Amortization of intangible assets related to the operating casinos was $0.3 million for the second quarter of 2012 compared to $9.2 million for the second quarter of 2011. The decrease in amortization costs related primarily to the buy-out of the management agreement for the Four Winds Casino Resort which resulted in the full amortization of the remaining intangible assets associated with that project during the second quarter of 2011.
Net unrealized gains and losses on notes receivable relate to the Company’s notes receivable from Indian tribes for casino projects that are not yet open, which are adjusted to estimated fair value based upon the current status of the related tribal casino projects and evolving market conditions. There were no net unrealized gains or losses on notes receivable during the second quarter of 2012. In the second quarter of 2011, net unrealized losses on notes receivable were $0.1 million related to the project with the Jamul Tribe due primarily to ongoing issues in the credit markets.
Other income, net, was $1.4 million for the second quarter of 2012 compared to $1.3 million for the second quarter of 2011, a significant portion of which relates to non-cash accretion of interest on the Company’s notes receivable.
The income tax benefit for the second quarter of 2012 was $0.1 million compared to a tax provision of $7.7 million for the second quarter of 2011. Lakes’ income tax benefit in the current year quarter was primarily associated with the Company’s ability to carry back its estimated 2012 taxable loss to a prior year and receive a refund of taxes previously paid. This benefit was partially offset by current income tax provision. Lakes’ income tax provision in the prior year period consisted primarily of current income tax provision.Six Month ResultsNet earnings for the six months ended July 1, 2012 were $2.2 million, compared to net earnings of $10.9 million for the six months ended July 3, 2011. Loss from operations was $2.7 million for the first six months of 2012 compared to earnings from operations of $16.9 million for the first six months of 2011. Basic and diluted earnings were $0.08 per share for the six months ended July 1, 2012 compared to earnings of $0.41 per share for the six months ended July 3, 2011. Lakes Entertainment reported revenues of $4.5 million for the six months ended July 1, 2012, compared to revenues of $34.1 million in the prior year period. The decrease in revenues was primarily due to the buy-out of the management agreement for the Four Winds Casino Resort during June of 2011. Pursuant to the buy-out agreement, the Pokagon Band of Potawatomi Indians paid to Lakes a buy-out fee of approximately $24.5 million. The decrease was partially offset by an increase in fees earned from the management of the Red Hawk Casino during the first six months of 2012 compared to the first six months of 2011. Revenues in the current year related to the management of the Red Hawk Casino.
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