Background and Basis of Presentation - CGP | 7 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 |
Growth Partners |
Organization and Basis of Presentation [Line Items] | ' | ' |
Background and Basis of Presentation | ' | ' |
Organization and Nature of Business Operations | Background and Basis of Presentation |
Caesars Acquisition Company (the “Company”, “CAC”, “we”, “our” and “us”), a Delaware corporation, was formed on February 25, 2013 to directly own 100% of the voting membership units in Caesars Growth Partners, LLC (“CGP LLC”), a Delaware limited liability company. CGP LLC was formed on July 16, 2013 for the purpose of holding certain businesses and assets of Caesars Entertainment Corporation ("Caesars Entertainment"). As of September 30, 2013, CAC and CGP LLC did not have any operating activities. | Organization and Transaction |
On October 21, 2013, the joint venture was formed between subsidiaries of Caesars Entertainment and CAC through the execution of the series of transactions described below: | Caesars Acquisition Company ("CAC" and the “Company”), a Delaware corporation, was formed on February 25, 2013 to directly own 100% of the voting membership units in Caesars Growth Partners, LLC (“CGP LLC”), a Delaware limited liability company. CGP LLC was formed on July 16, 2013 for the purpose of holding certain businesses and assets of Caesars Entertainment Corporation ("Caesars Entertainment"). As of September 30, 2013, CAC and CGP LLC did not have any operating activities. |
| | On October 21, 2013, the joint venture was formed between subsidiaries of Caesars Entertainment and CAC through the execution of the series of transactions described below: |
(i) | The Class A common stock of CAC was made available via a subscription rights offering by Caesars Entertainment to the shareholders of Caesars Entertainment as of October 17, 2013, the record date (the “Offering”), whereby each subscription right entitled its holder to purchase from CAC the same number of shares held of Caesars Entertainment common stock; | | |
| | (i) | The Class A common stock of CAC was made available via a subscription rights offering by Caesars Entertainment to the shareholders of Caesars Entertainment as of October 17, 2013, the record date (the “Offering”), whereby each subscription right entitled its holder to purchase from CAC the same number of shares held of Caesars Entertainment common stock; |
(ii) | Affiliates of Apollo Global Management, LLC (“Apollo”) and affiliates of TPG Global, LLC (“TPG” and, together with Apollo, the “Sponsors”) exercised their basic subscription rights in full and purchased $457.8 million worth of CAC's Class A common stock at a price of $8.64 per whole share; | | |
| | (ii) | Affiliates of Apollo Global Management, LLC (“Apollo”) and affiliates of TPG Global, LLC (“TPG” and, together with Apollo, the “Sponsors”) exercised their basic subscription rights in full and purchased $457.8 million worth of CAC's Class A common stock at a price of $8.64 per whole share; |
(iii) | CAC used the proceeds from the exercise of basic subscription rights in clause (ii) above to purchase 100% of the voting units of CGP LLC; | | |
| | (iii) | CAC used the proceeds from the exercise of basic subscription rights in clause (ii) above to purchase 100% of the voting units of CGP LLC; |
(iv) | CGP LLC in turn used $360.0 million of the proceeds received from CAC in clause (iii) above to purchase from Caesars Entertainment Operating Company, Inc. ("CEOC"), a wholly-owned subsidiary of Caesars Entertainment (we refer to the following assets as the “Purchased Assets”): | | |
| | (iv) | CGP LLC in turn used $360.0 million of the proceeds received from CAC in clause (iii) above to purchase from Caesars Entertainment Operating Company, Inc. ("CEOC"), a wholly-owned subsidiary of Caesars Entertainment (we refer to the following assets as the “Purchased Assets”): |
a. | the equity interests of a subsidiary of PHW Las Vegas, LLC, which holds all of the assets and liabilities formerly held directly by PHW Las Vegas, LLC, including Planet Hollywood Resort & Casino in Las Vegas (“Planet Hollywood”), | | |
| | a. | the equity interests of a subsidiary of PHW Las Vegas, LLC, which holds all of the assets and liabilities formerly held directly by PHW Las Vegas, LLC, including Planet Hollywood Resort & Casino in Las Vegas (“Planet Hollywood”), |
b. | the equity interests of Caesars Baltimore Investment Company, LLC, which is the entity that indirectly holds interests in the owner of Horseshoe Baltimore in Maryland (the “Maryland Joint Venture”), which is a licensed casino development project expected to open in the third quarter of 2014, and | | |
| | b. | the equity interests of Caesars Baltimore Investment Company, LLC, which is the entity that indirectly holds interests in the owner of Horseshoe Baltimore in Maryland (the “Maryland Joint Venture”), which is a licensed casino development project expected to open in the third quarter of 2014, and |
c. | a 50% interest in the management fee revenues of PHW Manager, LLC, which manages Planet Hollywood, and Caesars Baltimore Management Company LLC, which holds a management agreement to manage the Maryland Joint Venture; and | | |
| | c. | a 50% interest in the management fee revenues of PHW Manager, LLC, which manages Planet Hollywood, and Caesars Baltimore Management Company LLC, which holds a management agreement to manage the Maryland Joint Venture; and |
(v) | Caesars Entertainment contributed all of the shares of Caesars Interactive Entertainment, Inc.’s (“CIE”) outstanding common stock held by a subsidiary of Caesars Entertainment and approximately $1.1 billion in aggregate principal amount of senior notes held by a subsidiary of Caesars Entertainment (the “CEOC Notes” and, together with the shares of CIE, the “Contributed Assets”) to CGP LLC, in exchange for all of CGP LLC’s non-voting units. | | |
The closing of the Offering for subscription rights not previously exercised by the Sponsors, and for any over-subscription privileges, occurred on November 18, 2013. CAC distributed a total of 135,771,882 shares of Class A common stock to the holders of subscription rights who validly exercised their subscription rights and paid the subscription price in full. CAC received aggregate gross proceeds from the Offering of approximately $1,173.1 million. | (v) | Caesars Entertainment contributed all of the shares of Caesars Interactive Entertainment, Inc.’s (“CIE” or "Caesars Interactive") outstanding common stock held by a subsidiary of Caesars Entertainment and approximately $1.1 billion in aggregate principal amount of senior notes held by a subsidiary of Caesars Entertainment (the “CEOC Notes” and, together with the shares of CIE, the “Contributed Assets”) to CGP LLC, in exchange for all of CGP LLC’s non-voting units. |
CGP LLC is liable to reimburse Caesars Entertainment and CAC for certain fees and expenses incurred in connection with this transaction. | The closing of the Offering for subscription rights not previously exercised by the Sponsors, and for any over-subscription privileges, occurred on November 18, 2013. CAC distributed a total of 135,771,882 shares of Class A common stock to the holders of subscription rights who validly exercised their subscription rights and paid the subscription price in full. CAC received aggregate gross proceeds from the Offering of approximately $1,173.1 million. |
The distribution of CGP LLC's voting and non-voting units, the Offering and the contributions to and purchases of business and assets by CGP LLC are collectively referred to as the “Transactions”. | Also on October 21, 2013, the aggregate fair market value of the subscription rights issued by Caesars Entertainment was restored to Caesars Entertainment through a return of senior notes previously issued by CEOC from CGP LLC. The amount of the restoration was approximately $20.7 million. |
Effective November 19, 2013, as the result of our public offering, our common stock trades on the NASDAQ Global Select Market under the symbol “CACQ". | CGP LLC is liable to reimburse Caesars Entertainment and CAC for certain fees and expenses incurred in connection with this transaction. |
| The distribution of CGP LLC's voting and non-voting units, the Offering and the contributions to and purchases of business and assets by CGP LLC are collectively referred to as the “Transactions”. The entities and assets contributed to or purchased by CGP LLC are collectively referred to as “Growth Partners”. |
| Growth Partners has two reportable segments: Interactive Entertainment and Casino Properties and Developments. The Interactive Entertainment segment consists of the Caesars Interactive business and the Casino Properties and Developments segment consists primarily of the Planet Hollywood business along with the interest in Horseshoe Baltimore. |
| Basis of Presentation and Combination |
| The combined condensed financial statements have been prepared on a stand-alone basis and, as the Transaction is considered a transaction between entities under common control, have been derived from the historical accounting records and consolidated financial statements of Caesars Entertainment. The combined condensed historical financial statements consist of the financial position, results of operations and cash flows of the businesses and assets to be contributed to or acquired by CGP LLC in the Transaction described previously as if those businesses were combined into a reporting entity for all periods presented. The combined condensed historical financial statements reflect Growth Partners' financial position, results of operations and cash flows as we were historically managed, in accordance with accounting principles generally accepted in the United States (“GAAP”). The combined condensed historical financial statements include all revenues, costs, assets and liabilities directly attributable to us. |
| The accompanying unaudited combined condensed financial statements of Growth Partners have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable for interim periods and, therefore, do not include all information and footnotes necessary for complete financial statements in conformity with GAAP. The results for the interim periods reflect all adjustments (consisting primarily of normal recurring adjustments) that management considers necessary for a fair presentation of financial position, results of operations, and cash flows. |
| The results of operations for Growth Partners' interim periods are not necessarily indicative of the results of operations that may be achieved for the entire 2013 fiscal year. |
| The accompanying combined condensed financial statements also include allocations of certain Caesars Entertainment general corporate expenses in accordance with shared services agreements under which Caesars Entertainment and its subsidiaries provide services to both Caesars Interactive and Planet Hollywood. These allocations of general corporate expenses may not reflect the expense Growth Partners would have incurred if it were a stand-alone company nor are they necessarily indicative of Growth Partners' future costs. Management believes the assumptions and methodologies used in the allocation of general corporate expenses from Caesars Entertainment are reasonable. Given the nature of these costs, it is not practicable for Growth Partners to estimate what these costs would have been on a stand-alone basis. |
| Transactions between Caesars Entertainment and Growth Partners have been identified in the combined condensed historical financial statements and the notes thereto as transactions between related parties (see Note 19 — Related Party Transactions). |
| Use of Estimates |
| The presentation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the combined condensed financial statements and notes thereto. Significant estimates and assumptions reflected in Growth Partners' combined condensed historical financial statements include, but are not limited to, the estimated consumption rate of virtual goods that it uses for revenue recognition within the Interactive Entertainment segment, useful lives of property, equipment and amortizing intangible assets, income taxes, accounting for stock-based compensation, the valuation of contingent consideration and the evaluation of goodwill and long-lived assets for impairment. Management believes the accounting estimates are appropriate and reasonably determined. However, due to the inherent uncertainties in making these estimates, actual amounts could differ from such estimates. |