Annual report pursuant to Section 13 and 15(d)

GOODWILL AND INTANGIBLES

v3.8.0.1
GOODWILL AND INTANGIBLES
12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES

Goodwill:

The following tables set forth changes in the carrying value of goodwill by segment (in thousands):
 
December 31, 2017
 
Gross Carrying Value
 
Additions
 
Accumulated Impairments
 
Balance at
End of the
Year
Silver Slipper Casino and Hotel
$
14,671

 
$

 
$

 
$
14,671

Bronco Billy's Casino and Hotel
4,806

 

 

 
4,806

Rising Star Casino Resort
1,647

 

 
(1,647
)
 

Northern Nevada
5,809

 

 
(4,000
)
 
1,809

Goodwill, net of accumulated impairment losses
$
26,933

 
$

 
$
(5,647
)
 
$
21,286


 
December 31, 2016
 
Gross Carrying Value
 
Additions
 
Accumulated Impairments
 
Balance at
End of the
Year
Silver Slipper Casino and Hotel
$
14,671

 
$

 
$

 
$
14,671

Bronco Billy's Casino and Hotel

 
4,806

 

 
4,806

Rising Star Casino Resort
1,647

 

 
(1,647
)
 

Northern Nevada
5,809

 

 
(4,000
)
 
1,809

Goodwill, net of accumulated impairment losses
$
22,127

 
$
4,806

 
$
(5,647
)
 
$
21,286


 
Intangible Assets:

The following tables set forth changes in the carrying value of intangible assets (in thousands):
 
December 31, 2017
 
Estimated
Life
(Years)
 
Gross
Carrying
Value
 
Accumulated
Amortization
 
Accumulated Impairments, Net
 
Intangible
Assets, Net
 
 
 
 
 
 
 
 
 
 
Customer Loyalty Programs
3
 
$
7,600

 
$
(7,600
)
 
$

 
$

Land Lease and Water Rights
46
 
1,420

 
(163
)
 

 
1,257

Gaming Licenses
Indefinite
 
17,981

 

 
(10,203
)
 
7,778

Trade Names
Indefinite
 
1,800

 

 

 
1,800

Trademarks
Indefinite
 
101

 

 

 
101

 
 
 
$
28,902

 
$
(7,763
)
 
$
(10,203
)
 
$
10,936

 

 
December 31, 2016
 
Estimated
Life
(Years)
 
Gross
Carrying
Value
 
Accumulated
Amortization
 
Accumulated Impairments, Net
 
Intangible
Assets, Net
 
 
 
 
 
 
 
 
 
 
Customer Loyalty Programs
3
 
$
7,600

 
$
(7,600
)
 
$

 
$

Land Lease and Water Rights
46
 
1,420

 
(132
)
 

 
1,288

Gaming Licenses
Indefinite
 
17,981

 

 
(10,203
)
 
7,778

Trade Names
Indefinite
 
1,800

 

 

 
1,800

Trademarks
Indefinite
 
100

 

 

 
100

 
 
 
$
28,901

 
$
(7,732
)
 
$
(10,203
)
 
$
10,966


 
There were no impairments to goodwill or intangible assets for the years ended December 31, 2017 and 2016.

Customer Loyalty Programs. Customer loyalty programs represent the value of repeat business associated with our loyalty programs.  The values of $5.9 million for Silver Slipper and $1.7 million for Rising Star's customer loyalty programs, respectively, were determined using a multi-period excess earning method of the income approach, which examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return, which is attributable to the asset being valued, based on cash flows attributable to the customer loyalty program.  

Land Lease Acquisition Costs and Water Rights.  Silver Slipper recognized intangible assets related to its lease agreement with Cure Land Company, LLC (see Note 10). The lease was valued at $1 million and represents the excess fair value of the land over the estimated net present value of the land lease payments, and the water rights value of $0.4 million represented the fair value of the water rights based upon market rates in Hancock County, Mississippi.  
 
Gaming Licenses.  Gaming licenses represent the value of the license to conduct gaming in certain jurisdictions, which are subject to highly extensive regulatory oversight and, in some cases, a limitation on the number of licenses available for issuance.  The values of gaming licenses were primarily estimated using a multi-period excess earning method of the income approach, which examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return, which is attributable to the asset being valued, based on cash flows attributable to the gaming license.

Trade Names. Trade names represents the value of the Bronco Billy's casino name which has existed for approximately 25 years and provides brand recognition. The value was estimated using a multi-period excess earning method of the income approach based upon comparable trade name royalty agreements.

Current and Future Amortization.   Intangible asset amortization expense was $31,000 for each of the years ended December 31, 2017 and December 31, 2016, respectively.

Total amortization expense for intangible assets is expected to be $31,000 for each of the years ending 2018 through 2022 and $1.1 million thereafter.