Other income (expense), net for the third quarter of 2011 was $1.3 million, a significant portion of which relates to non-cash interest income. Other income (expense), net for the third quarter of 2010 was $23.8 million which included a gain on divestiture of a cost method investment of $23.1 million. During the third quarter of 2010, Lakes entered into a Termination Agreement with Penn Ventures, LLC in which the Company divested its interest in the entity to be formed in collaboration with Penn Ventures, LLC in exchange for a $25 million payment from Penn Ventures, LLC, resulting in this gain.
The income tax benefit for the third quarter of 2011 was $9.1 million compared to a tax provision of $11.0 million for the third quarter of 2010. Lakes’ income tax benefit in the current year quarter is primarily due to 2011 timing differences and related valuation allowances. Lakes’ income tax provision in the prior year period consisted primarily of current income tax provision.
Nine Month ResultsNet earnings for the nine months ended October 2, 2011 were $10.8 million, compared to $14.3 million for the nine months ended October 3, 2010. Earnings from operations were $6.5 million for the first nine months of 2011 compared to a loss from operations of $1.3 million for the first nine months of 2010. Basic and diluted earnings were $0.41 per share for the nine months ended October 2, 2011 compared to $0.54 per share for the nine months ended October 3, 2010.
Lakes Entertainment reported revenues of $34.3 million for the nine months ended October 2, 2011, compared to prior-year period revenues of $19.9 million. The increase in revenues was primarily the result of the buy-out of the management agreement for the Four Winds Casino Resort during the second quarter of 2011. Pursuant to the buy-out agreement, on June 30, 2011, the Pokagon Band paid to Lakes a buy-out fee of approximately $24.5 million.