XML 157 R27.htm IDEA: XBRL DOCUMENT v2.4.1.9
Related Party Transactions
12 Months Ended
Dec. 31, 2014
Related Party Transactions [Abstract]  
Related Party Transactions
Related Party Transactions
Non-Consolidated Affiliates
Our non-consolidated affiliates are accounted for under the equity method and, as of December 31, 2014, our investments in and advances to non-consolidated affiliates consisted primarily of Baluma S.A, our investment in Rock Ohio Caesars LLC (“ROC”) in Ohio, and an investment in a joint venture development project in Incheon, South Korea. CEOC manages ROC’s Horseshoe Cleveland casino, Horseshoe Cincinnati casino, and Thistledown Racino for a fee under management agreements that expire in May 2032, March 2033 and April 2033, respectively.
See Note 22, “Subsequent Events - Other,” for recent developments related to ROC.
Management Fees with Sponsors
Caesars Entertainment has a services agreement with Apollo Global Management, LLC ("Apollo") and affiliates of TPG Capital LP ("TPG") (collectively, the "Sponsors"), relating to the provision of financial and strategic advisory services and consulting services. We pay a monitoring fee for management services and reimburse the Sponsors for expenses they incur related to these management services. The fees paid to the Sponsors are included in corporate expense. The Sponsors granted a waiver of the monitoring fees due for 2014 and 2015. The total fees for 2013 and 2012 were $23 million and $30 million, respectively.
We may engage in transactions with companies owned or controlled by affiliates of our Sponsors in the normal course of business. We believe such transactions are conducted at fair value. In addition, certain entities affiliated with or under the control of our Sponsors may from time to time transact in and hold our debt securities, and participate in any modifications of such instruments on terms available to any other holder of our debt.
World Series of Poker (“WSOP”) Trademarks
CIE owns the WSOP trademarks and associated rights. CEOC has a perpetual, royalty-free license to use the WSOP trademarks in connection with operating WSOP branded poker rooms and selling certain WSOP branded retail items. Under a Trademark License Agreement entered into in 2011, Caesars Entertainment pays CIE $2 million per year for the right to host the WSOP tournaments at the Rio All-Suites Hotel & Casino in Las Vegas or at such other property agreed to by the parties. Caesars Entertainment also has the right to host a number of WSOP circuit events at Caesars Entertainment affiliate properties under a Circuit Event Agreement with CIE. Caesars Entertainment must pay CIE $75,000 for each such circuit event. Both the Trademark License Agreement and Circuit Event Agreement expire on September 1, 2016, unless terminated earlier pursuant to the terms of each agreement.
Hamlet Holdings LLC
Hamlet Holdings LLC (“Hamlet Holdings”), the members of which are comprised of individuals affiliated with each of the Sponsors, as of December 31, 2014, beneficially owns approximately 61% of our common stock pursuant to an irrevocable proxy providing Hamlet Holdings with sole voting and sole dispositive power over those shares, and, as a result, the Sponsors have the power to elect all of our directors.
XOJet, Inc.
XOJet, Inc. (“XOJet”), a private aviation company, is a TPG portfolio company. Caesars Entertainment and XOJet are parties to a Custom Membership Program Agreement pursuant to which, among other things, Caesars Entertainment has access to XOJet aircrafts at contractually agreed upon hourly rates. Pursuant to the terms of this agreement, Caesars Entertainment incurred expenses of approximately $3.0 million, $3.8 million, and $4.1 million for the years ended December 31, 2014, 2013, and 2012, respectively.
SunGard Availability Service LP
SunGard Availability Service LP (“SunGard”), a private software solutions company, is a TPG portfolio company. Caesars Entertainment and SunGard are parties to a Master Agreement for U.S. Availability Services pursuant to which, among other things, SunGard provides Caesars Entertainment enterprise cloud services and solutions for managed information technology. Pursuant to the terms of this agreement, Caesars Entertainment incurred expenses of approximately $1.5 million, $2.1 million, and $1.6 million for the years ended December 31, 2014, 2013, and 2012, respectively.
Sabre, Inc.
Sabre, Inc. (“Sabre”), a private travel sector technology company, is a TPG portfolio company. Caesars Entertainment and Sabre are parties to a Hotel Associate Distribution and Services Agreement pursuant to which, among other things, Caesars Entertainment uses Sabre’s technology to assist customers with booking hotel rooms. Pursuant to the terms of this agreement, Caesars Entertainment incurred expenses of approximately $0.5 million, $0.6 million, and $0.6 million for the years ended December 31, 2014, 2013, and 2012, respectively.
Avaya Inc.
Avaya Inc. (“Avaya”), a public communications solutions company, is a TPG portfolio company. Caesars Entertainment and Avaya are parties to a Customer Agreement pursuant to which, among other things, Avaya supplies Caesars Entertainment with technology products and services, software licenses and support for such products and services. Pursuant to the terms of this agreement, Caesars Entertainment incurred expenses of approximately $1.1 million, $1.4 million, and $1.5 million for the years ended December 31, 2014, 2013, and 2012, respectively.
Norwegian Cruise Line Holdings Ltd.
Norwegian Cruise Line Holdings Ltd. (“NCL”), a public cruise ship operations company, is an Apollo funds and TPG portfolio company. Caesars Entertainment and NCL are parties to a Marketing Agreement pursuant to which, among other things, NCL pays Caesars Entertainment a percentage of NCL’s gaming revenue. Pursuant to the terms of this agreement, Caesars Entertainment and NCL’s mutual business transactions amounted to approximately $2.0 million, $1.0 million, and $0.3 million for the years ended December 31, 2014, 2013, and 2012, respectively.
Classic Party Rentals
Classic Party Rentals, a private event rental company, is an Apollo portfolio company. Caesars Entertainment and Classic Party Rentals are parties to an Equipment Rental Agreement pursuant to which, among other things, Classic Party Rentals supplies Caesars Entertainment with tenting, draping, lighting, furniture, tableware, and linens for parties and events. Pursuant to the terms of this agreement, Caesars Entertainment incurred expenses of approximately $0.3 million, $0.1 million, and $0.1 million for the years ended December 31, 2014, 2013, and 2012, respectively.
Creative Artists Agency LLC
Creative Artists Agency, LLC. (“CAA”), a private talent and sports agency, is an Apollo funds and TPG portfolio company. Caesars and CAA are parties to multiple entertainment agreements pursuant to which, among other things, Caesars pays CAA fees in connection with artists’ performances at Caesars’ properties. Pursuant to the terms of these agreements, Caesars Entertainment incurred expenses of approximately $0.2 million for the year ended December 31, 2014 and did not incur material expenses during 2013 or 2012.
Other Related Party Transactions
In May 2014, CEOC, CERP, and CGPH entered into a services joint venture, CES. See Note 2, “Basis of Presentation and Principles of Consolidation.”
In May 2014, CEOC and CGP LLC consummated the CEOC-CGP LLC Property Transaction as disclosed in Note 2, “Basis of Presentation and Principles of Consolidation.”
In July 2014, CEOC completed the repurchase of $982 million aggregate principal amount outstanding of its 5.625% Senior Notes due 2015 and 10.00% Second-Priority Senior Secured Notes due 2015 for total consideration of approximately $1.0 billion. CGP LLC received approximately $452 million of consideration (including accrued and unpaid interest) as part of the note purchase transaction. See Note 10, “Debt.”
In August 2014, CGP LLC effectuated a distribution of 100% of its remaining investment in certain CEOC notes as a dividend to its members, CEC and CAC, pro rata based upon each member’s ownership percentage in CGP LLC. See Note 2, “Basis of Presentation and Principles of Consolidation.”
In December 2014, CEC and CAC entered into a merger agreement, pursuant to which, among other things, CAC will merge with and into CEC, with CEC as the surviving company. See Note 1, “Description of Business.”