For the six months ended July 1, 2012, Lakes’ selling, general and administrative expenses were $4.2 million compared to $4.9 million for the six months ended July 3, 2011. This decline resulted primarily from decreases in travel and related expenses due to the termination of the Company’s aircraft lease during the fourth quarter of 2011 as well as decreases in payroll and related expenses which were partially offset by increases in professional fees.
Lakes recognized impairments and other losses of $2.3 million and $1.5 million during the first six months of 2012 and 2011, respectively. The current year impairments and other losses included $1.7 million due to the March 2012 determination that Lakes would not continue to move forward with the casino project with the Jamul Tribe, and the termination of Lakes’ agreement with the Jamul Tribe. Also included in impairments and other losses for the six months ended July 1, 2012 were $0.6 million related to costs associated with development plans for the Rocky Gap project which were subsequently revised. The prior year impairments and other losses were due primarily to uncertainty surrounding the completion of the project with the Jamul Tribe.
Amortization of intangible assets related to the operating casinos was $0.5 million for the six months ended July 1, 2012 compared to $11.2 million for the six months ended July 3, 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 first six months of 2012. During the first six months of 2011, net unrealized gains on notes receivable were $0.6 million related to the project with the Jamul Tribe due primarily to improvements in the credit markets during that period.
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