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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to                 
Commission File No. 001-36629
CAESARS ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware46-3657681
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
100 West Liberty Street, 12th Floor, Reno, Nevada 89501
(Address and zip code of principal executive offices)
(775328-0100
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.00001 par valueCZRNASDAQ Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
The number of shares of the Registrant’s Common Stock, $0.00001 par value per share, outstanding as of April 30, 2021 was 208,698,623.



CAESARS ENTERTAINMENT, INC.
TABLE OF CONTENTS
Page
 
 
 
 
 






PART I - FINANCIAL INFORMATION
Item 1.  Unaudited Financial Statements
CAESARS ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
(In millions)March 31,
2021
December 31,
2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$1,794 $1,758 
Restricted cash and investments2,073 2,021 
Accounts receivable, net324 338 
Due from affiliates48 44 
Inventories41 44 
Prepayments and other current assets236 250 
Assets held for sale ($0 and $130 attributable to our VIEs)
2,046 2,212 
Total current assets6,562 6,667 
Investment in and advances to unconsolidated affiliates263 173 
Property and equipment, net 14,083 14,333 
Gaming rights and other intangibles, net4,235 4,253 
Goodwill9,729 9,723 
Other assets, net1,147 1,236 
Total assets$36,019 $36,385 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable$148 $165 
Accrued interest238 229 
Accrued other liabilities1,307 1,239 
Current portion of long-term debt67 67 
Liabilities related to assets held for sale ($0 and $130 attributable to our VIEs)
744 885 
Total current liabilities2,504 2,585 
Long-term financing obligation12,334 12,295 
Long-term debt14,103 14,073 
Deferred income taxes1,091 1,166 
Other long-term liabilities1,357 1,232 
Total liabilities31,389 31,351 
Commitments and contingencies (Note 8)


STOCKHOLDERS' EQUITY:
Caesars stockholders’ equity4,613 5,016 
Noncontrolling interests17 18 
Total stockholders’ equity4,630 5,034 
Total liabilities and stockholders’ equity$36,019 $36,385 
The accompanying notes are an integral part of these consolidated condensed financial statements.
2


CAESARS ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
(In millions, except per share data)20212020
REVENUES:
Casino and pari-mutuel commissions$1,140 $340 
Food and beverage166 56 
Hotel215 48 
Other178 29 
Net revenues1,699 473 
EXPENSES:
Casino and pari-mutuel commissions541 179 
Food and beverage106 53 
Hotel81 22 
Other68 9 
General and administrative366 98 
Corporate66 16 
Impairment charges 161 
Depreciation and amortization265 50 
Transaction costs and other operating costs20 8 
Total operating expenses1,513 596 
Operating income (loss)186 (123)
OTHER EXPENSE:
Interest expense, net(563)(67)
Other loss(133)(23)
Total other expense(696)(90)
Loss from continuing operations before income taxes(510)(213)
Benefit for income taxes79 37 
Net loss from continuing operations, net of income taxes(431)(176)
Discontinued operations, net of income taxes7  
Net loss(424)(176)
Net loss attributable to noncontrolling interests1  
Net loss attributable to Caesars$(423)$(176)
Net loss per share - basic and diluted:
Basic loss per share from continuing operations$(2.06)$(2.25)
Basic income per share from discontinued operations0.03  
Basic loss per share$(2.03)$(2.25)
Diluted loss per share from continuing operations$(2.06)$(2.25)
Diluted income per share from discontinued operations0.03  
Diluted loss per share$(2.03)$(2.25)
Weighted average basic shares outstanding208 78 
Weighted average diluted shares outstanding208 78 
The accompanying notes are an integral part of these consolidated condensed financial statements.
3


CAESARS ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
Three Months Ended March 31,
(In millions)20212020
Net loss$(424)$(176)
Change in fair market value of interest rate swaps, net of tax12  
Other(1) 
Other comprehensive income, net of tax11  
Comprehensive loss(413)(176)
Comprehensive loss attributable to noncontrolling interests1  
Comprehensive loss attributable to Caesars$(412)$(176)
The accompanying notes are an integral part of these consolidated condensed financial statements.
4


CAESARS ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
Caesars Stockholders’ Equity
Common StockTreasury Stock
(In millions)SharesAmountPaid-in
Capital
Retained
Earnings (Accumulated Deficit)
Accumulated
Other
Comprehensive
Income
AmountNon controlling InterestsTotal Stockholders’ Equity
Balance, December 31, 201978 $ $760 $366 $ $(9)$ $1,117 
Issuance of restricted stock units— — 6 — — — — 6 
Net loss— — — (176)— — — (176)
Shares withheld related to net share settlement of stock awards— — (7)— — — — (7)
Balance, March 31, 202078 $ $759 $190 $ $(9)$ $940 
Balance, December 31, 2020208 $ $6,382 $(1,391)$34 $(9)$18 $5,034 
Issuance of restricted stock units— — 23 — — — — 23 
Net loss— — — (423)— — (1)(424)
Other comprehensive income, net of tax— — — — 11 — — 11 
Shares withheld related to net share settlement of stock awards— — (14)— — — — (14)
Balance, March 31, 2021208 $ $6,391 $(1,814)$45 $(9)$17 $4,630 
The accompanying notes are an integral part of these consolidated condensed financial statements.
5


CAESARS ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended March 31,
(In millions)20212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities$45 $30 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net(65)(23)
Acquisition of gaming rights(2) 
Proceeds from sale of businesses, property and equipment, net of cash sold4 10 
Proceeds from the sale of investments42  
Proceeds from insurance related to property damage26  
Investments in unconsolidated affiliates(30) 
Net cash used in investing activities(25)(13)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities 465 
Repayments of long-term debt and revolving credit facilities(16)(10)
Taxes paid related to net share settlement of equity awards(14)(7)
Net cash provided by (used in) financing activities(30)448 
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities27  
Net cash from discontinued operations27  
Effect of foreign currency exchange rates on cash21  
Increase in cash, cash equivalents and restricted cash38 465 
Cash, cash equivalents and restricted cash, beginning of period4,216 217 
Cash, cash equivalents and restricted cash, end of period$4,254 $682 
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONSOLIDATED CONDENSED BALANCE SHEETS:
Cash and cash equivalents$1,794 $672 
Restricted cash included in restricted cash and investments2,050 4 
Restricted and escrow cash included in other assets, net410 6 
Total cash, cash equivalents and restricted cash$4,254 $682 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid$490 $64 
Income taxes refunded, net(1)(16)
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Payables for capital expenditures33 16 
Land contributed to joint venture61  
The accompanying notes are an integral part of these consolidated condensed financial statements.
6

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
The accompanying consolidated condensed financial statements include the accounts of Caesars Entertainment, Inc., a Delaware corporation, and its consolidated subsidiaries which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us” within these financial statements.
This Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2020 Annual Report.
We also refer to (i) our Consolidated Condensed Financial Statements as our “Financial Statements,” (ii) our Consolidated Condensed Balance Sheets as our “Balance Sheets,” (iii) our Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Loss as our “Statements of Operations,” and (iv) our Consolidated Condensed Statements of Cash Flows as our “Statements of Cash Flows.”
Note 1. Organization and Basis of Presentation
Organization
The Company is a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the Eldorado Hotel Casino in Reno, Nevada. The Company partnered with MGM Resorts International to build Silver Legacy Resort Casino in Reno, Nevada in 1993 and, beginning in 2005, grew through a series of acquisitions, including the acquisition of Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) in 2005, MTR Gaming Group, Inc. in 2014, Circus Circus Reno and the 50% membership interest in the Silver Legacy that was owned by MGM Resorts International in 2015, Isle of Capri Casinos, Inc. (“Isle” or “Isle of Capri”) in 2017 and Grand Victoria Casino (“Elgin”) and Tropicana Entertainment, Inc. (“Tropicana”) in 2018.
On July 20, 2020, the Company completed the merger with Caesars Entertainment Corporation (“Former Caesars”) pursuant to which Former Caesars became a wholly-owned subsidiary of the Company (the “Merger”).
The Company owns, leases or manages an aggregate of 54 domestic properties in 16 states with approximately 54,600 slot machines, video lottery terminals (“VLTs”) and e-tables, approximately 3,200 table games and approximately 47,700 hotel rooms as of March 31, 2021. We also have international operations in five countries outside of the U.S. In addition, we have other domestic and international properties that are authorized to use the brands and marks of Caesars Entertainment, Inc., as well as other non-gaming properties. Upon completion of our previously announced sales, or expected sales, of certain gaming properties, we expect to continue to own, lease or manage 48 properties. See Note 15 for segment information. The Company’s primary source of revenue is generated by gaming operations, and the Company utilizes its hotels, restaurants, bars, entertainment, racing, sportsbook offerings, retail shops and other services to attract customers to its properties.
The Company has entered into several agreements to divest of certain properties and initiated plans to divest of other assets, including non-core properties or divestitures required by regulatory agencies. See Note 2 for further discussion of the Merger and other transactions and Note 3 for a discussion of properties recently sold or currently held for sale.
Certain properties, including Harrah’s Louisiana Downs, Caesars Southern Indiana, Horseshoe Hammond, and Caesars UK group, including Emerald Resort & Casino, met held for sale criteria as of the date of the closing of the Merger. The sales of these properties are expected to close within one year and the properties are classified as discontinued operations.
Acquisition of William Hill
On September 30, 2020, the Company announced that it had reached an agreement with William Hill PLC on the terms of a recommended cash acquisition pursuant to which the Company would acquire the entire issued and to be issued share capital (other than shares owned by the Company or held in treasury) of William Hill PLC, in an all-cash transaction of approximately £2.9 billion. In order to manage the risk of appreciation of the GBP denominated purchase price the Company entered into foreign exchange forward contracts, which were settled as of March 31, 2021. See Note 7.
On September 29, 2020, the Company entered into a debt financing commitment letter pursuant to which the lenders party thereto committed to arrange and provide a newly formed subsidiary of the Company with (a) a £1.0 billion senior secured 540-day bridge loan facility, (b) a £116 million senior secured 540-day revolving credit facility and (c) a £503 million senior secured 60-day bridge loan facility (collectively, the “Debt Financing”), which was amended and restated on December 11, 2020 in order to join additional lenders as parties thereto.
Pending negotiation of the definitive loan agreement for the Debt Financing, on October 6, 2020, a newly formed subsidiary of the Company entered into a £1.5 billion Interim Facilities Agreement (the “Interim Facilities Agreement”) with Deutsche Bank
7

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
AG, London Branch and JPMorgan Chase Bank, N.A. to provide: (a) a 90-day £1.0 billion interim asset sale bridge facility and (b) a 90-day £503 million interim cash confirmation bridge facility, which Interim Facilities Agreement was amended and restated on December 11, 2020 in order to join additional lenders as parties thereto.
On April 20, 2021, a UK Court sanctioned the proposed acquisition and on April 22, 2021, the Company completed the acquisition of William Hill PLC for £2.9 billion, or approximately $4.0 billion (the “William Hill Acquisition”). See Note 2.
In addition to the financing transactions described above, certain net assets of Caesars and William Hill will be assessed in determining the consideration transferred and the allocation of the purchase price.
In connection with the William Hill Acquisition, on April 22, 2021, a newly formed subsidiary of the Company entered into a Credit Agreement (the “Bridge Credit Agreement”) with certain lenders party thereto and Deutsche Bank AG, London Branch, as administrative agent and collateral agent, pursuant to which the lenders party thereto provided the Debt Financing. The Bridge Credit Agreement provides for (a) a 540-day £1.0 billion asset sale bridge facility, (b) a 60-day £503 million cash confirmation bridge facility and (c) a 540-day £116 million revolving credit facility. The proceeds of the bridge loan facilities provided under the Bridge Credit Agreement were used (i) to pay a portion of the cash consideration for the acquisition and (ii) to pay fees and expenses related to the acquisition and related transactions. The proceeds of the revolving credit facility under the Bridge Credit Agreement will be used for working capital and general corporate purposes. The Interim Facilities Agreement was terminated upon the execution of the Bridge Credit Agreement for the Debt Financing. The Bridge Credit Agreement is included within William Hill’s non-U.S. operations which is expected to be divested.
Reclassifications
Certain reclassifications of prior year presentations have been made to conform to the current period presentation. Marketing and promotions expense previously disclosed for the three months ended March 31, 2020 has been reclassified to Casino and pari-mutuel commissions expense and General and administrative expense based on the nature of the expense.
Basis of Presentation
The accompanying unaudited consolidated condensed financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments, all of which are normal and recurring, considered necessary for a fair presentation. The results of operations for these interim periods are not necessarily indicative of the operating results for other quarters, for the full year or any future period. See Note 15 for a listing of properties included in each segment and the determination of our segments.
The presentation of financial information herein for the period after the Company’s acquisition of Former Caesars on July 20, 2020 is not fully comparable to the periods prior to the acquisition. In addition, the presentation of financial information herein for the periods after the Company’s sales of various properties are not fully comparable to the periods prior to their respective sale dates. See Note 2 for further discussion of the Merger and related transactions and Note 3 for properties recently sold or currently held for sale.
Consolidation of Subsidiaries and Variable Interest Entities
Our consolidated condensed financial statements include the accounts of Caesars and its subsidiaries after elimination of all intercompany accounts and transactions.
We consolidate all subsidiaries in which we have a controlling financial interest and variable interest entities (“VIEs”) for which we or one of our consolidated subsidiaries is the primary beneficiary. Control generally equates to ownership percentage, whereby (i) affiliates that are more than 50% owned are consolidated; (ii) investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method where we have determined that we have significant influence over the entities; and (iii) investments in affiliates of 20% or less are generally accounted for as investments in equity securities.
We consider ourselves the primary beneficiary of a VIE when we have both the power to direct the activities that most significantly affect the results of the VIE and the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. We review our investments for VIE consideration if a reconsideration event occurs to determine if the investment continues to qualify as a VIE. If we determine an investment no longer qualifies as a VIE, there may be a material effect to our financial statements.
8

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Consolidation of Korea Joint Venture
The Company had a joint venture to acquire, develop, own, and operate a casino resort project in Incheon, South Korea (the “Korea JV”). We determined that the Korea JV was a VIE and the Company was the primary beneficiary, and therefore, we had consolidated the Korea JV into our financial statements. As of December 31, 2020, the assets and liabilities of the Korea JV were classified as held for sale and consisted of $130 million of Property and equipment and other assets and $130 million of current and other long-term liabilities. We sold our interest in the Korea JV on January 21, 2021 and derecognized its assets and liabilities from our Balance Sheets. There was no gain or loss associated with the sale.
Recent Developments Related to COVID-19
In January 2020, an outbreak of a new strain of coronavirus (“COVID-19”) was identified and has since spread throughout much of the world, including the U.S. All of the Company’s casino properties were temporarily closed for the period from mid-March 2020 through mid-May 2020 due to orders issued by various government agencies and tribal bodies as part of certain precautionary measures intended to help slow the spread of the COVID-19 public health emergency. The Company has resumed certain operations at substantially all of our properties as of March 31, 2021, with the exception of Lake Charles which was severely damaged by Hurricane Laura (See Note 8), and many of our international properties. During the three months ended March 31, 2021, most of our properties have experienced positive trends as restrictions on maximum capacities and amenities available are eased.
The Company continued to pay its full-time employees through April 10, 2020, including tips and tokens. Effective April 11, 2020, the Company furloughed approximately 90% of its employees, implemented salary reductions and committed to continue to provide benefits to its employees through their furloughed period. A portion of the Company’s workforce has returned to service as the properties have resumed operations with limited capacities and in compliance with operating restrictions imposed by governmental or tribal orders, directives, and guidelines. Due to a triggering event resulting from the COVID-19 public health emergency, the Company recognized impairment charges of $116 million related to goodwill and trade names during the three months ended March 31, 2020.
The COVID-19 public health emergency has had, and continues to have, a material adverse effect on the Company’s business, financial condition and results of operations for the three months ended March 31, 2021 and 2020. As a result, the terms of our debt arrangements provide that the financial covenant measurement period is not effective through September 30, 2021, so long as we comply with a minimum liquidity requirement. See Note 9. In addition, on March 19, 2021, the Company filed a lawsuit against its insurance carriers for losses attributed to COVID-19 public health emergency. See Note 8.
Although the Company is experiencing positive operating trends thus far in 2021, the extent of the ongoing and future effects of the COVID-19 public health emergency on the Company’s business and the casino resort industry generally is uncertain. The extent and duration of the negative impact of COVID-19 public health emergency will ultimately depend on future developments, including but not limited to, the duration and severity of the outbreak, restrictions on operations imposed by governmental authorities, the potential for authorities reimposing stay at home orders or additional restrictions in response to continued developments with the COVID-19 public health emergency, the Company’s ability to adapt to evolving operating procedures, the impact on consumer demand and discretionary spending, the length of time it takes for demand to return, the efficacy and availability of vaccines, and the Company’s ability to adjust its cost structures for the duration of the outbreak’s effect on its operations.
Recently Issued Accounting Pronouncements
The Financial Accounting Standards Board (the “FASB”) issued the following authoritative guidance amending the FASB Accounting Standards Codification (“ASC”).
Effective January 1, 2021, we adopted the following Accounting Standards Updates (“ASU”) which did not have a material effect on our financial statements:
ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General
The following ASUs were not implemented as of March 31, 2021:
Previously Disclosed
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform. The amendments in this update are intended to provide relief to the companies that have contracts, hedging relationships or other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate which is expected to be discontinued because of reference rate reform.
9

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions if certain criteria are met. The amendments in this update are effective as of March 12, 2020 and companies may elect to apply the amendments prospectively through December 31, 2022. The Company has not yet adopted this new guidance and is evaluating the qualitative and quantitative effect the new guidance will have on its Financial Statements.
In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging. This update amends guidance on convertible instruments and the guidance on derivative scope exception for contracts in an entity’s own equity. The amendments for convertible instruments reduce the number of accounting models for convertible debt instruments and convertible preferred stock. In addition, the amendments provide guidance on instruments that will continue to be subject to separation models and improves disclosure for convertible instruments and guidance for earnings per share. Furthermore, the update amends guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. The amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. These amendments should be applied on either a modified retrospective basis or a fully retrospective basis. The Company is currently assessing the effect the adoption of this standard will have on its Financial Statements.
Note 2. Acquisitions and Purchase Price Accounting
Merger with Caesars Entertainment Corporation
On July 20, 2020, the Merger was consummated and Former Caesars became a wholly-owned subsidiary of the Company. The strategic rationale for the Merger includes, but is not limited to, the following:
Creation of the largest owner, operator and manager of domestic gaming assets
Diversification of the Company’s domestic footprint
Access to iconic brands, rewards programs and new gaming opportunities expected to enhance customer experience
Realization of significant identified synergies
The total purchase consideration for Former Caesars was $10.9 billion. The estimated purchase consideration in the acquisition was determined with reference to its acquisition date fair value.
(In millions)Consideration
Cash consideration paid$6,090 
Shares issued to Former Caesars shareholders (a)
2,381 
Cash paid to retire Former Caesars debt2,356 
Other consideration paid48 
Total purchase consideration$10,875 

____________________
(a)Former Caesars common stock was converted into the right to receive approximately 0.3085 shares of Company Common Stock, with a value equal to approximately $12.41 in cash (based on the volume weighted average price per share of Company Common Stock for the ten trading days ending on July 16, 2020).
Preliminary Purchase Price Allocation
The fair values are based on management’s analysis including preliminary work performed by third party valuation specialists, which are subject to finalization over the one-year measurement period. The purchase price accounting for Former Caesars is preliminary as it relates to determining the fair value of certain assets and liabilities, including goodwill, and is subject to change. The following table summarizes the preliminary allocation of the purchase consideration to the identifiable assets acquired and liabilities assumed of Former Caesars, with the excess recorded as goodwill as of March 31, 2021:
10

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions)Fair Value
Current and other assets$4,149 
Property and equipment12,691 
Goodwill8,928 
Intangible assets (a)
3,364 
Other noncurrent assets676 
Total assets$29,808 
Current liabilities$1,844 
Financing obligation8,149 
Long-term debt6,591 
Noncurrent liabilities2,331 
Total liabilities18,915 
Noncontrolling interests18 
Net assets acquired$10,875 
____________________
(a)Intangible assets consist of gaming rights valued at $388 million, trade names valued at $2.1 billion, Caesars Rewards programs valued at $523 million and customer relationships valued at $403 million.
As noted above, the preliminary purchase price allocation is subject to a measurement period and our estimates as of December 31, 2020 have been revised as of March 31, 2021. The net impact of these changes in our preliminary valuations was a $6 million increase to goodwill, $8 million increase to current liabilities and $2 million decrease to noncurrent liabilities. The effect of these revisions during the quarter did not have any impact on our Statements of Operations.
The fair values of the assets acquired and liabilities assumed were determined using the market, income, and cost approaches, or a combination. Valuation methodologies under both a market and income approach used for the identifiable net assets acquired in the Former Caesars acquisition make use of Level 3 inputs, such as expected cash flows and projected financial results. The market approach indicates value for a subject asset based on available market pricing for comparable assets.
Trade receivables and payables and other current and noncurrent assets and liabilities were valued at the existing carrying values as they represented the estimated fair value of those items at the Former Caesars acquisition date. Assets and liabilities held for sale are recorded at fair value, less costs to sell, based on the agreements reached as of the acquisition date, or an income approach.
Certain financial assets acquired were determined to have experienced more than insignificant deterioration of credit quality since origination. A reconciliation of the difference between the purchase price of financial assets, including acquired markers, and the face value of the assets is as follows:
(In millions)
Purchase price of financial assets$95 
Allowance for credit losses at the acquisition date based on the acquirer’s assessment
89 
Discount (premium) attributable to other factors2 
Face value of financial assets$186 
The fair value of land was determined using the sales comparable approach. The market data is then adjusted for any significant differences, to the extent known, between the identified comparable sites and the site being valued. The value of building and site improvements was estimated via the income approach. Other personal property assets such as furniture, gaming and computer equipment, fixtures, computer software, and restaurant equipment were valued using the cost approach which is based on replacement or reproduction costs of the asset. The cost approach is an estimation of fair value developed by computing the current cost of replacing a property and subtracting any depreciation resulting from one or more of the following factors: physical deterioration, functional obsolescence, and/or economic obsolescence.
Non-amortizing intangible assets acquired primarily include trademarks, Caesars Rewards and gaming rights. The fair value for these intangible assets was determined using either the relief from royalty method and excess earnings method under the income approach or a replacement cost market approach.
11

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Trademarks and Caesars Rewards were valued using the relief from royalty method, which presumes that without ownership of such trademarks or loyalty program, the Company would have to make a stream of payments to a brand or franchise owner in return for the right to use their name or program. By virtue of this asset, the Company avoids any such payments and records the related intangible value of the Company’s ownership of the brand name or program. The acquired trademarks, including Caesars Rewards are indefinite lived intangible assets.
Customer relationships are valued using an income approach, comparing the prospective cash flows with and without the customer relationships in place to estimate the fair value of the customer relationships, with the fair value assumed to be equal to the discounted cash flows of the business that would be lost if the customer relationships were not in place and needed to be replaced. We estimate the useful life of these customer relationships to be approximately seven years from the Merger date.
Gaming rights include our gaming licenses in various jurisdictions and may have indefinite lives or an estimated useful life. The fair value of the gaming rights was determined using the excess earnings or replacement cost methodology, based on whether the license resides in gaming jurisdictions where competition is limited to a specified number of licensed gaming operators. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the gaming license intangible asset, which is net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets. The replacement cost of the gaming license was used as an indicator of fair value. The acquired gaming rights have indefinite lives, with the exception of one jurisdiction in which we estimate the useful life of the license to be approximately 34 years.
Goodwill is the result of expected synergies from the operations of the combined company and the assembled workforce of Former Caesars. The final assignment of goodwill to our reporting units has not been completed. The goodwill acquired will not generate amortization deductions for income tax purposes.
The fair value of long-term debt has been calculated based on market quotes. The fair value of the financing obligations were calculated as the net present value of both the fixed base rent payments and the forecasted variable payments plus the expected residual value of the land and building returned at the end of the expected usage period.
The Company recognized acquisition-related transaction costs in connection with the Merger of $12 million and $9 million for the three months ended March 31, 2021 and 2020, respectively. These costs were associated with legal, IT costs, internal labor and professional services and were recorded in Transaction costs and other operating costs in our Statements of Operations.
For the period of January 1, 2021 through March 31, 2021, the properties of Former Caesars generated net revenues of $1.3 billion, excluding discontinued operations, and net loss of $482 million.
Acquisition of William Hill
On April 22, 2021, we completed the previously announced acquisition of William Hill PLC for cash consideration of approximately £2.9 billion, or approximately $4.0 billion, based on the GBP:USD exchange rate on the closing date.
Currently, William Hill PLC’s U.S. subsidiary, William Hill U.S. Holdco (“William Hill US” and together with William Hill PLC, “William Hill”) operates 37 sportsbooks at our properties in eight states (see Note 4) and, following the William Hill Acquisition, Caesars and William Hill will conduct sports wagering across 17 states across the U.S. plus the District of Columbia. Additionally, we will operate regulated online real money gaming businesses in four states — Nevada, Pennsylvania, New Jersey, and Michigan — and continue to leverage the World Series of Poker (“WSOP”) brand, and license the WSOP trademarks for a variety of products and services. Extensive usage of digital platforms and growing bettor demand are driving the market for online sports betting platforms in the U.S. and the William Hill Acquisition positions us to address this growing market. The Company intends to divest the non-U.S. operations including the UK and international online divisions and the retail betting shops.
The Company previously held an equity interest in William Hill PLC and William Hill US (see Note 4). Accordingly, the acquisition will be accounted for as a business combination achieved in stages, or a “step acquisition.” The major classes of assets acquired include cash and cash equivalents, trade and other accounts receivable, property and equipment, intangible assets, and other assets. The major classes of liabilities assumed include trade and other accounts payable, accrued expenses, long-term debt and other liabilities. Certain of the net assets of William Hill are the result of transactions with Caesars. Such net assets will be assessed and may be eliminated in connection with the William Hill Acquisition.
Given the short period of time from the acquisition completion date and the date of these consolidated condensed financial statements, and the size and complexity of the transaction, the initial accounting for the business combination is incomplete at this time. The Company is not able to provide the valuation of certain components of consideration transferred or provide the
12

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
allocation of consideration paid to the assets acquired or liabilities assumed. Supplemental pro forma revenue and earnings of the combined company are predicated on the completion of the business combination accounting and allocation of consideration.
The Company recognized acquisition-related transaction costs of $5 million for the three months ended March 31, 2021.
Note 3. Assets Held for Sale
The Company periodically divests assets that it does not consider core to its business to raise capital or, in some cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities. The carrying value of the net assets held for sale are compared to the expected selling price and any expected losses are recorded immediately. Gains or losses associated with the disposal of assets held for sale are recorded within other operating costs, unless the assets represent a discontinued operation.
Held for sale - Continuing operations
MontBleu, Evansville and Baton Rouge
On April 6, 2021, the Company consummated the sale of the equity interests of MontBleu Casino Resort & Spa (“MontBleu”) to Bally’s Corporation (formerly Twin River Worldwide Holdings, Inc.) for $15 million, subject to a customary working capital adjustment, resulting in a loss of approximately $2 million. The purchase price for MontBleu is due no later than the first anniversary of the consummation of the transaction. MontBleu’s assets and liabilities were held for sale as of March 31, 2021, and the results of operations are included in income from continuing operations in the periods presented.
As a result of the execution of the agreement to sell MontBleu, an impairment charge totaling $45 million was recorded during the three months ended March 31, 2020 due to the carrying value exceeding the estimated net sales proceeds. The impairment charges resulted in a reduction to the carrying amounts of the right-of-use assets, property and equipment, and goodwill and other intangibles totaling $18 million, $23 million and $4 million, respectively. MontBleu was within the Regional segment.
On July 16, 2020, in connection with its review of the Merger, the Indiana Gaming Commission determined as a condition to their approval of the Merger that the Company will be required to divest three properties within the state of Indiana in order to avoid undue economic concentration. On October 27, 2020, the Company entered into an agreement to sell the equity interests of Tropicana Evansville (“Evansville”) to Gaming and Leisure Properties, Inc. (“GLPI”) and Bally’s Corporation for $480 million, subject to a customary working capital adjustment. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in mid-2021. On December 24, 2020, the Company entered into an agreement to sell the equity interests of Caesars Southern Indiana. In addition, the Company plans to enter into an agreement to sell Horseshoe Hammond prior to December 31, 2021. Evansville met the requirements for presentation as assets held for sale as of March 31, 2021, while Caesars Southern Indiana and Horseshoe Hammond met the requirements for presentation as discontinued operations (see discussion below).
On December 1, 2020, the Company entered into a definitive agreement with CQ Holding Company, Inc. to sell the equity interests of Belle of Baton Rouge Casino & Hotel (“Baton Rouge”). The definitive agreement provides that the consummation of the sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the third quarter of 2021. Baton Rouge met the requirements for presentation as assets held for sale as of March 31, 2021.
13

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
The assets and liabilities held for sale of continuing operations, accounted for at carrying value unless fair value is lower, were as follows as of March 31, 2021 and December 31, 2020:
March 31, 2021
(In millions)MontBleuEvansvilleBaton Rouge
Assets:
Cash$2 $8 $2 
Property and equipment, net37 302 2 
Goodwill 9  
Gaming licenses and other intangibles, net 138  
Other assets, net33 33 1 
Assets held for sale$72 $490 $5 
Current liabilities$8 $11 $3 
Other long-term liabilities63 13 1 
Liabilities related to assets held for sale$71 $24 $4 
December 31, 2020
(In millions)MontBleuEvansvilleBaton Rouge
Assets:
Cash$3 $7 $2 
Property and equipment, net37 302 2 
Goodwill 9  
Gaming licenses and other intangibles, net 138  
Other assets, net32 49 1 
Assets held for sale$72 $505 $5 
Current liabilities$8 $12 $2 
Other long-term liabilities63 24 1 
Liabilities related to assets held for sale$71 $36 $3 
The following information presents the net revenues and net income (loss) for the Company’s properties considered continuing operations, that are held for sale:
Three Months Ended March 31, 2021
(In millions)MontBleuEvansvilleBaton Rouge
Net revenues$11 $31 $4 
Net income (loss)4 13 (1)
Three Months Ended March 31, 2020
(In millions)MontBleuEvansvilleBaton Rouge
Net revenues$9 $33 $6 
Net income (loss)(42)1 (10)
Held for sale - Sold
Eldorado Shreveport, Kansas City and Vicksburg Divestitures
Prior to their respective closing dates, Eldorado Shreveport, Isle of Capri Casino Kansas City (“Kansas City”), and Lady Luck Casino Vicksburg (“Vicksburg”) met the requirements for presentation as assets held for sale under GAAP. However, they did not meet the requirements for presentation as discontinued operations. All properties were previously reported in the Regional segment.
14

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
The following information presents the net revenues and net income of held for sale properties, which were recently sold, for the three months ended March 31, 2020:
Three Months Ended March 31, 2020
(In millions)Eldorado ShreveportKansas CityVicksburg
Net revenues$23 $14 $5 
Net income2 3  
Held for sale - Discontinued operations
As result of the Merger, certain Former Caesars properties, including Harrah’s Louisiana Downs, Caesars Southern Indiana, Horseshoe Hammond, and Caesars UK group, including Emerald Resorts & Casino met held for sale criteria as of the date of the closing of the Merger. The sales of these properties have or are expected to close within one year and the properties are classified as discontinued operations. Caesars UK group, including Emerald Resorts & Casino, is within the Managed, International, CIE segment while all other discontinued operations are in the Regional segment.
On September 3, 2020, the Company and VICI Properties L.P., a Delaware limited partnership (“VICI”) entered into an agreement to sell the equity interests of Harrah’s Louisiana Downs to Rubico Acquisition Corp. for $22 million, subject to a customary working capital adjustment, which proceeds will be split between the Company and VICI. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the third quarter of 2021.
On December 24, 2020, the Company entered into an agreement to sell the equity interests of Caesars Southern Indiana to the Eastern Band of Cherokee Indians (“EBCI”) for $250 million, subject to customary purchase price adjustments. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals, and is expected to close in the third quarter of 2021.
The following information presents the net revenues and net income (loss) for the Company’s properties that are part of discontinued operations for the three months ended March 31, 2021:
Three Months Ended March 31, 2021
(In millions)Harrah’s Louisiana DownsHorseshoe HammondCaesars UKCaesars Southern Indiana
Net revenues$13 $93 $10 $49 
Net income (loss)4 14 (7) 
The assets and liabilities held for sale as discontinued operations, accounted for at carrying value unless fair value was lower, were as follows as of March 31, 2021 and December 31, 2020:
March 31, 2021
(In millions)Harrah’s Louisiana DownsHorseshoe HammondCaesars UKCaesars Southern Indiana
Assets:
Cash$7 $16 $18 $8 
Property and equipment, net10 405 75 415 
Goodwill3 141 3 136 
Gaming licenses and other intangibles, net5 30 29 23 
Other assets, net 37 114 4 
Assets held for sale$25 $629 $239 $586 
Current liabilities$8 $28 $65 $17 
Other long-term liabilities (a)
5 72 116 334 
Liabilities related to assets held for sale$13 $100 $181 $351 
15

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
December 31, 2020
(In millions)Harrah’s Louisiana DownsHorseshoe HammondCaesars UKCaesars Southern Indiana
Assets:
Cash$6 $18 $32 $8 
Property and equipment, net11 402 75 418 
Goodwill3 141 3 136 
Gaming licenses and other intangibles, net5 30 28 23 
Other assets, net 38 117 4 
Assets held for sale$25 $629 $255 $589 
Current liabilities$6 $26 $73 $13 
Other long-term liabilities (a)
6 72 120 332 
Liabilities related to assets held for sale$12 $98 $193 $345 
____________________
(a)We have included $339 million and $336 million of deferred finance obligation as of March 31, 2021 and December 31, 2020, respectively, as held for sale liabilities for Caesars Southern Indiana and Harrah’s Louisiana Downs, which represent our preliminary purchase price allocation of the liability which will be derecognized upon completion of those divestitures. We have not included any portion of the deferred finance obligation associated with Horseshoe Hammond as held for sale as we do not yet have any sale agreements in place or know the effect of any possible master lease modification on our deferred finance lease liability.
Note 4. Investments in and Advances to Unconsolidated Affiliates
William Hill
The Company entered into a 25-year agreement, which became effective January 29, 2019, with William Hill which granted to William Hill the right to conduct betting activities, including operating our sportsbooks, in retail channels under certain skins for online channels with respect to the Company’s current and future properties, and conduct certain real money online gaming activities. The Company received a 20% ownership interest in William Hill US as well as 13 million ordinary shares of William Hill PLC, which shares initially received were subject to restrictions on transfer. The time restrictions on approximately 6 million shares expire within the next twelve months and are classified as current. Additionally, the Company receives a profit share from the operations of sports betting and other gaming activities associated with the Company’s properties. “Skin” in the context of this agreement refers to the Company’s ability to grant to William Hill an online channel that allows William Hill to operate online casino and sports gaming activities in reliance on, and utilizing the benefit of, any licenses granted to the Company or its subsidiaries.
As of March 31, 2021 and December 31, 2020, the Company’s receivable from William Hill totaled $13 million and $7 million, respectively, and is reflected in Due from affiliates on the Balance Sheets.
The Company is accounting for its investment in William Hill US under the equity method. The fair value of the Company’s initial investment in William Hill US of $129 million at January 29, 2019 was determined using Level 3 inputs. As of March 31, 2021 and December 31, 2020, the carrying value of the Company’s interest in William Hill US totaled $126 million and $128 million, respectively, and is recorded in Investment in and advances to unconsolidated affiliates on the Balance Sheets.
The Company is accounting for its investment in William Hill PLC as an investment in equity securities. As of March 31, 2021 and December 31, 2020, the fair value of the William Hill PLC shares totaled $45 million and $44 million, respectively, net of cumulative unrealized gains of $18 million and $17 million, respectively, and is included in Other assets, net on the Balance Sheets. The Company recorded an unrealized gain of $1 million and an unrealized loss of $19 million during the three months ended March 31, 2021 and 2020, respectively.
As described above, the Company granted William Hill the right to the use of certain skins to operate online sports betting operations through our market access in each state and operate retail sports betting in our current and future properties for an equity method investment. The fair value of the William Hill US and William Hill PLC shares received have been deferred and are recognized as revenue on a straight-line basis over the 25-year agreement term. The Company recognized revenue of $2 million for the three months ended March 31, 2021 and 2020, and is recorded in Other revenue in the Statements of Operations.
16

CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
As of March 31, 2021 and December 31, 2020, the balance of the William Hill deferred revenue totaled $132 million and $134 million, respectively, and is recorded in other long-term liabilities on the Balance Sheets.
On April 22, 2021, the Company consummated its previously announced acquisition of William Hill PLC in an all-cash transaction. See Note 1. The investments and transactions among Caesars and William Hill described above will be assessed as part of the consideration transferred and the allocation of the purchase price. See Note 2.
Pompano Joint Venture
In April 2018, the Company entered into a joint venture with Cordish Companies (“Cordish”) to plan and develop a mixed-use entertainment and hospitality destination expected to be located on unused land adjacent to the casino and racetrack at the Company’s Pompano property. As the managing member, Cordish will operate the business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation of the various phases of the project. Additionally, Cordish will be responsible for the development of the master plan for the project with the Company’s input and will submit it for the Company’s review and approval. The Company has made cash contributions totaling $1 million and has contributed land. On February 12, 2021, the Company contributed an additional 186 acres to the joint venture for a fair value of $61 million. Total contributions of approximately 206 acres of land have been made with a fair value of approximately $69 million, and the Company has no further obligation to contribute additional real estate or cash as of March 31, 2021. We entered into a short-term lease agreement in February 2021, which we can cancel at anytime, to lease back a portion of the land from the joint venture.
While the Company holds a 50% variable interest in the joint venture, it is not the primary beneficiary; as such the investment in the joint venture is accounted for using the equity method. The Company participates evenly with Cordish in the profits and losses of the joint venture, which are included in Transaction costs and other operating costs on the Statements of Operations. As of March 31, 2021 and December 31, 2020, the Company’s investment in the joint venture is recorded in Investment in and advances to unconsolidated affiliates on the Balance Sheets.
Note 5. Property and Equipment
(In millions)March 31, 2021December 31, 2020
Land$2,113 $2,174 
Buildings, riverboats, and leasehold and land improvements11,702 11,686 
Furniture, fixtures, and equipment1,426 1,404 
Construction in progress134 118 
Total property and equipment15,375 15,382 
Less: accumulated depreciation(1,292)(1,049)
Total property and equipment, net$14,083 $14,333 
Our property and equipment is subject to various operating leases for which we are the lessor. We lease our property and equipment related to our hotel rooms, convention space and retail space through various short-term and long-term operating leases.
Depreciation Expense
Three Months Ended March 31,
(In millions)20212020
Depreciation expense$245 $43 
Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the asset or the related lease.
Note 6. Goodwill and Intangible Assets, net
The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. The Company determines