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Acquisitions | 12 Months Ended
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Dec. 31, 2019
Business Combinations [Abstract] |
Acquisitions | Note 4 – Acquisitions Laughlin Acquisition Overview On January 14, 2019, the Company completed the acquisition of the Laughlin Entities from Marnell for $156.2 million in cash (after giving effect to the post-closing adjustment provisions in the purchase agreement) and the issuance of 911,002 shares of the Company’s common stock to certain assignees of Marnell. The results of operations of the Laughlin Entities are included in the Company’s results subsequent to the acquisition date. Acquisition Method of Accounting The Laughlin Acquisition has been accounted for using the acquisition method of accounting. The determination of the fair value of the acquired assets and assumed liabilities (and the related determination of estimated lives of depreciable tangible and identifiable intangible assets) was completed in the fourth quarter of 2019. The following table summarizes the allocation of the purchase price, based on estimates of the fair values of the assets acquired and liabilities assumed:
|  | Preliminary Allocation as of |  |  |  |  |  |  | Final Purchase Price |
(In thousands) |  | March 31, 2019 |  |  | Adjustments |  |  | Allocation |
Current assets |  | $ | 12,615 |  |  | $ | (123 | ) |  | $ | 12,492 |
Property and equipment |  |  | 126,198 |  |  |  | (1,131 | ) |  |  | 125,067 |
Right-of-use assets |  |  | 2,620 |  |  |  | – |  |  |  | 2,620 |
Intangible assets |  |  | 19,234 |  |  |  | (324 | ) |  |  | 18,910 |
Goodwill |  |  | 24,736 |  |  |  | 1,455 |  |  |  | 26,191 |
Other noncurrent assets |  |  | – |  |  |  | 123 |  |  |  | 123 |
Liabilities |  |  | (10,023 | ) |  |  | – |  |  |  | (10,023 | )
Lease liabilities |  |  | (2,620 | ) |  |  | – |  |  |  | (2,620 | )
Total assets acquired, net of liabilities assumed |  | $ | 172,760 |  |  | $ | – |  |  | $ | 172,760 |
The goodwill recognized is the excess of the purchase price over the final values assigned to the assets acquired and liabilities assumed. All of the goodwill was assigned to the Casinos reportable operating segment and $15.0 million is expected to be deductible for income tax purposes. The following table summarizes the values assigned to acquired property and equipment and estimated useful lives by category:
(In thousands) |  | Useful Life (Years) |  |  |  |
Land |  | Not applicable |  | $ | 4,160 |
Building and site improvements |  | 10-30 |  |  | 102,450 |
Furniture and equipment |  | 2-13 |  |  | 18,290 |
Construction in process |  | Not applicable |  |  | 167 |
Total property and equipment |  |  |  | $ | 125,067 |
The following table summarizes the values assigned to acquired intangible assets and estimated useful lives by category:
(In thousands) |  | Useful Life (Years) |  |  |  |
Non-compete agreements |  | 5 |  | $ | 3,630 |
Trade names |  | Indefinite |  |  | 6,980 |
Player relationships |  | 2 |  |  | 8,300 |
Total intangible assets |  |  |  | $ | 18,910 |
The following table summarizes the components of the purchase price paid by the Company to Marnell in the Laughlin Acquisition (after taking into account the adjustment to the cash portion of the purchase price pursuant to the post-closing adjustment provisions of the purchase agreement, as described above):
(In thousands) |  | Amount |
Cash |  | $ | 156,152 |
Fair value of common stock issued (911,002 shares) |  |  | 16,608 |
Total purchase price |  | $ | 172,760 |
Pro Forma Combined Financial Information The following unaudited pro forma combined financial information has been prepared by management for illustrative purposes only and does not purport to represent what the results of operations, financial condition or other financial information of the Company would have been if the Laughlin Acquisition had occurred on January 1, 2018, or what such results or financial condition will be for any future periods. The unaudited pro forma combined financial information is based on estimates and assumptions and on the information available at the time of the preparation thereof. The unaudited pro forma combined financial information does not reflect non-recurring charges that were incurred in connection with the Laughlin Acquisition, nor any cost savings and synergies expected to result from the Laughlin Acquisition (and associated costs to achieve such savings or synergies), nor any costs associated with severance, restructuring or integration activities resulting from the Laughlin Acquisition. The following table summarizes certain unaudited pro forma combined financial information derived from a combination of the historical consolidated financial statements of the Company and of the Laughlin Entities for the year ended December 31, 2018, adjusted to give effect to the Laughlin Acquisition and related transactions.
|  | Year Ended |
(In thousands, except per share data) |  | December 31, 2018 |
Pro forma combined revenues |  | $ | 951,802 |
Pro forma combined net loss |  |  | (16,432 | )
Weighted-average common shares outstanding: |  |  |  |
Basic |  |  | 28,464 |
Diluted |  |  | 28,464 |
Pro forma combined net loss per share: |  |  |  |
Basic |  | $ | (0.58 | )
Diluted |  |  | (0.58 | )
As the Laughlin Acquisition occurred on January 14, 2019, the unaudited pro forma combined financial information for the year ended December 31, 2019, would not reflect significant adjustments to the consolidated financial information. In connection with the Laughlin Acquisition, the Company incurred approximately $1.8 million of acquisition costs for the year ended December 31, 2019. For the year ended December 31, 2019, the Laughlin Entities contributed revenue of approximately $90.4 million and operating expenses related to the Laughlin Entities were approximately $47.9 million. American Acquisition Overview On October 20, 2017, the Company completed the acquisition of all of the outstanding equity interests of American for $787.6 million in cash (after giving effect to post-closing adjustments) and the issuance of approximately 4.0 million shares of its common stock to a former American equity holder with a fair value of $101.5 million, based on the closing price of the Company’s common stock on October 20, 2017 of $25.08 per share. Acquisition Method of Accounting The American Acquisition has been accounted for using the acquisition method of accounting. The determination of the fair value of the acquired assets and assumed liabilities (and the related determination of estimated lives of depreciable tangible and identifiable intangible assets) was completed in the second quarter of 2018. There were no measurement period adjustments that were material to the Company’s consolidated financial statements. The following table summarizes the allocation of the purchase price, based on estimates of the fair values of the assets acquired and liabilities assumed:
(In thousands) |  |  |  |
Current assets |  | $ | 83,079 |
Property and equipment |  |  | 754,581 |
Other noncurrent assets |  |  | 264 |
Intangible assets |  |  | 66,140 |
Goodwill |  |  | 52,479 |
Liabilities |  |  | (67,476 | )
Total assets acquired, net of liabilities assumed |  | $ | 889,067 |
The following table summarizes the values assigned to acquired property and equipment and estimated useful lives by category:
(In thousands) |  | Useful Life (Years) |  |  |  |
Land |  | Not applicable |  | $ | 106,800 |
Land improvements |  | 15 |  |  | 6,240 |
Building and improvements |  | 45 |  |  | 607,698 |
Furniture, fixtures and equipment |  | 3-4 |  |  | 32,829 |
Construction in process |  | Not applicable |  |  | 1,014 |
Total property and equipment |  |  |  | $ | 754,581 |
The following table summarizes the values assigned to acquired intangible assets and estimated useful lives by category:
(In thousands) |  | Useful Life (Years) |  |  |  |
Trade names |  | Indefinite |  | $ | 34,510 |
Player loyalty programs |  | 3 |  |  | 26,850 |
Leasehold interest |  | 3-80 |  |  | 3,110 |
In-place lease value |  | 3-4 |  |  | 1,670 |
Total intangible assets |  |  |  | $ | 66,140 |
See Note 12, Financial Instruments and Fair Value Measurements, for further discussion regarding the valuation of the tangible and intangible assets acquired through the American Acquisition. For the period from the American Acquisition date of October 20, 2017 through December 31, 2017, American generated net revenue of $76.3 million and net income of $5.5 million. Refinancing In connection with the closing of the American Acquisition, the Company entered into the Credit Facility, then consisting of a $800.0 million term loan and a $100.0 million revolving credit facility (which was undrawn at closing and upsized to $200.0 million in 2018), and the $200.0 million Second Lien Term Loan. The Company used the net proceeds from the borrowings under these credit facilities primarily to fund the cash purchase price in the American Acquisition (a portion of which was used to repay American’s outstanding senior secured indebtedness), to refinance the Company’s outstanding senior secured indebtedness under its then-existing senior secured credit facility, and to pay certain transaction fees and expenses. See Note 8, Debt, for a discussion of the Credit Facility and associated refinancing. Pro Forma Combined Financial Information The following unaudited pro forma combined financial information has been prepared by management for illustrative purposes only and does not purport to represent what the results of operations, financial condition or other financial information of the Company would have been if the American Acquisition had occurred on January 1, 2017 or what such results or financial condition will be for any future periods. The unaudited pro forma combined financial information is based on estimates and assumptions and on the information available at the time of the preparation thereof. These estimates and assumptions may change, be revised or prove to be materially different, and the estimates and assumptions may not be representative of facts existing at the time of the American Acquisition. The unaudited pro forma combined financial information does not reflect non-recurring charges incurred in connection with the American Acquisition, nor any cost savings and synergies expected to result from the American Acquisition (and associated costs to achieve such savings or synergies), nor any costs associated with severance, restructuring or integration activities resulting from the American Acquisition. The following table summarizes certain unaudited pro forma combined financial information derived from a combination of the historical consolidated financial statements of the Company and of American for the year ended December 31, 2017, adjusted to give effect to the American Acquisition and related transactions (including the refinancing).
|  | Year Ended |
|  | December 31, 2017 |
(In thousands, except per share data) |  |  |  |
Pro forma combined revenues |  | $ | 843,589 |
Pro forma combined net income |  |  | 23,131 |
Pro forma combined net income per share: |  |  |  |
Basic |  |  | 26,342 |
Diluted |  |  | 27,897 |
Weighted-average common shares outstanding: |  |  |  |
Basic |  | $ | 0.88 |
Diluted |  |  | 0.83 |

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- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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