ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Casino
|
|
$
|
1,028,047
|
|
$
|
1,032,241
|
|
$
|
981,099
|
|
Rooms
|
|
|
29,457
|
|
|
30,427
|
|
|
31,252
|
|
Food, beverage, pari-mutuel and other
|
|
|
132,436
|
|
|
137,215
|
|
|
132,411
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenues
|
|
|
1,189,940
|
|
|
1,199,883
|
|
|
1,144,762
|
|
Less promotional allowances
|
|
|
(211,348
|
)
|
|
(222,838
|
)
|
|
(210,353
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
978,592
|
|
|
977,045
|
|
|
934,409
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Casino
|
|
|
152,713
|
|
|
156,547
|
|
|
152,914
|
|
Gaming taxes
|
|
|
261,916
|
|
|
263,362
|
|
|
249,638
|
|
Rooms
|
|
|
6,820
|
|
|
6,576
|
|
|
6,853
|
|
Food, beverage, pari-mutuel and other
|
|
|
48,481
|
|
|
48,903
|
|
|
46,184
|
|
Marine and facilities
|
|
|
54,111
|
|
|
55,994
|
|
|
55,318
|
|
Marketing and administrative
|
|
|
220,079
|
|
|
223,857
|
|
|
224,011
|
|
Corporate and development
|
|
|
29,067
|
|
|
29,088
|
|
|
28,455
|
|
Valuation charges
|
|
|
|
|
|
9,000
|
|
|
151,591
|
|
Litigation accrual reversals
|
|
|
|
|
|
|
|
|
(9,330
|
)
|
Preopening expense
|
|
|
153
|
|
|
|
|
|
3,898
|
|
Depreciation and amortization
|
|
|
82,105
|
|
|
77,798
|
|
|
79,579
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
855,445
|
|
|
871,125
|
|
|
989,111
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
123,147
|
|
|
105,920
|
|
|
(54,702
|
)
|
Interest expense
|
|
|
(68,025
|
)
|
|
(84,131
|
)
|
|
(81,342
|
)
|
Interest income
|
|
|
311
|
|
|
369
|
|
|
349
|
|
Loss on early extinguishment of debt
|
|
|
(2,966
|
)
|
|
(13,757
|
)
|
|
|
|
Derivative income
|
|
|
|
|
|
|
|
|
398
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
52,467
|
|
|
8,401
|
|
|
(135,297
|
)
|
Income tax (provision) benefit
|
|
|
(4,178
|
)
|
|
(1,111
|
)
|
|
18,494
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
48,289
|
|
|
7,290
|
|
|
(116,803
|
)
|
Loss from discontinued operations, including loss on sale, net of income tax provision of $0, $0 and $(1,226) for the fiscal years ended 2016, 2015 and
2014, respectively
|
|
|
(2,085
|
)
|
|
(2,113
|
)
|
|
(10,883
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
46,204
|
|
$
|
5,177
|
|
$
|
(127,686
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share attributable to common stockholdersbasic:
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
1.19
|
|
$
|
0.18
|
|
$
|
(2.94
|
)
|
Loss from discontinued operations including gain on sale, net of income taxes
|
|
|
(0.05
|
)
|
|
(0.05
|
)
|
|
(0.27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
1.14
|
|
$
|
0.13
|
|
$
|
(3.21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share attributable to common stockholdersdiluted
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
1.17
|
|
$
|
0.18
|
|
$
|
(2.94
|
)
|
Loss from discontinued operations including gain on sale, net of income taxes
|
|
|
(0.05
|
)
|
|
(0.05
|
)
|
|
(0.27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable common stockholders
|
|
$
|
1.12
|
|
$
|
0.13
|
|
$
|
(3.21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares
|
|
|
40,690,929
|
|
|
39,955,735
|
|
|
39,731,766
|
|
Weighted average diluted shares
|
|
|
41,323,473
|
|
|
40,320,267
|
|
|
39,731,766
|
|
See accompanying notes to consolidated financial statements.
51
Table of Contents
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Net income (loss)
|
|
$
|
46,204
|
|
$
|
5,177
|
|
$
|
(127,686
|
)
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
Deferred hedge adjustment, net of income tax provision of $149 for 2014
|
|
|
|
|
|
|
|
|
247
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
247
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
$
|
46,204
|
|
$
|
5,177
|
|
$
|
(127,439
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the consolidated financial statements.
52
Table of Contents
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of
Common
Stock
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
(Deficit)
|
|
Accum. Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
Total
Stockholders'
Equity
|
|
Balance, April 28, 2013
|
|
|
42,066,148
|
|
|
421
|
|
|
246,214
|
|
|
(74,227
|
)
|
|
(247
|
)
|
|
(29,751
|
)
|
|
142,410
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
(127,686
|
)
|
|
|
|
|
|
|
|
(127,686
|
)
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
247
|
|
|
|
|
|
247
|
|
Issuance of restricted stock, net of forfeitures
|
|
|
|
|
|
|
|
|
(2,808
|
)
|
|
|
|
|
|
|
|
2,808
|
|
|
|
|
Stock compensation expense
|
|
|
|
|
|
|
|
|
4,413
|
|
|
|
|
|
|
|
|
|
|
|
4,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 27, 2014
|
|
|
42,066,148
|
|
|
421
|
|
|
247,819
|
|
|
(201,913
|
)
|
|
|
|
|
(26,943
|
)
|
|
19,384
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
5,177
|
|
|
|
|
|
|
|
|
5,177
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options
|
|
|
|
|
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
|
121
|
|
|
74
|
|
Issuance of restricted stock, net of forfeitures
|
|
|
|
|
|
|
|
|
(2,392
|
)
|
|
|
|
|
|
|
|
2,392
|
|
|
|
|
Issuance of stock under compensation plans
|
|
|
|
|
|
|
|
|
(6,894
|
)
|
|
(2,336
|
)
|
|
|
|
|
4,644
|
|
|
(4,586
|
)
|
Stock compensation expense
|
|
|
|
|
|
|
|
|
3,413
|
|
|
|
|
|
|
|
|
|
|
|
3,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 26, 2015
|
|
|
42,066,148
|
|
|
421
|
|
|
241,899
|
|
|
(199,072
|
)
|
|
|
|
|
(19,786
|
)
|
|
23,462
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
46,204
|
|
|
|
|
|
|
|
|
46,204
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options
|
|
|
|
|
|
|
|
|
(821
|
)
|
|
|
|
|
|
|
|
1,690
|
|
|
869
|
|
Issuance of restricted stock, net of forfeitures
|
|
|
|
|
|
|
|
|
(1,689
|
)
|
|
|
|
|
|
|
|
1,689
|
|
|
|
|
Stock compensation expense
|
|
|
|
|
|
|
|
|
5,083
|
|
|
|
|
|
|
|
|
|
|
|
5,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 24, 2016
|
|
|
42,066,148
|
|
$
|
421
|
|
$
|
244,472
|
|
$
|
(152,868
|
)
|
$
|
|
|
$
|
(16,407
|
)
|
$
|
75,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
53
Table of Contents
ISLE OF CAPRI CASINOS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
46,204
|
|
$
|
5,177
|
|
$
|
(127,686
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
82,451
|
|
|
78,875
|
|
|
82,245
|
|
Amortization and write-off of deferred financing costs
|
|
|
4,237
|
|
|
4,700
|
|
|
4,464
|
|
Amortization of debt (premium) discount, net
|
|
|
(446
|
)
|
|
344
|
|
|
242
|
|
Loss on early extinguishment of debt
|
|
|
2,966
|
|
|
13,757
|
|
|
|
|
Litigation accrual reversals
|
|
|
|
|
|
|
|
|
(16,953
|
)
|
Valuation charges
|
|
|
4,424
|
|
|
9,000
|
|
|
162,100
|
|
Deferred income taxes
|
|
|
4,050
|
|
|
943
|
|
|
(9,913
|
)
|
Stock compensation expense
|
|
|
5,083
|
|
|
3,413
|
|
|
4,413
|
|
Gain on sale of discontinued operations
|
|
|
(6,424
|
)
|
|
|
|
|
|
|
Gain on derivative instruments
|
|
|
|
|
|
|
|
|
(398
|
)
|
Loss (gain) on disposal of assets
|
|
|
143
|
|
|
102
|
|
|
(535
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Marketable securites
|
|
|
179
|
|
|
7,772
|
|
|
(1,769
|
)
|
Accounts receivable
|
|
|
(1,539
|
)
|
|
1,444
|
|
|
(1,537
|
)
|
Income taxes payable/receivable
|
|
|
(2
|
)
|
|
198
|
|
|
4,716
|
|
Prepaid expenses and other assets
|
|
|
(529
|
)
|
|
1,041
|
|
|
4,120
|
|
Accounts payable and accrued liabilities
|
|
|
(4,885
|
)
|
|
(1,198
|
)
|
|
(16,760
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
135,912
|
|
|
125,568
|
|
|
86,749
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(70,262
|
)
|
|
(41,686
|
)
|
|
(38,149
|
)
|
Proceeds from asset sales
|
|
|
11,496
|
|
|
73
|
|
|
49,881
|
|
Payments towards gaming license
|
|
|
|
|
|
|
|
|
(7,500
|
)
|
Restricted cash and investments
|
|
|
(425
|
)
|
|
340
|
|
|
1,879
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by investing activities
|
|
|
(59,191
|
)
|
|
(41,273
|
)
|
|
6,111
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt borrowings
|
|
|
|
|
|
153,000
|
|
|
|
|
Net (repayments) borrowings on line of credit
|
|
|
(7,500
|
)
|
|
10,300
|
|
|
(90,200
|
)
|
Principal repayments on long-term debt
|
|
|
(62,399
|
)
|
|
(238,061
|
)
|
|
(626
|
)
|
Premiums payments on retirement of long-term debt
|
|
|
(2,409
|
)
|
|
(10,465
|
)
|
|
|
|
Payment of deferred financing costs
|
|
|
(209
|
)
|
|
(2,536
|
)
|
|
(673
|
)
|
Payment of other long-term obligation
|
|
|
(9,384
|
)
|
|
|
|
|
|
|
Proceeds from exercise of stock options
|
|
|
869
|
|
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(81,032
|
)
|
|
(87,688
|
)
|
|
(91,499
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease (increase) in cash and cash equivalents
|
|
|
(4,311
|
)
|
|
(3,393
|
)
|
|
1,361
|
|
Cash and cash equivalents at beginning of year
|
|
|
66,437
|
|
|
69,830
|
|
|
68,469
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
62,126
|
|
$
|
66,437
|
|
$
|
69,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
54
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share amounts)
1. Organization
Organization
Isle of Capri Casinos, Inc., a Delaware corporation, was incorporated in February 1990. Except where otherwise noted, the words
"we," "us," "our" and similar terms, as well as "Company," refer to Isle of Capri Casinos, Inc. and all of its subsidiaries. We are a developer, owner and operator of branded gaming facilities
and related lodging and entertainment facilities in markets throughout the United States. Our wholly owned subsidiaries own or operate fourteen casino gaming facilities in the United States located in
Black Hawk, Colorado; Pompano Beach, Florida; Bettendorf, Marquette and Waterloo, Iowa; Lake Charles, Louisiana; Lula and Vicksburg, Mississippi; Boonville, Cape Girardeau, Caruthersville and Kansas
City, Missouri; and Nemacolin, Pennsylvania.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany
balances and transactions have been eliminated. We view each property as an operating segment and all operating segments have been aggregated into one reporting segment.
Discontinued
operations include our Natchez, Mississippi property sold in October 2015 and our Davenport, Iowa property sold in February 2014.
Fiscal Year-End
Our fiscal year ends on the last Sunday in April. Periodically, this system necessitates a 53-week year. Fiscal years 2016, 2015 and
2014 were 52-week years, which commenced on April 27, 2015, April 28, 2014 and April 29, 2013, respectively.
Reclassifications
Certain reclassifications of prior year presentations have been made to conform to the fiscal 2016 presentation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents
We consider all highly liquid investments purchased with an original maturity of three months or less as cash equivalents.
Cash also includes the minimum operating cash balances required by state regulatory bodies, which totaled $23,071 and $25,099 at April 24, 2016 and April 26, 2015, respectively.
Marketable Securities
Marketable securities consist primarily of trading securities held by our captive insurance subsidiary. The trading securities
are primarily debt and equity securities that are purchased with the intention to resell in the near term. The trading securities are carried at fair value with changes in fair value recognized in
current period income in the accompanying statements of operations.
Inventories
Inventories are stated at the lower of weighted average cost or market value.
Property and Equipment
Property and equipment are stated at cost or if purchased through a business acquisition, the value determined under purchase
accounting. We capitalize the cost of purchased property and equipment and capitalize the cost of improvements to property and equipment
55
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
2. Summary of Significant Accounting Policies (Continued)
that
increases the value or extends the useful lives of the assets. Costs of normal repairs and maintenance are charged to expense as incurred.
Depreciation
is computed using the straight-line method over the following estimated useful lives of the assets:
|
|
|
|
|
Years
|
Slot machines, software and computers
|
|
3 - 5
|
Furniture, fixtures and equipment
|
|
5 - 10
|
Leasehold improvements
|
|
Lesser of life of lease or
estimated useful life
|
Buildings and improvements
|
|
7 - 39.5
|
Certain
property currently leased in Bettendorf, Iowa and at our Nemacolin, Pennsylvania casino is accounted for in accordance with Accounting Standards Codification ("ASC") Topic 840,
Leases ("ASC 840").
We
periodically evaluate the carrying value of long-lived assets to be held and used in accordance with ASC Topic 360, Property, Plant and Equipment ("ASC 360") which requires
impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less
than the assets' carrying amounts. In assessing the recoverability of the carrying value of such property, equipment and other long-lived assets, we make assumptions regarding future cash flows and
residual values. In estimating expected future cash flows, assets are grouped at the lowest level of identifiable cash flows, which is usually the individual property. If the assets are determined to
be impaired, a loss is recognized based on the amount by which the carrying amount exceeds the estimated fair market value of the long-lived assets.
Capitalized Interest
The interest cost associated with major development and construction projects is capitalized and included in the cost of the
project. When no debt is incurred specifically for a project, interest is capitalized on amounts expended on the project using the weighted-average cost of our borrowings. Capitalization of interest
ceases when the project is substantially complete or development activity is suspended. Capitalized interest was $600, $23 and $185 for fiscal years 2016, 2015 and 2014, respectively.
Restricted Cash and Investments
We classify cash and investments which are either statutorily or contractually restricted as to withdrawal or usage as
restricted cash short-term, included in prepaid expenses and other assets, or restricted cash and investments long-term based on the duration of the underlying restriction. Restricted cash primarily
includes amounts related to state tax bonds and other gaming-related bonds, and amounts held in escrow related to leases. Restricted investments relate to trading securities pledged as collateral by
our captive insurance company.
Goodwill and Other Intangible Assets
Goodwill represents the excess of cost over the net identifiable tangible and intangible assets of acquired
businesses and is stated at cost, net of impairments, if any. Other intangible assets include values attributable to acquired gaming licenses, customer lists, and trademarks. ASC Topic 350,
IntangiblesGoodwill and Other ("ASC 350") requires
56
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
2. Summary of Significant Accounting Policies (Continued)
these
assets be reviewed for impairment at least annually or on an interim basis if indicators of impairment exist. We perform our annual impairment test as of the first day of the fourth fiscal
quarter. We first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting
unit is less than it carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of an indefinite-lived intangible or
reporting unit is greater than its carrying amount, then performing further testing is not required. However, if we conclude otherwise, we are required to perform the first step of a two-step
quantitative impairment test using; 1) a discounted cash flow analysis based on forecasted future results discounted at the weighted average cost of capital and, 2) by using a market
approach based upon public trading and recent transaction valuation multiples for similar companies. Intangible assets with indefinite lives not subject to amortization are reviewed by comparing the
fair value of the recoded assets to their carrying amount. We review, at least annually, the continued use of an indefinite useful life. If these intangible assets are determined to have a finite
useful life, they are amortized over their estimated remaining useful lives.
Deferred Financing Costs
The costs of issuing long-term debt are capitalized and amortized using the effective interest method over the term of the
related debt.
Self-Insurance
We are self-funded up to a maximum amount per claim for employee-related health care benefits, workers' compensation and general
liabilities. Claims in excess of this maximum are fully insured through stop-loss insurance policies. We accrue for workers' compensation and general liabilities on a discounted basis based on claims
filed and estimates of claims incurred but not reported. The estimates have been discounted at 1.0% and 0.9% at April 24, 2016 and April 26, 2015, respectively, or a discount of $645 and
$618, respectively. We utilize independent consultants to assist management in its determination of estimated insurance liabilities. While the total cost of claims incurred depends on future
developments, in managements' opinion, recorded reserves are adequate to cover future claims payments. Workers' compensation and general liability claims expense is included in corporate and
development expense in our consolidated statements of
operations. Employee related health care benefits expenses are included in the consolidated statement of operations lines that include the respective employee compensation costs. Reserves for workers'
compensation and employee related health care are included in accrued liabilitiespayroll and related in the consolidated balance sheets.
57
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
2. Summary of Significant Accounting Policies (Continued)
Reserves
for general liability claims are included in accrued liabilitiesother in the consolidated balance sheets. Total self-insurance reserves are as follows:
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
Beginning balance
|
|
$
|
26,253
|
|
$
|
27,785
|
|
Additions:
|
|
|
|
|
|
|
|
Charged to expenses
|
|
|
31,031
|
|
|
27,841
|
|
Employee contributions
|
|
|
9,353
|
|
|
8,550
|
|
Payments
|
|
|
(40,830
|
)
|
|
(38,101
|
)
|
Change in discount
|
|
|
(27
|
)
|
|
178
|
|
|
|
|
|
|
|
|
|
Ending Balance
|
|
$
|
25,780
|
|
$
|
26,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Recognition
In accordance with gaming industry practice, we recognize casino revenues as the net win from gaming activities. Casino revenues
are net of accruals for anticipated payouts of progressive slot and table game jackpots. Revenues from rooms, food, beverage, entertainment and the gift shops are recognized at the time the related
service or sale is performed or realized.
Promotional Allowances
The actual retail value of rooms, food and beverage and other services furnished to guests without charge or at a discount is
included in gross revenues and then deducted as promotional allowances to arrive at net revenues included in the accompanying consolidated statements of operations at the time such good or services
are provided to our guests. The cost of providing such complimentary services from continuing operations are included in casino expense in the accompanying statement of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Rooms
|
|
$
|
8,457
|
|
$
|
8,916
|
|
$
|
8,504
|
|
Food and beverage
|
|
|
63,555
|
|
|
66,745
|
|
|
62,958
|
|
Other
|
|
|
493
|
|
|
527
|
|
|
520
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of complimentary services
|
|
$
|
72,505
|
|
$
|
76,188
|
|
$
|
71,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fan Club
Our guests are eligible to participate in our Fan Club, our customer loyalty program, which offers certain sales incentives accounted for
under ASC 605-50 "Revenue Recognition Customer Payments and Incentives." We accrue a liability for the estimated cost of providing Fan Club benefits as our guest earns Fan Club points. Such sales
incentives are recorded as a reduction of revenues in our promotional allowances in our statements of operations. The points earned under Fan Club may be redeemed for free slot play, cash, or other
goods or services depending upon the property.
58
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
2. Summary of Significant Accounting Policies (Continued)
At
April 24, 2016 and April 26, 2015, our accrual was $4,213 and $4,787, respectively, for estimated cost of providing benefits under our Fan Club and included in
progressive jackpots and slot club awards in our consolidated balance sheets.
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
Beginning balance
|
|
$
|
4,787
|
|
$
|
5,197
|
|
Earned
|
|
|
19,544
|
|
|
25,886
|
|
Redeemed
|
|
|
(18,832
|
)
|
|
(22,360
|
)
|
Expirations
|
|
|
(1,651
|
)
|
|
(3,133
|
)
|
Other
|
|
|
365
|
|
|
(803
|
)
|
|
|
|
|
|
|
|
|
Ending Balance
|
|
$
|
4,213
|
|
$
|
4,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
Advertising costs are expensed the first time the related advertisement appears. Total advertising costs from continuing operations were
$33,913, $33,799 and $34,312 in fiscal years 2016, 2015 and 2014, respectively.
Operating Leases
We recognize rent expense for each lease on the straight-line basis, aggregating all future minimum rent payments including any
predetermined fixed escalations of the minimum rentals. Our liabilities include the aggregate difference between rent expense recorded on the straight-line basis and amounts paid under the leases.
Development Costs
We pursue development opportunities for new gaming facilities in an ongoing effort to expand our business. In accordance with ASC
Topic 720, Other Expenses ("ASC 720"), costs related to projects in the development stage are recorded as a development expense, except for those costs capitalized in accordance with the
guidance of ASC 720. Previously capitalized development costs are expensed when the development is deemed less than probable. Total development costs expensed from continuing operations were
recorded in the consolidated statements of operations in corporate and development expenses.
Pre-Opening Costs
We expense pre-opening costs as incurred. Pre-opening costs include payroll, outside services, advertising, insurance, utilities,
travel and various other expenses related to new operations prior to opening. Pre-opening costs from continuing operations were $153 in fiscal year 2016 related to preparing for our new land-based
operations in Bettendorf and $3,898 in fiscal 2014 related to our new casino at the Nemacolin Woodlands Resort, which opened in July 2013.
Income Taxes
We account for income taxes in accordance with ASC Topic 740, Income Taxes ("ASC 740"). ASC 740 requires the recognition of
deferred income tax liabilities and deferred income tax assets for the difference between the book basis and tax basis of assets and liabilities. We have recorded valuation allowances related to net
operating loss carry forwards and certain temporary differences. Recognizable future tax benefits are subject to a valuation allowance, unless such tax benefits are determined to be more likely than
not realizable. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.
59
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
2. Summary of Significant Accounting Policies (Continued)
Earnings (Loss) Per Common Share
In accordance with the guidance of ASC 260, Earnings Per Share ("ASC 260"), basic earnings (loss) per
share ("EPS") is computed by dividing net income (loss) applicable to common stockholders by the weighted average common shares outstanding during the period. Diluted EPS reflects the additional
dilution related to all potentially dilutive securities such as restricted stock units and stock options. Any potentially dilutive securities with an exercise price in excess of the average market
price of our common stock during the periods presented are not considered when calculating diluted earnings per share calculations as they would be anti-dilutive.
Stock Compensation
Our stock based compensation is accounted for in accordance with ASC Topic 718, CompensationStock Compensation
("ASC 718"). Stock compensation cost is measured at the grant date, based on the estimated fair value of the award and is recognized as expense on a straight-line basis over the requisite
service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards.
Allowance for Doubtful Accounts
We reserve for receivables that may not be collected. Methodologies for estimating the allowance for doubtful accounts
range from specific reserves to various percentages applied to aged receivables. Historical collection rates are considered, as are customer relationships, in determining specific reserves.
In March 2016, the Financial Accounting Standards Board ("FASB") issued Update No. 2016-09, "CompensationStock
Compensation," which simplifies the accounting for share-based compensation, including the income tax consequences. This Update amends treatment of excess tax benefits and deficiencies as a component
of income tax expense rather than equity, the presentation of excess tax benefits as an operating activity on the statement of cash flows and allows an entity to make an accounting policy election to
account for forfeitures. The amendments are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. We are evaluating the impact of adopting this
accounting standard update on our consolidated financial statements and disclosures.
In
February 2016, the FASB issued Update No. 2016-02, "Leases." Under this guidance, lessees will be required to recognize operating and finance leases with lease terms greater
than 12 months as liabilities and corresponding right-of-use assets on the balance sheet. The amendments in this update are effective for fiscal years beginning after December 15, 2018,
including interim periods within those fiscal years, on a modified retrospective basis and early adoption is permitted. We are evaluating the impact of adopting this accounting standard update on our
consolidated financial statements and disclosures.
In
November 2015, the FASB issued Update No. 2015-17, "Balance Sheet Classification of Deferred Taxes." This update requires that deferred tax liabilities and assets be classified
as noncurrent in a classified statement of financial position. The standard is effective for annual periods beginning after December 31, 2016 and for interim periods within those annual periods
with early adoption permitted for any interim or annual financial statements not yet issued. The amendment may be applied either prospectively or retrospectively. The Company has elected to early
adopt this update to simplify the presentation of deferred taxes on the consolidated financial statements and disclosures for
60
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
2. Summary of Significant Accounting Policies (Continued)
the
annual period ending April 24, 2016. The Company is applying this amendment on a prospective basis and prior periods were not retrospectively adjusted.
In
August 2015, the FASB issued Update No. 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements," which further
clarifies the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. This update allows for debt issuance costs related to line-of-credit arrangements
to be presented as an asset and subsequent amortization of the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding
borrowings on the line-of-credit. The standard is effective for financial statements issued for fiscal years beginning after December 31, 2015, for interim periods within those fiscal years and
early adoption is permitted. Management plans to adopt this standard beginning in the first quarter of fiscal 2017.
In
April 2015, the FASB issued Update No. 2015-03, "Interest-Imputation of Interest". This update requires debt issuance costs to be presented as a direct deduction from the
carrying amount of the related debt liability. The standard is effective for annual periods beginning after December 15, 2015. Early adoption is permitted for financial statements that have not
been previously issued. The standard requires application of the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the
period-specific effects of applying the new guidance. Adoption of this update will reduce total assets and total liabilities in our consolidated balance sheet and will not have any impact on our
statement of operations or retained earnings. Management plans to adopt this standard beginning in the first quarter of fiscal 2017.
In
May 2014, the FASB issued Update No. 2014-09, "Revenue from Contracts with Customers," which converges the FASB's and the International Accounting Standards Board's current
standards on revenue recognition. The standard provides companies with a single model to use in accounting for revenue arising from contracts with customers and supersedes current revenue guidance.
The proposed effective date for the standard was for annual and interim periods beginning after December 15, 2016. In April 2105, FASB proposed a deferral of the effective date for one year.
Early adoption is not permitted. The standard permits companies to either apply the adoption to all periods presented, or apply the requirements in the year of adoption through a cumulative
adjustment. We are currently evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.
3. Discontinued Operations
Natchez, Mississippi
On October 19, 2015, we closed our casino property in Natchez, Mississippi and completed the previously announced sale of
the hotel and certain related non-gaming assets to Casino Holding Investment Partners, LLC for net cash proceeds of $11,448. As a result, we recorded a net gain of $2,000 in discontinued
operations in fiscal 2016. The net gain consisted of a gain on the sale of the hotel and related non-gaming assets of $6,424, offset by a non-cash pretax charge of $4,424 related to the write-off of
the Natchez gaming vessel and certain other assets. The results of our Natchez casino operations are presented as discontinued operations for all periods presented.
Davenport, Iowa
On December 4, 2013, we entered into a definitive asset purchase agreement to sell substantially all of the assets and for the
assumption of certain liabilities related to our casino
61
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
3. Discontinued Operations (Continued)
located
in Davenport, Iowa, ("Davenport"). We completed the sale on February 3, 2014 for net cash proceeds of $48,727. Including closing costs, we recorded a loss of $459 in discontinued
operations. The results of our Davenport casino operations are presented as discontinued operations for all periods presented.
We
adopted Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" ("ASU 2014-08") on
April 27, 2015. The disposition of our Natchez reporting unit qualifies for discontinued accounting treatment under ASU 2014-08 and as such, the operations of our Natchez property has
been classified as discontinued operations and as assets held for sale for all periods presented.
The
Company incurred $258 and $1,215 for capital expenditures at our Natchez property during the fiscal year ending April 24, 2016 and April 26, 2015, respectively.
The
results of our discontinued operations are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Net revenues
|
|
$
|
7,992
|
|
$
|
19,233
|
|
$
|
49,349
|
|
Valuation charges
|
|
|
(4,424
|
)
|
|
|
|
|
(10,509
|
)
|
Depreciation expense
|
|
|
(346
|
)
|
|
(1,076
|
)
|
|
(2,668
|
)
|
Pretax loss from discontinued operations
|
|
|
(2,085
|
)
|
|
(2,113
|
)
|
|
(9,657
|
)
|
Income tax provision from discontinued operations
|
|
|
|
|
|
|
|
|
(1,226
|
)
|
Loss from discontinued operations
|
|
|
(2,085
|
)
|
|
(2,113
|
)
|
|
(10,883
|
)
|
Interest
expense of $6 for the fiscal year 2014 has been allocated to discontinued operations related to third-party debt at our former Davenport property.
4. Property and Equipment, Net
Property and equipment, net consists of the following:
|
|
|
|
|
|
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
Property and equipment:
|
|
|
|
|
|
|
|
Land and land improvements
|
|
$
|
195,020
|
|
$
|
195,367
|
|
Leasehold improvements
|
|
|
144,343
|
|
|
144,927
|
|
Buildings and improvements
|
|
|
720,167
|
|
|
711,956
|
|
Riverboats and floating pavilions
|
|
|
101,660
|
|
|
101,535
|
|
Furniture, fixtures and equipment
|
|
|
515,287
|
|
|
507,794
|
|
Construction in progress
|
|
|
39,824
|
|
|
12,139
|
|
|
|
|
|
|
|
|
|
Total property and equipment
|
|
|
1,716,301
|
|
|
1,673,718
|
|
Less accumulated depreciation and amortization
|
|
|
(817,134
|
)
|
|
(771,492
|
)
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
$
|
899,167
|
|
$
|
902,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We
recorded depreciation expense of $81,267, $76,961 and $78,394 for our continuing operations for the fiscal years ended 2016, 2015, and 2014, respectively.
62
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
5. Goodwill and Other Intangible Assets
We have recorded goodwill, net of impairment, of $108,970 at April 24, 2016, April 26, 2015 and April 27, 2014, respectively. Goodwill includes accumulated
impairment losses of $213,125.
Other
intangible assets consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 24, 2016
|
|
April 26, 2015
|
|
|
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Accumulated
Impairment
|
|
Net
Carrying
Amount
|
|
Historical
Cost
|
|
Accumulated
Amortization
|
|
Accumulated
Impairment
|
|
Net
Carrying
Amount
|
|
Indefinite-lived assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming licenses
|
|
$
|
44,342
|
|
$
|
|
|
$
|
|
|
$
|
44,342
|
|
$
|
44,342
|
|
$
|
|
|
$
|
|
|
$
|
44,342
|
|
Trademarks
|
|
|
7,149
|
|
|
|
|
|
|
|
|
7,149
|
|
|
7,149
|
|
|
|
|
|
|
|
|
7,149
|
|
Intangible assetssubject to amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming licenses
|
|
|
12,500
|
|
|
(347
|
)
|
|
(12,153
|
)
|
|
|
|
|
12,500
|
|
|
(347
|
)
|
|
(12,153
|
)
|
|
|
|
Customer relationships
|
|
|
6,700
|
|
|
(4,955
|
)
|
|
|
|
|
1,745
|
|
|
6,700
|
|
|
(4,118
|
)
|
|
|
|
|
2,582
|
|
Customer lists
|
|
|
15,393
|
|
|
(15,393
|
)
|
|
|
|
|
|
|
|
15,393
|
|
|
(15,393
|
)
|
|
|
|
|
|
|
Tradename
|
|
|
544
|
|
|
(544
|
)
|
|
|
|
|
|
|
|
544
|
|
|
(544
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
86,628
|
|
$
|
(21,239
|
)
|
$
|
(12,153
|
)
|
$
|
53,236
|
|
$
|
86,628
|
|
$
|
(20,402
|
)
|
$
|
(12,153
|
)
|
$
|
54,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our
indefinite-lived intangible assets consist primarily of gaming licenses and trademarks for which it is reasonably assured that we will continue to renew indefinitely. Our other
finite-lived intangible assets consist of customer relationships amortized over 8 years, customer lists amortized over 2 to 4 years, and a trade name amortized over 1.5 years. The
weighted average remaining life of our customer relationships is approximately 2.1 years.
We
recorded amortization expense of $838, $838 and $1,185, for our intangible assets subject to amortization related to our continuing operations for the fiscal years ended 2016, 2015,
and 2014, respectively.
Future
amortization expense of our amortizable intangible assets is as follows:
|
|
|
|
|
2017
|
|
|
838
|
|
2018
|
|
|
838
|
|
2019
|
|
|
69
|
|
Thereafter
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
6. Valuation Charges
We recorded valuation charges as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Property and equipment, net impairment charges
|
|
$
|
|
|
$
|
9,000
|
|
$
|
14,200
|
|
Intangible asset impairment charge
|
|
|
|
|
|
|
|
|
12,153
|
|
Goodwill impairment charges:
|
|
|
|
|
|
|
|
|
|
|
Bettendorf
|
|
|
|
|
|
|
|
|
60,000
|
|
Lake Charles
|
|
|
|
|
|
|
|
|
24,238
|
|
Lula
|
|
|
|
|
|
|
|
|
36,000
|
|
Vicksburg
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total goodwill impairment charges
|
|
|
|
|
|
|
|
|
125,238
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impairment valuation charges
|
|
$
|
|
|
$
|
9,000
|
|
$
|
151,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Long-Lived Assets
During fiscal 2015, we recorded a $9,000 impairment charge related to our Nemacolin property and equipment, net as a result of
our impairment testing under ASC 360. The non-recurring fair value of $15,848 used in our determination of the impairment charge considered level 3 inputs, including market valuation,
estimated replacement cost values, estimates for economic obsolescence and estimated risk premiums and was the result of our current and future expected cash flows at the property.
During
fiscal 2014, we recorded impairment charges related to property and equipment, net of $14,200 at our Nemacolin property and $12,153 related to intangible assets at our Nemacolin
property as a result of our impairment testing under ASC 360. The non-recurring fair values used in our determination of the impairment charges considered level 2 and 3 inputs, including
the cost replacement value of the assets adjusted for an associated risk premium or economic obsolescence, and a market based valuation multiple method. The impairments were the result of our current
and future expected cash flows at our properties.
Goodwill
Our goodwill impairment charges in fiscal 2014 were a result of expected decreases in future cash flows as a result of unfavorable economic
conditions and the impact of changes by our competitors. Competitive changes included a proposed land-based casino replacing an existing riverboat casino competing with our Bettendorf property, a new
casino competing with our Lake Charles property and expansions by casinos competing with our Lula property.
The
non-recurring fair values used in our determination of the goodwill impairment charges considered level 2 and 3 inputs, including discounted cash flows and market based
multiple valuation methods.
64
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
6. Valuation Charges (Continued)
The
remaining goodwill balance by property as of April 24, 2016 is as follows:
|
|
|
|
|
|
|
April 24,
2016
|
|
Bettendorf
|
|
$
|
5,713
|
|
Black Hawk
|
|
|
30,533
|
|
Boonville
|
|
|
2,599
|
|
Kansas City
|
|
|
7,182
|
|
Lula
|
|
|
6,581
|
|
Marquette
|
|
|
29,195
|
|
Vicksburg
|
|
|
27,167
|
|
|
|
|
|
|
Total
|
|
$
|
108,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7. Long-Term Debt
Long-term debt consists of the following:
|
|
|
|
|
|
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
Senior Secured Credit Facility:
|
|
|
|
|
|
|
|
Revolving line of credit, expires April 19, 2018, interest payable at least quarterly at either LIBOR and/or prime plus a margin
|
|
$
|
67,500
|
|
$
|
75,000
|
|
5.875% Senior Notes, interest payable semi-annually March 15 and September 15, net
|
|
|
502,541
|
|
|
502,987
|
|
7.75% Senior Notes, interest payable semi-annually March 15 and September 15, net
|
|
|
|
|
|
62,012
|
|
8.875% Senior Subordinated Notes, interest payable semi-annually June 15 and December 15
|
|
|
350,000
|
|
|
350,000
|
|
Other
|
|
|
2,652
|
|
|
2,883
|
|
|
|
|
|
|
|
|
|
|
|
|
922,693
|
|
|
992,882
|
|
Less current maturities
|
|
|
80
|
|
|
170
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
$
|
922,613
|
|
$
|
992,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Secured Credit Facility, as amended and restated
Our Senior Secured Credit Facility as amended and restated ("Credit Facility") consists of a
$300,000 revolving line of credit. The Credit Facility is secured on a first priority basis by substantially all of our assets and guaranteed by all of our restricted subsidiaries.
Our
net revolving line of credit availability at April 24, 2016, as limited by our outstanding borrowings, was approximately $224,000, after consideration of $8,000 in outstanding
letters of credit. We have an annual commitment fee related to the unused portion of the Credit Facility of up to 0.55% which is included in interest expense in the accompanying consolidated
statements of operations. The weighted average effective interest rates of the Credit Facility for fiscal years 2016 and 2015 were 2.63% and 3.54%, respectively.
65
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
7. Long-Term Debt (Continued)
The Credit Facility includes a number of affirmative and negative covenants, as well as certain financial covenants including maintenance of a total leverage ratio, senior secured
leverage ratio and minimum interest coverage ratio. The Credit Facility also restricts our ability to make certain investments or distributions. We were in compliance with the covenants as of
April 24, 2016.
In
fiscal 2015, we amended our Credit Facility to revise the definition of consolidated EBITDA to exclude the costs associated with the Colorado Referendum and certain severance expenses
related to the corporate restructuring.
In
fiscal 2014, we amended our Credit Facility to modify our maximum allowed leverage and minimum interest coverage ratio covenants. This was accounted for in accordance with ASC 470-50,
Debt Modifications and Extinguishments and we capitalized new deferred financing costs of $673.
5.875% Senior Notes
In March 2013, we issued $350,000 of 5.875% Senior Notes due 2021 ("5.875% Senior Notes"). The net proceeds were used to repay
term loan borrowings under our Credit Facility. On April 14, 2015, we issued an additional $150,000 of 5.875% Senior Notes at a price of 102.0%, which have the same terms and are treated as the
same class as the outstanding 5.875% Senior Notes (the "April 2015 issuance"). After deducting underwriting fees, the net proceeds of $151,500 from the April 2015 issuance were used to purchase a
portion of the 7.75% Senior Notes validly tendered pursuant to the Tender Offer (as defined below). As a result of the April 2015 issuance, we capitalized deferred financing costs of $209 in fiscal
2016 and $2,536 in fiscal 2015, respectively.
The
5.875% Senior Notes are guaranteed, on a joint and several basis, by substantially all of our significant subsidiaries and certain other subsidiaries as described in Note 16.
All of the guarantor
subsidiaries are wholly owned by us. The 5.875% Senior Notes are general unsecured obligations and rank junior to all of our senior secured indebtedness and senior to our senior subordinated
indebtedness. The 5.875% Senior Notes are redeemable, in whole or in part, at our option as of March 15, 2016, with call premiums as defined in the indenture governing the 5.875% Senior Notes.
7.75% Senior Notes
In March 2011, we issued $300,000 of 7.75% Senior Notes due 2019 at a price of 99.264% ("7.75% Senior Notes"). On April 7,
2015, we launched a cash tender offer for any and all of our outstanding 7.75% Senior Notes (the "Tender Offer"). The Tender Offer expired on April 13, 2015. We accepted for purchase $237,832
of the outstanding 7.75% Senior Notes validly tendered pursuant to the Tender Offer and we funded the payments utilizing the net proceeds from the 5.875% Senior Notes April 2015 issuance, additional
borrowings under our Credit Facility and cash on hand. The aggregate amount paid of approximately $250,000, included tender offer consideration of $1.043 per $1.000 principal amount tendered, as well
as accrued and unpaid interest on the 7.75% Senior Notes. As a result of the completed Tender Offer, we incurred expenses related to the write-off of deferred financing costs and the discount, tender
fees and other related costs of $13,757, recorded as a loss on early extinguishment of debt in the fiscal 2015 consolidated statement of operations.
On
April 14, 2015 we issued an irrevocable notice of redemption of the remaining $62,168 of outstanding 7.75% Senior Notes at a redemption price of 103.875% of the principal
amount, plus accrued and unpaid interest at the redemption date in accordance with the terms of the indenture governing the 7.75% Senior Notes. On May 14, 2015, we completed the redemption for
approximately $65,000, utilizing additional borrowings under our Credit Facility and cash on hand. As a result of the
66
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
7. Long-Term Debt (Continued)
redemption,
we recorded a loss of $2,966 on early extinguishment of debt in the fiscal 2016 consolidated statement of operations.
8.875% Senior Subordinated Notes
On August 7, 2012, we completed the issuance and sale of $350,000 of 8.875% Senior Subordinated Notes due 2020
("8.875% Senior Subordinated Notes"). We received net proceeds of $343,000 for this issuance after deducting underwriting fees. As a result of the issuance, we capitalized deferred financing costs of
$8,137.
The
8.875% Senior Subordinated Notes are guaranteed, on a joint and several basis, by substantially all of our significant subsidiaries and certain other subsidiaries as described in
Note 16. All of the guarantor subsidiaries are wholly owned by us. The 8.875% Senior Subordinated Notes are general
unsecured obligations and rank junior to all of our senior indebtedness. The 8.875% Senior Subordinated Notes are redeemable, in whole or in part, at our option at any time as of June 15, 2016,
with call premiums as defined in the indenture governing the 8.875% Senior Subordinated Notes.
The
indentures governing the 5.875% Senior Notes and the 8.875% Senior Subordinated Notes limit, among other things, our ability and our restricted subsidiaries' ability to borrow money,
make restricted payments, use assets as security in other transactions, enter into transactions with affiliates, pay dividends, or repurchase stock. The indentures also limit our ability to issue and
sell capital stock of subsidiaries, sell assets in excess of specified amounts or merge with or into other companies.
Future Principal Payments of Long-term Debt
The aggregate principal payments due on long-term debt as of April 24, 2016 over the next five
years and thereafter, are as follows:
|
|
|
|
|
Fiscal Years Ending:
|
|
|
|
|
2017
|
|
$
|
80
|
|
2018
|
|
|
67,587
|
|
2019
|
|
|
94
|
|
2020
|
|
|
102
|
|
2021
|
|
|
850,111
|
|
Thereafter
|
|
|
2,178
|
|
|
|
|
|
|
|
|
|
920,152
|
|
Debt premium
|
|
|
2,541
|
|
|
|
|
|
|
|
|
$
|
922,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8. Other Long-Term Obligations
Nemacolin Woodlands Resort
We entered into agreements with Nemacolin Woodland Resort ("Resort") in Pennsylvania to construct and manage a casino,
which we opened in July 2013. Under terms of the agreements, the Resort provided land, land improvements and a building for the casino property. The Company was deemed, for accounting purposes only,
to be the owner of these assets provided by the Resort during the construction and casino operating periods due to our continuing involvement. Therefore, we are accounting for the transaction using
the direct financing method. As of April 24, 2016, in accordance with ASC 840, we have recorded property and equipment, net of
67
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
8. Other Long-Term Obligations (Continued)
accumulated
depreciation, of $5,626, and a liability of $6,100 in other long-term obligations related to the agreement.
The
other long-term obligations will be reflected in our consolidated balance sheets until completion of the management agreement, at which time the related fixed assets, net of
accumulated depreciation, will be removed from our consolidated financial statements and the net remaining obligation over the net carrying value of the associated fixed asset will be recognized as a
gain (loss) on the sale of the facility.
Quad-Cities Waterfront Convention Center
We entered into agreements with the City of Bettendorf, Iowa under which the City constructed a convention
center which opened in January 2009, adjacent to our hotel. We lease, manage, and provide financial and operating support for the convention center. The Company was deemed, for accounting purposes
only, to be the owner of the convention center during the construction period. Upon completion of the convention center we were precluded from accounting for the transaction as a sale and leaseback
due to our continuing involvement. Therefore, we are accounting for the transaction using the direct financing method. Under the terms of our agreements for the convention center, we have guaranteed
certain obligations related to notes issued by the City of Bettendorf, Iowa for the convention center.
On
May 4, 2015, we made a payment of approximately $9,400 related to the notes issued by the City per the terms of our agreement with borrowings from our Credit Facility. With
this prepayment, we have fulfilled our financial obligation related to the Convention Center and have no future payments under this long-term obligation. The remaining balance of the long-term
obligation will remain on our consolidated balance sheet until completion of the lease agreement, at which time the related fixed assets, net of accumulated depreciation, and the net remaining
obligation over the net carrying value of the associated fixed assets will be recognized as a gain on sale of the facility. As of April 24, 2016, we have recorded in other long-term obligations
$7,812 related to our liability under ASC 840 related to the convention center.
9. Income Taxes
Income tax (provision) benefit from continuing operations consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Current:
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
|
|
$
|
|
|
$
|
|
|
State
|
|
|
(128
|
)
|
|
(167
|
)
|
|
7,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(128
|
)
|
|
(167
|
)
|
|
7,352
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(2,623
|
)
|
|
(3,219
|
)
|
|
10,116
|
|
State
|
|
|
(1,427
|
)
|
|
2,275
|
|
|
1,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,050
|
)
|
|
(944
|
)
|
|
11,142
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (provision) benefit
|
|
$
|
(4,178
|
)
|
$
|
(1,111
|
)
|
$
|
18,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
9. Income Taxes (Continued)
A
reconciliation of income taxes from continuing operations at the statutory corporate federal tax rate of 35% to the income tax (provision) benefit reported in the accompanying
consolidated statements of operations is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Statutory tax (provision) benefit
|
|
$
|
(18,364
|
)
|
$
|
(2,940
|
)
|
$
|
47,354
|
|
Effects of :
|
|
|
|
|
|
|
|
|
|
|
State taxes, net of federal effect
|
|
|
930
|
|
|
3,542
|
|
|
10,337
|
|
Reduction of unrecognized tax benefits
|
|
|
|
|
|
|
|
|
5,010
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Lobbying & Referendum costs
|
|
|
(671
|
)
|
|
(2,018
|
)
|
|
(607
|
)
|
Employment tax credits
|
|
|
767
|
|
|
932
|
|
|
1,027
|
|
Fines & Penalties
|
|
|
(35
|
)
|
|
(17
|
)
|
|
(25
|
)
|
Meals & Entertainment
|
|
|
(55
|
)
|
|
(46
|
)
|
|
(60
|
)
|
Various permanent differences
|
|
|
(421
|
)
|
|
(14
|
)
|
|
(15
|
)
|
Interest
|
|
|
|
|
|
|
|
|
(446
|
)
|
Goodwill impairment
|
|
|
|
|
|
|
|
|
(42,083
|
)
|
Valuation allowance
|
|
|
12,615
|
|
|
(109
|
)
|
|
(1,031
|
)
|
Expiration of stock awards
|
|
|
|
|
|
(611
|
)
|
|
|
|
Other
|
|
|
1,056
|
|
|
170
|
|
|
(967
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (provision) benefit
|
|
$
|
(4,178
|
)
|
$
|
(1,111
|
)
|
$
|
18,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
9. Income Taxes (Continued)
Significant
components of our domestic net deferred income tax asset (liability) are as follows:
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
Property and equipment
|
|
$
|
(40,709
|
)
|
$
|
(37,421
|
)
|
Goodwill and intangibles
|
|
|
(22,727
|
)
|
|
(21,527
|
)
|
Gain on early extinguishment of debt
|
|
|
(9,751
|
)
|
|
(14,613
|
)
|
Other
|
|
|
(382
|
)
|
|
(347
|
)
|
|
|
|
|
|
|
|
|
Total deferred tax liabilities
|
|
|
(73,569
|
)
|
|
(73,908
|
)
|
|
|
|
|
|
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
Net operating losses
|
|
|
40,061
|
|
|
62,672
|
|
Employment tax credits
|
|
|
21,973
|
|
|
22,378
|
|
Accrued expenses
|
|
|
13,564
|
|
|
8,383
|
|
Alternative minimum tax credit
|
|
|
4,103
|
|
|
2,481
|
|
Other
|
|
|
14,355
|
|
|
14,503
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets
|
|
|
94,056
|
|
|
110,417
|
|
Valuation allowance on deferred tax assets
|
|
|
(57,245
|
)
|
|
(69,217
|
)
|
|
|
|
|
|
|
|
|
Net deferred tax asset
|
|
|
36,811
|
|
|
41,200
|
|
|
|
|
|
|
|
|
|
Net deferred tax liability
|
|
$
|
(36,758
|
)
|
$
|
(32,708
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise from net operating loss and tax credit
carryforwards, as well as from temporary basis differences in assets and liabilities between financial reporting and tax.
At
April 24, 2016, we have federal net operating loss carryforwards of $45,432 for income tax purposes, with expiration dates from fiscal 2031 to 2036. Approximately $10,967 of
these net operating losses are attributable to our Colorado subsidiaries and can only be used to offset income earned by these entities. The remaining federal net operating losses are subject to
limitations under the internal revenue code and underlying treasury regulations, which may limit the amount ultimately utilized. We also have various state income tax net operating loss carryforwards
totaling $390,804 with expiration dates from fiscal 2018 to 2036. This includes both consolidated and separate company net operating loss carryforwards. Our federal and state net operating loss
carryforwards include adjustments of $15,740 and $16,733, respectively, for excess tax benefits from stock compensation deductions that have not yet been recognized for financial statement purposes.
Equity will be increased if and when these deferred tax assets are realized. We also have federal general business and alternative minimum tax credit carryforwards of $26,075 for income tax purposes,
with expiration dates from fiscal 2022 to 2036. For the current period, all deferred income taxes, including those related to NOL carryforwards, have been classified as noncurrent in the consolidated
balance sheet in accordance with FASB Update
No. 2015-17. We have applied this amendment on a prospective basis and prior period amounts have not been retrospectively adjusted.
70
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
9. Income Taxes (Continued)
We
periodically evaluate the realizability of our deferred tax assets and perform an analysis in light of all available evidence, both positive and negative, consistent with the
provisions of ASC 740. As of April 24, 2016, we remain in a three-year cumulative loss, which is a significant piece of negative evidence. While it is primarily the result of intangible and
fixed asset impairments, and not an indication of continuing operations, we are required to give objective historical evidence significantly more weight than subjective evidence, such as forecasts of
future income. Based on this evidence, we concluded that a valuation allowance should continue to be booked against our federal and most of our state deferred tax assets as of April 24, 2016.
During
fiscal 2015, our Florida operations experienced their third consecutive year of substantive pretax income. After considering all of the positive and negative evidence, we
concluded that our deferred income tax assets related to our Florida state operations are more likely than not to be realized. Accordingly, as of April 26, 2015, we released all of our
valuation allowance against our net Florida deferred income tax assets, resulting in the $2,301 benefit in our provision for income taxes.
A
reconciliation of the beginning and ending amounts of valuation allowance is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
State
|
|
Total
|
|
Balance, April 27, 2014
|
|
$
|
40,885
|
|
$
|
26,177
|
|
$
|
67,062
|
|
(Benefit) Provision
|
|
|
(1,377
|
)
|
|
5,833
|
|
|
4,456
|
|
Release of Valuation Allowance
|
|
|
|
|
|
(2,301
|
)
|
|
(2,301
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 26, 2015
|
|
$
|
39,508
|
|
$
|
29,709
|
|
$
|
69,217
|
|
(Benefit) Provision
|
|
|
(13,956
|
)
|
|
1,984
|
|
|
(11,972
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 24, 2016
|
|
$
|
25,552
|
|
$
|
31,693
|
|
$
|
57,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We
allocated the income tax provision and valuation allowance between continuing operations and discontinued operations consistent with the provisions of ASC 740.
During
fiscal 2016, a decrease to the valuation allowance of $11,972 was recorded as an income tax benefit due to current year earnings. The ending valuation allowance balance does not
preclude us from utilizing the deferred tax assets in the future, nor does it reflect a change in our long-term outlook. If or when recognized, the tax benefits relating to any reversal of the
valuation allowance on deferred tax assets as of April 24, 2016 will be accounted for as a reduction of income tax expense.
We
account for unrecognized tax benefits in accordance with ASC 740. A reconciliation of the beginning and ending amounts of unrecognized tax benefits as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Beginning balance
|
|
$
|
|
|
$
|
|
|
$
|
4,072
|
|
Impact of favorable court ruling
|
|
|
|
|
|
|
|
|
(4,072
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On
February 13, 2014, the Supreme Court of Mississippi ruled in our favor with regard to positions taken on Mississippi income tax returns for fiscal years ending April 2002
through April 2008.
71
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
9. Income Taxes (Continued)
As
a result, we recognized a benefit of $4,072 related to principle and $4,025 related to interest. As of April 24, 2016, we do not have any uncertain tax positions.
We
recorded interest expense of $0, $0 and $390 in fiscal 2016, 2015 and 2014, respectively, prior to the favorable ruling. We accrued no penalties during fiscal 2016, 2015 or 2014.
As
of April 24, 2016, we were subject to U.S. federal income tax examination for fiscal years 2009 to 2015. We are also subject to state and local income tax examinations for
various tax years in jurisdictions where we operate.
10. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except share and per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
Income (loss) applicable to common shares:
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to common stockholders
|
|
$
|
48,289
|
|
$
|
7,290
|
|
$
|
(116,803
|
)
|
Loss from discontinued operations
|
|
|
(2,085
|
)
|
|
(2,113
|
)
|
|
(10,883
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to the common stockholders
|
|
$
|
46,204
|
|
$
|
5,177
|
|
$
|
(127,686
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic income (loss) per shareweighted average shares
|
|
|
40,690,929
|
|
|
39,955,735
|
|
|
39,731,766
|
|
Effect of dilutive securities
|
|
|
|
|
|
|
|
|
|
|
Employee stock options
|
|
|
109,244
|
|
|
84,938
|
|
|
|
|
Restricted stock units
|
|
|
523,300
|
|
|
279,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted income (loss) per shareadjusted weighted average shares and assumed conversions
|
|
|
41,323,473
|
|
|
40,320,267
|
|
|
39,731,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
1.19
|
|
$
|
0.18
|
|
$
|
(2.94
|
)
|
Loss from discontinued operations
|
|
|
(0.05
|
)
|
|
(0.05
|
)
|
|
(0.27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders
|
|
$
|
1.14
|
|
$
|
0.13
|
|
$
|
(3.21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per share attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
1.17
|
|
$
|
0.18
|
|
$
|
(2.94
|
)
|
Loss from discontinued operations
|
|
|
(0.05
|
)
|
|
(0.05
|
)
|
|
(0.27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
1.12
|
|
$
|
0.13
|
|
$
|
(3.21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
10. Earnings Per Share (Continued)
Our basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of shares outstanding for the period. Stock options representing 444,365
shares, which were anti-dilutive, were excluded from the calculation of common shares for diluted earnings per share for fiscal 2016.
Stock
options representing 205,060 shares, which were anti-dilutive, were excluded from the calculation of common shares for diluted earnings per share for fiscal 2015.
Due
to the loss from continuing operations, stock options representing 52,501 shares, which were potentially dilutive and 753,860 stock options, which were anti-dilutive, were excluded
from the calculation of common shares for diluted earnings per share for fiscal 2014. Restricted stock units representing 48,362 shares, which were potentially dilutive, and 1,254,413 restricted stock
units whose minimum market performance conditions had not been achieved, were also excluded from the calculation of diluted earnings per share for fiscal 2014.
11. Stock Based Compensation
Under our amended and restated Long Term Incentive Plan, we have issued restricted stock units, performance-based restricted stock units, restricted stock and stock options.
Restricted Stock Units
During fiscal 2016, we granted 104,982 restricted stock units ("RSUs") to employees with a fair market value of $14.89 per unit
on the date of grant. The RSUs will vest and be converted to stock ratably over three years commencing on the one-year anniversary of the grant date. The aggregate compensation cost related to these
RSUs was $1,563 to be recognized over the vesting periods. Our aggregate estimate of forfeitures for these RSUs is 25%. Per the terms of the agreement, the awards are issued net of shares necessary to
pay minimum withholding taxes. Subsequent to year-end, 21,022 shares were issued for the first tranche vesting on April 27, 2016.
A
summary of restricted stock unit activity for fiscal 2016 is presented below:
|
|
|
|
|
|
|
|
|
|
Restricted
Stock Units
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Outstanding at April 26, 2015
|
|
|
|
|
$
|
|
|
Granted
|
|
|
104,982
|
|
|
14.89
|
|
Vested
|
|
|
|
|
|
|
|
Forfeited and expired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at April 24, 2016
|
|
|
104,982
|
|
$
|
14.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 24, 2016:
|
|
|
|
|
|
|
|
Weighted average remaining contractual term
|
|
|
1.5 years
|
|
|
|
|
Aggregate intrinsic value:
|
|
|
|
|
|
|
|
Outstanding
|
|
$
|
1,572
|
|
|
|
|
Nonvested:
|
|
|
|
|
|
|
|
Unrecognized compensation cost
|
|
$
|
381
|
|
|
|
|
Weighted average remaining vesting period
|
|
|
1.5 years
|
|
|
|
|
73
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
11. Stock Based Compensation (Continued)
During
fiscal 2013, we granted RSUs containing market performance conditions which determined the ultimate amount of RSUs to be awarded. The market condition period ended on
April 26, 2015 and a gross award of 1,532,417 shares was achieved. Per the terms of the agreement, the awards are issued net of shares necessary to pay minimum withholding taxes with 50% of the
RSUs vesting on April 26, 2015 and the remaining 50% vesting on April 26, 2016. On April 26, 2015, 459,473 net shares were issued for the first vested tranche. Subsequent to
year-end, 467,073 net shares were issued for the second vested tranche on April 26, 2016. The fair value of these RSUs was initially determined utilizing a lattice pricing model which considers
a range of assumptions including volatility and risk-free interest rates. The aggregate compensation cost related to these RSUs was $4,637 recognized over the vesting periods.
Performance-based Restricted Stock Units
During fiscal 2016, we granted performance-based restricted stock units ("PRSUs"), with a company performance
condition which will determine the number of shares which will ultimately vest, if any, up to 251,964 shares with a fair market value of $14.89 per unit on the date of grant. Any shares earned will
vest at the end of three years from the date of grant. Probability of meeting the performance condition is assessed on a regular basis and compensation cost is adjusted accordingly. As of
April 24, 2016, our estimated unrecognized compensation cost remaining on the PRSUs was $1,338 with an estimated aggregate forfeiture of 37%.
Restricted Stock
We have issued shares of restricted common stock to employees and directors under our Long Term Incentive Plan. Restricted stock
awarded to employees primarily vests one-third on each of the first three anniversaries of the grant date and for directors' vests one-half on the grant date and one-half on the first anniversary of
the grant date. Our aggregate estimate of forfeitures for restricted stock for employees is 9%.
A
summary of restricted stock activity for fiscal 2016 is presented below:
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Outstanding at April 26, 2015
|
|
|
325,074
|
|
$
|
7.28
|
|
Granted
|
|
|
141,353
|
|
|
19.80
|
|
Vested
|
|
|
(238,669
|
)
|
|
7.88
|
|
Forfeited and expired
|
|
|
(7,433
|
)
|
|
12.72
|
|
|
|
|
|
|
|
|
|
Outstanding at April 24, 2016
|
|
|
220,325
|
|
$
|
14.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 24, 2016:
|
|
|
|
|
|
|
|
Weighted average remaining contractual term
|
|
|
0.8 years
|
|
|
|
|
Aggregate intrinsic value:
|
|
|
|
|
|
|
|
Outstanding
|
|
$
|
3,299
|
|
|
|
|
Nonvested:
|
|
|
|
|
|
|
|
Unrecognized compensation cost
|
|
$
|
1,093
|
|
|
|
|
Weighted average remaining vesting period
|
|
|
0.8 years
|
|
|
|
|
74
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
11. Stock Based Compensation (Continued)
Stock Options
We have issued incentive stock options and nonqualified stock options which have a maximum term of 10 years and are, generally,
exercisable in yearly installments of 20% commencing one year after the date of grant. During fiscal 2016, we issued 378,905 stock options which have a maximum term of seven years and are exercisable
in yearly installments of 20% commencing one year after the grant date. The options have a per share grant date fair value of $5.764 utilizing the
Black-Scholes-Merton option pricing model. Our aggregate estimate of forfeitures for stock options is 30%. There were no stock options granted in fiscal 2015 or 2014.
A
summary of stock option activity for fiscal 2016 is presented below:
|
|
|
|
|
|
|
|
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Outstanding at April 26, 2015
|
|
|
405,060
|
|
$
|
11.18
|
|
Granted
|
|
|
378,905
|
|
|
14.86
|
|
Exercised
|
|
|
(134,000
|
)
|
|
6.48
|
|
Forfeited and expired
|
|
|
(39,600
|
)
|
|
21.35
|
|
|
|
|
|
|
|
|
|
Outstanding at April 24, 2016
|
|
|
610,365
|
|
$
|
13.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 24, 2016:
|
|
|
|
|
|
|
|
Outstanding exercisable options
|
|
|
610,365
|
|
$
|
13.84
|
|
Weighted average remaining contractual term
|
|
|
4.7 years
|
|
|
|
|
Aggregate intrinsic value:
|
|
|
|
|
|
|
|
Outstanding exercisable
|
|
$
|
1,056
|
|
|
|
|
Outstanding
|
|
$
|
1,100
|
|
|
|
|
Nonvested:
|
|
|
|
|
|
|
|
Unrecognized compensation cost
|
|
$
|
743
|
|
|
|
|
Subsequent Event
Subsequent to our fiscal year ended April 24, 2016, we granted restricted stock units and stock options to certain employees
under the Long-Term Incentive Plan. We issued 145,516 restricted stock units with a weighted average fair market value of $15.16 per unit on the date of grant. The restricted stock units will vest and
be converted to stock ratably over three years commencing on the one year anniversary of the grant date. We also issued 310,735 stock options which have a maximum term of seven years and are
exercisable in yearly installments of 20% commencing one year after the grant date. The options have a per share grant date fair value of $5.968 utilizing the Black-Scholes-Merton option pricing
model. In addition, we granted performance-based restricted stock units ("PRSUs"), with a company performance condition which will determine the number of shares which will ultimately vest, if any, up
to 216,699 shares. Any shares earned will vest at the end of three years from the date of grant. Probability of meeting the performance condition will be assessed on a regular basis and compensation
cost will be adjusted accordingly.
Stock Compensation Expense
Total stock compensation expense from continuing operations in the accompanying consolidated statements of operations was
$5,069, $3,396 and $4,383 for the fiscal years 2016, 2015, and 2014, respectively. We recognize compensation expense for our stock-based awards on a straight-line basis over the requisite service
period for each separately vesting portion of the award.
75
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
11. Stock Based Compensation (Continued)
Share Based Plans
Information relating to our share based plans is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
April 24,
2016
|
|
April 26,
2015
|
|
April 27,
2014
|
|
Restricted Stock Units:
|
|
|
|
|
|
|
|
|
|
|
Fair value of restricted stock units vested during the year
|
|
$
|
|
|
$
|
11,451
|
|
$
|
|
|
Restricted Stock:
|
|
|
|
|
|
|
|
|
|
|
Fair value of restricted stock vested during the year
|
|
|
1,881
|
|
|
3,238
|
|
|
3,660
|
|
Stock Options:
|
|
|
|
|
|
|
|
|
|
|
Intrinsic value of stock options exercised
|
|
|
1,436
|
|
|
57
|
|
|
|
|
Proceeds from stock option exercises
|
|
|
869
|
|
|
74
|
|
|
|
|
We
have 2,949,054, shares available for future issuance under our equity compensation plan as of April 24, 2016. After consideration of activity subsequent to year-end, we have
2,522,355 shares available for future issuance in the plan. During fiscal 2016, we added 2,000,000 shares to the plan. Upon issuance of restricted shares, vesting of RSUs or exercise of stock options,
shares may be issued from available treasury or common shares.
Tax effect of Stock Based Compensation
Upon the exercise of stock options, vested restricted stock and vested RSUs, the tax benefit (provision)
related to stock compensation, subject to certain limitations, is recognized as an addition to or deduction from additional paid-in capital. During fiscal year 2016, there was no impact to additional
paid-in capital related to the vesting of restricted stock and exercise of stock options. At April 24, 2016, we have $6,422 of unrecognized tax benefits associated with stock exercises and
restricted stock vesting due to our net operating loss position.
Stock Repurchase
Our Board of Directors has approved a stock repurchase program, as amended, allowing up to 6,000,000 shares of our common stock to be
repurchased. As of April 24, 2016, we have repurchased 4,895,792 shares of common stock, and retired 553,800 shares of common stock under this stock repurchase program. No shares were
repurchased in fiscal years 2016, 2015 or 2014.
12. Supplemental Disclosure of Cash Flow Information
For the fiscal years 2016, 2015 and 2014, we made cash payments for interest, net of capitalized interest, of $65,061, $81,023 and $85,472, respectively. We made income tax payments, net
of refunds, of $134 in fiscal 2016 and received income tax refunds, net of payments, of $29 and $4,354 in fiscal 2015 and 2014, respectively.
For
fiscal 2016 and 2015, the change in accrued purchases of property and equipment in accounts payable increased by $7,923 and $1,959, respectively, and decreased by $7,149 in fiscal
2014.
For
fiscal 2016 and 2015, we capitalized interest of $600 and $23, primarily related to the land-based and hotel renovations at our Bettendorf property. For fiscal 2014, we capitalized
interest of $185 primarily related to construction of our casino at the Nemacolin Woodland Resort in Pennsylvania.
76
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
13. Employee Benefit Plans
401(k) Plan
We have a 401(k) plan covering substantially all of our employees who have completed 90 days of service. Expense for our
contributions from continuing operations related to the 401(k) plan was $1,731, $1,454 and $1,412 in fiscal years 2016, 2015, and 2014, respectively. Our contribution is based on a percentage of
employee contributions and may include an additional discretionary amount.
2005 Deferred Compensation Plan
Our 2005 Deferred Compensation Plan (the "Plan"), as amended and restated, is an unfunded deferred compensation
arrangement for the benefit of key management officers and employees of the Company and its subsidiaries. The terms of the Plan include the ability of the participants to defer, on a pre-tax basis,
salary, and bonus payments in excess of the amount permitted under IRS Code Section 401(k). The terms also allow for a discretionary annual matching contribution by the Company. The Plan allows
for the aggregation and investment of deferred amounts in notional investment alternatives, including units representing shares of our common stock. The liability related to the Plan as of
April 24, 2016 and April 26, 2015 was $3,564 and $3,953,
respectively, and is included in long-term other accrued liabilities in the consolidated balance sheets. For fiscal 2016 and fiscal 2015, there were no discretionary matching contributions by the
Company. For fiscal 2014, expense from continuing operations for the Company's discretionary matching contribution related to the Plan was $79.
14. Interest Rate Derivatives
We previously had interest rate derivative agreements in order to manage market risk on variable rate loans outstanding. We had an interest rate swap agreement with an aggregate notional
value of $50,000 that matured in September 2013. During fiscal 2010, our interest rate swaps no longer met the criteria for hedge effectiveness and changes in the fair value of the swaps since that
date were recorded in derivative income in the consolidated statements of operations. The cumulative loss recorded in other comprehensive income (loss), through the date of ineffectiveness, was
amortized into derivative expense over the remaining term of the individual interest rate swap agreements.
The
loss recorded in accumulated other comprehensive income (loss) of our interest rate swap contracts is recorded net of deferred income tax benefits of $149 as of April 27,
2014.
Derivative
income related to the change in fair value of interest rate swap contracts was $794 in fiscal 2014.
Derivative
expense realized associated with the amortization of cumulative loss recorded in other comprehensive income (loss) for the interest rate swaps through the date of
ineffectiveness is as follows:
|
|
|
|
|
|
|
Fiscal Year
Ended
|
|
|
|
April 27, 2014
|
|
Accumulated OCI amortization
|
|
$
|
247
|
|
Change in deferred taxes
|
|
|
149
|
|
Derivative expense
|
|
|
(396
|
)
|
77
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
15. Fair Value
ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820") establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various
valuation techniques (market approach, income approach, and cost approach). The levels of hierarchy are described below:
Level 1:
Inputs such as quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.
Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for
similar assets in active markets, quoted prices from identical or similar assets in inactive markets and observable inputs such as interest rate and yield curves.
Level 3:
Inputs that are not observable in the market and that include management's judgments about assumptions market participants would use.
Items Measured at Fair Value on a Recurring Basis
The following table sets forth the assets measured at fair value on a recurring basis, by input
level, in the consolidated balance sheets at April 24, 2016 and April 26, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
April 24, 2016
|
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
$
|
8,950
|
|
$
|
10,388
|
|
$
|
19,338
|
|
Restricted cash and investments
|
|
|
6,362
|
|
|
3,457
|
|
|
9,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 26, 2015
|
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
$
|
6,809
|
|
$
|
12,708
|
|
$
|
19,517
|
|
Restricted cash and investments
|
|
|
5,553
|
|
|
3,640
|
|
|
9,193
|
|
Marketable securities
The estimated fair values of our marketable securities are determined on an individual asset basis based upon quoted prices of
identical assets
available in active markets (Level 1), quoted prices of identical assets in inactive markets, or quoted prices for similar assets in active and inactive markets (Level 2), and represent
the amounts we would expect to receive if we sold these marketable securities.
Restricted cash and investments
The estimated fair values of our restricted cash and investments are based upon quoted prices available in active
markets (Level 1), or quoted
prices for similar assets in active and inactive markets (Level 2), and represent the amounts we would expect to receive if we sold our restricted cash and investments.
There
were no transfers between level 1 and level 2 investments.
78
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
15. Fair Value (Continued)
Other Financial Instruments
The estimated carrying amounts and fair values of our other financial instruments are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 24, 2016
|
|
April 26, 2015
|
|
|
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving line of credit
|
|
$
|
67,500
|
|
$
|
66,150
|
|
$
|
75,000
|
|
$
|
73,875
|
|
5.875% Senior notes
|
|
|
502,541
|
|
|
520,000
|
|
|
502,987
|
|
|
515,055
|
|
7.75% Senior notes
|
|
|
|
|
|
|
|
|
62,012
|
|
|
64,593
|
|
8.875% Senior subordinated notes
|
|
|
350,000
|
|
|
367,206
|
|
|
350,000
|
|
|
383,915
|
|
Other long-term debt
|
|
|
2,652
|
|
|
2,652
|
|
|
2,883
|
|
|
2,883
|
|
Other long-term obligations
|
|
|
13,912
|
|
|
13,912
|
|
|
22,211
|
|
|
22,211
|
|
The
fair value of our long-term debt or other long-term obligations is estimated based on the quoted market price of the underlying debt issue (Level 1) or, when a quoted market
price is not available, the discounted cash flow of future payments utilizing current rates available to us for debt of similar remaining maturities (Level 3). Debt obligations with a short
remaining maturity have a carrying amount that approximates fair value.
16. Consolidating Condensed Financial Information
Certain of our wholly owned subsidiaries have fully and unconditionally guaranteed on a joint and several basis, the payment of all obligations under our 5.875% Senior Notes and 8.875%
Senior Subordinated Notes.
The
following wholly owned subsidiaries of the Company are guarantors, on a joint and several basis, under the 5.875% Senior Notes and 8.875% Senior Subordinated Notes: Black Hawk
Holdings, L.L.C.; CCSC/Blackhawk, Inc.; IC Holdings Colorado, Inc.; IOC-Black Hawk Distribution Company, L.L.C.; IOC-Boonville, Inc.; IOC-Caruthersville, L.L.C.; IOC-Kansas
City, Inc.; IOC-Lula, Inc.; IOC-Natchez, Inc.; IOC-Black Hawk County, Inc.; IOC Holdings, L.L.C.; IOC-Vicksburg, Inc.; IOC-Vicksburg, LLC; Rainbow Casino-
Vicksburg Partnership, L.P.; IOC Cape Girardeau, LLC; Isle of Capri Bettendorf, L.C; Isle of Capri Black Hawk, L.L.C.; Isle of Capri Marquette, Inc.; PPI, Inc.; and
St. Charles Gaming Company, L.L.C. Each of the subsidiaries' guarantees is joint and several with the guarantees of the other subsidiaries.
During
fiscal 2015, our wholly owned subsidiary, IOC-Davenport, Inc., changed designations from a Guarantor Subsidiary to a Non-Guarantor Subsidiary. All periods presented below
reflect the operations of IOC-Davenport, Inc. as a Non-Guarantor Subsidiary.
79
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
16. Consolidating Condensed Financial Information (Continued)
Consolidating condensed balance sheets as of April 24, 2016 and April 26, 2015 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 24, 2016
|
|
|
|
Isle of Capri
Casinos, Inc.
(Parent
Obligor)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
and
Eliminating
Entries
|
|
Isle of Capri
Casinos, Inc.
Consolidated
|
|
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
10,575
|
|
$
|
76,646
|
|
$
|
25,804
|
|
$
|
(130
|
)
|
$
|
112,895
|
|
Intercompany receivables
|
|
|
424,693
|
|
|
|
|
|
|
|
|
(424,693
|
)
|
|
|
|
Investments in subsidiaries
|
|
|
586,569
|
|
|
3,358
|
|
|
|
|
|
(589,927
|
)
|
|
|
|
Property and equipment, net
|
|
|
3,650
|
|
|
871,353
|
|
|
24,164
|
|
|
|
|
|
899,167
|
|
Other assets
|
|
|
15,130
|
|
|
169,487
|
|
|
26,974
|
|
|
(18,504
|
)
|
|
193,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,040,617
|
|
$
|
1,120,844
|
|
$
|
76,942
|
|
$
|
(1,033,254
|
)
|
$
|
1,205,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
35,862
|
|
$
|
77,128
|
|
$
|
24,687
|
|
$
|
(130
|
)
|
$
|
137,547
|
|
Intercompany payables
|
|
|
|
|
|
371,104
|
|
|
53,589
|
|
|
(424,693
|
)
|
|
|
|
Long-term debt, less current maturities
|
|
|
922,613
|
|
|
|
|
|
|
|
|
|
|
|
922,613
|
|
Other accrued liabilities
|
|
|
6,524
|
|
|
74,267
|
|
|
7,084
|
|
|
(18,504
|
)
|
|
69,371
|
|
Stockholders' equity
|
|
|
75,618
|
|
|
598,345
|
|
|
(8,418
|
)
|
|
(589,927
|
)
|
|
75,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,040,617
|
|
$
|
1,120,844
|
|
$
|
76,942
|
|
$
|
(1,033,254
|
)
|
$
|
1,205,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of April 26, 2015
|
|
|
|
Isle of Capri
Casinos, Inc.
(Parent
Obligor)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
and
Eliminating
Entries
|
|
Isle of Capri
Casinos, Inc.
Consolidated
|
|
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
14,582
|
|
$
|
79,118
|
|
$
|
26,157
|
|
$
|
(185
|
)
|
$
|
119,672
|
|
Intercompany receivables
|
|
|
433,527
|
|
|
|
|
|
|
|
|
(433,527
|
)
|
|
|
|
Investments in subsidiaries
|
|
|
573,258
|
|
|
3,358
|
|
|
|
|
|
(576,616
|
)
|
|
|
|
Property and equipment, net
|
|
|
4,844
|
|
|
869,486
|
|
|
27,896
|
|
|
|
|
|
902,226
|
|
Other assets
|
|
|
32,217
|
|
|
160,727
|
|
|
22,123
|
|
|
(9,203
|
)
|
|
205,864
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,058,428
|
|
$
|
1,112,689
|
|
$
|
76,176
|
|
$
|
(1,019,531
|
)
|
$
|
1,227,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
36,304
|
|
$
|
71,723
|
|
$
|
25,769
|
|
$
|
(185
|
)
|
$
|
133,611
|
|
Intercompany payables
|
|
|
|
|
|
425,267
|
|
|
8,260
|
|
|
(433,527
|
)
|
|
|
|
Long-term debt, less current maturities
|
|
|
992,650
|
|
|
|
|
|
62
|
|
|
|
|
|
992,712
|
|
Other accrued liabilities
|
|
|
6,012
|
|
|
73,982
|
|
|
7,186
|
|
|
(9,203
|
)
|
|
77,977
|
|
Stockholders' equity
|
|
|
23,462
|
|
|
541,717
|
|
|
34,899
|
|
|
(576,616
|
)
|
|
23,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,058,428
|
|
$
|
1,112,689
|
|
$
|
76,176
|
|
$
|
(1,019,531
|
)
|
$
|
1,227,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
16. Consolidating Condensed Financial Information (Continued)
Consolidating
condensed statements of operations for the fiscal years ended April 24, 2016, April 26, 2015 and April 27, 2014 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year Ended April 24, 2016
|
|
|
|
Isle of Capri
Casinos, Inc.
(Parent
Obligor)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
and
Eliminating
Entries
|
|
Isle of Capri
Casinos, Inc.
Consolidated
|
|
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino
|
|
$
|
|
|
$
|
986,968
|
|
$
|
41,079
|
|
$
|
|
|
$
|
1,028,047
|
|
Rooms, food, beverage, pari-mutuel and other
|
|
|
77
|
|
|
157,665
|
|
|
12,039
|
|
|
(7,888
|
)
|
|
161,893
|
|
Management fee revenue
|
|
|
35,280
|
|
|
|
|
|
|
|
|
(35,280
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenues
|
|
|
35,357
|
|
|
1,144,633
|
|
|
53,118
|
|
|
(43,168
|
)
|
|
1,189,940
|
|
Less promotional allowances
|
|
|
|
|
|
(202,437
|
)
|
|
(8,911
|
)
|
|
|
|
|
(211,348
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
35,357
|
|
|
942,196
|
|
|
44,207
|
|
|
(43,168
|
)
|
|
978,592
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino
|
|
|
|
|
|
145,763
|
|
|
6,950
|
|
|
|
|
|
152,713
|
|
Gaming taxes
|
|
|
|
|
|
245,405
|
|
|
16,511
|
|
|
|
|
|
261,916
|
|
Rooms, food, beverage, pari-mutuel and other
|
|
|
30,811
|
|
|
316,192
|
|
|
19,596
|
|
|
(7,888
|
)
|
|
358,711
|
|
Management fee expense
|
|
|
|
|
|
34,080
|
|
|
1,200
|
|
|
(35,280
|
)
|
|
|
|
Depreciation and amortization
|
|
|
1,742
|
|
|
76,073
|
|
|
4,290
|
|
|
|
|
|
82,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
32,553
|
|
|
817,513
|
|
|
48,547
|
|
|
(43,168
|
)
|
|
855,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
2,804
|
|
|
124,683
|
|
|
(4,340
|
)
|
|
|
|
|
123,147
|
|
Interest expense, net
|
|
|
(30,499
|
)
|
|
(35,281
|
)
|
|
(1,934
|
)
|
|
|
|
|
(67,714
|
)
|
Loss on early extinguishment of debt
|
|
|
(2,966
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,966
|
)
|
Equity in income (loss) of subsidiaries
|
|
|
55,433
|
|
|
|
|
|
|
|
|
(55,433
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
24,772
|
|
|
89,402
|
|
|
(6,274
|
)
|
|
(55,433
|
)
|
|
52,467
|
|
Income tax (provision) benefit
|
|
|
23,517
|
|
|
(31,028
|
)
|
|
3,333
|
|
|
|
|
|
(4,178
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuining operations
|
|
|
48,289
|
|
|
58,374
|
|
|
(2,941
|
)
|
|
(55,433
|
)
|
|
48,289
|
|
Income (loss) of discontinued operations
|
|
|
(2,085
|
)
|
|
(2,151
|
)
|
|
|
|
|
2,151
|
|
|
(2,085
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
46,204
|
|
$
|
56,223
|
|
$
|
(2,941
|
)
|
$
|
(53,282
|
)
|
$
|
46,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
16. Consolidating Condensed Financial Information (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year Ended April 26, 2015
|
|
|
|
Isle of Capri
Casinos, Inc.
(Parent
Obligor)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
and
Eliminating
Entries
|
|
Isle of Capri
Casinos, Inc.
Consolidated
|
|
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino
|
|
$
|
|
|
$
|
990,785
|
|
$
|
41,456
|
|
$
|
|
|
$
|
1,032,241
|
|
Rooms, food, beverage, pari-mutuel and other
|
|
|
91
|
|
|
163,494
|
|
|
12,942
|
|
|
(8,885
|
)
|
|
167,642
|
|
Management fee revenue
|
|
|
34,869
|
|
|
|
|
|
|
|
|
(34,869
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenues
|
|
|
34,960
|
|
|
1,154,279
|
|
|
54,398
|
|
|
(43,754
|
)
|
|
1,199,883
|
|
Less promotional allowances
|
|
|
|
|
|
(212,101
|
)
|
|
(10,737
|
)
|
|
|
|
|
(222,838
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
34,960
|
|
|
942,178
|
|
|
43,661
|
|
|
(43,754
|
)
|
|
977,045
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino
|
|
|
|
|
|
149,778
|
|
|
6,769
|
|
|
|
|
|
156,547
|
|
Gaming taxes
|
|
|
|
|
|
247,395
|
|
|
15,967
|
|
|
|
|
|
263,362
|
|
Rooms, food, beverage, pari-mutuel and other
|
|
|
33,520
|
|
|
321,692
|
|
|
18,091
|
|
|
(8,885
|
)
|
|
364,418
|
|
Valuation charges
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
|
|
9,000
|
|
Management fee expense
|
|
|
|
|
|
33,669
|
|
|
1,200
|
|
|
(34,869
|
)
|
|
|
|
Depreciation and amortization
|
|
|
1,990
|
|
|
70,344
|
|
|
5,464
|
|
|
|
|
|
77,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
35,510
|
|
|
822,878
|
|
|
56,491
|
|
|
(43,754
|
)
|
|
871,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(550
|
)
|
|
119,300
|
|
|
(12,830
|
)
|
|
|
|
|
105,920
|
|
Interest expense, net
|
|
|
(43,775
|
)
|
|
(37,865
|
)
|
|
(2,122
|
)
|
|
|
|
|
(83,762
|
)
|
Loss on early extinguishment of debt
|
|
|
(13,757
|
)
|
|
|
|
|
|
|
|
|
|
|
(13,757
|
)
|
Equity in income (loss) of subsidiaries
|
|
|
43,319
|
|
|
|
|
|
|
|
|
(43,319
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
(14,763
|
)
|
|
81,435
|
|
|
(14,952
|
)
|
|
(43,319
|
)
|
|
8,401
|
|
Income tax (provision) benefit
|
|
|
22,053
|
|
|
(29,417
|
)
|
|
6,253
|
|
|
|
|
|
(1,111
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuining operations
|
|
|
7,290
|
|
|
52,018
|
|
|
(8,699
|
)
|
|
(43,319
|
)
|
|
7,290
|
|
Income (loss) of discontinued operations
|
|
|
(2,113
|
)
|
|
(2,504
|
)
|
|
|
|
|
2,504
|
|
|
(2,113
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
5,177
|
|
$
|
49,514
|
|
$
|
(8,699
|
)
|
$
|
(40,815
|
)
|
$
|
5,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
16. Consolidating Condensed Financial Information (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year Ended April 27, 2014
|
|
|
|
Isle of Capri
Casinos, Inc.
(Parent
Obligor)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
and
Eliminating
Entries
|
|
Isle of Capri
Casinos, Inc.
Consolidated
|
|
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino
|
|
$
|
|
|
$
|
954,395
|
|
$
|
26,704
|
|
$
|
|
|
$
|
981,099
|
|
Rooms, food, beverage, pari-mutuel and other
|
|
|
688
|
|
|
159,923
|
|
|
12,237
|
|
|
(9,185
|
)
|
|
163,663
|
|
Management fee revenue
|
|
|
32,911
|
|
|
|
|
|
|
|
|
(32,911
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenues
|
|
|
33,599
|
|
|
1,114,318
|
|
|
38,941
|
|
|
(42,096
|
)
|
|
1,144,762
|
|
Less promotional allowances
|
|
|
|
|
|
(204,197
|
)
|
|
(6,156
|
)
|
|
|
|
|
(210,353
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
33,599
|
|
|
910,121
|
|
|
32,785
|
|
|
(42,096
|
)
|
|
934,409
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino
|
|
|
|
|
|
147,166
|
|
|
5,748
|
|
|
|
|
|
152,914
|
|
Gaming taxes
|
|
|
|
|
|
238,970
|
|
|
10,668
|
|
|
|
|
|
249,638
|
|
Rooms, food, beverage, pari-mutuel and other
|
|
|
31,737
|
|
|
320,904
|
|
|
21,263
|
|
|
(9,185
|
)
|
|
364,719
|
|
Valuation charges
|
|
|
|
|
|
125,238
|
|
|
26,353
|
|
|
|
|
|
151,591
|
|
Litigation accrual reversals
|
|
|
(1,979
|
)
|
|
|
|
|
(7,351
|
)
|
|
|
|
|
(9,330
|
)
|
Management fee expense
|
|
|
|
|
|
32,103
|
|
|
808
|
|
|
(32,911
|
)
|
|
|
|
Depreciation and amortization
|
|
|
1,709
|
|
|
72,427
|
|
|
5,443
|
|
|
|
|
|
79,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
31,467
|
|
|
936,808
|
|
|
62,932
|
|
|
(42,096
|
)
|
|
989,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
2,132
|
|
|
(26,687
|
)
|
|
(30,147
|
)
|
|
|
|
|
(54,702
|
)
|
Interest expense, net
|
|
|
(45,829
|
)
|
|
(38,780
|
)
|
|
3,616
|
|
|
|
|
|
(80,993
|
)
|
Derivative income
|
|
|
398
|
|
|
|
|
|
|
|
|
|
|
|
398
|
|
Equity in income (loss) of subsidiaries
|
|
|
(105,831
|
)
|
|
|
|
|
|
|
|
105,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
(149,130
|
)
|
|
(65,467
|
)
|
|
(26,531
|
)
|
|
105,831
|
|
|
(135,297
|
)
|
Income tax (provision) benefit
|
|
|
32,327
|
|
|
(22,018
|
)
|
|
8,185
|
|
|
|
|
|
18,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuining operations
|
|
|
(116,803
|
)
|
|
(87,485
|
)
|
|
(18,346
|
)
|
|
105,831
|
|
|
(116,803
|
)
|
Income (loss) of discontinued operations
|
|
|
(10,883
|
)
|
|
(13,259
|
)
|
|
916
|
|
|
12,343
|
|
|
(10,883
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(127,686
|
)
|
$
|
(100,744
|
)
|
$
|
(17,430
|
)
|
$
|
118,174
|
|
$
|
(127,686
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
16. Consolidating Condensed Financial Information (Continued)
Consolidating condensed statements of cash flows for the fiscal years ended April 24, 2016, April 26, 2015 and April 27, 2014, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year Ended April 24, 2016
|
|
Statement of Cash Flows
|
|
Isle of Capri
Casinos, Inc.
(Parent
Obligor)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
and
Eliminating
Entries
|
|
Isle of Capri
Casinos, Inc.
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
22,702
|
|
$
|
116,648
|
|
$
|
(3,438
|
)
|
$
|
|
|
$
|
135,912
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(376
|
)
|
|
(69,247
|
)
|
|
(639
|
)
|
|
|
|
|
(70,262
|
)
|
Proceeds from sales of assets
|
|
|
|
|
|
11,496
|
|
|
|
|
|
|
|
|
11,496
|
|
Restricted cash and investments
|
|
|
|
|
|
|
|
|
(425
|
)
|
|
|
|
|
(425
|
)
|
Parent company investment in subsidiaries
|
|
|
49,242
|
|
|
|
|
|
|
|
|
(49,242
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
48,866
|
|
|
(57,751
|
)
|
|
(1,064
|
)
|
|
(49,242
|
)
|
|
(59,191
|
)
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net repayments on line of credit
|
|
|
(7,500
|
)
|
|
|
|
|
|
|
|
|
|
|
(7,500
|
)
|
Principal repayments on long-term debt
|
|
|
(62,241
|
)
|
|
|
|
|
(158
|
)
|
|
|
|
|
(62,399
|
)
|
Premium payments on long-term debt
|
|
|
(2,409
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,409
|
)
|
Payment of deferred financing costs
|
|
|
(209
|
)
|
|
|
|
|
|
|
|
|
|
|
(209
|
)
|
Proceeds from exercise of stock options
|
|
|
869
|
|
|
|
|
|
|
|
|
|
|
|
869
|
|
Net proceeds from (payments to) related parties
|
|
|
|
|
|
(54,164
|
)
|
|
4,922
|
|
|
49,242
|
|
|
|
|
Payment of other long-term obligation
|
|
|
|
|
|
(9,384
|
)
|
|
|
|
|
|
|
|
(9,384
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(71,490
|
)
|
|
(63,548
|
)
|
|
4,764
|
|
|
49,242
|
|
|
(81,032
|
)
|
Net decrease in cash and cash equivalents
|
|
|
78
|
|
|
(4,651
|
)
|
|
262
|
|
|
|
|
|
(4,311
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
5,077
|
|
|
53,033
|
|
|
8,327
|
|
|
|
|
|
66,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the period
|
|
$
|
5,155
|
|
$
|
48,382
|
|
$
|
8,589
|
|
$
|
|
|
$
|
62,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
16. Consolidating Condensed Financial Information (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year Ended April 26, 2015
|
|
Statement of Cash Flows
|
|
Isle of Capri
Casinos, Inc.
(Parent
Obligor)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
and
Eliminating Entries
|
|
Isle of Capri
Casinos, Inc.
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
(14,187
|
)
|
$
|
128,904
|
|
$
|
10,851
|
|
$
|
|
|
$
|
125,568
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(105
|
)
|
|
(41,017
|
)
|
|
(564
|
)
|
|
|
|
|
(41,686
|
)
|
Proceeds from sales of assets
|
|
|
|
|
|
73
|
|
|
|
|
|
|
|
|
73
|
|
Payments towards gaming license
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash and investments
|
|
|
|
|
|
|
|
|
340
|
|
|
|
|
|
340
|
|
Parent company investment in subsidiaries
|
|
|
100,844
|
|
|
|
|
|
|
|
|
(100,844
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
100,739
|
|
|
(40,944
|
)
|
|
(224
|
)
|
|
(100,844
|
)
|
|
(41,273
|
)
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt borrowings
|
|
|
153,000
|
|
|
|
|
|
|
|
|
|
|
|
153,000
|
|
Net borrowings on line of credit
|
|
|
10,300
|
|
|
|
|
|
|
|
|
|
|
|
10,300
|
|
Principal repayments on long-term debt
|
|
|
(237,899
|
)
|
|
|
|
|
(162
|
)
|
|
|
|
|
(238,061
|
)
|
Premium payments on long-term debt
|
|
|
(10,465
|
)
|
|
|
|
|
|
|
|
|
|
|
(10,465
|
)
|
Payment of deferred financing costs
|
|
|
(2,536
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,536
|
)
|
Proceeds from exercise of stock options
|
|
|
74
|
|
|
|
|
|
|
|
|
|
|
|
74
|
|
Net proceeds from (payments to) related parties
|
|
|
|
|
|
(88,714
|
)
|
|
(12,130
|
)
|
|
100,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(87,526
|
)
|
|
(88,714
|
)
|
|
(12,292
|
)
|
|
100,844
|
|
|
(87,688
|
)
|
Net decrease in cash and cash equivalents
|
|
|
(974
|
)
|
|
(754
|
)
|
|
(1,665
|
)
|
|
|
|
|
(3,393
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
6,051
|
|
|
53,787
|
|
|
9,992
|
|
|
|
|
|
69,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the period
|
|
$
|
5,077
|
|
$
|
53,033
|
|
$
|
8,327
|
|
$
|
|
|
$
|
66,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
16. Consolidating Condensed Financial Information (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year Ended April 27, 2014
|
|
Statement of Cash Flows
|
|
Isle of Capri
Casinos, Inc.
(Parent
Obligor)
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
and
Eliminating
Entries
|
|
Isle of Capri
Casinos, Inc.
Consolidated
|
|
Net cash provided by (used in) operating activities
|
|
$
|
5,431
|
|
$
|
103,025
|
|
$
|
(21,707
|
)
|
$
|
|
|
$
|
86,749
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(580
|
)
|
|
(19,063
|
)
|
|
(18,506
|
)
|
|
|
|
|
(38,149
|
)
|
Proceeds from sales of assets
|
|
|
|
|
|
32
|
|
|
49,849
|
|
|
|
|
|
49,881
|
|
Payments towards gaming license
|
|
|
|
|
|
|
|
|
(7,500
|
)
|
|
|
|
|
(7,500
|
)
|
Restricted cash and investments
|
|
|
|
|
|
|
|
|
1,879
|
|
|
|
|
|
1,879
|
|
Parent company investment in subsidiaries
|
|
|
85,222
|
|
|
|
|
|
|
|
|
(85,222
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
84,642
|
|
|
(19,031
|
)
|
|
25,722
|
|
|
(85,222
|
)
|
|
6,111
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net repayments on line of credit
|
|
|
(90,200
|
)
|
|
|
|
|
|
|
|
|
|
|
(90,200
|
)
|
Principal payments on debt
|
|
|
(63
|
)
|
|
|
|
|
(563
|
)
|
|
|
|
|
(626
|
)
|
Payments of deferred financing costs
|
|
|
(673
|
)
|
|
|
|
|
|
|
|
|
|
|
(673
|
)
|
Net proceeds from (payments to) related parties
|
|
|
|
|
|
(84,819
|
)
|
|
(403
|
)
|
|
85,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(90,936
|
)
|
|
(84,819
|
)
|
|
(966
|
)
|
|
85,222
|
|
|
(91,499
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(863
|
)
|
|
(825
|
)
|
|
3,049
|
|
|
|
|
|
1,361
|
|
Cash and cash equivalents at beginning of period
|
|
|
6,914
|
|
|
54,612
|
|
|
6,943
|
|
|
|
|
|
68,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the period
|
|
$
|
6,051
|
|
$
|
53,787
|
|
$
|
9,992
|
|
$
|
|
|
$
|
69,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17. Selected Quarterly Financial Information (unaudited)
Our selected quarterly financial information includes new casino operations in Nemacolin opening July 1, 2013 and includes reclassifications for amounts shown in our previously
filed reports on
86
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
17. Selected Quarterly Financial Information (unaudited) (Continued)
Forms 10-Q
to reflect the discontinued operations presentation for our Natchez, Mississippi property which was classified as discontinued operations during the quarter ended July 26,
2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarters Ended
|
|
|
|
July 26,
2015
|
|
October 25,
2015
|
|
January 24,
2016
|
|
April 24,
2016
|
|
Net revenues
|
|
$
|
246,924
|
|
$
|
236,261
|
|
$
|
230,540
|
|
$
|
264,867
|
|
Operating income
|
|
|
29,647
|
|
|
25,627
|
|
|
24,679
|
|
|
43,194
|
|
Income from continuing operations
|
|
|
8,468
|
|
|
7,811
|
|
|
7,015
|
|
|
24,995
|
|
Loss from discontinued operations, net of income taxes
|
|
|
(5,324
|
)
|
|
3,639
|
|
|
(400
|
)
|
|
|
|
Net income
|
|
|
3,144
|
|
|
11,450
|
|
|
6,615
|
|
|
24,995
|
|
Earnings (loss) per common share basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.21
|
|
$
|
0.19
|
|
$
|
0.17
|
|
$
|
0.61
|
|
Income (loss) from discontinued operations, net of income taxes
|
|
|
(0.13
|
)
|
|
0.09
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
0.08
|
|
$
|
0.28
|
|
$
|
0.16
|
|
$
|
0.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.21
|
|
$
|
0.19
|
|
$
|
0.17
|
|
$
|
0.60
|
|
Income (loss) from discontinued operations, net of income taxes
|
|
|
(0.13
|
)
|
|
0.09
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
0.08
|
|
$
|
0.28
|
|
$
|
0.16
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares
|
|
|
40,580,806
|
|
|
40,697,797
|
|
|
40,730,065
|
|
|
40,755,048
|
|
Weighted average dilutive shares
|
|
|
41,205,520
|
|
|
41,353,544
|
|
|
41,378,792
|
|
|
41,351,978
|
|
87
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
17. Selected Quarterly Financial Information (unaudited) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarters Ended
|
|
|
|
July 27,
2014
|
|
October 26,
2014
|
|
January 25,
2015
|
|
April 26,
2015
|
|
Net revenues
|
|
$
|
236,896
|
|
$
|
234,458
|
|
$
|
236,404
|
|
$
|
269,287
|
|
Operating income
|
|
|
20,500
|
|
|
21,975
|
|
|
27,545
|
|
|
35,900
|
|
Income (loss) from continuing operations
|
|
|
(1,725
|
)
|
|
(71
|
)
|
|
5,926
|
|
|
3,160
|
|
Loss from discontinued operations, net of income taxes
|
|
|
(592
|
)
|
|
(950
|
)
|
|
(503
|
)
|
|
(68
|
)
|
Net income (loss)
|
|
|
(2,317
|
)
|
|
(1,021
|
)
|
|
5,423
|
|
|
3,092
|
|
Earnings (loss) per common share basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
(0.04
|
)
|
$
|
|
|
$
|
0.15
|
|
$
|
0.08
|
|
Loss from discontinued operations, net of income taxes
|
|
|
(0.02
|
)
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(0.06
|
)
|
$
|
(0.03
|
)
|
$
|
0.14
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
(0.04
|
)
|
$
|
|
|
$
|
0.15
|
|
$
|
0.08
|
|
Income (loss) from discontinued operations, net of income taxes
|
|
|
(0.02
|
)
|
|
(0.03
|
)
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(0.06
|
)
|
$
|
(0.03
|
)
|
$
|
0.13
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares
|
|
|
39,827,889
|
|
|
39,932,856
|
|
|
40,028,776
|
|
|
40,033,404
|
|
Weighted average dilutive shares
|
|
|
39,827,889
|
|
|
39,932,856
|
|
|
40,336,663
|
|
|
41,020,503
|
|
A
summary of certain revenues and expenses from our continuing operations impacting our quarterly financial results is as follows:
-
(1)
-
During
the first quarter of fiscal 2016, we incurred a loss on extinguishment of debt of $2,966 related to the redemption of our 7.75% Senior Notes in May
2016.
-
(2)
-
During
the fourth quarter of fiscal 2016, we incurred $153 of expense related to the preopening of our Bettendorf property and $770 of expense related to an
executive's exit agreement.
-
(3)
-
During
the first quarter of fiscal 2015, we incurred $1,013 of expense related to opposing the proposed Colorado gaming expansion referendum and $2,259 of
severance expense related to restructuring at the corporate office.
-
(4)
-
During
the second quarter of fiscal 2015, we incurred $3,044 of expense related to opposing the proposed Colorado gaming expansion referendum and recorded a
favorable property tax settlement related to our Waterloo property of $1,225.
-
(5)
-
During
the fourth quarter of fiscal 2015, we recorded impairment charges of $9,000 related to our long-lived assets at Nemacolin and $13,757 of loss on
early extinguishment of debt.
88
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
18. Commitments and Contingencies
Operating Leases
The Company leases real estate and various equipment under operating lease agreements. Future minimum payments over the lease term of
non-cancelable operating leases with initial terms of one year or more consisted of the following at April 24, 2016:
|
|
|
|
|
Fiscal Years Ending:
|
|
|
|
2017
|
|
|
10,293
|
|
2018
|
|
|
9,887
|
|
2019
|
|
|
9,196
|
|
2020
|
|
|
6,982
|
|
2021
|
|
|
6,663
|
|
Therafter
|
|
|
122,621
|
|
|
|
|
|
|
Total minimum lease payments
|
|
$
|
165,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rent
expense related to continuing operations was $24,585, $24,731 and $25,895 in fiscal years 2016, 2015 and 2014, respectively. Such amounts include contingent rentals of $2,942,
$3,012 and $2,926 in fiscal years 2016, 2015 and 2014, respectively. Contingent rent is based upon casino revenues or other metrics as defined in our lease agreements. Certain of our leases are
subject to renewals and may contain escalation clauses.
Legal and Regulatory Proceedings
In October 2012, we opened our new casino in Cape Girardeau, Missouri. A subcontractor filed a mechanics' lien
against our property resulting from a dispute between the subcontractor and our general contractor for the construction project. We demanded that the general contractor cause the lien to be bonded
against or satisfied; however, the general contractor refused to do so and asserted that a portion of the subcontractor's claim resulted from additional work directly requested by us. In October 2013,
the subcontractor filed suit against our wholly-owned subsidiary IOC-Cape Girardeau, LLC, the general contractor and two other defendants alleging various contract and equitable claims and were
seeking damages of approximately $3.8 million. In August 2014, we filed a cross claim against the general contractor alleging breach of contract and various indemnity claims. In January 2016,
all parties reached a settlement fully resolving all claims related to this matter and we paid and capitalized additional construction costs of $1.4 million.
We
and our wholly-owned subsidiary, Riverboat Corporation of MississippiVicksburg, were defendants in a lawsuit filed in the Circuit Court of Adams County, Mississippi by
Silver Land, Inc., alleging breach of contract in connection with our 2006 sale of casino operations in Vicksburg, Mississippi. The court originally ruled in favor of Silver Land and awarded
damages of $1,979, which we accrued. We appealed the decision and in June 2013 the court of appeals reversed the trial court and ruled in our favor. Silver Land filed a Petition for Writ of Certiorari
in November 2013 requesting review by the Mississippi Supreme Court. On February 20, 2014, the Mississippi Supreme Court denied Silver Land's request, which effectively disposed of the matter
in its entirety. As a result, during fiscal 2014, we reversed a litigation accrual of $2,223, of which $1,979 was recorded as a reduction to operating expenses and $244 was recorded as a reduction to
interest expense.
Our
wholly owned subsidiary, Lady Luck Gaming Corporation, and several joint venture partners were defendants in the Greek Civil Courts and the Greek Administrative Courts in similar
lawsuits brought by the country of Greece. The actions alleged that the defendants failed to make specified
89
Table of Contents
ISLE OF CAPRI CASINOS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(amounts in thousands, except share and per share amounts)
18. Commitments and Contingencies (Continued)
payments
in connection with the gaming license bid process for Patras, Greece. In the Civil Court lawsuit, the Civil Court of First Instance ruled in our favor and dismissed the lawsuit in 2001. The
lawsuits continued through the appeals process and in October 2013, the Supreme Administrative Court rejected both lawsuits in a final and irrevocable decision which disposed of this matter
completely. As a result, during fiscal 2014, we reversed a litigation accrual of $14,730, of which $7,351 was recorded as a reduction to operating expenses and $7,379 was recorded as a reduction to
interest expense.
We
are subject to certain federal, state and local environmental protection, health and safety laws, regulations and ordinances that apply to businesses generally, and are subject to
cleanup requirements at certain of our facilities as a result thereof. We have not made, and do not anticipate making material expenditures, nor do we anticipate incurring delays with respect to
environmental remediation or
protection. However, in part because our present and future development sites have, in some cases, been used as manufacturing facilities or other facilities that generate materials that are required
to be remediated under environmental laws and regulations, there can be no guarantee that additional pre-existing conditions will not be discovered and we will not experience material liabilities or
delays.
We
are subject to various contingencies and litigation matters and have a number of unresolved claims. Although the ultimate liability of these contingencies, this litigation and these
claims cannot be determined at this time, we believe they will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.
90
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