Delaware | 001-10410 | 62-1411755 | ||
(State of Incorporation) | (Commission File Number) | (IRS Employer | ||
Identification Number) | ||||
One Caesars Palace Drive | ||||
Las Vegas, Nevada 89109 | ||||
(Address of principal executive offices) (Zip Code) |
(b) | Pro forma financial information. |
(d) | Exhibits. The following exhibits are being filed and furnished herewith: |
Exhibit No. | Description |
99.1 | Text of press release, dated January 15, 2015 (incorporated by reference from Exhibit 99.1 to CEC’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 15, 2015). |
99.2 | Unaudited Pro Forma Consolidated Financial Information. |
CAESARS ENTERTAINMENT CORPORATION | ||||
Date: | January 22, 2015 | By: | /S/ KEITH A. CAUSEY | |
Keith A. Causey | ||||
Senior Vice President and Chief Accounting Officer |
Exhibit No. | Description |
99.1 | Text of press release, dated January 15, 2015 (incorporated by reference from Exhibit 99.1 to CEC’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 15, 2015). |
99.2 | Unaudited Pro Forma Consolidated Financial Information. |
• | Unaudited consolidated condensed pro forma balance sheet as of September 30, 2014; |
• | Unaudited consolidated condensed pro forma statement of operations for the nine months ended September 30, 2014; |
• | Unaudited consolidated condensed pro forma statement of operations for the year ended December 31, 2013; and |
• | Notes to unaudited consolidated condensed pro forma financial statements. |
(a) | (b) | |||||||||||||||||||
Historical CEC Consolidated | Less: Deconsolidation of CEOC | Eliminations | Pro Forma Adjustments | Pro Forma CEC Consolidated | ||||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 3,182 | $ | 1,480 | $ | — | $ | — | $ | 1,702 | ||||||||||
Restricted cash | 62 | — | — | — | 62 | |||||||||||||||
Receivables, net | 623 | 562 | 115 | — | 176 | |||||||||||||||
Deferred income taxes | 4 | — | — | — | 4 | |||||||||||||||
Prepayments and other current assets | 246 | 121 | 4 | — | 129 | |||||||||||||||
Inventory | 45 | 29 | — | — | 16 | |||||||||||||||
Total current assets | 4,162 | 2,192 | 119 | — | 2,089 | |||||||||||||||
Property and equipment, net | 13,485 | 5,916 | — | 7,569 | ||||||||||||||||
Goodwill | 2,773 | 753 | (10 | ) | — | 2,010 | ||||||||||||||
Intangible assets other than goodwill | 3,223 | 2,566 | — | — | 657 | |||||||||||||||
Investments in and advances to non-consolidated affiliates | 169 | 143 | — | — | 26 | |||||||||||||||
Restricted cash | 42 | 8 | 8 | — | 42 | |||||||||||||||
Deferred income taxes | 24 | — | — | — | 24 | |||||||||||||||
Deferred charges and other | 611 | 440 | 215 | — | 386 | |||||||||||||||
Investment in CEOC | — | — | — | 60 | (h) | 60 | ||||||||||||||
Assets held for sale | 3 | 3 | — | — | — | |||||||||||||||
Total assets | $ | 24,492 | $ | 12,021 | $ | 332 | $ | 60 | $ | 12,863 | ||||||||||
(a) | (b) | |||||||||||||||||||
Historical CEC Consolidated | Less: Deconsolidation of CEOC | Eliminations | Pro Forma Adjustments | Pro Forma CEC Consolidated | ||||||||||||||||
Liabilities and Stockholders’ Equity/(Deficit) | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable | $ | 431 | $ | 248 | $ | 99 | $ | — | $ | 282 | ||||||||||
Accrued expenses and other current liabilities | 1,319 | 806 | 9 | — | 522 | |||||||||||||||
Interest payable | 594 | 412 | 7 | — | 189 | |||||||||||||||
Deferred income taxes | 314 | 228 | — | 296 | — | 86 | ||||||||||||||
Current portion of long-term debt | 141 | 82 | 4 | — | 63 | |||||||||||||||
Total current liabilities | 2,799 | 1,776 | 119 | — | 1,142 | |||||||||||||||
Long-term debt | 22,889 | 16,045 | — | 89 | (f) | 6,933 | ||||||||||||||
Deferred income taxes | 2,077 | 949 | — | (5 | ) | (c) | 1,123 | |||||||||||||
Deferred credits and other | 441 | 564 | 222 | — | 99 | |||||||||||||||
Total liabilities | 28,206 | 19,334 | 341 | 84 | 9,297 | |||||||||||||||
Stockholders’ equity/(deficit) | ||||||||||||||||||||
Common stock, voting | 2 | — | — | — | 2 | |||||||||||||||
Treasury stock | (19 | ) | — | — | — | (19 | ) | |||||||||||||
Additional paid-in capital | 8,104 | 2,827 | 13 | (724 | ) | (g) | 4,566 | |||||||||||||
Accumulated deficit | (12,082 | ) | (10,142 | ) | (22 | ) | (99 | ) | (d) | (2,061 | ) | |||||||||
Accumulated other comprehensive loss | (17 | ) | (22 | ) | — | (4 | ) | (g) | 1 | |||||||||||
Total Caesars stockholders’ equity/(deficit) | (4,012 | ) | (7,337 | ) | (9 | ) | (827 | ) | 2,489 | |||||||||||
Noncontrolling interests | 298 | 24 | — | 803 | (g) | 1,077 | ||||||||||||||
Total stockholders’ equity/(deficit) | (3,714 | ) | (7,313 | ) | (9 | ) | (24 | ) | 3,566 | |||||||||||
Total liabilities and stockholders’ equity/(deficit) | $ | 24,492 | $ | 12,021 | $ | 332 | $ | 60 | $ | 12,863 |
(e) | (b) | ||||||||||||||||||
Historical CEC Consolidated | Less: Deconsolidation of CEOC | Eliminations | Pro Forma Adjustments | Pro Forma CEC Consolidated | |||||||||||||||
Revenues | |||||||||||||||||||
Casino | $ | 4,047 | $ | 2,838 | $ | — | $ | — | $ | 1,209 | |||||||||
Food and beverage | 1,144 | 614 | — | — | 530 | ||||||||||||||
Rooms | 915 | 402 | — | — | 513 | ||||||||||||||
Management fees | 44 | 68 | 24 | — | — | ||||||||||||||
Other | 892 | 199 | 33 | — | 726 | ||||||||||||||
Reimbursed management costs | 197 | 312 | 115 | — | — | ||||||||||||||
Less: casino promotional allowances | (854 | ) | (494 | ) | — | — | (360 | ) | |||||||||||
Net revenues | 6,385 | 3,939 | 172 | — | 2,618 | ||||||||||||||
Operating expenses | |||||||||||||||||||
Direct | |||||||||||||||||||
Casino | 2,413 | 1,744 | — | — | 669 | ||||||||||||||
Food and beverage | 516 | 250 | — | — | 266 | ||||||||||||||
Rooms | 242 | 96 | — | — | 146 | ||||||||||||||
Property, general, administrative, and other | 1,680 | 821 | 57 | — | 916 | ||||||||||||||
Reimbursable management costs | 197 | 312 | 115 | — | — | ||||||||||||||
Depreciation and amortization | 371 | 200 | — | — | 171 | ||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries | 95 | 59 | 4 | — | 40 | ||||||||||||||
Impairment of intangible and tangible assets | 549 | 418 | (23 | ) | — | 108 | |||||||||||||
Loss on interests in non-consolidated affiliates | 9 | 9 | — | — | — | ||||||||||||||
Corporate expense | 193 | 133 | — | — | 60 | ||||||||||||||
Acquisition and integration costs | 71 | 17 | — | — | 54 | ||||||||||||||
Amortization of intangible assets | 100 | 39 | — | — | 61 | ||||||||||||||
Total operating expenses | 6,436 | 4,098 | 153 | — | 2,491 | ||||||||||||||
Income/(loss) from operations | (51 | ) | (159 | ) | 19 | — | 127 |
(e) | (b) | ||||||||||||||||||
Historical CEC Consolidated | Less: Deconsolidation of CEOC | Eliminations | Pro Forma Adjustments | Pro Forma CEC Consolidated | |||||||||||||||
Interest expense | (1,954 | ) | (1,633 | ) | (119 | ) | — | (440 | ) | ||||||||||
Gain/(loss) on early extinguishment of debt | (95 | ) | (113 | ) | 52 | — | 70 | ||||||||||||
Loss on partial sale of subsidiary | (3 | ) | (3 | ) | — | — | — | ||||||||||||
Other income, including interest income | 5 | 18 | 56 | — | 43 | ||||||||||||||
Loss from continuing operations, before income taxes | (2,098 | ) | (1,890 | ) | 8 | — | (200 | ) | |||||||||||
Income tax benefit | 479 | 444 | — | 5 | (c) | 40 | |||||||||||||
Loss from continuing operations, net of income taxes | (1,619 | ) | (1,446 | ) | 8 | 5 | (160 | ) | |||||||||||
Discontinued operations | |||||||||||||||||||
Loss from discontinued operations | (188 | ) | (170 | ) | 3 | — | (15 | ) | |||||||||||
Income tax benefit | 11 | 11 | — | — | — | ||||||||||||||
Loss from discontinued operations, net of income taxes | (177 | ) | (159 | ) | 3 | — | (15 | ) | |||||||||||
Net loss | (1,796 | ) | (1,605 | ) | 11 | 5 | (175 | ) | |||||||||||
Net (income)/loss attributable to noncontrolling interests | 35 | (3 | ) | — | (104 | ) | (g) | (66 | ) | ||||||||||
Net loss attributable to Caesars | $ | (1,761 | ) | $ | (1,608 | ) | $ | 11 | $ | (99 | ) | $ | (241 | ) | |||||
Loss per share | |||||||||||||||||||
Loss per share from continuing operations | $ | (11.16 | ) | $ | (1.59 | ) | |||||||||||||
Loss per share from discontinued operations | (1.25 | ) | (0.11 | ) | |||||||||||||||
Net loss per share | $ | (12.41 | ) | $ | (1.70 | ) | |||||||||||||
Weighted-average common shares outstanding | 142 | 142 |
(e) | (b) | ||||||||||||||||||
Historical CEC Consolidated | Less: Deconsolidation of CEOC | Eliminations | Pro Forma Adjustments | Pro Forma CEC Consolidated | |||||||||||||||
Revenues | |||||||||||||||||||
Casino | $ | 5,809 | $ | 4,641 | $ | — | $ | — | $ | 1,168 | |||||||||
Food and beverage | 1,510 | 996 | — | — | 514 | ||||||||||||||
Rooms | 1,220 | 742 | — | — | 478 | ||||||||||||||
Management fees | 57 | 59 | 2 | — | — | ||||||||||||||
Other | 875 | 385 | 45 | — | 535 | ||||||||||||||
Reimbursed management costs | 268 | 285 | 19 | — | 2 | ||||||||||||||
Less: casino promotional allowances | (1,179 | ) | (827 | ) | — | — | (352 | ) | |||||||||||
Net revenues | 8,560 | 6,281 | 66 | — | 2,345 | ||||||||||||||
Operating expenses | |||||||||||||||||||
Direct | |||||||||||||||||||
Casino | 3,281 | 2,690 | — | — | 591 | ||||||||||||||
Food and beverage | 658 | 412 | — | — | 246 | ||||||||||||||
Rooms | 305 | 174 | — | — | 131 | ||||||||||||||
Property, general, administrative, and other | 2,170 | 1,423 | 40 | — | 787 | ||||||||||||||
Reimbursable management costs | 268 | 285 | 19 | — | 2 | ||||||||||||||
Depreciation and amortization | 565 | 401 | — | — | 164 | ||||||||||||||
Write-downs, reserves, and project opening costs, net of recoveries | 104 | 86 | — | — | 18 | ||||||||||||||
Impairment of intangible and tangible assets | 3,019 | 1,955 | (6 | ) | — | 1,058 | |||||||||||||
Loss on interests in non-consolidated affiliates | 18 | 21 | — | — | (3 | ) | |||||||||||||
Corporate expense | 161 | 138 | 8 | — | 31 | ||||||||||||||
Acquisition and integration costs | 81 | 13 | — | — | 68 | ||||||||||||||
Amortization of intangible assets | 165 | 90 | — | — | 75 | ||||||||||||||
Total operating expenses | 10,795 | 7,688 | 61 | — | 3,168 | ||||||||||||||
Loss from operations | (2,235 | ) | (1,407 | ) | 5 | — | (823 | ) |
(e) | (b) | ||||||||||||||||||
Historical CEC Consolidated | Less: Deconsolidation of CEOC | Eliminations | Pro Forma Adjustments | Pro Forma CEC Consolidated | |||||||||||||||
Interest expense | (2,253 | ) | (2,119 | ) | (184 | ) | — | (318 | ) | ||||||||||
Gain/(loss) on early extinguishment of debt | (30 | ) | (32 | ) | — | — | 2 | ||||||||||||
Gain on partial sale of subsidiary | 44 | 44 | — | — | — | ||||||||||||||
Other income, including interest income | 14 | 15 | 184 | — | 183 | ||||||||||||||
Loss from continuing operations, before income taxes | (4,460 | ) | (3,499 | ) | 5 | — | (956 | ) | |||||||||||
Income tax benefit | 1,550 | 1,242 | (2 | ) | — | 306 | |||||||||||||
Loss from continuing operations, net of income taxes | (2,910 | ) | (2,257 | ) | 3 | — | (650 | ) | |||||||||||
Discontinued operations | |||||||||||||||||||
Loss from discontinued operations | (30 | ) | (30 | ) | — | — | — | ||||||||||||
Income tax provision | — | — | — | — | — | ||||||||||||||
Loss from discontinued operations, net of income taxes | (30 | ) | (30 | ) | — | — | — | ||||||||||||
Net loss | (2,940 | ) | (2,287 | ) | 3 | — | (650 | ) | |||||||||||
Net income attributable to noncontrolling interests | (8 | ) | (4 | ) | — | — | (4 | ) | |||||||||||
Net loss attributable to Caesars | $ | (2,948 | ) | $ | (2,291 | ) | $ | 3 | $ | — | $ | (654 | ) | ||||||
Loss per share | |||||||||||||||||||
Loss per share from continuing operations | $ | (22.70 | ) | $ | (5.07 | ) | |||||||||||||
Loss per share from discontinued operations | (0.23 | ) | — | ||||||||||||||||
Net loss per share | $ | (22.93 | ) | $ | (5.07 | ) | |||||||||||||
Weighted-average common shares outstanding | 129 | 129 |
(a) | Reflects the deconsolidation of CEOC’s assets and liabilities (including CEOC’s intercompany balances with CEC and its remaining consolidated entities) at their carrying amounts included in CEC’s financial statements as of September 30, 2014. |
(b) | Represents adjustments to remove the effect of intercompany amounts and transactions that were included in CEC’s historical financial statements. The adjustment to retained earnings also includes the estimated impact from the gain on deconsolidation due to the de-recognition of the carrying amounts of CEOC’s assets and liabilities and accumulated other comprehensive loss previously consolidated in CEC’s historical consolidated financial statements as of September 30, 2014. The pro forma statements of operations do not include the estimated gain on deconsolidation as it is not expected to have a continuing impact due to its non-recurring nature. The following are the primary intercompany amounts and transactions reflected in the adjustments: |
1. | Amounts recorded as trade accounts payable for pro forma financial statement presentation. Prior to the deconsolidation of CEOC, these amounts were considered intercompany trade accounts payable and were eliminated in consolidation. Subsequent to the deconsolidation, these amounts are recorded as balances with CEC (related party accounts payable). |
2. | Management fee revenue related to CEOC’s management of certain casinos on behalf of CGP LLC, which after the deconsolidation of CEOC will be considered third party transactions and are expected to have a continuing impact. Prior to the deconsolidation, these amounts were considered intercompany transactions between consolidated entities and eliminated in consolidation. |
3. | Interest expense related to CEOC notes held by CEC and CGP LLC during the periods presented. Prior to the deconsolidation, these amounts were considered intercompany interest income from CEOC and were eliminated in consolidation. |
4. | Gains and losses recognized on the extinguishment of CEOC debt and other CEOC debt transactions related to debt instruments held by CGP LLC. Prior to the deconsolidation, these amounts were considered intercompany transactions with CEOC and were eliminated in consolidation. |
(c) | Represents the impact of additional deferred taxes as a result of the deconsolidation of CEOC. |
(d) | The adjustment to retained earnings reflects the net impact of amounts as a result of the pro-forma adjustments column. |
(e) | Reflects the deconsolidation of CEOC’s statement of operations (including CEOC’s intercompany transactions with CEC and remaining consolidated entities) included in CEC’s financial statements for the periods ended September 30, 2014 and December 31, 2013. |
(f) | Represents other than temporary impairment of a discount recognized by CEC on CEOC notes that were distributed by CGP LLC through a dividend to a non-consolidated affiliate. |
(g) | Represents the amount of the accumulated stockholders’ deficit and net income allocated to the noncontrolling interests’ ownership in CEOC. Prior to the deconsolidation, this amount was recorded as a reduction in the accumulated stockholders’ deficit. |
(h) | Represents our investment in CEOC using the cost method of accounting as of September 30, 2014, based on the estimated fair value of the CEOC enterprise, net of the fair value of CEOC debt. |