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Description Of Business And Basis Of Presentation | 9 Months Ended
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Sep. 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 September 30, 2015, the Company owned casino operations in North America; 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; managed cruise ship-based casinos on international waters; managed a casino in Aruba and had an agreement to provide gaming services in Argentina. The Company 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.
The Company’s subsidiary Century Casinos Europe GmbH (“CCE”) owns 66.6% of Casinos Poland Ltd (“CPL” or “Casinos Poland”). CPL is the owner and operator of nine casinos throughout Poland. CPL is consolidated as a majority-owned subsidiary for which the Company has a controlling financial interest. Polish Airports Company (“Polish Airports”) owns the remaining 33.3% of CPL, which is reported as a non-controlling financial interest. CCE owns 75% of the outstanding shares issued by United Horsemen of Alberta Inc. dba Century Downs Racetrack and Casino (“CDR” or “Century Downs”). CDR operates Century Downs Racetrack and Casino, a REC in Balzac, a north metropolitan area of Calgary, Alberta, Canada. CDR is consolidated as a majority-owned subsidiary for which the Company has a controlling financial interest. The remaining 25% of CDR is owned by unaffiliated shareholders and is reported as a non-controlling financial interest. The casino at CDR opened in April 2015 and the 2015 horse racing season is from April to November. See Note 3 for additional information related to CDR. CCE owns 75% of the outstanding shares issued by Century Bets! Inc. (“CBS” or “Century Bets”) and CBS is consolidated as a majority-owned subsidiary for which the Company has a controlling financial interest. Rocky Mountain Turf Club (“RMTC”) owns the remaining 25% of CBS, which is reported as a non-controlling financial interest. CBS began operating the pari-mutuel off-track horse betting network in southern Alberta in May 2015. The Company has concession agreements to operate 11 ship-based casinos onboard ships of the following t hree cruise lines: TUI Cruises, Windstar Cruises, and Nova Star Cruises Ltd. In 2015, the Company began operating the ship-based casinos onboard the following three newly launched cruise ships: Windstar Cruises Star Breeze and Star Legend and TUI Cruises Mein Schiff 4. In September 2015, the Company amended its concession agreement with TUI Cruises to include its operation of the ship-based casinos onboard Mein Schiff 5 and Mein Schiff 6, two new 2,500 passenger cruise ships that are currently being built and are expected to begin operations in the second quarter of 2016 and 2017, respectively. 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 in the second quarter of 2015. As consideration for the early termination of the concession agreements, the Company received $4.0 million in June 2015. In the second quarter of 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, which is payable $250,000 per quarter. The Company has a long-term management agreement to direct the operation of the casino at the Hilton Aruba Caribbean Resort and Casino from which the Company receives a monthly management fee. In October 2014, CCE purchased 7.5% of the shares of Mendoza Central Entretenimientos S.A., an Argentina company (“MCE”), for $1.0 million. The shares are reported on the condensed consolidated balance sheet using the cost method of accounting. MCE has an 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. In addition, CCE and MCE have entered into a Consulting Services Agreement pursuant to which CCE provides advice on casino matters and receives a service fee consisting of a fixed fee plus a percentage of MCE’s earnings before interest, taxes, depreciation and amortization (“EBITDA”). See Note 4 for additional information related to MCE. 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 the 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) or 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, 2014. The results of operations for the period ended September 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:
|  | September 30, |  | December 31, |  | September 30,
Ending Rates |  | 2015 |  | 2014 |  | 2014
Canadian dollar (CAD) |  | 1.3394 |  | 1.1601 |  | 1.1208
Euros (€) |  | 0.8959 |  | 0.8264 |  | 0.7919
Polish zloty (PLN) |  | 3.8040 |  | 3.5401 |  | 3.3140
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 nine months |  |
|  | ended September 30, |  |  |  | ended September 30, |  |
Average Rates |  | 2015 |  | 2014 |  | % Change |  | 2015 |  | 2014 |  | % Change
Canadian dollar (CAD) |  | 1.3083 |  | 1.0890 |  | (20.1%) |  | 1.2597 |  | 1.0940 |  | (15.1%)
Euros (€) |  | 0.8991 |  | 0.7552 |  | (19.1%) |  | 0.8973 |  | 0.7381 |  | (21.6%)
Polish zloty (PLN) |  | 3.7665 |  | 3.1544 |  | (19.4%) |  | 3.7291 |  | 3.0820 |  | (21.0%)
Source: Pacific Exchange Rate Service |  |  |  |  |  |  |  |  |  |  |  |

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