XML 40 R9.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Note 3. Rocky Gap Casino Resort | 12 Months Ended
--- | ---
Dec. 29, 2013
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | 3. Rocky Gap Casino Resort Background In April 2012, a video lottery operation license (“Gaming License”) for the Rocky Gap Lodge & Golf Resort was awarded to the Company by the State of Maryland Video Lottery Facility Location Commission (the “Commission”). In August 2012, Lakes acquired the assets of Rocky Gap for $6.8 million and simultaneously entered into an operating lease for the underlying land (see note 21, Commitments and Contingencies). The AAA Four Diamond Award® winning resort included a hotel, convention center, spa, two restaurants and the only Jack Nicklaus signature golf course in Maryland. After acquiring Rocky Gap, the Company converted the existing convention center space into a gaming facility and renamed the property Rocky Gap Casino Resort. The gaming facility opened to the public on May 22, 2013 and features 558 video lottery terminals (“VLTs”), 10 table games, three poker tables, a casino bar and a new lobby food and beverage outlet. A new event and conference center, which can accommodate large groups and features multiple flexible use meeting rooms opened during the fourth quarter of 2013. The total cost of the Rocky Gap project was approximately $35.0 million, which included the initial acquisition cost. Total assets related to Rocky Gap were approximately $34.4 million and $12.0 million as of December 29, 2013 and December 30, 2012, respectively, which consisted primarily of property, equipment, construction in process, intangible assets related to the acquisition of Rocky Gap, and the Gaming License. Included in impairments and other losses during fiscal 2012 was $1.2 million related to costs associated with initial development plans for Rocky Gap which were subsequently revised. Application of the Acquisition Method of Accounting The acquisition of Rocky Gap was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Under the acquisition method of accounting, the total purchase price is allocated to the net tangible and intangible assets of Rocky Gap acquired in connection with the acquisition, based on their estimated fair values. The allocation of the purchase price to the assets acquired and liabilities assumed is as follows (in thousands):
|  | Amount |
Building |  | $ | 2,788 |
Site improvements |  |  | 2,091 |
Furniture and equipment |  |  | 1,294 |
Intangible assets |  |  | 627 |
Inventories |  |  | 126 |
Other assets |  |  | 136 |
Current liabilities assumed |  |  | (228 | )
Total purchase price |  | $ | 6,834 |
The amounts assigned to intangible assets by category are summarized in the table below (in thousands):
| Useful Life (years) |  | Amount Assigned |
Advance bookings | 1.4 |  | $ | 179 |
Memberships | 25 |  |  | 448 |
Total intangible assets |  | $ | 627 |
Advance bookings – Advance bookings are reservations that represent future cash flows the Company will enjoy when the guest visits Rocky Gap. These reservations have been “pre-sold” as of the acquisition date of August 3, 2012 and would not require future sales or marketing expenses to be incurred. Memberships – Memberships provide access to the golf course and related amenities in exchange for the payment of dues. The portion of Rocky Gap’s income attributed to the possession of such membership contracts forms the basis of the intangible value. Amortization expense related to the advance bookings and memberships intangible assets for the twelve months ended December 29, 2013 was less than $0.1 million and was approximately $0.2 million for the period from August 3, 2012 through December 30, 2012. Gaming License Amortization of the Gaming License began on May 22, 2013, the date the gaming facility opened for public play, and is being amortized over its 15 year term. Amortization expense related to the Gaming License was $0.1 million and zero for the twelve months ended December 29, 2013 and December 30, 2012, respectively. Information with respect to the Gaming License is as follows (in thousands):
|  | December 29, 2013 |  |  | December 30, 2012 |
Original cost |  | $ | 2,100 |  |  | $ | 2,100 |
Accumulated amortization |  |  | (85 | ) |  |  | — |
|  | $ | 2,015 |  |  | $ | 2,100 |
The estimated future amortization expense related to the Gaming License for the next five years and thereafter is as follows (in thousands):
|  | 2014 |  |  | 2015 |  |  | 2016 |  |  | 2017 |  |  | 2018 |  |  | Thereafter |
Estimated amortization expense |  | $ | 140 |  |  | $ | 140 |  |  | $ | 140 |  |  | $ | 140 |  |  | $ | 140 |  |  | $ | 1,315 |
Unaudited Pro Forma Condensed Consolidated Financial Information The following unaudited pro forma condensed consolidated financial results of operations for the fiscal year ended December 30, 2012 are presented as if the acquisition had been completed at the beginning of the period. The amounts shown for the year ended December 29, 2013 are based on actual results for the period:
|  | Years Ended |
|  | December 29, 2013 |  |  | December 30, 2012 |
|  |  |  |  |  | (Pro forma) |
|  | (In thousands, except per-share data) |
Total net revenues |  | $ | 38,790 |  |  | $ | 15,078 |
Net earnings attributable to Lakes Entertainment, Inc. |  |  | 18,651 |  |  |  | 2,062 |
Earnings per share: |  |  |  |  |  |  |  |
Basic |  |  | 0.70 |  |  |  | 0.08 |
Diluted |  |  | 0.70 |  |  |  | 0.08 |
Weighted average common shares outstanding: |  |  |  |  |  |  |  |
Basic |  |  | 26,483 |  |  |  | 26,438 |
Diluted |  |  | 26,689 |  |  |  | 26,439 |
The unaudited pro forma condensed consolidated financial results for the year ended December 30, 2012 have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the first day of the 2012 period presented, or of future results of the consolidated entities. The unaudited pro forma condensed consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition. The following adjustments have been made to the pro forma net earnings attributable to Lakes and pro forma earnings per share for the year ended December 30, 2012 in the table above:
| ● | Management and service fees paid by Rocky Gap to the previous management company have been excluded as Rocky Gap would not have incurred these costs if owned by Lakes.
| ● | Ground rent expense incurred by Rocky Gap has been adjusted to reflect the terms of the lease agreement that Lakes and the Maryland DNR entered into upon the acquisition of Rocky Gap, as further discussed in note 21, Commitments and Contingencies.
| ● | Interest expense incurred by Rocky Gap has been excluded as Lakes did not assume the debt of Rocky Gap upon the acquisition of the property.

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 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 2: 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=7488404&loc=d3e7000-128479 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=6910749&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 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 5: 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=6910749&loc=d3e4934-128472 Reference 6: 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 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=7488404&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=7488404&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=6910749&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