Attached files
| file | filename |
|---|---|
| EX-99.4 - UNAUDITED PRO FORMA - PENINSULA GAMING - PENINSULA GAMING CORP. | proforma.htm |
| EX-99.2 - AUDITED FINANCIALS OF BELLE OF ORLEANS JAN-OCT 2009 - PENINSULA GAMING CORP. | financials2009.htm |
| EX-99.1 - AUDITED FINANCIALS OF BELLE OF ORLEANS 2008 - PENINSULA GAMING CORP. | auditedfinancials2008.htm |
| 8-K - PENINSULA GAMING FORM 8-K 1-06-10 - PENINSULA GAMING CORP. | form8k.htm |
EXHIBIT
99.3
BELLE
OF ORLEANS, L.L.C.
d/b/a
Amelia Belle Casino
| Page | |
| Belle of Orleans, L.L.C. d/b/a Amelia Belle Casino | |
| Condensed Statement of Operations (Unaudited) for the Nine Months Ended September 30, 2008 | 2 |
| Condensed Statement of Changes in Member’s Equity (Unaudited) for the Nine Months Ended September 30, 2008 | 3 |
| Condensed Statement of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2008 | 4 |
| Notes to Condensed Financial Statements (Unaudited) | 5 |
1
BELLE
OF ORLEANS, L.L.C.
d/b/a
AMELIA BELLE CASINO
CONDENSED
STATEMENT OF OPERATIONS (UNAUDITED)
(in
thousands)
|
Nine Months
Ended
September
30,
2008
|
||||
|
Operating
Revenues:
|
||||
|
Casino
|
$
|
39,862
|
||
|
Food
and beverage
|
2,540
|
|||
|
Other
|
275
|
|||
|
Less
promotional allowances
|
(3,487
|
)
|
||
|
Total
net revenues
|
39,190
|
|||
|
Operating
Expenses;
|
||||
|
Casino
|
6,937
|
|||
|
Food
and beverage
|
2,208
|
|||
|
Marketing,
advertising and casino promotions
|
2,936
|
|||
|
Gaming
taxes and licenses
|
8,525
|
|||
|
Administrative
and general
|
5,365
|
|||
|
Impairment
of related party receivables
|
2,729
|
|||
|
Depreciation
and amortization
|
3,561
|
|||
|
Total
operating expenses
|
32,261
|
|||
|
INCOME
FROM OPERATIONS
|
6,929
|
|||
|
INTEREST
INCOME
|
12
|
|||
|
NET
INCOME
|
$
|
6,941
|
||
See
accompanying notes to condensed financial statements (unaudited).
2
BELLE
OF ORLEANS, L.L.C.
d/b/a
AMELIA BELLE CASINO
CONDENSED
STATEMENT OF CHANGES IN MEMBER’S EQUITY
NINE
MONTHS ENDED SEPTMEBER 30, 2008
(in
thousands)
|
COMMON
MEMBER’S
EQUITY
|
||||
|
BALANCE,
JANUARY 1, 2008
|
$
|
56,480
|
||
|
Net
income
|
6,941
|
|||
|
Member
distributions
|
-
|
|||
|
BALANCE,
SEPTEMBER 30, 2008
|
$
|
63,421
|
||
See
accompanying notes to condensed financial statements (unaudited).
3
BELLE
OF ORLEANS, L.L.C.
d/b/a
AMELIA BELLE CASINO
CONDENSED
STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
|
Nine Months
Ended
September
30,
2008
|
||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||
|
Net
income
|
$
|
6,941
|
||
|
Adjustments
to reconcile net income to net cash flows from operating
activities:
|
||||
|
Depreciation
and amortization
|
3,561
|
|||
|
Terminated
project costs
|
254
|
|||
|
Impairment
of related party receivables
|
2,729
|
|||
| Insurance proceeds for property damage | (6,939 | ) | ||
|
Changes
in operating assets and liabilities:
|
||||
|
Receivables
|
5
|
|||
|
Inventories,
prepaid expenses and other assets
|
(560
|
)
|
||
|
Accounts
payable
|
(1,453
|
)
|
||
|
Accrued
expenses and other liabilities
|
10,740
|
|||
|
Related
party receivables and payables, net
|
(18,444
|
)
|
||
|
Net
cash flows from operating activities
|
(3,166
|
) | ||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||
| Changes in insurance receivable for property damage | 6,939 | |||
|
Additions
to property and equipment
|
(882
|
)
|
||
|
Net
cash flows from investing activities
|
6,057
|
|
||
|
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
2,891
|
|||
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
6,358
|
|||
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
9,249
|
||
See
accompanying notes to condensed financial statements (unaudited).
4
BELLE
OF ORLEANS, L.L.C.
d/b/a
AMELIA BELLE CASINO
NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Basis of
Presentation
Belle of
Orleans, L.L.C. (the “Company”) was acquired by Columbia Properties New Orleans,
LLC (CPNO) on June 8, 2005. CPNO is a wholly owned subsidiary of Wimar Tahoe
Corporation (WTC) (fka Tropicana Casinos and Resorts, Inc.). WTC is
CPNO’s sole member. The Company owns and operates the Amelia Belle
Casino, a riverboat casino in Amelia, Louisiana. Columbia Sussex Corporation
(CSC), a company controlled by the sole shareholder of WTC, provides various
services to the Company (see Note 4).
In the
opinion of management, the accompanying unaudited financial statements contain
all adjustments, consisting only of normal recurring entries unless otherwise
disclosed, necessary to present fairly the financial information of the Company
for the interim periods presented and have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
interim results reflected in the financial statements are not necessarily
indicative of results expected for the full year or other periods.
The
financial statements herein should be read in conjunction with the accompanying
audited financial statements and notes to the financial statements for the year
ended December 31, 2007. Accordingly, footnote disclosure that would
substantially duplicate the disclosure in the audited financial statements has
been omitted in the accompanying unaudited financial statements.
2.
Summary of Significant Accounting Policies
Intangible
Assets – The Company’s gaming license requires renewal every five years
in the State of Louisiana. Renewal costs are deferred and amortized over the
five year renewal period. The Company’s renewal experience is that
renewals will be granted except under extraordinary circumstances.
Casino
Promotional Allowances - Casino promotional allowances consist of the
retail value of complimentary food and beverages and entertainment provided to
casino patrons. Also included is the value of the coupons redeemed for cash at
the property. The estimated cost of providing such complimentary services
(substantially all of which is classified as casino expenses) total $2.1 million
for the nine months ended September 30, 2008. Promotional allowances
also include "cash back" awards (cash coupons, rebates or refunds) which total
$1.4 million for the nine months ended September 30, 2008.
Insurance
Program - The Company’s insurance program for medical, general liability,
workers compensation and property is provided through CSC and
WTC. CSC allocates to the Company the cost of third party insurance
coverage and WTC allocates an estimated cost of the self-insured portion of the
coverage (up to $1.0 million of general liability and workers compensation
claims). The rates used for the self-insured portion are actuarially
determined based on historical experience of paid claims for all of CSC’s
operations. The Company was charged $0.8 million and $0.1 million by
CSC and WTC, respectively, for the above insurance costs during the nine months
ended September 30, 2008.
Use of
Estimates— The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the use of
management’s estimates and assumptions that affect the reported amount of
assets, liabilities, revenues and expenses and disclosures of contingent assets
and liabilities. Actual results could differ from these
estimates.
Recently Issued
Accounting Standards— In August 2009, the Financial Accounting
Standards Board (“FASB”) issued a standard on measuring the fair value of
liabilities. The standard becomes effective for the Company at the beginning of
its 2009 fourth quarter. The standard provides clarification that in
circumstances in which a quoted price in an active market for the identical
liability is not available, a reporting entity is required to measure fair value
using one or more of the following methods: (i) a valuation technique that uses
a) the quoted price of the identical liability when traded as an asset; or b)
quoted prices for similar liabilities or similar liabilities when traded as
assets; and/or (ii) a valuation technique that is consistent with the principles
of an income or market approach. The standard also clarifies that when
estimating the fair value of a liability, a reporting entity is not required to
include inputs relating to the existence of transfer restrictions on that
liability. The adoption of this standard is not expected to have a significant
effect on the Company’s financial statements.
In June
2009, the FASB issued the
Codification and the Hierarchy of Generally Accepted Accounting Principles
("GAAP") (“Codification”). The purpose of the
Codification is to provide a single source of authoritative U.S.
GAAP. The Codification was effective for the Company in the third
quarter of 2009. As the Codification was not intended to change or
alter existing GAAP, the adoption of the Codification did not have a material
effect on the Company’s financial statements.
5
In May
2009, the FASB issued a new standard related to subsequent events which
establishes the accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. The new standard was adopted in the second quarter of
2009. The adoption of the new standard did not have a material effect
on the Company’s financial statements.
In
April 2009, the FASB issued three standards intended to provide additional
application guidance and enhanced disclosures regarding fair value measurements
and impairments of securities. The Company adopted these standards
effective June 30, 2009. The adoption of these standards did not have a material
effect on the Company’s financial statements.
In April
2008, the FASB issued a new standard that requires entities to disclose
information for recognized intangible assets that enable users of financial
statements to understand the extent to which expected future cash flows
associated with intangible assets are affected by the entity’s intent or ability
to renew or extend the arrangement associated with the intangible
asset. The standard also amends the factors an entity should consider
in developing the renewal or extension assumptions used in determining the
useful life of recognized intangible assets. The standard applies
prospectively to intangible assets acquired after the standard’s effective date,
but the disclosure requirements applies prospectively to all intangible assets
recognized as of, and after, the standard’s effective date. The
standard was effective for fiscal years beginning after December 15, 2008, with
early adoption prohibited. The Company adopted the new standard on
January 1, 2009 and the adoption did not have a material effect on the Company’s
financial statements.
In March
2008, the FASB issued a new standard that requires, among other things, enhanced
disclosure about the volume and nature of derivative and hedging activities and
a tabular summary showing the fair value of derivative instruments included in
the balance sheet and statement of operations. The standard also requires
expanded disclosure of contingencies included in derivative instruments related
to credit-risk. The standard was effective for fiscal years and interim periods
beginning after November 15, 2008. The Company adopted the standard on January
1, 2009 and the adoption did not have a material effect on the Company’s
financial statements.
In
February 2008, the FASB issued a new standard that delayed for one year the fair
value measurement requirements for non-financial assets and non-financial
liabilities, except for items that are recognized or disclosed at fair value in
the financial statements on a recurring basis. Therefore, beginning on January
1, 2009, this standard applies prospectively to fair value measurements of
non-financial assets and non-financial liabilities. The Company adopted the new
standard on January 1, 2009 and the adoption did not have a material effect
on the Company’s financial statements.
In
December 2007, the FASB issued a new standard that significantly changes the way
companies account for business combinations and will generally require more
assets acquired and liabilities assumed to be measured at their acquisition-date
fair value. Legal fees and other transaction-related costs are expensed as
incurred and are no longer included as a cost of acquiring the business. Also,
acquirers are to estimate the acquisition date fair value of any contingent
consideration and to recognize any subsequent changes in the fair value of
contingent consideration in earnings. In addition, restructuring costs the
acquirer expected, but was not obligated to incur, will be recognized separately
from the business acquisition. The standard applies to the Company prospectively
for business combinations occurring on or after January 1, 2009. The Company
expects the standard will have an impact on accounting for business
combinations, but the effect will be dependent upon any potential future
acquisition.
3. Commitments and
Contingencies
The
Company is subject to various litigation claims and assessments that arise in
the ordinary course of its business. Based upon information presently available,
management believes that resolution of such matters will not likely have a
material adverse effect on the financial position, results of operations or cash
flows of the Company.
4. Related Party
Transactions
CSC has
guaranteed the Company’s performance under surety bonds amounting to $0.3
million at September 30, 2008.
CSC
provides various administrative and accounting services to the Company under
administrative service agreements. CSC charged the Company $0.1
million for these services for the nine months ended September 30,
2008.
The
Company has various dealings with CSC and its subsidiaries, including shared
payroll and benefit services, insurance and payments to common
vendors. The amounts allocated to the Company related to these
transactions and services are based on actual amounts attributable to the
Company’s operations.
Also, see
Note 6 for a further description of related party activity with Tropicana
Entertainment, LLC.
6
5. Casualty Loss –
Hurricane
On August
28, 2005, Hurricane Katrina struck the Gulf Coast and damaged the Belle of
Orleans casino riverboat. The riverboat sustained substantial damage
and as a result had to be substantially rebuilt. The riverboat was
out of service from August 28, 2005 until May 18, 2007, when it reopened in
Amelia, Louisiana as the Amelia Belle Casino.
In
addition, the Company leased land and docking facilities for its riverboat
casino when it was berthed in New Orleans, Louisiana prior to Hurricane
Katrina. The lease provided for quarterly rent of $0.4 million plus
monthly rental of 5% of gross revenue subject to a minimum of $0.1
million. The lease was to expire in 2013. The Company, on
the advice of counsel, suspended the rent payments due to the impairment of the
leased facility damaged by Hurricane Katrina. The landlord filed suit
against the Company for unpaid rent, and future rent and damages caused to the
leased facilities by the Company’s riverboat. The Company filed
claims with its insurance carriers for the physical damage to the riverboat and
for business interruption coverage. The claims were settled in
2008.
During
the nine months ended September 30, 2008, the Company received insurance
proceeds of approximately $9.8 million for physical damage and for rent
claims.
6.
Related Party Bankruptcy Filing
Tropicana
Entertainment, LLC (TE) and its subsidiaries, a significant subsidiary of WTC,
the Company’s parent, filed for bankruptcy protection on May 5, 2008 which cases
are currently pending in the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”) in the jointly administered cases titled in re
Tropicana Entertainment, LLC et all, Case No. 08-10856 (KJC) (the “Tropicana
Cases”). As of September 30, 2008 and as of the date of the
bankruptcy filing, TE and its subsidiaries owed the Company $2.7 million,
primarily related to slot machines and other gaming equipment that was
transferred to these entities following Hurricane Katrina. The
Company fully reserved these related party receivables during the nine months
ended September 30, 2008 due to the uncertainty of collection from the entities
operating in bankruptcy. By orders dated March 6, 2009, the
Bankruptcy Court in the Tropicana Cases approved the Debtors’ Disclosure
Statement for the First Amended Joint Plan of Reorganization of Tropicana
Entertainment, LLC and Certain of Its Debtor Affiliates under Chapter 11 of the
Bankruptcy Court (the “Proposed Plan”). The Court set April 17, 2009
as the voting deadline and on May 5, 2009 the Proposed Plan was confirmed by the
Bankruptcy Court. The Proposed Plan indicates that no payments will
be made to the Company for these related party receivables. The
Company received certain casino management services from WTC employees who were
transferred to TE during 2008. The Company and WTC have made other
arrangements for these services and the Company does not currently rely on TE or
any of its subsidiaries for any casino or administrative services.
Prior to
bankruptcy of TE, the Company incurred costs of $0.3 million related to the
contemplated swap of the Company’s casino riverboat with another casino
riverboat held by TE. Subsequent to the bankruptcy of TE, this
project was terminated and the costs were written off and are included in
Administrative and General expenses in the accompanying statement of operations
for the nine months ended September 30, 2008.
The
Proposed Plan contemplates the establishment of a litigation trust (the
“Litigation Trust”) to pursue possible causes of action against certain entities
including WTC and certain of its affiliates, which may include claims for breach
of fiduciary duty, gross negligence and breach of contract. WTC
denies that there has been any breach of fiduciary duty, gross negligence,
breach of contract or other grounds on which the Debtors or the Litigation Trust
would have a legal claim against it and intends to vigorously defend against any
such claims and causes of action.
In
addition, WTC remains obligated for substantial amounts owed under a lawsuit
settlement with Park Cattle Company reached in April 2008. This
lawsuit related to certain leases between Park Cattle Company as Lessor, and WTC
and certain subsidiaries of TE, as Lessees. Although the Company was
not a party to this litigation and is not subject to the settlement agreement,
WTC as the Company’s parent, may authorize distributions from the Company to
partially fund obligations under the settlement agreement which total $66.3
million as of September 30, 2008.
Other
than as described above, the Company is not affected by the bankruptcy of TE and
its subsidiaries or by the settlement with Park Cattle Company.
7. Subsequent
Event
On
October 22, 2009, AB Casino Acquisition, LLC, a wholly owned subsidiary of
Peninsula Gaming, LLC, acquired 100% of the Company from CPNO.
7