Assets
Current assets	$	24,502	$	24,096
Property and equipment, net	119,675		130,868
Other assets, net	106,660		105,906
Total assets	$	250,837	$	260,870

Liabilities and Members' Equity
Current liabilities	$	21,620	$	16,783
Current portion of long-term debt	8,333		8,332
Long-term debt, excluding current portion	20,520		26,584
Other liabilities	75		75
Members' equity	200,289		209,096
Total liabilities and members' equity	$	250,837	$	260,870



	Years Ended December 31,
(in thousands)	2015			2014			2013
Casino revenue	$	130,327		$	126,374		$	6,144
Non-casino revenue	6,568			6,257			5,479
Net revenue	136,895			132,631			11,623
Operating and SG&A expense	98,688			97,648			10,926
Depreciation & amortization expense	12,816			12,299			935
Pre-opening expense	—			54			7,240
Operating income (loss)	25,391			22,630			(7,478		)
Interest and other expense, net	(4,197		)	(4,829		)	(397		)
Net income (loss)	$	21,194		$	17,801		$	(7,875	)

The joint venture's long-term debt consists of a $50 million secured note payable from MVG to the MVG Sellers payable quarterly over 6 years through August 2019 at a 5.0% interest rate for which it has funded $16.7 million in principal repayments. In 2015, we received distributions from MVG totaling $15.0 million.

Our 50% share of MVG's results has been included in the Consolidated Statements of Comprehensive Income:



	Years Ended December 31,
(in thousands)	2015		2014		2013
Equity in income (losses) of unconsolidated investments	$	10,597	$	8,900	$	(3,718	)

SHRI Equity Investment

On October 2, 2015, we completed the acquisition of a 25% equity investment in SCH which owns Saratoga Casino and Raceway ("Saratoga") in Saratoga Springs, New York, for $24.5 million from SHRI. Saratoga has a casino facility with approximately 1,700 VLTs, a 1/2-mile harness racetrack with a racing simulcast center, and three dining facilities. Saratoga has a 50%interest in a joint venture with DNC to manage the Gideon Putnam Hotel and Resort. We signed a five-year management agreement with SCH to manage Saratoga for which we receive management fee revenue. Saratoga expects to complete a $40.0 million expansion including a 117-room hotel, expanding dining facilities and a 3,000 square-foot multi-functional event space in 2016.

In addition, SHRI agreed to transfer its controlling interest in Saratoga Casino Black Hawk in Black Hawk, Colorado to SCH upon approval from the Colorado Division of Gaming. When the approval is received and the transfer is completed, we expect to pay the remainder of the purchase price of approximately $6.4 million to SHRI for our pro-rata ownership of the Colorado operations, and we expect to sign a five-year management agreement with SCH to manage Saratoga Casino Black Hawk for which we expect to receive management fee revenue.

Our investment in SCH recorded under the equity method included our share of the basis difference between the fair value of property and equipment and definite-lived intangible assets of $3.7 million and $2.7 million, respectively. These basis differences will be charged to expense over the remaining estimated useful lives of the property and equipment and intangible assets and are recorded as a component of equity in income (loss) of unconsolidated investments. Basis differences related to non-depreciable assets, such as land and indefinite lived-intangible assets, are not being amortized. In 2015, we received distributions from SCH of $0.3 million.