During the third quarter of 2011, Lakes incurred a loss on a convertible note receivable of $4.0 million related to a potential Jai Alai fronton project in Florida. There were no such losses during 2012.
Lakes recognized impairments and other losses of $4.5 million and $8.5 million during 2012 and 2011, respectively. The current year impairments and other losses included $1.8 million due to the termination of Lakes’ agreement with the Jamul Tribe as well as $1.2 million related to costs associated with initial development plans for the Rocky Gap project, which were subsequently revised. Also included in current year impairments and other losses were $1.3 million due to selling the majority of the land owned in Vicksburg, Mississippi for an amount less than its recorded book value. The prior year impairments and other losses included losses of $3.3 million related to the early termination of Lakes’ airplane lease. Also included were impairments of $1.6 million due to declines in the estimated fair value of land owned by Lakes in Vicksburg, Mississippi and $3.7 million related to uncertainty surrounding the completion of the project with the Jamul Tribe.
Amortization of intangible assets related to the operating casinos was $1.1 million for 2012 compared to $11.7 million for 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.
There were no net unrealized losses on notes receivable during 2012. During 2011, net unrealized losses on notes receivable were $11.9 million. The 2011 net unrealized losses consisted of losses related to the Jamul project due primarily to the termination of the agreement with the Jamul Tribe.Other income, net, was $7.8 million for 2012 compared to $5.2 million for 2011. The increase in other income, net, during 2012 related to a favorable legal settlement of $2.2 million. A significant portion of the remaining other income, net, in both periods relates to non-cash accretion of interest on the Company’s notes receivable.
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