Historical Full House Resorts, Inc.				Historical Silver Slipper Casino Venture, LLC				Pro Forma Adjustments						Pro Forma
Revenues
Casino		$	74,708			$	51,965			$	--					$	126,673
Food and beverage			4,517				13,061				--						17,578
Management fees			24,186				--				--						24,186
Other			2,050				729				--						2,779
Less: promotional allowances			--				(8,495	)			8,495		i	)			--
			105,461				57,260				8,495						171,216
Operating costs and expenses
Casino			42,509				7,089				--						49,598
Food and beverage			4,469				7,717				--						12,186
Other operations			4,465				145				--						4,610
Project development and acquisition costs			793				--				1,390		a	)			2,183
													a	)
													b	)
Selling, general and administrative			25,429				31,396				8,495		i	)			65,320
Management fee			--				742				(742	)	c	)			--
Depreciation and amortization			7,001				4,736				2,047		f	)			13,784
			84,666				51,825				11,190						147,681
Operating gains (losses)
Equity in net income of unconsolidated joint venture and related  guaranteed payments			3,306				--				--						3,306
Impairment loss			(4,920	)			--				--						(4,920	)
Unrealized gains (losses) on notes receivable, tribal governments			(8	)			--				--						(8	)
			(1,622	)			--				--						(1,622	)
Operating income			19,173				5,435				(2,695	)					21,913
Other income (expense)
													e	)
													g	)
Interest expense			(2,838	)			(7,153	)			(475	)	h	)			(10,466	)
Loss on derivative instruments			(513	)			--				--						(513	)
Interest and other income			8				(56	)			--						(48	)
Income before income taxes			15,830				(1,774	)			(3,170	)					10,886
Income taxes			3,240				--				(4,923	)	d	)			(1,683	)
Net income			12,590				(1,774	)			1,753						12,569
Income attributable to non-controlling interest in consolidated joint venture			(10,247	)			--				--						(10,247	)
Net income attributable to the Company		$	2,343			$	(1,774	)		$	1,753					$	2,322
Net income attributable to the Company per common share		$	0.13													$	0.13
Weighted-average number of common shares outstanding			18,397,599														18,397,599

 

 

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		Historical Full House Resorts, Inc.				Historical Silver Slipper Casino Venture, LLC				Pro Forma Adjustments						Pro Forma
Revenues
Casino		$	78,744			$	38,783			$	--					$	117,527
Food and beverage			4,074				9,833				--						13,907
Management fees			6,548				--				--						6,548
Other			1,934				665				--						2,599
Less: promotional allowances			--				(6,546	)			6,546		i	)			--
			91,300				42,735				6,546						140,581
Operating costs and expenses
Casino			44,428				5,489				--						49,917
Food and beverage			3,807				5,753				--						9,560
Other operations			4,218				131				--						4,349
Project development and acquisition costs			376				--				--						376
													a	)
													b	)
Selling, general and administrative			24,164				24,022				6,393		i	)			54,579
Management fee			--				553				(553	)	c	)			--
Depreciation and amortization			4,736				3,705				1,535		f	)			9,976
			81,729				39,653				7,375						128,757
Operating gains (losses)
Gain on sale of joint venture			41,200				--				--						41,200
Operating income			50,771				3,082				(829	)					53,024
Other income (expense)
													e	)
													g	)
Interest expense			(805	)			(5,366	)			(48	)	h	)			(6,219	)
Gain on derivative instruments			8				--				--						8
Interest and other income			9				(725	)			--						(716	)
Loss on extinguishment of debt			(1,719	)			--				--						(1,719	)
Income before income taxes			48,264				(3,009	)			(877	)					44,378
Income taxes			17,417				--				(4,454	)	d	)			12,963
Net income			30,847				(3,009	)			3,577						31,415
Income attributable to non-controlling interest in consolidated joint venture			(2,181	)			--				--						(2,181	)
Net income attributable to the Company		$	28,666			$	(3,009	)		$	3,577					$	29,234
Net income attributable to the Company per common share		$	1.53													$	1.57
Weighted-average number of common shares outstanding			18,676,824														18,676,824

 

 

 

a)

To record the October 1, 2012 Silver Slipper purchase transaction based on the Company’s initial allocation of the purchase price of $69.60 million, exclusive of working capital adjustment, property cash and fees.  The allocations of assets include property, plant and equipment of $47.4 million, intangible assets of $7.3 million and estimated working capital of $2.9 million.  The purchase included the purchase of property cash of approximately $3.3 million.  This transaction also records the pay-off of the Silver Slipper’s $59.0 million current note payable as well as other estimated costs related to the purchase. Also as of September 30, 2012, to record the estimated investment in the Silver Slipper, an estimated $4.7 million of additional loan acquisition costs, $14.7 million of goodwill, the $50.0 million First Lien Credit Agreement with Capital One (“First Lien Credit Agreement”) and $20.0 million Second Lien Credit Agreement with ABC Funding, LLC as administrative agent (“Second Lien Credit Agreement”) related to the acquisition were recorded.

 

b)

To eliminate Silver Slipper non-operating expenses, which were primarily related to bonus payouts associated with the purchase.

 

c)

To eliminate Silver Slipper management fee expense, which was incurred under the prior ownership, as outside management fees will not continue.

 

d)

To record the pro forma federal income tax expense at 34%, Mississippi state income tax expense at 5.0% and Mississippi franchise taxes for the year ended December 31, 2011 and for the nine months ended September 30, 2012.  The tax calculations also include state income tax expense for other applicable states, which are consolidated with Full House Resorts, Inc.’s operations.

 

e)

To amortize the estimated $5.3 million of loan acquisition costs over the term of the First and Second Lien Credit Agreements.

 

f)

To amortize the estimated $5.9 million player loyalty program over 3 years, $1.4 million of capital leases over 15.6 years, and ($0.06) million for the Hula’s lease over 5.9 years.

 

g)

To accrue interest on the $50.0 million and $20.0 million First and Second Lien Credit Agreements, respectively, as well as accrue the Capital One commitment fee on the $5.0 million line of credit, interest cap premium related to the loans and amortization on the yearly administrative fees.

 

h)

To eliminate Silver Slipper’s interest expense.

 

i)

Reclassify to conform to the Company’s presentation.