EX-99.1 6 cacq-ex991cgpllc3x09financ.htm CONSOLIDATED CONDENSED FINANCIAL INFORMATION OF CAESARS GROWTH PARTNERS, LLC CACQ-ex99.1 CGP LLC 3-09 Financials Q1 2014


Exhibit 99.1

FINANCIAL INFORMATION OF CAESARS GROWTH PARTNERS, LLC
A SIGNIFICANT EQUITY METHOD INVESTEE OF CAESARS ACQUISITION COMPANY
EXPLANATORY NOTE
Unconsolidated Significant Subsidiary
Upon the completion of the Transactions described in our Annual Report on Form 10-K for the year ended December 31, 2013, Caesars Acquisition Company’s (the "Company," "CAC," "we," "our" and "us") sole material asset is its interest in Caesars Growth Partners, LLC ("CGP LLC"), which is accounted for using the equity method. As our investment in CGP LLC is considered to be significant for the period subsequent to the Transactions, CGP LLC's annual financial statements are required to be included as an exhibit to each CAC Annual Report on Form 10-K in accordance with SEC Rule 3-09 of Regulation S-X. Given the significance of this investment to the financial position and results of operations of CAC, we have elected to include selected financial information of CGP LLC in this Quarterly Report on Form 10-Q.
For a discussion of the results of operations for CGP LLC for the first quarter 2014 in comparison to the first quarter 2013 results of operations derived from the assets and entities that were acquired by or contributed to CGP LLC in connection with the Transactions (referred to in the aggregate as Predecessor Growth Partners), please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations for Caesars Acquisition Company in Item 2 of its quarterly report on Form 10-Q for the quarter ended March 31, 2014.



CAESARS GROWTH PARTNERS, LLC
INDEX TO CONSOLIDATED CONDENSED FINANCIAL INFORMATION



2



CAESARS GROWTH PARTNERS, LLC
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
(In millions)

 
March 31, 2014
 
December 31, 2013
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
972.6

 
$
976.9

Short-term investments
—

 
15.0

Receivables, net of allowance for doubtful accounts of $3.9 and $3.9, respectively
65.2

 
53.7

Interest receivable from related party
25.3

 
8.9

Deferred tax assets
3.3

 
7.0

Restricted cash
22.8

 
28.8

Prepayments and other current assets
12.0

 
13.2

Total current assets
1,101.2

 
1,103.5

Investment in notes from related party
973.2

 
931.6

Land, property and equipment, net
596.8

 
516.0

Goodwill
126.6

 
112.8

Intangible assets other than goodwill, net
213.1

 
168.2

Restricted cash
203.6

 
231.6

Deferred tax assets
9.5

 
—

Deferred charges and other
115.1

 
114.8

Total assets
$
3,339.1

 
$
3,178.5

 
 
 
 
Liabilities and Equity
 
 
 
Current liabilities
 
 
 
Accounts payable
$
92.7

 
$
54.8

Payables to related party
47.1

 
49.4

Accrued expenses
169.0

 
126.4

Foreign tax payable
0.9

 
1.8

Deferred tax liabilities
0.4

 
—

Current portion of long-term debt
0.1

 
0.1

Total current liabilities
310.2

 
232.5

Long-term debt
677.6

 
680.2

Long-term debt to related party
39.8

 
39.8

Convertible notes issued to related party
47.7

 
47.7

Deferred tax liabilities
10.1

 
3.8

Contingently issuable non-voting membership units
382.6

 
306.5

Deferred credits and other
80.2

 
69.6

Total liabilities
1,548.2

 
1,380.1

 
 
 
 
Commitments and contingencies
 
 
 
Redeemable non-controlling interests
3.3

 
3.9

Equity
 
 
 
Additional paid-in capital
751.2

 
749.6

Retained earnings
746.8

 
766.5

Accumulated other comprehensive income
242.8

 
233.6

Total equity attributable to Caesars Growth Partners, LLC
1,740.8

 
1,749.7

Non-controlling interests
46.8

 
44.8

Total equity
1,787.6

 
1,794.5

Total liabilities and equity
$
3,339.1

 
$
3,178.5



3

CAESARS GROWTH PARTNERS, LLC
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
(In millions)

 
Quarter Ended
March 31, 2014
Revenues
 
Interactive Entertainment
 
Social and mobile games
$
115.7

WSOP and online real money gaming
8.5

 
124.2

Casino Properties and Developments
 
Casino
46.9

Food and beverage
24.9

Rooms
27.8

Other
16.2

Less: casino promotional allowances
(13.7
)
 
102.1

Net revenues
226.3

 
 
Operating expenses
 
Interactive Entertainment - Direct
 
Platform fees
35.3

Casino Properties and Developments - Direct
 
Casino
20.9

Food and beverage
12.0

Rooms
7.7

Property, general, administrative and other
121.8

Depreciation and amortization
13.6

Change in fair value of contingently issuable non-voting membership units
76.1

Change in fair value of contingent consideration
0.7

Total operating expenses
288.1

Loss from operations
(61.8
)
Interest expense, net of interest capitalized
(11.9
)
Interest income
1.0

Interest income - related party
48.8

Loss on extinguishment of debt
(0.6
)
Loss before provision for income taxes
(24.5
)
Provision for income taxes
(1.7
)
Net loss
(26.2
)
Less: net loss attributable to non-controlling interests
6.5

Net loss attributable to Caesars Growth Partners, LLC
$
(19.7
)




4

CAESARS GROWTH PARTNERS, LLC
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE LOSS
(UNAUDITED)
(In millions)
 
Quarter Ended
March 31, 2014
Net loss
$
(26.2
)
Other comprehensive income, net of income taxes:
 
Unrealized gain on investments in notes from related party
9.2

Total other comprehensive income
9.2

Comprehensive loss
(17.0
)
Less: net loss attributable to non-controlling interests
6.5

Comprehensive loss attributable to Caesars Growth Partners, LLC
$
(10.5
)




5

CASESARS GROWTH PARTNERS, LLC
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(In millions)


 
Additional Paid-in Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Income
 
Non-controlling Interests
 
Total Equity
Balance at December 31, 2013, as previously reported
$
734.0

 
$
782.1

 
$
233.6

 
$
44.8

 
$
1,794.5

Prior-period adjustment (1)
15.6

 
(15.6
)
 
—

 
—

 
—

Balance at December 31, 2013, as restated
749.6

 
766.5

 
233.6

 
44.8

 
1,794.5

Net loss
—

 
(19.7
)
 
—

 
(5.9
)
 
(25.6
)
Issuance of Caesars Interactive common stock
13.7

 
—

 
—

 
1.5

 
15.2

Purchase of Caesars Interactive common stock
(17.2
)
 
—

 
—

 
(1.9
)
 
(19.1
)
Stock-based compensation
1.9

 
—

 
—

 
—

 
1.9

Sale of partial interest in Baltimore joint venture
3.4

 
—

 
—

 
8.3

 
11.7

Unrealized gain on investments in notes from related party, net of tax
—

 
—

 
9.2

 
—

 
9.2

Distributions to parent
(0.2
)
 
—

 
—

 
—

 
(0.2
)
Balance at March 31, 2014
$
751.2

 
$
746.8

 
$
242.8

 
$
46.8

 
$
1,787.6


(1) 
Represents a distribution from CGP LLC to its parent entities recorded against Additional paid-in capital during the year ended December 31, 2013. Because the amount did not exceed cumulative earnings, the distribution should have been recorded as a distribution from Retained earnings rather than from Additional paid-in capital.
  

6

CAESARS GROWTH PARTNERS, LLC
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
(In millions)
 
Quarter Ended
March 31, 2014
Cash flows from operating activities
 
Net loss
$
(26.2
)
Adjustments to reconcile net loss to cash flows provided by operating activities
 
Depreciation and amortization
13.6

Amortization of debt discount
6.5

Loss on early extinguishments of debt
0.6

Change in fair value of contingently issuable non-voting membership units
76.1

Change in fair value of contingent consideration
0.7

Accretion of discount on investments in notes from related party
(32.4
)
Stock-based compensation expense
18.3

Net change in deferred income taxes
(9.2
)
Net change in long-term accounts
3.6

Net change in working capital accounts
(38.0
)
Cash flows provided by operating activities
13.6

Cash flows from investing activities
 
Land, buildings and equipment additions, net of change in construction payables
(29.6
)
Payments to acquire business, net of cash acquired
(22.5
)
Purchase of equity method investment
(1.3
)
Sale of short-term investments
15.0

Increase in restricted cash
(74.3
)
Decrease in restricted cash
108.3

Cash flows used in investing activities
(4.4
)
Cash flows from financing activities
 
Purchase of Caesars Interactive common stock
(19.1
)
Sale of partial interest in Baltimore joint venture
11.7

Proceeds from exercise of options
3.8

Repayments under lending agreements
(9.7
)
Distributions to parents
(0.2
)
Cash flows used in financing activities
(13.5
)
Net decrease in cash and cash equivalents
(4.3
)
Cash and cash equivalents, beginning of period
976.9

Cash and cash equivalents, end of period
$
972.6





7