Unconsolidated Investees:

12 Months Ended

Dec. 31, 2014

NOTE 3 - Unconsolidated Investees:

For the year ended December 31, 2014, the Company’s equity in loss of CCR totaled $2,972,256. For the year ended December 31, 2013, the Company’s equity in the loss of CCR totaled $7,434,403.

The following tables present condensed financial information of CCR as of December 31, 2014 and 2013, and for the years ended December 31, 2014 and 2013 (in thousands):

	2014			2013
Balance Sheet
Current assets	$	65,816		$	66,779
Investments in securities	327			383
Property and equipment, net	631,390			656,580
Other	116,382			119,335
	$	813,915		$	843,077

Current liabilities	$	35,277		$	35,348
Long-term liabilities	542,478			561,893
Members’ equity	236,160			245,836
	$	813,915		$	843,077

Income Statement
Revenue	$	422,089		$	443,354

Net loss	$	(9,373	)	$	(23,445	)

On May 13, 2014, CCR and its wholly-owned subsidiary, PA MezzCo, LLC, (“MezzCo” and collectively with CCR, the “Sellers”), entered into a Membership Interest Purchase Agreement (the “MIPA”) with Gaming and Leisure Properties, Inc. (“GLPI”) and GLP Capital, L.P., a subsidiary of GLPI, (“GLP,” and together with GLPI, the “Buyers”) to sell PA Meadows for approximately $465 million. To close, the transaction requires approval from the Pennsylvania Gaming Control Board (the “Pennsylvania Board”) and the Pennsylvania Racing Commission (the “Pennsylvania Commission”) and, subject to a favorable outcome to Sellers in the litigation discussed in the next paragraph, is expected to close in 2015. In connection with entering into the MIPA, Sellers simultaneously also entered into a consulting agreement with the Buyers (“Consulting Agreement”) whereby Sellers have agreed to provide general advisory services to the Buyers relating to the transaction contemplated under the MIPA. The Consulting Agreement terminates upon the earliest of (i) the closing of the sale of PA Meadows, (ii) 33 months from execution of the Consulting Agreement, or (iii) the failure of the Buyers and Sellers to deliver certain required representations to extend the Consulting Agreement upon the 13-month and 25-month anniversary of executing the Consulting Agreement. Upon executing the Consulting Agreement, Sellers received a non-refundable consulting fee of $10 million, and if extended, would earn a $5 million extension fee at each of the 13-month and 25-month anniversaries of executing the Consulting Agreement, assuming the delivery of certain representations and subject to a favorable outcome to Sellers in the litigation discussed in the next paragraph.

On October 27, 2014, GLPI filed a lawsuit in the United States District Court for the Southern District of New York against CCR. The lawsuit was voluntarily dismissed by GLPI for jurisdictional reasons on December 29, 2014. On January 7, 2015, GLPI and GLP filed a lawsuit against Sellers in the Supreme Court of the State of New York County of New York. Buyers allege breach of contract and other misconduct on the part of CCR with respect to the MIPA and Consulting Agreement. Buyers seek declaratory relief regarding the breach of contract claims, unspecified damages and a declaration that a material adverse effect has occurred that would excuse GLPI from closing the transaction to purchase PA Meadows.

CCR’s management believes the lawsuit is without merit and intends to defend the suit vigorously to ensure that GLPI complies with its contractual obligations under both agreements, but the ultimate outcome of this litigation cannot be predicted at this time.

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

+ References+ Details

OCM HoldCo, LLC 10-K