Attached files
file | filename |
---|---|
EX-99.2 - AUDITED FINANCIALS OF BELLE OF ORLEANS JAN-OCT 2009 - PENINSULA GAMING CORP. | financials2009.htm |
EX-99.3 - UNAUDITED FINANCIALS OF BELLE OF ORLEANS FOR NINE MONTH PERIOD ENDED SEPT 2008 - PENINSULA GAMING CORP. | thirdqtrfinancials.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
99.4
PENINSULA
GAMING, LLC
PRO
FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER
30, 2009
(UNAUDITED)
(Dollars
in thousands)
Peninsula
Gaming, LLC
|
Belle
of
Orleans,
L.L.C.
|
Pro
Forma Adjustments
|
Notes
|
Pro
Forma Combined Peninsula Gaming, LLC
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
CURRENT
ASSETS:
|
||||||||||||||||||||
Cash
and cash equivalents
|
$ | 128,650 | $ | 6,031 | $ | (99,261 | ) | 3(a) | $ | 35,420 | ||||||||||
Restricted
cash - purse settlements
|
5,305 | — | — | 5,305 | ||||||||||||||||
Accounts
receivable, net
|
4,797 | 187 | (187 | ) | 3(b) | 4,797 | ||||||||||||||
Receivables
from affiliates
|
95 | — | — | 95 | ||||||||||||||||
Inventories
|
1,326 | 50 | — | 1,376 | ||||||||||||||||
Prepaid
expenses and other assets
|
2,238 | 1,684 | (418 | ) | 3(b) | 3,504 | ||||||||||||||
Total
current assets
|
142,411 | 7,952 | (99,866 | ) | 50,497 | |||||||||||||||
PROPERTY
AND EQUIPMENT, NET
|
252,601 | 41,250 | (7,222 | ) | 3(j) | 286,629 | ||||||||||||||
OTHER
ASSETS:
|
||||||||||||||||||||
Deferred
financing costs, net
|
25,712 | — | — | 25,712 | ||||||||||||||||
Goodwill
|
53,083 | — | 42,267 | 3(c) | 95,350 | |||||||||||||||
Licenses
and other intangibles
|
39,849 | 10,639 | 17,066 | 3(d) | 67,554 | |||||||||||||||
Deposits
and other assets
|
12,962 | — | (10,000 | ) | 3(e) | 2,962 | ||||||||||||||
Investment
available for sale
|
14,729 | — | — | 14,729 | ||||||||||||||||
Total
other assets
|
146,335 | 10,639 | 49,333 | 206,307 | ||||||||||||||||
TOTAL
|
$ | 541,347 | $ | 59,841 | $ | (57,755 | ) | $ | 543,433 | |||||||||||
LIABILITIES
AND MEMBER'S (DEFICIT) EQUITY
|
||||||||||||||||||||
CURRENT
LIABILITIES:
|
||||||||||||||||||||
Accounts
payable
|
$ | 3,983 | $ | 625 | $ | — | $ | 4,608 | ||||||||||||
Construction
payable
|
1,678 | — | — | 1,678 | ||||||||||||||||
Purse
settlement payable
|
6,771 | — | — | 6,771 | ||||||||||||||||
Accrued
payroll and payroll taxes
|
5,953 | 736 | (465 | ) | 3(b) | 6,224 | ||||||||||||||
Accrued
interest
|
8,215 | — | — | 8,215 | ||||||||||||||||
Other
accrued expenses
|
12,240 | 1,801 | (132 | ) | 3(b) | 13,909 | ||||||||||||||
Payable
to affiliates
|
3,250 | 84 | — | 3,334 | ||||||||||||||||
Current
maturity of long-term debt and leases
|
3,199 | — | — | 3,199 | ||||||||||||||||
Total
current liabilities
|
45,289 | 3,246 | (597 | ) | 47,938 | |||||||||||||||
LONG-TERM
LIABILITIES:
|
||||||||||||||||||||
8
3/8% senior secured notes, net of discount
|
234,599 | — | — | 234,599 | ||||||||||||||||
10
¾% senior unsecured notes, net of discount
|
297,158 | — | — | 297,158 | ||||||||||||||||
Term
loan
|
5,572 | — | — | 5,572 | ||||||||||||||||
Notes
payable and leases payable, net
|
637 | — | — | 637 | ||||||||||||||||
Obligation
under Minimum Assessment Agreement
|
18,482 | — | — | 18,482 | ||||||||||||||||
Other
liabilities
|
960 | — | — | 960 | ||||||||||||||||
Total
long-term liabilities
|
557,408 | — | — | 557,408 |
Peninsula
Gaming, LLC
|
Belle
of
Orleans,
L.L.C.
|
Pro
Forma Adjustments
|
Notes
|
Pro
Forma Combined Peninsula Gaming, LLC
|
||||||||||||||||
Total
liabilities
|
602,697 | 3,246 | (597 | ) | 605,346 | |||||||||||||||
COMMITMENTS
AND CONTINGENCIES
|
||||||||||||||||||||
MEMBER'S
(DEFICIT) EQUITY:
|
||||||||||||||||||||
Total
member's (deficit) equity
|
(61,350 | ) | 56,595 | (57,158 | ) | 3(f) | (61,913 | ) | ||||||||||||
TOTAL
LIABILITIES AND MEMBER'S (DEFICIT) EQUITY
|
$ | 541,347 | $ | 59,841 | $ | (57,755 | ) | $ | 543,433 |
|
See
accompanying notes to unaudited pro forma condensed combined financial
statements
|
PENINSULA
GAMING, LLC
PRO
FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE
MONTHS ENDED SEPTEMBER 30, 2009
(UNAUDITED)
(Dollars
in thousands)
Peninsula
Gaming, LLC
|
Belle
of
Orleans,
L.L.C.
|
Pro
Forma Adjustments
|
Notes
|
Pro
Forma Combined Peninsula Gaming, LLC
|
||||||||||||||||
REVENUES:
|
||||||||||||||||||||
Casino
|
$ | 193,569 | $ | 40,530 | $ | — | $ | 234,099 | ||||||||||||
Racing
|
13,685 | — | — | 13,685 | ||||||||||||||||
Video
poker
|
4,170 | — | — | 4,170 | ||||||||||||||||
Food
and beverage
|
17,580 | 2,905 | — | 20,485 | ||||||||||||||||
Other
|
8,023 | 278 | — | 8,301 | ||||||||||||||||
Less:
Promotional allowances
|
(20,358 | ) | (4,645 | ) | — | (25,003 | ) | |||||||||||||
Total
net revenues
|
216,669 | 39,068 | — | 255,737 | ||||||||||||||||
EXPENSES:
|
||||||||||||||||||||
Casino
|
79,739 | 15,426 | — | 95,165 | ||||||||||||||||
Racing
|
12,294 | — | — | 12,294 | ||||||||||||||||
Video
poker
|
3,047 | — | — | 3,047 | ||||||||||||||||
Food
and beverage
|
12,658 | 2,554 | — | 15,212 | ||||||||||||||||
Other
|
5,691 | — | — | 5,691 | ||||||||||||||||
Selling,
general and administrative
|
33,370 | 8,559 | — | 41,929 | ||||||||||||||||
Depreciation
and amortization
|
17,845 | 3,585 | (38 | ) | 3(g) | 21,392 | ||||||||||||||
Development
expense
|
704 | — | (563 | ) | 3(h) | 141 | ||||||||||||||
Affiliate
management fees
|
4,094 | 94 | — | 4,188 | ||||||||||||||||
Loss
on disposal of assets
|
1,983 | — | — | 1,983 | ||||||||||||||||
Total
expenses
|
171,425 | 30,218 | (601 | ) | 201,042 | |||||||||||||||
INCOME
FROM OPERATIONS
|
45,244 | 8,850 | 601 | 54,695 | ||||||||||||||||
OTHER
INCOME (EXPENSE):
|
||||||||||||||||||||
Interest
income
|
1,505 | 1 | — | 1,506 | ||||||||||||||||
Interest
expense
|
(35,621 | ) | — | (6,127 | ) | 3(i) | (41,748 | ) | ||||||||||||
Loss
on early retirement of debt
|
(22,475 | ) | — | — | (22,475 | ) | ||||||||||||||
Total
other expense
|
(56,591 | ) | 1 | (6,127 | ) | (62,717 | ) | |||||||||||||
NET
(LOSS) INCOME
|
$ | (11,347 | ) | $ | 8,851 | $ | (5,526 | ) | $ | (8,022 | ) |
See
accompanying notes to unaudited pro forma condensed combined financial
statements
PENINSULA
GAMING, LLC
PRO
FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR
ENDED DECEMBER 31, 2008
(UNAUDITED)
(Dollars
in thousands)
Peninsula
Gaming, LLC
|
Belle
of
Orleans,
L.L.C.
|
Pro
Forma Adjustments
|
Notes
|
Pro
Forma Combined Peninsula Gaming, LLC
|
||||||||||||||||
REVENUES:
|
||||||||||||||||||||
Casino
|
$ | 227,269 | $ | 55,622 | $ | — | $ | 282,891 | ||||||||||||
Racing
|
17,986 | — | — | 17,986 | ||||||||||||||||
Video
poker
|
5,901 | — | — | 5,901 | ||||||||||||||||
Food
and beverage
|
16,767 | 3,616 | — | 20,383 | ||||||||||||||||
Other
|
11,809 | 369 | — | 12,178 | ||||||||||||||||
Less:
Promotional allowances
|
(20,579 | ) | (5,548 | ) | — | (26,127 | ) | |||||||||||||
Total
net revenues
|
259,153 | 54,059 | — | 313,212 | ||||||||||||||||
EXPENSES:
|
||||||||||||||||||||
Casino
|
97,421 | 20,421 | — | 117,842 | ||||||||||||||||
Racing
|
15,739 | — | — | 15,739 | ||||||||||||||||
Video
poker
|
4,349 | — | — | 4,349 | ||||||||||||||||
Food
and beverage
|
13,174 | 3,040 | — | 16,214 | ||||||||||||||||
Other
|
7,564 | — | — | 7,564 | ||||||||||||||||
Selling,
general and administrative
|
34,657 | 11,858 | — | 46,515 | ||||||||||||||||
Depreciation
and amortization
|
20,134 | 4,748 | (47 | ) | 3(g) | 24,835 | ||||||||||||||
Pre-opening
expense
|
785 | — | — | 785 | ||||||||||||||||
Development
expense
|
(922 | ) | 283 | — | (639 | ) | ||||||||||||||
Affiliate
management fees
|
5,401 | 134 | — | 5,535 | ||||||||||||||||
Impairment
of asset held for sale
|
831 | — | — | 831 | ||||||||||||||||
Impairment
of related party receivable
|
— | 2,741 | — | 2,741 | ||||||||||||||||
Gain
on insurance proceeds
|
— | (6,025 | ) | — | (6,025 | ) | ||||||||||||||
Loss
on disposal of assets
|
95 | — | — | 95 | ||||||||||||||||
Total
expenses
|
199,228 | 37,200 | (47 | ) | 236,381 | |||||||||||||||
INCOME
FROM OPERATIONS
|
59,925 | 16,859 | 47 | 76,831 | ||||||||||||||||
OTHER
INCOME (EXPENSE):
|
||||||||||||||||||||
Interest
income
|
2,465 | 25 | — | 2,490 | ||||||||||||||||
Interest
expense
|
(39,634 | ) | — | (10,261 | ) | 3(i) | (49,895 | ) | ||||||||||||
Total
other expense
|
(37,169 | ) | 25 | (10,261 | ) | (47,405 | ) | |||||||||||||
NET
INCOME
|
$ | 22,756 | $ | 16,884 | $ | (10,214 | ) | $ | 29,426 |
See
accompanying notes to unaudited pro forma condensed combined financial
statements
PENINSULA
GAMING, LLC
NOTES
TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
1.
|
Basis
of Presentation
|
Peninsula Gaming, LLC, a
Delaware limited liability company (“PGL”), is a holding company with no
independent operations whose primary assets are its equity interests in the
following wholly owned operating subsidiaries:
·
|
Diamond
Jo, LLC, a Delaware limited liability company, which owns and operates the
Diamond Jo casino in Dubuque, Iowa;
|
·
|
The
Old Evangeline Downs, L.L.C., a Louisiana limited liability company, which
owns and operates the Evangeline Downs Racetrack and Casino, or “racino,”
in St. Landry Parish, Louisiana, and four off-track betting parlors in
Louisiana;
|
·
|
Diamond
Jo Worth, LLC, a Delaware limited liability company, which owns and
operates the Diamond Jo Worth casino in Worth County, Iowa;
and
|
·
|
Belle
of Orleans, L.L.C., a Louisiana limited liability company (“ABC”), which
owns and operates the Amelia Belle Casino in Amelia,
Louisiana.
|
PGL is a
wholly owned subsidiary of Peninsula Gaming Partners, LLC, a Delaware limited
liability company (“PGP”).
On June
18, 2009, PGP and AB Acquisition, a wholly owned subsidiary of PGL formed solely
for the acquisition of ABC, entered into a definitive purchase agreement (the
“Amelia Belle Purchase Agreement”) with Columbia Properties New Orleans, L.L.C.
to purchase 100% of the outstanding limited liability company interests of
ABC. On October 22, 2009, the transaction was consummated for
$104.0 million, plus $2.2 million for working capital, funded with cash on
hand.
These
unaudited pro forma combined financial statements have been prepared to give
effect to the acquisition, and have been compiled from and include:
(a)
|
An
unaudited pro forma condensed combined balance sheet combining the
unaudited condensed consolidated balance sheet of PGL at September 30,
2009 with the unaudited condensed balance sheet of ABC at September 30,
2009 giving effect to the acquisition as if it occurred on September 30,
2009.
|
(b)
|
An
unaudited pro forma condensed combined statement of operations combining
the unaudited condensed consolidated statement of operations of PGL for
the nine months ended September 30, 2009 with the unaudited condensed
statement of operations of ABC for the nine months ended September 30,
2009 giving effect to the acquisition as if it occurred on January 1,
2008.
|
(c)
|
An
unaudited pro forma condensed combined statement of operations combining
the audited condensed consolidated statement of operations of PGL for the
year ended December 31, 2008 with the audited condensed statement of
operations of ABC for the year ended December 31, 2008, giving effect to
the acquisition as if it occurred on January 1,
2008.
|
These
unaudited pro forma condensed combined financial statements have been compiled
using the significant accounting policies under U.S. generally accepted
accounting principles as disclosed in PGL’s audited financial statements
included in PGL’s Annual Report on Form 10-K for the year ended December 31,
2008. The unaudited pro forma condensed combined financial statements
should be read in conjunction with the historical financial statements and notes
thereto of ABC included in this Form 8-K and of PGL included in PGL’s Annual
Report on Form 10-K for the year ended December 31, 2008 and quarterly report on
Form 10-Q for the period ended September 30, 2009.
The
unaudited pro forma condensed combined financial statements are not intended to
reflect the results of operations or the financial position of PGL which would
have actually resulted had the acquisition been effected on the dates
indicated. Further, the unaudited pro forma condensed combined
financial information is not necessarily indicative of the results of operations
that may be obtained in the future. The pro forma adjustments and
allocations of the purchase price for ABC are based in part on preliminary
estimates of the fair value of the assets acquired and liabilities
assumed. The final purchase price allocation will be completed after
asset and liability valuations are finalized. The final valuation
will be based on actual net tangible and intangible assets of ABC that exist as
of the date of the completion of the acquisition. Any final
adjustments may change the allocation of purchase price which could affect the
fair value assigned to the assets and liabilities and could result in a change
to the unaudited pro forma condensed combined financial
statements. In addition, the impact of integration activities have
not been incorporated into these unaudited pro forma condensed combined
financial statements nor do they include any items not expected to have a
continuing impact on the combined results of the companies.
2.
|
Acquisition
of ABC
|
The
acquisition of ABC has been accounted for by applying the acquisition method
with PGL as the acquirer of ABC.
For the purpose of these pro forma condensed combined financial statements, the purchase consideration has been allocated on a preliminary basis to the assets acquired and liabilities assumed based on management’s best estimates. PGL will continue to review information and intends to perform further analysis prior to finalizing the allocation of the purchase price. Although the results of this review are unknown, the purchase price allocation will be subject to change as a result of this review. Therefore, it is likely that the recorded values of assets and liabilities acquired will vary from those shown and differences may be material.
For
purposes of measuring the estimated fair value of the assets acquired and
liabilities assumed as reflected in the pro forma condensed combined financial
statements, management estimated fair values based on the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants (an exit price). Market
participants are assumed to be buyers and sellers in the principal (most
advantageous) market for the asset or liability. Additionally, fair
value measurements for an asset assume the highest and best use of that asset by
market participants. As a result, PGL may be required to value assets
of ABC at fair value measurements that do not reflect management’s intended use
of those assets. Use of different estimates and judgments could yield
different results.
The
preliminary purchase price allocation is as follows (dollars in
millions):
Purchase
price:
|
||||
Purchase
price
|
$ | 104.0 | ||
Cash
paid for working capital
|
2.2 | |||
$ | 106.2 | |||
Allocation:
|
||||
Identifiable
intangible assets with indefinite lives
|
$ | 25.2 | ||
Identifiable
intangible assets with finite lives
|
2.5 | |||
Goodwill
|
42.3 | |||
Property
and equipment
|
34.0 | |||
Current
assets
|
4.3 | |||
Current
liabilities
|
(2.1 | ) | ||
$ | 106.2 |
The
weighted average useful life of the identifiable intangible assets with finite
lives is estimated to be 9 years and property and equipment is estimated to
be 20 years.
3.
|
Pro
Forma Adjustments
|
The unaudited pro forma condensed combined financial statements incorporate the following pro forma adjustments:
(a)
|
Represents
(i) cash on hand used for the purchase of ABC and (ii) elimination of cash
retained by the seller of $3.0
million.
|
(b)
|
Represents
the elimination of assets and liabilities of ABC which will not be
purchased or assumed by PGL.
|
(c)
|
Represents
estimated goodwill from the purchase price
allocation.
|
(d)
|
Represents
estimated identifiable intangible assets from the purchase price
allocation net of the elimination of the historical intangible assets of
ABC.
|
(e)
|
Represents
the use of a $10.0 million deposit applied toward the purchase price of
ABC.
|
(f)
|
Represents
the elimination of the historical equity of
ABC.
|
(g)
|
Represents
(i) adjustment to depreciation related to property and equipment based on
the estimated fair value of the assets acquired and their estimated useful
lives and (ii) amortization of acquired finite lived intangible assets
over their estimated useful lives.
|
(h)
|
Represents
acquisition related transaction costs. These amounts are expensed as
incurred. Such costs are not reflected in the unaudited pro forma
condensed combined statement of operations because they will not have a
continuing impact.
|
(i)
|
Represents
the pro rata effective interest expense on $100 million of the 8 3/8%
senior secured notes and the 10 ¾% senior unsecured notes for the period
of time such notes were not outstanding during the pro forma period. PGL
issued the secured and unsecured notes in August 2009. The notes required
PGL to redeem on a pro rata basis $100 million of the principle amount of
the notes if the ABC acquisition was not completed by December 31, 2009.
Since the ABC acquisition was completed, $100 million of the pro rata
amount of the notes was considered directly related to the acquisition.
The pro rata effective interest rate on the notes is
10.3%.
|
(j)
|
Represents
estimated property and equipment from the purchase price allocation net of
the elimination of the historical net property and equipment of
ABC.
|