XML 24 R8.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Acquisition and Purchase Accounting | 3 Months Ended
--- | ---
Mar. 31, 2015
Acquisition and Purchase Accounting |
Acquisition and Purchase Accounting | Note 2. Acquisition and Purchase Accounting The Merger has been accounted for as a reverse acquisition of MTR Gaming by HoldCo under which HoldCo is considered the acquirer for accounting purposes. Consideration Transferred The total consideration paid was $103.0 million. The purchase consideration in a reverse acquisition was determined with reference to the value of equity the accounting acquirer, HoldCo, would have had to issue to the owners of the accounting acquiree, MTR Gaming, to give them the same percentage interest in the combined entity. However, in a reverse acquisition between a public company as the legal acquirer and a private company as the accounting acquirer, the fair value of the legal acquirer's publicly traded stock generally was a more reliable determination of the fair value of the purchase consideration than the fair value of the accounting acquirer's untraded equity security, and, as such, was used in calculating the purchase consideration. Accordingly, the following table provides the calculation of the purchase price using the fair value of the outstanding common stock of MTR Gaming based on the closing stock price of $4.43 on the Merger Date, as well as a reconciliation of the total shares outstanding on the Merger Date.
ERI Outstanding Share Calculation: |  |  |  |
Shares issued to HoldCo(1) |  |  | 23,286,202 |
Number of MTR Gaming shares outstanding on the Merger Date(2) |  |  | 28,386,084 |
MTR Gaming RSUs that vested upon closing of the Merger(3) |  |  | 499,179 |
​ | ​ | ​ | ​ | ​
Total ERI shares outstanding—before share repurchase |  |  | 52,171,465 |
MTR Gaming shares acquired at $6.05 per share based on $35.0 million cash election(4) |  |  | (5,785,123 | )
​ | ​ | ​ | ​ | ​
Total ERI shares outstanding at Merger Date(5) |  |  | 46,386,342 |
Resorts % ownership |  |  | 50.20 | %
MTR Gaming % ownership |  |  | 49.80 | %
Consideration Transferred (dollars in thousands, except stock price) |  |  |  |
Number of MTR Gaming shares outstanding at the Merger Date |  |  | 28,386,084 |
MTR Gaming RSUs that vested upon closing of the Merger |  |  | 499,179 |
MTR Gaming shares acquired at $6.05 per share based on $35.0 million cash election |  |  | (5,785,123 | )
​ | ​ | ​ | ​ | ​
Total net MTR Gaming shares |  |  | 23,100,140 |
FMV of MTR Gaming common stock at Merger Date |  | $ | 4.43 |
​ | ​ | ​ | ​ | ​
Fair value of MTR Gaming shares |  | $ | 102,334 |
Fair value of MTR Gaming stock options(3) |  |  | 677 |
​ | ​ | ​ | ​ | ​
Total consideration transferred |  | $ | 103,011 |
​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
(1) | The number of shares issued to members of HoldCo in the Mergers as merger consideration was determined pursuant to the terms of the Merger Agreement. The shares have been adjusted based upon the final review, as defined in the Merger Agreement. As a result, 25,290 escrow shares previously issued were returned to authorized and unissued prior to December 31, 2014.
(2) | Number of shares of MTR Gaming common stock issued and outstanding immediately prior to closing.
(3) | Pursuant to the MTR Gaming 2010 Long-Term Incentive Plan, immediately prior to closing, all outstanding stock options and MTR Gaming RSUs vested and became immediately exercisable. All vested MTR Gaming RSUs were exchanged for one share of ERI common stock. All outstanding stock options became exercisable for shares of ERI common stock with the same terms as the previous awards.
(4) | Total cash election includes $30.0 million paid by MTR Gaming and $5.0 million paid by HoldCo on the Merger Date.
(5) | The number of shares issued and outstanding, after settlement of the escrow shares, as determined pursuant to the terms of the Merger Agreement.
Final Purchase Price Allocation The following table summarizes the fair values of the assets acquired and liabilities assumed at the Merger Date. The fair values were based on management's analysis, including work performed by third-party valuation specialists. The following table summarizes the final purchase price allocation of the acquired assets and assumed liabilities as recorded at fair value on the Merger Date (dollars in thousands):
Current and other assets |  | $ | 75,031 |
Property and equipment |  |  | 289,211 |
Goodwill |  |  | 66,826 |
Intangible assets(1) |  |  | 473,000 |
Other noncurrent assets |  |  | 20,381 |
​ | ​ | ​ | ​ | ​
Total assets |  |  | 924,449 |
​ | ​ | ​ | ​ | ​
Current liabilities |  |  | 46,446 |
Long-term debt(2) |  |  | 624,877 |
Deferred income taxes(3) |  |  | 143,104 |
Other noncurrent liabilities |  |  | 7,011 |
​ | ​ | ​ | ​ | ​
Total liabilities assumed |  |  | 821,438 |
​ | ​ | ​ | ​ | ​
Net assets acquired |  | $ | 103,011 |
​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
(1) | Intangible assets consist of gaming licenses, trade names and customer loyalty programs.
(2) | Long-term debt was comprised of MTR Second Lien Notes totaling $570.7 million.
(3) | Deferred tax liabilities were derived based on fair value adjustments for property and equipment, identified intangibles, deferred financing costs, certain long term liabilities and long-term debt.
Goodwill, the excess of the purchase price of acquiring MTR Gaming over the fair market value of the net assets acquired, in the amount of $66.8 million, was recorded as of the Merger Date. The Company considers the goodwill to represent benefits expected to be realized as a result of the Merger. Pro Forma Information The following table includes the pro forma results for the three months ended March 31, 2014 which gives effect to the Merger as if it had occurred on January 1, 2013 and reflect proforma adjustments that are expected to have a continuing impact on the results of operations of the Company and are directly attributable to the Merger (amounts in thousands, except per share data):
|  | Three Months Ended March 31, 2014 (unaudited) |
Net revenues |  | $ | 171,858 |
Net loss |  |  | (3,127 | )
Net loss per common share: |  |  |  |
Basic and diluted |  | $ | (0.07 | )
Weighted shares outstanding: |  |  |  |
Basic and diluted |  |  | 46,386,342 |
These pro forma results do not necessarily represent the results of operations that would have been achieved if the Merger had taken place on January 1, 2013, nor are they indicative of the results of operations for future periods. The pro forma amounts include the historical operating results of the Company and MTR Gaming prior to the acquisition, with adjustments directly attributable to the Merger.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4934-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4926-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 7: 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=25497992&loc=d3e1392-128463 Reference 8: 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=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration