Form 10-Q Caesars Entertainment, For: Mar 31
Exhibit 10.1
FORM OF ASSIGNMENT AGREEMENT
WHEREAS, Caesars Entertainment, Inc. (f/k/a Eldorado Resorts, Inc. (the “Company”)) and [________] (“Employee”) are parties to that certain Executive Employment Agreement dated as of [________], (as amended from time to time, the “Employment Agreement”);
WHEREAS, effective as of January 1, 2021, the Company centralized its payroll operations by transferring such operations to its subsidiary, Caesars Entertainment Services (“CES”), with CES becoming the new employer of record for impacted employees; and
WHEREAS, in connection with the foregoing, the parties to this Assignment Agreement (this “Assignment”) wish to reflect (i) the assignment of the Employment Agreement to CES, and (ii) the transfer of Employee’s employment thereunder to CES.
NOW, THEREFORE, the parties to this Assignment hereby agree that (i) the Employment Agreement has been assigned to CES, and (ii) the Employee’s employment thereunder has been transferred to CES.
_____________________________
Caesars Entertainment, Inc.
Date:
_____________________________
Caesars Entertainment Services
Date:
_____________________________
Date:
- 1 -
02012.00000
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
I, Thomas R. Reeg, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Caesars Entertainment, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 4, 2021
| /s/ THOMAS R. REEG | |||||
Thomas R. Reeg Chief Executive Officer (Principal Executive Officer) | |||||
Exhibit 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
I, Bret Yunker, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Caesars Entertainment, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 4, 2021
| /s/ BRET YUNKER | |||||
Bret Yunker Chief Financial Officer (Principal Financial Officer) | |||||
Exhibit 32.1
CERTIFICATION
of
Thomas R. Reeg
Chief Executive Officer
I, Thomas R. Reeg, Chief Executive Officer of Caesars Entertainment, Inc. (the “Company”), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.The Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2021 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
2.The information contained in the Periodic Report fairly represents, in all material respects, the financial condition and results of operations of the Company.
Date: May 4, 2021
| /s/ THOMAS R. REEG | |||||
| Thomas R. Reeg | |||||
| Chief Executive Officer | |||||
Exhibit 32.2
CERTIFICATION
of
Bret Yunker
Chief Financial Officer
I, Bret Yunker, Chief Financial Officer of Caesars Entertainment, Inc. (the “Company”), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.The Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2021 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
2.The information contained in the Periodic Report fairly represents, in all material respects, the financial condition and results of operations of the Company.
Date: May 4, 2021
| /s/ BRET YUNKER | |||||
| Bret Yunker | |||||
| Chief Financial Officer | |||||
Supplemental Consolidating Financial Information
Caesars Resort Collection, LLC
(Unaudited)
Exhibit. Supplemental Consolidating Financial Information
The following tables present the balance sheets as of March 31, 2021 and December 31, 2020, statements of operations and cash flows for the three months ended March 31, 2021 and 2020, and Adjusted EBITDA for the three months ended March 31, 2021 of Caesars Resort Collection, LLC (“CRC”), as it consolidates into CEI as a wholly-owned subsidiary. “Other Operations, Eliminations” presents the operations of CEI’s other subsidiaries, including eliminations of intercompany transactions. CEI consolidated balances do not include CRC until the period starting from July 20, 2020.
The consolidating condensed balance sheets as of March 31, 2021 and December 31, 2020 are as follows:
| March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
| (In millions) | CRC | Other Operations, Eliminations | CEI Consolidated | CRC | Other Operations, Eliminations | CEI Consolidated | |||||||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||||||||
| CURRENT ASSETS: | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 475 | $ | 1,319 | $ | 1,794 | $ | 374 | $ | 1,384 | $ | 1,758 | |||||||||||||||||||||||
| Restricted cash and investments | 20 | 2,053 | 2,073 | 9 | 2,012 | 2,021 | |||||||||||||||||||||||||||||
| Accounts receivable, net | 267 | 57 | 324 | 262 | 76 | 338 | |||||||||||||||||||||||||||||
| Due from affiliates | 357 | (309) | 48 | 613 | (569) | 44 | |||||||||||||||||||||||||||||
| Inventories | 28 | 13 | 41 | 30 | 14 | 44 | |||||||||||||||||||||||||||||
| Prepayments and other current assets | 145 | 91 | 236 | 157 | 93 | 250 | |||||||||||||||||||||||||||||
| Assets held for sale | 1,479 | 567 | 2,046 | 1,500 | 712 | 2,212 | |||||||||||||||||||||||||||||
| Total current assets | 2,771 | 3,791 | 6,562 | 2,945 | 3,722 | 6,667 | |||||||||||||||||||||||||||||
| Investments in and advances to unconsolidated affiliates | — | 263 | 263 | — | 173 | 173 | |||||||||||||||||||||||||||||
| Property and equipment, net | 11,586 | 2,497 | 14,083 | 11,763 | 2,570 | 14,333 | |||||||||||||||||||||||||||||
| Gaming rights and other intangibles, net | 3,136 | 1,099 | 4,235 | 3,151 | 1,102 | 4,253 | |||||||||||||||||||||||||||||
| Goodwill | 8,878 | 851 | 9,729 | 8,872 | 851 | 9,723 | |||||||||||||||||||||||||||||
| Other assets, net | 1,412 | (265) | 1,147 | 1,412 | (176) | 1,236 | |||||||||||||||||||||||||||||
| Total assets | $ | 27,783 | $ | 8,236 | $ | 36,019 | $ | 28,143 | $ | 8,242 | $ | 36,385 | |||||||||||||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||
| CURRENT LIABILITIES: | |||||||||||||||||||||||||||||||||||
| Accounts payable | $ | 112 | $ | 36 | $ | 148 | $ | 110 | $ | 55 | $ | 165 | |||||||||||||||||||||||
| Accrued interest | 138 | 100 | 238 | 46 | 183 | 229 | |||||||||||||||||||||||||||||
| Accrued other liabilities | 878 | 429 | 1,307 | 827 | 412 | 1,239 | |||||||||||||||||||||||||||||
| Due to affiliates | 20 | (20) | — | 12 | (12) | — | |||||||||||||||||||||||||||||
| Current portion of long-term debt | 67 | — | 67 | 67 | — | 67 | |||||||||||||||||||||||||||||
| Liabilities related to assets held for sale | 645 | 99 | 744 | 646 | 239 | 885 | |||||||||||||||||||||||||||||
| Total current liabilities | 1,860 | 644 | 2,504 | 1,708 | 877 | 2,585 | |||||||||||||||||||||||||||||
| Long-term financing obligation | 11,100 | 1,234 | 12,334 | 11,064 | 1,231 | 12,295 | |||||||||||||||||||||||||||||
| Long-term debt | 8,325 | 5,778 | 14,103 | 8,304 | 5,769 | 14,073 | |||||||||||||||||||||||||||||
| Long-term debt to related party | 15 | (15) | — | 15 | (15) | — | |||||||||||||||||||||||||||||
| Deferred income taxes | 1,586 | (495) | 1,091 | 1,223 | (57) | 1,166 | |||||||||||||||||||||||||||||
| Other long-term liabilities | 558 | 799 | 1,357 | 610 | 622 | 1,232 | |||||||||||||||||||||||||||||
| Total liabilities | 23,444 | 7,945 | 31,389 | 22,924 | 8,427 | 31,351 | |||||||||||||||||||||||||||||
| STOCKHOLDERS' EQUITY: | |||||||||||||||||||||||||||||||||||
| Caesars stockholders’ equity | 4,322 | 291 | 4,613 | 5,202 | (186) | 5,016 | |||||||||||||||||||||||||||||
| Noncontrolling interests | 17 | — | 17 | 17 | 1 | 18 | |||||||||||||||||||||||||||||
| Total stockholders’ equity | 4,339 | 291 | 4,630 | 5,219 | (185) | 5,034 | |||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 27,783 | $ | 8,236 | $ | 36,019 | $ | 28,143 | $ | 8,242 | $ | 36,385 | |||||||||||||||||||||||
Supplemental Consolidating Financial Information
Caesars Resort Collection, LLC
(Unaudited)
The consolidating condensed statements of operations for the three months ended March 31, 2021 and 2020 are as follows:
| Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | ||||||||||||||||||||||||||||||||||
| (In millions) | CRC | Other Operations, Eliminations | CEI Consolidated | CRC (a) | Other Operations, Eliminations | CEI Consolidated | |||||||||||||||||||||||||||||
| REVENUES: | |||||||||||||||||||||||||||||||||||
| Casino and pari-mutuel commissions | $ | 759 | $ | 381 | $ | 1,140 | $ | 945 | $ | (605) | 340 | ||||||||||||||||||||||||
| Food and beverage | 137 | 29 | 166 | 329 | (273) | 56 | |||||||||||||||||||||||||||||
| Hotel | 175 | 40 | 215 | 317 | (269) | 48 | |||||||||||||||||||||||||||||
| Other | 156 | 22 | 178 | 236 | (207) | 29 | |||||||||||||||||||||||||||||
| Net revenues | 1,227 | 472 | 1,699 | 1,827 | (1,354) | 473 | |||||||||||||||||||||||||||||
| EXPENSES: | |||||||||||||||||||||||||||||||||||
| Casino and pari-mutuel commissions | 360 | 181 | 541 | 581 | (402) | 179 | |||||||||||||||||||||||||||||
| Food and beverage | 85 | 21 | 106 | 261 | (208) | 53 | |||||||||||||||||||||||||||||
| Hotel | 66 | 15 | 81 | 115 | (93) | 22 | |||||||||||||||||||||||||||||
| Other | 65 | 3 | 68 | 133 | (124) | 9 | |||||||||||||||||||||||||||||
| General and administrative | 265 | 101 | 366 | 413 | (315) | 98 | |||||||||||||||||||||||||||||
| Corporate | 48 | 18 | 66 | 49 | (33) | 16 | |||||||||||||||||||||||||||||
| Impairment charges | — | — | — | 65 | 96 | 161 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 217 | 48 | 265 | 255 | (205) | 50 | |||||||||||||||||||||||||||||
| Transaction costs and other operating costs | 10 | 10 | 20 | 13 | (5) | 8 | |||||||||||||||||||||||||||||
| Total operating expenses | 1,116 | 397 | 1,513 | 1,885 | (1,289) | 596 | |||||||||||||||||||||||||||||
| Operating (loss) income | 111 | 75 | 186 | (58) | (65) | (123) | |||||||||||||||||||||||||||||
| OTHER EXPENSE: | |||||||||||||||||||||||||||||||||||
| Interest expense, net | (401) | (162) | (563) | (316) | 249 | (67) | |||||||||||||||||||||||||||||
| Other income (loss) | (4) | (129) | (133) | 13 | (36) | (23) | |||||||||||||||||||||||||||||
| Total other expense | (405) | (291) | (696) | (303) | 213 | (90) | |||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes | (294) | (216) | (510) | (361) | 148 | (213) | |||||||||||||||||||||||||||||
| Benefit (provision) for income taxes | 70 | 9 | 79 | 71 | (34) | 37 | |||||||||||||||||||||||||||||
| Net income (loss) from continuing operations, net of income taxes | (224) | (207) | (431) | (290) | 114 | (176) | |||||||||||||||||||||||||||||
| Discontinued operations, net of income taxes | 7 | — | 7 | — | — | — | |||||||||||||||||||||||||||||
| Net income (loss) | (217) | (207) | (424) | (290) | 114 | (176) | |||||||||||||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | — | 1 | 1 | 1 | (1) | — | |||||||||||||||||||||||||||||
| Net income (loss) attributable to Caesars | $ | (217) | $ | (206) | $ | (423) | $ | (289) | $ | 113 | $ | (176) | |||||||||||||||||||||||
____________________
(a)In connection with the Merger, CEOC, LLC has been contributed to CRC and the results for the periods presented have been recast as the contribution was between entities under common control.
Supplemental Consolidating Financial Information
Caesars Resort Collection, LLC
(Unaudited)
The consolidating condensed statements of cash flows for the three months ended March 31, 2021 and 2020 are as follows:
| Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | ||||||||||||||||||||||||||||||||||
| (In millions) | CRC | Other Operations, Eliminations | CEI Consolidated | CRC (a) | Other Operations, Eliminations | CEI Consolidated | |||||||||||||||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||||||||||||||||||
| Net cash (used in) provided by operating activities | $ | 134 | $ | (89) | $ | 45 | $ | (102) | $ | 132 | $ | 30 | |||||||||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||||||||||||||||||
| Purchase of property and equipment, net | (38) | (27) | (65) | (111) | 88 | (23) | |||||||||||||||||||||||||||||
| Acquisition of gaming rights | — | (2) | (2) | — | — | — | |||||||||||||||||||||||||||||
| Proceeds from sale of businesses, property and equipment, net of cash sold | 3 | 1 | 4 | — | 10 | 10 | |||||||||||||||||||||||||||||
| Proceeds from the sale of investments | — | 42 | 42 | — | — | — | |||||||||||||||||||||||||||||
| Proceeds from insurance | — | 26 | 26 | — | — | — | |||||||||||||||||||||||||||||
| Investments in unconsolidated affiliates | — | (30) | (30) | — | — | — | |||||||||||||||||||||||||||||
| Net cash (used in) provided by investing activities | (35) | 10 | (25) | (111) | 98 | (13) | |||||||||||||||||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||||||||||||||||||
| Proceeds from long-term debt and revolving credit facilities | — | — | — | 1,137 | (672) | 465 | |||||||||||||||||||||||||||||
| Repayments of long-term debt and revolving credit facilities | (16) | — | (16) | (16) | 6 | (10) | |||||||||||||||||||||||||||||
| Financing obligation payments | — | — | — | (2) | 2 | — | |||||||||||||||||||||||||||||
| Transactions with parent | — | — | — | (5) | 5 | — | |||||||||||||||||||||||||||||
| Taxes paid related to net share settlement of equity awards | — | (14) | (14) | — | (7) | (7) | |||||||||||||||||||||||||||||
| Net cash (used in) provided by financing activities | (16) | (14) | (30) | 1,114 | (666) | 448 | |||||||||||||||||||||||||||||
| CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||||||||||||||||||||||||||||||||||
| Cash flows from operating activities | 26 | 1 | 27 | — | — | — | |||||||||||||||||||||||||||||
| Net cash from discontinued operations | 26 | 1 | 27 | — | — | — | |||||||||||||||||||||||||||||
| Effect of foreign currency exchange rates on cash | — | 21 | 21 | — | — | — | |||||||||||||||||||||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 109 | (71) | 38 | 901 | (436) | 465 | |||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 393 | 3,823 | 4,216 | 1,422 | (1,205) | 217 | |||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 502 | $ | 3,752 | $ | 4,254 | $ | 2,323 | $ | (1,641) | $ | 682 | |||||||||||||||||||||||
____________________
(a)In connection with the Merger, CEOC, LLC has been contributed to CRC and the results for the periods presented have been recast as the contribution was between entities under common control.
Supplemental Consolidating Financial Information
Caesars Resort Collection, LLC
(Unaudited)
The reconciliations of net income (loss) attributable to Caesars to Adjusted EBITDA for the three months ended March 31, 2021 are as follows:
| Three Months Ended March 31, 2021 | |||||||||||||||||
| (In millions) | CRC | Other Operations, Eliminations | CEI Consolidated | ||||||||||||||
| Net loss attributable to Caesars | $ | (217) | $ | (206) | $ | (423) | |||||||||||
| Net loss attributable to noncontrolling interests | — | (1) | (1) | ||||||||||||||
| Net income from discontinued operations | (7) | — | (7) | ||||||||||||||
| Income tax benefit | (70) | (9) | (79) | ||||||||||||||
| Other loss | 4 | 129 | 133 | ||||||||||||||
| Interest expense | 401 | 162 | 563 | ||||||||||||||
| Depreciation and amortization | 217 | 48 | 265 | ||||||||||||||
| Transaction costs and other operating costs | 10 | 10 | 20 | ||||||||||||||
| Stock-based compensation expense | 10 | 13 | 23 | ||||||||||||||
| Other items | 8 | 3 | 11 | ||||||||||||||
| Adjusted EBITDA | $ | 356 | $ | 149 | $ | 505 | |||||||||||