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Description Of Business And Basis Of Presentation | 6 Months Ended
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Jun. 30, 2015
Description Of Business And Basis Of Presentation [Abstract] |
Description Of Business And Basis Of Presentation | 1.DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Century Casinos, Inc. (“CCI” or the “Company”) is an international casino entertainment company. As of June 30, 2015, the Company owned casino operations in North America; managed cruise ship-based casinos on international waters; held a majority ownership interest in nine casinos throughout Poland, a racetrack and entertainment center (“REC”) in Canada and the pari-mutuel off-track betting network in Southern Alberta, Canada; manage d a casino in Aruba and had an agreement to provide gaming services in Argentina. T he Company currently owns, operates and manages the following casinos through wholly-owned subsidiaries in North America:
- | The Century Casino & Hotel in Edmonton, Alberta, Canada;
- | The Century Casino Calgary, Alberta, Canada;
- | The Century Casino & Hotel in Central City, Colorado; and
- | The Century Casino & Hotel in Cripple Creek, Colorado.
In March 2007, the Company’s subsidiary Century Casinos Europe GmbH (“CCE”) acquired 33.3% of the outstanding shares issued by Casinos Poland Ltd (“CPL” or “Casinos Poland”) and the Company accounted for the investment under the equity method. In April 2013, CCE acquired from LOT Polish Airlines an additional 33.3% ownership interest in CPL. As of the date of acquisition, the Company began consolidating its 66.6% ownership of CPL as a majority-owned subsidiary for which it has a controlling financial interest. Polish Airports Company (“Polish Airports”) owns the remaining 33.3% of CPL. The Company accounts for and reports the 33.3% Polish Airports ownership interest as a non-controlling financial interest. The Company operates 11 ship-based casinos onboard the ships of the following t hree cruise lines: TUI Cruises, Windstar Cruises, and Nova Star Cruises Ltd. In May 2014, Windstar Cruises launched the Star Pride, the first of three newly acquired all suite cruise ships. Windstar Cruises launched two additional ships, the Star Breeze and Star Legend, in May 2015. The Company operates the ship-based casino s onboard each of these ship s. In February 2014, the Company signed an exclusive agreement with Nova Star Cruises Ltd. to operate a ship-based casino onboard the Nova Star, a round trip cruise ferry service connecting Portland, Maine and Yarmouth, Nova Scot ia. The ferry began operations i n May 2014 and operates on a seasonal basis. Operations for the 2015 season began in June 2015. In June 2014, TUI Cruises launched the Mein Schiff 3 and the Company currently operates the ship-based casino onboard this ship. Also, in November 2014, the Company amended its concession agreement with TUI Cruises to include its operation of the ship-based casino onboard the Mein Schiff 4, a new 2,500 passenger ship that began operations in May 2015. The Company currently operates the ship-based casino onboard this ship. In March 2015, the Company mutually agreed with Norwegian Cruise Line Holdings (“Norwegian”) to terminate its concession agreements with Oceania Cruises (“Oceania”) and Regent Seven Seas Cruises (“Regent”), indirect subsidiaries of Norwegian, effective June 1, 2015 (the “Termination Agreement”). The Company transitioned operations of the eight ship-based casinos that it operated onboard Oceania and Regent vessels to Norwegian throughout April and May 2015. As consideration for the early termination of the concession agreements, the Company received $4.0 million in June 2015. The Company recorded this on its condensed consolidated statement of earnings (loss) under operating income less $0.6 million in assets that were sold to Norwegian as part of the Termination Agreement. The Company also entered into a two-year consulting agreement, which became effective on June 1, 2015, under which the Company is providing limited consulting services for the ship-based casinos of Oceania and Regent in exchange for receiving a consulting fee of $2.0 million. T he Company has a long-term management agreement to direct the operation of the casino at the Radisson Aruba Resort, Casino & Spa. In July 2015, the Radisson Aruba Resort, Casino & Spa was sold and rebranded as Hilton Aruba Caribbean Resort and Casino. The Company’s management agreement was assumed in the sale and no changes were made to the agreement. The Company receives a management fee consisting of a fixed fee plus a percentage of the casino’s gross revenues and earnings before interest, taxes, depreciation and amortization (“EBITDA”). In November 2012, CCE signed credit and management agreements with United Horsemen of Alberta Inc. dba Century Downs Racetrack and Casino ("CDR" or “Century Downs”) in connection with the development and operation of a REC in Balzac, north metropolitan area of Calgary, Alberta, Canada, which the Company operate s as Century Downs Racetrack and Casino. On November 29, 2013, CCE and CDR amended the credit agreement. Under the amended credit agreement, CCE acquired 15% of CDR, controls the CDR board of directors, manages the development and operation of the REC project and ha d the right to convert CAD 11 million that CCE had loaned to CDR into an additional 60% ownership interest in CDR. The Company began consolidating CDR as a minority owned subsidiary for which it has a controlling financial interest on November 29, 2013 and, as a result of the consolidation, the loans between CDR and CCE are considered intercompany transactions and eliminated upon consolidation. On March 20, 2015, CCE converted CAD 11 million of loans made to CDR into an additional 60% ownership interest in CDR. Unaffiliated shareholders own the remaining 25% of CDR, and the Company accounts for and reports the 25% CDR ownership interest as a non-controlling financial interest. See Note 3 for additional information related to CDR. The casino at the REC opened on April 1, 2015, and the racing season started on April 25, 2015. In October 2014, CCE entered into an agreement (the “MCE Agreement”) with Gambling and Entertainment LLC and its affiliates, pursuant to which CCE purchased 7.5% of the shares of Mendoza Central Entretenimientos S.A., a company formed in Argentina (“MCE”), for $1.0 million. Pursuant to the MCE Agreement, CCE is working with MCE to utilize MCE’s exclusive concession agreement with Instituto Provincial de Juegos y Casinos to lease slot machines and provide related services to Mendoza Casino, a casino located in Mendoza, Argentina, and owned by the Province of Mendoza. MCE may also pursue other gaming opportunities. Under the MCE Agreement, CCE has appointed one director to MCE’s board of directors. In addition, CCE has a three-year option to purchase up to 50% of the shares of MCE. The Company reports its 7.5% ownership interest in MCE using the cost method of accounting and reports the $1.0 million investment on the condensed consolidated balance sheet. See Note 4 for additional information related to MCE. In October 2014, CCE and MCE also entered into a Consulting Services Agreement pursuant to which CCE will provide advice on casino matters. Through the Consulting Services Agreement, CCE receives a service fee consisting of a fixed fee plus a percentage of MCE’s EBITDA. In December 2014, the Company announced that it had been selected by Horse Racing Alberta (“HRA”) to operate the pari-mutuel off-track horse betting network in Southern Alberta beginning in 2015. On January 6, 2015, the Company formed a new subsidiary, Century Bets! Inc. (“CBS”), together with Rocky Mountain Turf Club (“RMTC”), to operate the off-track betting network. The Company has a 75% ownership interest in CBS, and RMTC has a 25% ownership interest in CBS. CBS began operating the pari-mutuel network on May 4, 2015. The pari-mutuel network consists of agreements with racetracks throughout North America and world-wide for the sourcing of common pool pari-mutuel wagering content. CBS also provides pari-mutuel wagering content and live video to off-track betting parlors throughout Southern Alberta. See Note 4 for additional information related to CBS. The Company accounts for and reports RMTC’s 25% ownership interest in CBS as a non-controlling financial interest. As a result of the Company’s recent and continuing expansion efforts, during the fourth quarter of 2014, the Company reorganized its internal management reporting structure. Although the Company’s condensed consolidated results of operations, financial position and cash flows were not impacted, certain reclassifications of previously reported amounts have been made to conform to current year presentation in Note 12 “Segment Information”. These reclassifications did not impact previously reported amounts on the Company’s unaudited condensed consolidated balance sheets, statements of earnings (loss) and statements of cash flows. The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial reporting, the rules and regulations of the Securities and Exchange Commission which apply to interim financial statements and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated. In the opinion of management, all adjustments considered necessary for fair presentation of financial position, results of operations and cash flows of the Company have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 201 4. The results of operations for the period ended June 30, 2015 are not necessarily indicative of the operating results for the full year. Presentation of Foreign Currency Amounts The Company’s functional currency is the U.S. dollar (“USD” or “$”). Foreign subsidiaries with a functional currency other than the U.S. dollar translate assets and liabilities at current exchange rates at the end of the reporting periods, while income and expense accounts are translated at average exchange rates for the respective periods. The Company and its subsidiaries enter into various transactions made in currencies different from their functional currencies. These transactions are typically denominated in the Canadian dollar (“CAD”), Euro (“EUR”) and Polish zloty (“PLN”). Gains and losses resulting from changes in foreign currency exchange rates related to these transactions are included in income from operations as they occur. The exchange rates to the U.S. dollar used to translate balances at the end of the reported periods are as follows:
|  | June 30, |  | December 31, |  | June 30,
Ending Rates |  | 2015 |  | 2014 |  | 2014
Canadian dollar (CAD) |  | 1.2474 |  | 1.1601 |  | 1.0676
Euros (€) |  | 0.8967 |  | 0.8264 |  | 0.7305
Polish zloty (PLN) |  | 3.7550 |  | 3.5401 |  | 3.0381
The average exchange rates to the U.S. dollar used to translate balances during each reported period are as follows:
|  | For the three months |  |  |  | For the six months |  |
|  | ended June 30, |  |  |  | ended June 30, |  |
Average Rates |  | 2015 |  | 2014 |  | % Change |  | 2015 |  | 2014 |  | % Change
Canadian dollar (CAD) |  | 1.2302 |  | 1.0905 |  | (12.8%) |  | 1.2354 |  | 1.0966 |  | (12.7%)
Euros (€) |  | 0.9041 |  | 0.7293 |  | (24.0%) |  | 0.8964 |  | 0.7296 |  | (22.9%)
Polish zloty (PLN) |  | 3.6972 |  | 3.0382 |  | (21.7%) |  | 3.7104 |  | 3.0458 |  | (21.8%)
Source: Pacific Exchange Rate Service |  |  |  |  |  |  |  |  |  |  |  |

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