Consolidating Financial Information of Guarantors and Issuers

6 Months Ended

Jun. 30, 2012

Consolidating Financial Information of Guarantors and Issuers [Abstract]

Consolidating Financial Information of Guarantors and Issuers

Note 17—Consolidating Financial Information of Guarantors and Issuers

CEOC is the issuer of certain debt securities that have been guaranteed by Caesars Entertainment and certain subsidiaries of CEOC. The following consolidating schedules present condensed financial information for Caesars Entertainment, the parent and guarantor; CEOC, the subsidiary issuer; guarantor subsidiaries of CEOC; and non-guarantor subsidiaries of Caesars Entertainment and CEOC as of June 30, 2012, and December 31, 2011, and for the quarters and six months ended June 30, 2012 and 2011.

In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we have included the accompanying condensed consolidating financial statements based on Rule 3-10 of the SEC’s Regulation S-X. Management does not believe that separate financial statements of the guarantor subsidiaries are material to our investors; therefore, separate financial statements and other disclosures concerning the guarantor subsidiaries are not presented.

CAESARS ENTERTAINMENT CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2012

CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2012

(In millions)

	CEC (Parent)		Subsidiary Issuer			Guarantors		Non- Guarantors		Consolidating/ Eliminating Adjustments			Total
Assets
Cash and cash equivalents	$	8.0	$	106.8		$	302.2	$	568.1	$	—		$	985.1
Assets held for sale		—		—			11.1		—		—			11.1
Other current assets		21.7		336.5			725.3		467.2		(577.9	)		972.8
Property and equipment, net		—		195.5			9,156.4		7,324.2		—			16,676.1
Goodwill		—		—			1,526.2		1,834.2		—			3,360.4
Intangible assets other than goodwill		—		4.6			3,441.7		797.7		—			4,244.0
Investments in subsidiaries		—		12,992.5			777.7		886.2		(14,656.4	)		—
Restricted cash		—		—			—		346.2		—			346.2
Intercompany receivables		529.3		1,079.9			585.9		98.6		(2,293.7	)		—
Assets held for sale		—		—			592.3		—		—			592.3
Other long-term assets		0.8		309.1			187.2		348.1		5.0			850.2
	$	559.8	$	15,024.9		$	17,306.0	$	12,670.5	$	(17,523.0	)	$	28,038.2
Liabilities and Stockholders’ Equity/(Deficit)
Interest payable	$	—	$	154.7		$	0.6	$	28.3	$	—		$	183.6
Current portion of long-term debt		—		11.8			19.4		11.6		—			42.8
Liabilities held for sale		—		—			9.6		—		—			9.6
Other current liabilities		29.6		352.0			774.3		859.8		(577.9	)		1,437.8
Long-term debt		—		14,664.6			52.8		6,069.6		(886.2	)		19,900.8
Deferred credits and other		—		616.2			140.7		132.9		—			889.8
Deferred income taxes		—		462.0			2,542.9		1,961.7		—			4,966.6
Intercompany payables		—		573.6			871.7		848.4		(2,293.7	)		—
		29.6		16,834.9			4,412.0		9,912.3		(3,757.8	)		27,431.0
Total Caesars stockholders’ equity/(deficit)		530.2		(1,810.0	)		12,894.0		2,681.2		(13,765.2	)		530.2
Non-controlling interests		—		—			—		77.0		—			77.0
Total equity/(deficit)		530.2		(1,810.0	)		12,894.0		2,758.2		(13,765.2	)		607.2
	$	559.8	$	15,024.9		$	17,306.0	$	12,670.5	$	(17,523.0	)	$	28,038.2

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2011

(In millions)

	CEC (Parent)		Subsidiary Issuer			Guarantors		Non- Guarantors		Consolidating/ Eliminating Adjustments			Total
Assets
Cash and cash equivalents	$	3.9	$	16.6		$	372.5	$	501.6	$	—		$	894.6
Assets held for sale		—		—			11.6		—		—			11.6
Other current assets		15.7		322.4			672.1		418.5		(497.7	)		931.0
Property and equipment, net		—		205.6			9,499.8		7,364.5		—			17,069.9
Goodwill		—		—			1,526.2		1,834.2		—			3,360.4
Intangible assets other than goodwill		—		4.9			3,524.2		834.1		—			4,363.2
Investments in subsidiaries		535.8		13,568.0			886.8		882.9		(15,873.5	)		—
Restricted cash		—		—			—		451.1		—			451.1
Intercompany receivables		469.0		1,102.8			586.0		98.7		(2,256.5	)		—
Assets held for sale		—		—			593.4		—		—			593.4
Other long-term assets		5.0		324.9			187.1		323.4		—			840.4
	$	1,029.4	$	15,545.2		$	17,859.7	$	12,709.0	$	(18,627.7	)	$	28,515.6
Liabilities and Stockholders’ Equity/(Deficit)
Interest payable	$	—	$	174.0		$	0.8	$	16.6	$	—		$	191.4
Current portion of long-term debt		—		20.2			7.0		13.2		—			40.4
Liabilities held for sale		—		—			10.1		—		—			10.1
Other current liabilities		22.7		303.5			830.4		702.0		(497.7	)		1,360.9
Long-term debt		—		14,446.3			69.8		6,100.7		(857.3	)		19,759.5
Deferred credits and other		—		612.5			166.0		123.3		—			901.8
Deferred income taxes		—		647.7			2,558.8		1,991.6		—			5,198.1
Intercompany payables		—		420.2			871.7		964.6		(2,256.5	)		—
		22.7		16,624.4			4,514.6		9,912.0		(3,611.5	)		27,462.2
Total Caesars stockholders’ equity/(deficit)		1,006.7		(1,079.2	)		13,345.1		2,750.3		(15,016.2	)		1,006.7
Non-controlling interests		—		—			—		46.7		—			46.7
Total equity/(deficit)		1,006.7		(1,079.2	)		13,345.1		2,797.0		(15,016.2	)		1,053.4
	$	1,029.4	$	15,545.2		$	17,859.7	$	12,709.0	$	(18,627.7	)	$	28,515.6

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME/(LOSS)

FOR THE QUARTER ENDED JUNE 30, 2012

(In millions)

	CEC (Parent)			Subsidiary Issuer			Guarantors			Non- Guarantors			Consolidating/ Eliminating Adjustments			Total
Net revenues	$	—		$	27.0		$	1,254.7		$	928.9		$	(44.9	)	$	2,165.7
Direct operating expenses		—			11.7			679.7			458.4			—			1,149.8
Property, general, administrative, and other		—			3.3			281.1			278.1			(40.1	)		522.4
Depreciation and amortization		—			1.7			110.0			69.2			—			180.9
Intangible and tangible asset impairment charges		—			—			33.0			101.0			—			134.0
Loss/(income) on interests in subsidiaries		240.0			(9.5	)		(7.6	)		—			(222.9	)		—
Corporate expense		6.5			25.8			7.2			6.6			(4.8	)		41.3
Other operating expenses		—			2.5			33.4			19.6			—			55.5
Total operating expenses		246.5			35.5			1,136.8			932.9			(267.8	)		2,083.9
(Loss)/income from operations		(246.5	)		(8.5	)		117.9			(4.0	)		222.9			81.8
Interest expense, net of interest capitalized		—			(461.8	)		(6.8	)		(76.7	)		48.8			(496.5	)
Gains on early extinguishments of debt		—			—			—			33.7			—			33.7
Other income, including interest income		3.9			14.3			5.2			31.9			(48.8	)		6.5
(Loss)/income from continuing operations before income taxes		(242.6	)		(456.0	)		116.3			(15.1	)		222.9			(374.5	)
Benefit/(provision) for income taxes		0.9			168.9			(38.3	)		(17.7	)		4.8			118.6
Net (loss)/income from continuing operations, net of taxes		(241.7	)		(287.1	)		78.0			(32.8	)		227.7			(255.9	)
Discontinued operations
Income from discontinued operations		—			—			22.9			—			—			22.9
Provision for income taxes		—			—			(4.0	)		—			(4.8	)		(8.8	)
Income from discontinued operations, net of income taxes		—			—			18.9			—			(4.8	)		14.1
Net loss		(241.7	)		(287.1	)		96.9			(32.8	)		222.9			(241.8	)
Less: net loss attributable to non-controlling interests		—			—			—			0.1			—			0.1
Net (loss)/income attributable to Caesars		(241.7	)		(287.1	)		96.9			(32.7	)		222.9			(241.7	)
Other comprehensive income/(loss):
Total other comprehensive (loss)/income, net of income taxes		—			(13.6	)		—			16.5			—			2.9
Less: foreign currency translation adjustments attributable to non-controlling interests		—			—			—			(0.5	)		—			(0.5	)
Comprehensive (loss)/income attributable to Caesars	$	(241.7	)	$	(300.7	)	$	96.9		$	(16.7	)	$	222.9		$	(239.3	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME/(LOSS)

FOR THE QUARTER ENDED JUNE 30, 2011

(In millions)

	CEC (Parent)			Subsidiary Issuer			Guarantors			Non- Guarantors			Consolidating/ Eliminating Adjustments			Total
Net revenues	$	—		$	34.6		$	1,292.3		$	889.5		$	(54.7	)	$	2,161.7
Direct operating expenses		—			12.9			679.9			445.8			—			1,138.6
Property, general, administrative, and other		—			13.2			295.4			231.9			(34.2	)		506.3
Depreciation and amortization		—			1.7			105.6			62.2			—			169.5
Loss/(income) on interests in subsidiaries		153.8			(122.6	)		(15.6	)		—			(15.6	)		—
Corporate expense		5.5			31.7			4.6			22.9			(20.5	)		44.2
Other operating expenses		—			16.4			32.7			22.4			—			71.5
Total operating expenses		159.3			(46.7	)		1,102.6			785.2			(70.3	)		1,930.1
(Loss)/income from operations		(159.3	)		81.3			189.7			104.3			15.6			231.6
Interest expense, net of interest capitalized		—			(476.5	)		(8.5	)		(85.7	)		46.1			(524.6	)
Gains on early extinguishments of debt		—			—			—			14.7			—			14.7
Other income, including interest income		2.9			12.0			4.7			31.5			(46.1	)		5.0
(Loss)/income from continuing operations before income taxes		(156.4	)		(383.2	)		185.9			64.8			15.6			(273.3	)
Benefit/(provision) for income taxes		0.9			184.3			(68.3	)		(13.6	)		4.4			107.7
Net (loss)/income from continuing operations, net of taxes		(155.5	)		(198.9	)		117.6			51.2			20.0			(165.6	)
Discontinued operations
Income from discontinued operations		—			—			20.5			—			—			20.5
Provision for income taxes		—			—			(3.6	)		—			(4.4	)		(8.0	)
Income from discontinued operations, net of income taxes		—			—			16.9			—			(4.4	)		12.5
Net loss		(155.5	)		(198.9	)		134.5			51.2			15.6			(153.1	)
Less: net income attributable to non-controlling interests		—			—			—			(2.4	)		—			(2.4	)
Net (loss)/income attributable to Caesars		(155.5	)		(198.9	)		134.5			48.8			15.6			(155.5	)
Other comprehensive income/(loss):
Total other comprehensive (loss)/income, net of income taxes		—			(23.4	)		—			10.8			—			(12.6	)
Less: foreign currency translation adjustments attributable to non-controlling interests		—			—			—			(0.2	)		—			(0.2	)
Comprehensive (loss)/income attributable to Caesars	$	(155.5	)	$	(222.3	)	$	134.5		$	59.4		$	15.6		$	(168.3	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME/(LOSS)

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(In millions)

	CEC (Parent)			Subsidiary Issuer			Guarantors			Non- Guarantors			Consolidating/ Eliminating Adjustments			Total
Net revenues	$	—		$	53.6		$	2,557.8		$	1,861.1		$	(98.4	)	$	4,374.1
Direct operating expenses		—			21.6			1,372.3			919.1			—			2,313.0
Property, general, administrative, and other		—			13.0			573.9			529.1			(81.3	)		1,034.7
Depreciation and amortization		—			3.4			218.4			142.8			—			364.6
Intangible and tangible asset impairment charges		—			—			200.5			101.0			—			301.5
Loss/(income) on interests in subsidiaries		520.3			(5.0	)		4.9			—			(520.2	)		—
Corporate expense		12.1			63.5			13.9			21.1			(17.1	)		93.5
Other operating expenses		—			5.6			66.1			56.8			—			128.5
Total operating expenses		532.4			102.1			2,450.0			1,769.9			(618.6	)		4,235.8
(Loss)/income from operations		(532.4	)		(48.5	)		107.8			91.2			520.2			138.3
Interest expense, net of interest capitalized		—			(970.9	)		(14.5	)		(171.9	)		98.8			(1,058.5	)
Gains on early extinguishments of debt		—			—			—			79.5			—			79.5
Other income, including interest income		9.0			29.2			10.8			64.5			(98.8	)		14.7
(Loss)/income from continuing operations before income taxes		(523.4	)		(990.2	)		104.1			63.3			520.2			(826.0	)
Benefit/(provision) for income taxes		1.1			354.1			(39.4	)		(47.2	)		8.8			277.4
Net (loss)/income from continuing operations, net of taxes		(522.3	)		(636.1	)		64.7			16.1			529.0			(548.6	)
Discontinued operations
Income from discontinued operations		—			—			41.9			—			—			41.9
Provision for income taxes		—			—			(7.4	)		—			(8.8	)		(16.2	)
Income from discontinued operations, net of income taxes		—			—			34.5			—			(8.8	)		25.7
Net loss		(522.3	)		(636.1	)		99.2			16.1			520.2			(522.9	)
Less: net loss attributable to non-controlling interests		—			—			—			0.6			—			0.6
Net (loss)/income attributable to Caesars		(522.3	)		(636.1	)		99.2			16.7			520.2			(522.3	)
Other comprehensive income/(loss):
Total other comprehensive (loss)/income, net of income taxes		—			(25.8	)		—			38.0			—			12.2
Less: foreign currency translation adjustments attributable to non-controlling interests		—			—			—			(1.5	)		—			(1.5	)
Comprehensive (loss)/income attributable to Caesars	$	(522.3	)	$	(661.9	)	$	99.2		$	53.2		$	520.2		$	(511.6	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME/(LOSS)

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(In millions)

	CEC (Parent)			Subsidiary Issuer			Guarantors			Non-Guarantors			Consolidating/ Eliminating Adjustments			Total
Net revenues	$	—		$	63.4		$	2,568.1		$	1,755.9		$	(109.6	)	$	4,277.8
Direct operating expenses		—			25.0			1,358.3			888.9			—			2,272.2
Property, general, administrative, and other		—			27.5			611.9			457.3			(69.2	)		1,027.5
Depreciation and amortization		—			3.4			214.0			124.3			—			341.7
Loss/(income) on interests in subsidiaries		300.5			(228.7	)		(26.1	)		—			(45.7	)		—
Corporate expense		10.2			55.2			8.3			45.3			(40.4	)		78.6
Other operating expenses		0.3			28.8			60.8			41.7			—			131.6
Total operating expenses		311.0			(88.8	)		2,227.2			1,557.5			(155.3	)		3,851.6
(Loss)/income from operations		(311.0	)		152.2			340.9			198.4			45.7			426.2
Interest expense, net of interest capitalized		—			(915.5	)		(18.1	)		(166.9	)		102.5			(998.0	)
Gains on early extinguishments of debt		—			—			—			47.9			—			47.9
Other income, including interest income		6.8			23.7			9.5			71.0			(102.5	)		8.5
(Loss)/income from continuing operations before income taxes		(304.2	)		(739.6	)		332.3			150.4			45.7			(515.4	)
Benefit/(provision) for income taxes		1.3			347.9			(125.0	)		(39.1	)		8.4			193.5
Net (loss)/income from continuing operations, net of taxes		(302.9	)		(391.7	)		207.3			111.3			54.1			(321.9	)
Discontinued operations
Income from discontinued operations		—			—			39.5			—			—			39.5
Provision for income taxes		—			—			(7.1	)		—			(8.4	)		(15.5	)
Income from discontinued operations, net of income taxes		—			—			32.4			—			(8.4	)		24.0
Net loss		(302.9	)		(391.7	)		239.7			111.3			45.7			(297.9	)
Less: net income attributable to non-controlling interests		—			—			—			(5.0	)		—			(5.0	)
Net (loss)/income attributable to Caesars		(302.9	)		(391.7	)		239.7			106.3			45.7			(302.9	)
Other comprehensive income/(loss):
Total other comprehensive (loss)/income, net of income taxes		—			24.0			—			(20.4	)		—			3.6
Less: foreign currency translation adjustments attributable to non-controlling interests		—			—			—			(3.4	)		—			(3.4	)
Comprehensive (loss)/income attributable to Caesars	$	(302.9	)	$	(367.7	)	$	239.7		$	82.5		$	45.7		$	(302.7	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(In millions)

	CEC (Parent)			Subsidiary Issuer			Guarantors			Non- Guarantors			Consolidating/ Eliminating Adjustments			Total
Cash flows provided by/(used in) operating activities	$	175.5		$	(137.9	)	$	(99.7	)	$	133.8		$	—		$	71.7
Cash flows from investing activities
Acquisitions of property and equipment, net of change in construction payables		—			(3.0	)		(66.0	)		(123.2	)		—			(192.2	)
Change in restricted cash		—			—			—			100.7			—			100.7
Purchase of additional interests in subsidiaries		(127.7	)		(13.9	)		—			—			141.6			—
Return of investment in subsidiary		—			—			92.5			—			(92.5	)		—
Other		(0.8	)		—			(5.6	)		(2.5	)		—			(8.9	)
Cash flows (used in)/provided by investing activities		(128.5	)		(16.9	)		20.9			(25.0	)		49.1			(100.4	)
Cash flows from financing activities
Proceeds from the issuance of long-term debt		—			1,351.6			—			358.5			—			1,710.1
Debt issuance costs and fees		—			(24.7	)		—			(7.2	)		—			(31.9	)
Borrowings under lending agreements		—			453.0			—			—			—			453.0
Repayments under lending agreements		—			(608.0	)		—			—			—			(608.0	)
Cash paid for early extinguishments of debt		—			(1,095.6	)		—			(355.0	)		—			(1,450.6	)
Proceeds from sale of non-controlling interest in a subsidiary		—			—			—			32.2			—			32.2
Net intercompany financing activities		(60.3	)		176.3			0.1			(67.0	)		(49.1	)		—
Other		17.4			(7.6	)		(18.3	)		(3.8	)		—			(12.3	)
Cash flows (used in)/provided by financing activities		(42.9	)		245.0			(18.2	)		(42.3	)		(49.1	)		92.5
Cash flows from discontinued operations
Cash flows from operating activities		—			—			29.0			—			—			29.0
Cash flows from investing activities		—			—			(2.3	)		—			—			(2.3	)
Net cash provided by discontinued operations		—			—			26.7			—			—			26.7
Net increase/(decrease) in cash and cash equivalents		4.1			90.2			(70.3	)		66.5			—			90.5
Cash and cash equivalents, beginning of period		3.9			16.6			372.5			501.6			—			894.6
Cash and cash equivalents, end of period	$	8.0		$	106.8		$	302.2		$	568.1		$	—		$	985.1

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(In millions)

	CEC (Parent)			Subsidiary Issuer			Guarantors			Non- Guarantors			Consolidating/ Eliminating Adjustments			Total
Cash flows provided by/(used in) operating activities	$	107.2		$	(226.9	)	$	(24.0	)	$	225.8		$	—		$	82.1
Cash flows from investing activities
Acquisitions of property and equipment, net of change in construction payables		—			(7.1	)		(49.8	)		(32.8	)		—			(89.7	)
Change in restricted cash		—			—			—			(546.0	)		—			(546.0	)
Payments to acquire business, net of transactions costs and cash acquired		—			—			—			(31.1	)		—			(31.1	)
Purchase of additional interests in subsidiaries		(108.5	)		(89.6	)		(15.6	)		—			213.7			—
Other		—			—			(3.9	)		(77.6	)		—			(81.5	)
Cash flows (used in)/provided by investing activities		(108.5	)		(96.7	)		(69.3	)		(687.5	)		213.7			(748.3	)
Cash flows from financing activities
Proceeds from the issuance of long-term debt		—			418.3			—			445.5			—			863.8
Debt issuance costs and fees		—			(3.2	)		—			(14.3	)		—			(17.5	)
Borrowings under lending agreements		—			135.0			—			—			—			135.0
Repayments under lending agreements		—			(135.0	)		—			—			—			(135.0	)
Cash paid for early extinguishments of debt		—			—			(0.7	)		(125.2	)		—			(125.9	)
Net intercompany financing activities		(82.0	)		31.2			15.6			248.9			(213.7	)		—
Other		(0.9	)		(13.4	)		(3.3	)		(14.1	)		—			(31.7	)
Cash flows (used in)/provided by financing activities		(82.9	)		432.9			11.6			540.8			(213.7	)		688.7
Cash flows from discontinued operations
Cash flows from operating activities		—			—			33.0			—			—			33.0
Cash flows from investing activities		—			—			(2.0	)		—			—			(2.0	)
Net cash provided by discontinued operations		—			—			31.0			—			—			31.0
Net (decrease)/increase in cash and cash equivalents		(84.2	)		109.3			(50.7	)		79.1			—			53.5
Cash and cash equivalents, beginning of period		136.0			61.0			344.7			431.8			—			973.5
Cash and cash equivalents, end of period	$	51.8		$	170.3		$	294.0		$	510.9		$	—		$	1,027.0