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Intangible and Other Assets Related to Indian Casino Projects

12 Months Ended

Jan. 01, 2012

Intangible and Other Assets Related to Indian Casino Projects [Abstract]

Intangible and Other Assets Related to Indian Casino Projects

4. Intangible and Other Assets Related to Indian Casino Projects

Intangible Assets

Intangible assets consist of costs associated with the acquisition of the management, development, consulting, or financing contracts related to tribal gaming projects and are periodically evaluated for impairment after they are initially recorded.

Information with respect to the intangible assets by project is summarized as follows (in thousands):


	Pokagon *Band()**		Shingle Springs Tribe()**		Jamul Tribe()*		Total
Balance, January 3, 2010	$	17,346		26,328		—		43,674
Allocation of advances		—		—		2,498		2,498
Amortization		(6,715)		(4,422)		—		(11,137)
Impairment charges		—		(16,664)		(2,498)		(19,162)

Balance, January 2, 2011		10,631	$	5,242	$	—	$	15,873
Allocation of advances		—		—		3,345		3,345
Amortization		(10,631)		(1,058)		—		(11,689)
Impairment charges		—		—		(3,345)		(3,345)

Balance, January 1, 2012	$	—	$	4,184	$	—	$	4,184

(*)	Due to the Buy-Out Agreement, the remaining estimated useful life of intangible assets associated with the Pokagon Band was revised and was determined to be through June 30, 2011 resulting in the intangible assets being fully amortized as of June 30, 2011.

(**)

The intangible assets related to the Shingle Springs Tribe are being amortized through the end of the management agreement, which expires in December 2015. Due to the carrying amount of the intangible assets associated with the Shingle Springs Tribe exceeding the expected future cash flows from the management agreement for the Red Hawk Casino, impairment charges of $16.7 million were recognized during fiscal 2010.

(***)

Due to the continued uncertainty surrounding the Jamul Casino Project and Lakes’ termination of the Jamul Development Agreement in March 2012, Lakes recognized an impairment charge of $3.3 million and $2.5 million related to the intangible assets associated with this project during fiscal 2011 and fiscal 2010, respectively. The impairment charge is included in impairments and other losses in the consolidated statements of operations.

Based on the length of the management agreement with the Shingle Springs Tribe, the Company expects to recognize amortization expense related to the Shingle Springs intangible assets as follows (in thousands):


Fiscal year
2012		1,057
2013		1,057
2014		1,057
2015		1,013

	$	4,184

Land Held for Development

Lakes currently owns approximately 96 acres of land for possible sale to the Jamul Tribe. In the event that this land is not sold to the Jamul Tribe, the Company has the right to sell it to a third party. This land held for development is carried at $1.0 million as of January 1, 2012 and January 2, 2011.

Management Fees Receivable and Other

Long-term assets include financial instruments related to deferred management fees and interest due from the Shingle Springs Tribe of $6.0 million and $3.1 million as of January 1, 2012 and January 2, 2011, respectively. As defined in the management and development agreement with the Shingle Springs Tribe, payment of management fees, if any, are deferred when operating results are not sufficient and are paid in subsequent periods when operating results are sufficient. In addition, long-term assets include amounts due from Mr. Kevin M. Kean (see note 9, Contract Acquisition Costs Payable). Financial instruments related to Mr. Kean have a carrying value of $1.3 million and $1.8 million, net of current portion of $0.5 million as of January 1, 2012 and January 2, 2011.