Acquisitions, Investments, Dispositions and Divestitures

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Acquisitions, Investments, Dispositions and Divestitures

Acquisitions, Investments, Dispositions and Divestitures

Acquisitions

Buffalo Studios, LLC and Bubbler Media

In December 2012, CIE purchased substantially all of the net assets of Buffalo Studios, LLC ("Buffalo"), a social and mobile games developer and owner of Bingo Blitz, for consideration of $45.2 million plus an earnout payment with an acquisition date fair value estimated at $5.6 million. During the first quarter 2013, the estimated fair value of the earnout was increased to $58.0 million, with a charge to acquisition and integration costs of $52.4 million.

In September 2012, CIE purchased the assets of Bubbler Media ("Bubbler") a social and mobile games developer based in Belarus, for consideration of approximately $7.5 million.

The purchase prices of Buffalo and Bubbler were allocated based on estimated fair values of the assets acquired and liabilities assumed, with the excess of the purchase price over the estimated fair value of the net tangible and intangible assets acquired recorded as goodwill. The preliminary purchase price allocations include total assets, liabilities and net assets acquired of Buffalo of $52.9 million, $7.7 million and $45.2 million, respectively. The preliminary purchase price allocations include net assets acquired of Bubbler of $7.5 million. The Company has not yet finalized its purchase price allocations for either of these transactions and is in the process of performing final reviews of the values assigned to assets acquired and liabilities assumed for both transactions.

Dispositions

Harrah's St. Louis

On November 2, 2012, the Company sold its Harrah's St. Louis casino and recorded a pre-tax gain of $9.3 million on the sale. In March 2013, upon resolution of the working capital adjustment in connection with such sale, the Company recorded a $0.7 million reduction to the originally recorded pre-tax gain. We have presented the results of the Harrah's St. Louis casino as discontinued operations in our Consolidated Condensed Statements of Operations for the quarters ended March 31, 2013 and 2012. See “Discontinued Operations” below.

Macau Land Concession

In the fourth quarter of 2012, the Company began discussions with interested investors regarding a sale of the subsidiaries that hold a land concession in Macau. As a result of this plan of disposal, the assets and liabilities have been classified as held for sale in our Consolidated Condensed Balance Sheets at March 31, 2013 and December 31, 2012. During the quarter ended March 31, 2013, the Company recorded a tangible asset impairment charge of $21.0 million related to the land concession. We have presented the operations of the business as discontinued operations in the Consolidated Condensed Statements of Operations for the quarter ended March 31, 2013 and 2012. See “Discontinued Operations” below.

Alea Leeds

On March 4, 2013, we permanently closed our Alea Leeds casino in England. As a result of the closure, during the quarter ended March 31, 2013, we recorded charges of $5.7 million related to the write-down of tangible and intangible assets, net of currency translation adjustment and $15.8 million related to exit costs comprised of non-cancellable contract costs of $15.1 million, employment related costs of $0.5 million and other costs in the amount of $0.2 million. We have presented the operations of Alea Leeds casino as discontinued operations in the Consolidated Condensed Statements of Operations for the quarters ended March 31, 2013 and 2012. See “Discontinued Operations” below.

Discontinued Operations

Assets and liabilities classified as held for sale are as follows:

(In millions)	March 31, 2013		December 31, 2012
Assets
Cash and cash equivalents	$	4.8	$	4.7
Other current assets	0.4		0.4
Assets held for sale, current	$	5.2	$	5.1
Property and equipment, net	$	442.6	$	471.2
Assets held for sale, non-current	$	442.6	$	471.2
Liabilities
Accounts payable and accrued expenses	$	3.5	$	3.8
Liabilities held for sale, current	$	3.5	$	3.8
Deferred credits and other	$	0.3	$	0.2
Deferred income taxes	49.4		51.9
Liabilities held for sale, non-current	$	49.7	$	52.1

Net revenues, pre-tax (loss)/income from operations, and (loss)/income, net of income taxes presented as discontinued operations are as follows:

	Quarter Ended March 31,
(In millions)	2013			2012
Net revenues
Harrah's St. Louis	$	—		$	63.5
Macau	1.0			0.9
Alea Leeds	0.7			1.4
Total net revenues	$	1.7		$	65.8
Pre-tax (loss)/income from operations
Harrah's St. Louis	$	(0.7	)	$	19.1
Macau	(20.7		)	(3.7		)
Alea Leeds	(22.4		)	(1.2		)
Total pre-tax (loss)/income from discontinued operations	$	(43.8	)	$	14.2
(Loss)/income, net of income taxes
Harrah's St. Louis	$	(0.4	)	$	11.6
Macau	(18.2		)	(3.1		)
Alea Leeds	(22.4		)	(1.2		)
Total (loss)/income from discontinued operations, net of income taxes	$	(41.0	)	$	7.3