x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
62-1411755
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
One Caesars Palace Drive, Las Vegas, Nevada
|
|
89109
|
(Address of principal executive offices)
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|
(Zip Code)
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Large accelerated filer
|
o
|
Accelerated filer
|
x
|
|
|
|
|
Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
Class
|
Outstanding at August 1, 2016
|
Common stock, $0.01 par value
|
146,922,790
|
|
|
|
Page
|
||
Item 1.
|
|
|
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||
|
||
|
||
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||
|
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Item 2.
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||
Item 3.
|
||
Item 4.
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||
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|
|
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||
Item 1.
|
||
Item 1A.
|
||
Item 2.
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||
Item 3.
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||
Item 4.
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||
Item 5.
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||
Item 6.
|
||
(In millions)
|
June 30, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents ($1,133 and $1,060 attributable to our VIEs)
|
$
|
1,525
|
|
|
$
|
1,338
|
|
Restricted cash ($4 and $4 attributable to our VIEs)
|
56
|
|
|
59
|
|
||
Receivables, net ($129 and $123 attributable to our VIEs)
|
200
|
|
|
193
|
|
||
Due from affiliates ($25 and $32 attributable to our VIEs)
|
25
|
|
|
32
|
|
||
Prepayments and other current assets ($58 and $51 attributable to our VIEs)
|
126
|
|
|
128
|
|
||
Inventories ($5 and $7 attributable to our VIEs)
|
16
|
|
|
21
|
|
||
Total current assets
|
1,948
|
|
|
1,771
|
|
||
Property and equipment, net ($2,576 and $2,620 attributable to our VIEs)
|
7,511
|
|
|
7,598
|
|
||
Goodwill ($294 and $294 attributable to our VIEs)
|
1,696
|
|
|
1,696
|
|
||
Intangible assets other than goodwill ($233 and $251 attributable to our VIEs)
|
500
|
|
|
543
|
|
||
Restricted cash ($5 and $9 attributable to our VIEs)
|
5
|
|
|
109
|
|
||
Deferred income taxes ($20 and $28 attributable to our VIEs)
|
20
|
|
|
28
|
|
||
Deferred charges and other assets ($250 and $260 attributable to our VIEs)
|
437
|
|
|
450
|
|
||
Total assets
|
$
|
12,117
|
|
|
$
|
12,195
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity/(Deficit)
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable ($116 and $141 attributable to our VIEs)
|
$
|
165
|
|
|
$
|
179
|
|
Due to affiliates ($15 and $15 attributable to our VIEs)
|
17
|
|
|
16
|
|
||
Accrued expenses and other current liabilities ($245 and $272 attributable to our VIEs)
|
631
|
|
|
588
|
|
||
Accrued restructuring and support expenses
|
3,170
|
|
|
905
|
|
||
Interest payable ($36 and $37 attributable to our VIEs)
|
127
|
|
|
131
|
|
||
Current portion of long-term debt ($23 and $70 attributable to our VIEs)
|
71
|
|
|
187
|
|
||
Total current liabilities
|
4,181
|
|
|
2,006
|
|
||
Long-term debt ($2,262 and $2,267 attributable to our VIEs)
|
6,763
|
|
|
6,777
|
|
||
Deferred income taxes ($2 and $4 attributable to our VIEs)
|
1,004
|
|
|
991
|
|
||
Deferred credits and other liabilities ($218 and $138 attributable to our VIEs)
|
265
|
|
|
188
|
|
||
Total liabilities
|
12,213
|
|
|
9,962
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
|
||
Stockholders’ equity/(deficit)
|
|
|
|
||||
Caesars stockholders’ equity/(deficit)
|
(1,394
|
)
|
|
987
|
|
||
Noncontrolling interests
|
1,298
|
|
|
1,246
|
|
||
Total stockholders’ equity/(deficit)
|
(96
|
)
|
|
2,233
|
|
||
Total liabilities and stockholders’ equity/(deficit)
|
$
|
12,117
|
|
|
$
|
12,195
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions, except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Casino
|
$
|
545
|
|
|
$
|
543
|
|
|
$
|
1,075
|
|
|
$
|
1,203
|
|
Food and beverage
|
204
|
|
|
203
|
|
|
410
|
|
|
429
|
|
||||
Rooms
|
235
|
|
|
221
|
|
|
464
|
|
|
443
|
|
||||
Interactive entertainment
|
248
|
|
|
186
|
|
|
476
|
|
|
363
|
|
||||
Other revenue
|
130
|
|
|
121
|
|
|
245
|
|
|
246
|
|
||||
Less: casino promotional allowances
|
(132
|
)
|
|
(133
|
)
|
|
(272
|
)
|
|
(289
|
)
|
||||
Net revenues
|
1,230
|
|
|
1,141
|
|
|
2,398
|
|
|
2,395
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Direct
|
|
|
|
|
|
|
|
||||||||
Casino
|
279
|
|
|
278
|
|
|
564
|
|
|
634
|
|
||||
Food and beverage
|
100
|
|
|
99
|
|
|
193
|
|
|
202
|
|
||||
Rooms
|
63
|
|
|
57
|
|
|
122
|
|
|
113
|
|
||||
Platform fees
|
68
|
|
|
51
|
|
|
132
|
|
|
100
|
|
||||
Property, general, administrative, and other
|
385
|
|
|
305
|
|
|
716
|
|
|
655
|
|
||||
Depreciation and amortization
|
109
|
|
|
96
|
|
|
228
|
|
|
198
|
|
||||
Corporate expense
|
41
|
|
|
45
|
|
|
82
|
|
|
91
|
|
||||
Other operating costs
|
21
|
|
|
24
|
|
|
43
|
|
|
72
|
|
||||
Total operating expenses
|
1,066
|
|
|
955
|
|
|
2,080
|
|
|
2,065
|
|
||||
Income from operations
|
164
|
|
|
186
|
|
|
318
|
|
|
330
|
|
||||
Interest expense
|
(150
|
)
|
|
(147
|
)
|
|
(301
|
)
|
|
(384
|
)
|
||||
Deconsolidation and restructuring of CEOC and other
|
(2,026
|
)
|
|
7
|
|
|
(2,263
|
)
|
|
7,096
|
|
||||
Income/(loss) from continuing operations before income taxes
|
(2,012
|
)
|
|
46
|
|
|
(2,246
|
)
|
|
7,042
|
|
||||
Income tax benefit/(provision)
|
(31
|
)
|
|
4
|
|
|
(71
|
)
|
|
(188
|
)
|
||||
Income/(loss) from continuing operations, net of income taxes
|
(2,043
|
)
|
|
50
|
|
|
(2,317
|
)
|
|
6,854
|
|
||||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||
Net income/(loss)
|
(2,043
|
)
|
|
50
|
|
|
(2,317
|
)
|
|
6,847
|
|
||||
Net income attributable to noncontrolling interests
|
(34
|
)
|
|
(35
|
)
|
|
(68
|
)
|
|
(60
|
)
|
||||
Net income/(loss) attributable to Caesars
|
$
|
(2,077
|
)
|
|
$
|
15
|
|
|
$
|
(2,385
|
)
|
|
$
|
6,787
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings/(loss) per share - basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings/(loss) per share from continuing operations
|
$
|
(14.25
|
)
|
|
$
|
0.10
|
|
|
$
|
(16.39
|
)
|
|
$
|
46.93
|
|
Basic loss per share from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.04
|
)
|
||||
Basic earnings/(loss) per share
|
$
|
(14.25
|
)
|
|
$
|
0.10
|
|
|
$
|
(16.39
|
)
|
|
$
|
46.89
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings/(loss) per share from continuing operations
|
$
|
(14.25
|
)
|
|
$
|
0.10
|
|
|
$
|
(16.39
|
)
|
|
$
|
46.31
|
|
Diluted loss per share from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.04
|
)
|
||||
Diluted earnings/(loss) per share
|
$
|
(14.25
|
)
|
|
$
|
0.10
|
|
|
$
|
(16.39
|
)
|
|
$
|
46.27
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding - basic
|
146
|
|
|
145
|
|
|
146
|
|
|
145
|
|
||||
Weighted-average common shares outstanding - diluted
|
146
|
|
|
147
|
|
|
146
|
|
|
147
|
|
|
Caesars Stockholders’ Equity/(Deficit)
|
|
|
|
|
||||||||||||||||||||||||||
(In millions)
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-in-
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
|
Total
Caesars
Stockholders’
Equity/(Deficit)
|
|
Noncontrolling
Interests
|
|
Total Equity/(Deficit)
|
||||||||||||||||
Balance as of December 31, 2014
|
$
|
1
|
|
|
$
|
(19
|
)
|
|
$
|
8,140
|
|
|
$
|
(13,104
|
)
|
|
$
|
(15
|
)
|
|
$
|
(4,997
|
)
|
|
$
|
255
|
|
|
$
|
(4,742
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
6,787
|
|
|
—
|
|
|
6,787
|
|
|
60
|
|
|
6,847
|
|
||||||||
Share-based compensation
|
—
|
|
|
(2
|
)
|
|
31
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||||||
Elimination of CEOC noncontrolling interest and deconsolidation
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
16
|
|
|
854
|
|
|
870
|
|
||||||||
Decrease in noncontrolling interests, net of distributions and contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
||||||||
Other
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
1
|
|
|
(3
|
)
|
|
15
|
|
|
12
|
|
||||||||
Balance as of June 30, 2015
|
$
|
1
|
|
|
$
|
(21
|
)
|
|
$
|
8,167
|
|
|
$
|
(6,317
|
)
|
|
$
|
2
|
|
|
$
|
1,832
|
|
|
$
|
1,176
|
|
|
$
|
3,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance as of December 31, 2015
|
$
|
1
|
|
|
$
|
(21
|
)
|
|
$
|
8,191
|
|
|
$
|
(7,185
|
)
|
|
$
|
1
|
|
|
$
|
987
|
|
|
$
|
1,246
|
|
|
$
|
2,233
|
|
Net income/(loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,385
|
)
|
|
—
|
|
|
(2,385
|
)
|
|
68
|
|
|
(2,317
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
(5
|
)
|
|
24
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||||||
CIE stock transactions, net
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(5
|
)
|
|
(20
|
)
|
||||||||
Change in noncontrolling interest, net of distributions and contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||||
Balance as of June 30, 2016
|
$
|
1
|
|
|
$
|
(26
|
)
|
|
$
|
8,200
|
|
|
$
|
(9,570
|
)
|
|
$
|
1
|
|
|
$
|
(1,394
|
)
|
|
$
|
1,298
|
|
|
$
|
(96
|
)
|
(1)
|
The effect of the deconsolidation of CEOC. See
Note 1
.
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2016
|
|
2015
|
||||
Cash flows provided by operating activities
|
$
|
366
|
|
|
$
|
101
|
|
Cash flows from investing activities
|
|
|
|
||||
Acquisitions of property and equipment, net of change in related payables
|
(106
|
)
|
|
(227
|
)
|
||
Deconsolidation of CEOC cash
|
—
|
|
|
(958
|
)
|
||
Increase in restricted cash
|
(6
|
)
|
|
(30
|
)
|
||
Decrease in restricted cash
|
113
|
|
|
41
|
|
||
Proceeds from the sale and maturity of investments
|
24
|
|
|
—
|
|
||
Payments to acquire investments
|
(8
|
)
|
|
—
|
|
||
Other
|
(1
|
)
|
|
—
|
|
||
Cash flows provided by/(used in) investing activities
|
16
|
|
|
(1,174
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from long-term debt and revolving credit facilities
|
80
|
|
|
190
|
|
||
Repayments of long-term debt and revolving credit facilities
|
(221
|
)
|
|
(258
|
)
|
||
Payment of contingent consideration
|
—
|
|
|
(32
|
)
|
||
Repurchase of CIE management shares
|
(43
|
)
|
|
(38
|
)
|
||
Distributions to noncontrolling interest owners
|
(13
|
)
|
|
(15
|
)
|
||
Other
|
2
|
|
|
6
|
|
||
Cash flows used in financing activities
|
(195
|
)
|
|
(147
|
)
|
||
Cash flows from discontinued operations
|
|
|
|
||||
Cash flows used in operating activities
|
—
|
|
|
(7
|
)
|
||
Cash used in discontinued operations
|
—
|
|
|
(7
|
)
|
||
Net increase/(decrease) in cash and cash equivalents
|
187
|
|
|
(1,227
|
)
|
||
Cash and cash equivalents, beginning of period
|
1,338
|
|
|
2,806
|
|
||
Cash and cash equivalents, end of period
|
$
|
1,525
|
|
|
$
|
1,579
|
|
|
|
|
|
||||
Supplemental Cash Flow Information:
|
|
|
|
||||
Cash paid for interest
|
$
|
290
|
|
|
$
|
403
|
|
Cash paid for income taxes
|
46
|
|
|
35
|
|
||
Non-cash investing and financing activities:
|
|
|
|
||||
Change in accrued capital expenditures
|
(8
|
)
|
|
(11
|
)
|
•
|
we have limited cash available to meet the financial commitments of CEC, primarily resulting from significant expenditures made to (1) defend against the litigation matters disclosed below and (2) support a plan of reorganization for CEOC (the “Restructuring”);
|
•
|
we have made material future commitments to support the Restructuring described below; and
|
•
|
we are a defendant in litigation relating to certain CEOC transactions dating back to 2010 and other legal matters (see
Note 3
) that could result in one or more adverse rulings against us.
|
(a)
|
First Amended Restructuring Support and Forbearance Agreement dated June 20, 2016, with certain parties holding claims under CEOC’s first lien credit agreement (the “First Lien Bank RSA”);
|
(b)
|
Restructuring Support and Forbearance Agreement dated June 21, 2016, with certain parties holding claims under CEOC’s subsidiary guaranteed notes (the “SGN RSA”);
|
(c)
|
First Amended and Restated Restructuring Support, Settlement, and Contribution Agreement dated July 9, 2016, with CEOC (the “CEC RSA”);
|
(d)
|
Amended and Restated Restructuring Support Agreement dated July 9, 2016, with CAC and CEOC (the “CAC RSA”);
|
(e)
|
Restructuring Support and Settlement Agreement dated June 22, 2016, with the unsecured claimholders’ committee in the Chapter 11 cases (the “UCC RSA”); and
|
(f)
|
Restructuring Support and Forbearance Agreement dated July 31, 2016, with certain parties holding claims under CEOC’s second lien note agreements (the “Second Lien Note RSA”) (see
Note 16
).
|
Accrued Restructuring and Support Expenses
|
|||||||||||||||
|
|
|
|
|
Accrued as of
|
||||||||||
(Dollars in millions)
|
Initial Plan Terms
|
|
Amended Plan
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||
Cash to Debtors and forbearance fees (“Fixed Payments”) in connection with the Restructuring
(1)
|
$
|
406
|
|
|
$
|
406
|
|
|
$
|
320
|
|
|
$
|
320
|
|
Contingent payment to CEOC if there is insufficient liquidity at the Effective Date
(2)
|
75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
“Additional Consideration” for the period from February 1, 2016 through the Effective Date
for the benefit of the First Lien Noteholders
(2)
|
$25 per month
|
|
—
|
|
|
—
|
|
|
162
|
|
|||||
“Upfront Payments” to certain First Lien Bank Lenders
(3)
|
63
|
|
|
63
|
|
|
2
|
|
|
2
|
|
||||
“Bank Guaranty Settlement” to purchase from the Settling First Lien Bank Lenders 100% of their respective First Lien Bank Obligations that survive the Effective Date
(4)
|
460
|
|
|
579
|
|
|
579
|
|
|
386
|
|
||||
Issuance of CEC convertible notes for the settlement of litigation claims and potential claims against CEC
(5)
|
—
|
|
|
1,000
|
|
|
1,060
|
|
|
—
|
|
||||
Issuance of CEC common shares for the settlement of litigation claims and potential claims against CEC
(6)
|
—
|
|
|
—
|
|
|
1,167
|
|
|
—
|
|
||||
Professional fees for subsidiary guaranteed note lenders
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
||||
Consideration for general unsecured claims
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
||||
Total accrued
|
|
|
|
|
$
|
3,135
|
|
|
$
|
870
|
|
(1)
|
$86 million
was paid in fourth quarter of 2015.
|
(2)
|
This provision is included in the First Lien Bond RSA, but has been omitted from the Amended Plan and the other RSAs.
|
(3)
|
$61 million
was paid in fourth quarter of 2015.
|
(4)
|
Amount payable is subject to the excess cash projected to be held by CEOC on the Effective Date.
|
(5)
|
Accrual represents the estimated fair value of the
$1.0 billion
in face value of convertible notes CEC expects to issue as part of the Amended Plan. The convertible notes mature within
seven
years of issuance, prior to which they can be converted to a number of shares equal to
12.195%
of CEC’s fully diluted outstanding shares as of the Effective Date (subject to limitation). See
Note 7
for additional information on fair value measurements.
|
(6)
|
Accrual represents the estimated fair value of the portion of CEC common shares expected to be issued as part of the Amended Plan for the settlement of claims. This fair value does not include the value of CEC common shares expected to be issued in exchange for OpCo preferred stock, described below. See
Note 7
for additional information on fair value measurements.
|
Purchase 100% of OpCo common stock for $700 million
(1)
|
Issuance of CEC common shares in exchange for OpCo preferred stock
|
Purchase 5% of PropCo equity for $91 million
(2)
|
PropCo has right of first refusal on all new domestic non-Las Vegas gaming facility opportunities, with CEC or OpCo leasing such properties
|
PropCo receives a call right to purchase listed properties: Harrah’s Atlantic City, Harrah’s Laughlin, and Harrah’s New Orleans (subject to the terms of the CERP and CGPH credit agreements)
|
Guarantee of OpCo’s payment obligations to PropCo under the leases of the CEOC Properties
|
Guarantee of OpCo debt received by the First Lien Bank Lenders and First Lien Noteholders
|
(1)
|
“OpCo” refers to the proposed entity resulting from the Restructuring that will operate the CEOC Properties under a lease with PropCo. “CEOC Properties” refers to those properties owned by CEOC as of the Petition Date.
|
(2)
|
“PropCo” refers to the proposed entity resulting from the Restructuring that will own the CEOC Properties as of the Effective Date. This commitment is dependent on the ultimate legal structure of the entities formed as part of the Restructuring.
|
Cash and Available Revolver Capacity
|
|||||||||||||||
|
June 30, 2016
|
||||||||||||||
(In millions)
|
CERP
|
|
CES
|
|
CGP
|
|
Other
|
||||||||
Cash and cash equivalents
|
$
|
191
|
|
|
$
|
104
|
|
|
$
|
1,029
|
|
|
$
|
201
|
|
Revolver capacity
|
270
|
|
|
—
|
|
|
160
|
|
|
—
|
|
||||
Revolver capacity drawn or committed to letters of credit
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
446
|
|
|
$
|
104
|
|
|
$
|
1,189
|
|
|
$
|
201
|
|
•
|
Litigation commenced by Wilmington Savings Fund Society, FSB on August 4, 2014 (the “Delaware Second Lien Lawsuit”);
|
•
|
Litigation commenced by parties on September 3, 2014 and October 2, 2014 (the “Senior Unsecured Lawsuits”);
|
•
|
Litigation commenced by UMB Bank on November 25, 2014 (the “Delaware First Lien Lawsuit”);
|
•
|
Demands for payment made by Wilmington Savings Fund Society, FSB on February 13, 2015 (the “February 13 Notice”);
|
•
|
Demands for payment made by BOKF, N.A., on February 18, 2015 (see “February 18 Notice”);
|
•
|
Litigation commenced by BOKF, N.A. on March 3, 2015 (the “New York Second Lien Lawsuit”);
|
•
|
Litigation commenced by UMB Bank on June 15, 2015 (the “New York First Lien Lawsuit”);
|
•
|
Litigation commenced by Wilmington Trust, National Association on October 20, 2015 (the “New York Senior Notes Lawsuit”); and
|
•
|
Litigation commenced by Trustees of the National Retirement Fund in January 2015 (“NRF Litigation”).
|
(In millions)
|
June 30, 2016
|
|
December 31, 2015
|
||||
Land and land improvements
|
$
|
3,584
|
|
|
$
|
3,584
|
|
Buildings, riverboats, and improvements
|
4,178
|
|
|
4,134
|
|
||
Furniture, fixtures, and equipment
|
1,369
|
|
|
1,326
|
|
||
Construction in progress
|
65
|
|
|
59
|
|
||
Total property and equipment
|
9,196
|
|
|
9,103
|
|
||
Less: accumulated depreciation
|
(1,685
|
)
|
|
(1,505
|
)
|
||
Total property and equipment, net
|
$
|
7,511
|
|
|
$
|
7,598
|
|
Depreciation Expense and Capitalized Interest
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Depreciation expense
(1)
|
$
|
85
|
|
|
$
|
72
|
|
|
$
|
182
|
|
|
$
|
148
|
|
Capitalized interest
|
—
|
|
|
6
|
|
|
—
|
|
|
9
|
|
(1)
|
Included in depreciation and amortization and corporate expense.
|
Changes in Carrying Value of Goodwill and other Intangible Assets
|
|||||||||||
|
Amortizing Intangible Assets
|
|
Non-Amortizing Intangible Assets
|
||||||||
(In millions)
|
|
Goodwill
|
|
Other
|
|||||||
Balance as of December 31, 2015
|
$
|
395
|
|
|
$
|
1,696
|
|
|
$
|
148
|
|
Amortization
|
(43
|
)
|
|
—
|
|
|
—
|
|
|||
Balance as of June 30, 2016
|
$
|
352
|
|
|
$
|
1,696
|
|
|
$
|
148
|
|
Gross Carrying Value and Accumulated Amortization of Intangible Assets Other Than Goodwill
|
|||||||||||||||||||||||||
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||
(Dollars in millions)
|
Weighted
Average
Remaining
Useful Life
(in years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Amortizing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
4.9
|
|
$
|
917
|
|
|
$
|
(622
|
)
|
|
$
|
295
|
|
|
$
|
917
|
|
|
$
|
(589
|
)
|
|
$
|
328
|
|
Contract rights
|
8.5
|
|
3
|
|
|
(1
|
)
|
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
2
|
|
||||||
Developed technology
|
1.7
|
|
86
|
|
|
(57
|
)
|
|
29
|
|
|
86
|
|
|
(49
|
)
|
|
37
|
|
||||||
Gaming rights
|
7.8
|
|
52
|
|
|
(26
|
)
|
|
26
|
|
|
52
|
|
|
(24
|
)
|
|
28
|
|
||||||
|
|
|
$
|
1,058
|
|
|
$
|
(706
|
)
|
|
352
|
|
|
$
|
1,058
|
|
|
$
|
(663
|
)
|
|
395
|
|
||
Non-amortizing
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gaming rights
|
|
22
|
|
|
|
|
|
|
22
|
|
|||||||||||||||
Trademarks
|
|
126
|
|
|
|
|
|
|
126
|
|
|||||||||||||||
|
|
|
|
|
|
|
148
|
|
|
|
|
|
|
148
|
|
||||||||||
Total intangible assets other than goodwill
|
|
$
|
500
|
|
|
|
|
|
|
$
|
543
|
|
Investments
|
|||||||||||||||
(In millions)
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
June 30, 2016
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government bonds
|
50
|
|
|
—
|
|
|
50
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
53
|
|
|
$
|
3
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government bonds
|
67
|
|
|
—
|
|
|
67
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
71
|
|
|
$
|
4
|
|
|
$
|
67
|
|
|
$
|
—
|
|
Estimated Fair Value
|
|||||||||||||||
(In millions)
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
June 30, 2016
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Issuance of CEC convertible notes
|
$
|
1,060
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,060
|
|
Issuance of CEC common shares
|
1,167
|
|
|
—
|
|
|
1,167
|
|
|
—
|
|
||||
Total liabilities at fair value
|
$
|
2,227
|
|
|
$
|
—
|
|
|
$
|
1,167
|
|
|
$
|
1,060
|
|
Changes in Fair Value
|
||||
(In millions)
|
|
CEC Convertible Notes
|
||
Balance as of December 31, 2015
|
|
$
|
—
|
|
Initial loss recognized in net loss
|
|
1,060
|
|
|
Balance as of June 30, 2016
|
|
$
|
1,060
|
|
•
|
Incremental cost of borrowing -
5.5%
|
•
|
Implied volatility -
35%
|
•
|
Risk-free rate -
1.3%
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||
(In millions)
|
Face Value
|
|
Book Value
|
|
Book Value
|
||||||
CERP
|
$
|
4,611
|
|
|
$
|
4,549
|
|
|
$
|
4,627
|
|
CGP
|
2,344
|
|
|
2,285
|
|
|
2,337
|
|
|||
Total Debt
|
6,955
|
|
|
6,834
|
|
|
6,964
|
|
|||
Current Portion of Long-Term Debt
|
(71
|
)
|
|
(71
|
)
|
|
(187
|
)
|
|||
Long-Term Debt
|
$
|
6,884
|
|
|
$
|
6,763
|
|
|
$
|
6,777
|
|
|
|
|
|
|
|
||||||
Unamortized discounts and deferred finance charges
|
|
|
$
|
121
|
|
|
$
|
132
|
|
||
Fair value
|
$
|
6,712
|
|
|
|
|
|
Annual Estimated Debt Service Requirements
|
|||||||||||||||||||||||||||
(In millions)
|
Remaining
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
CERP
|
$
|
20
|
|
|
$
|
41
|
|
|
$
|
25
|
|
|
$
|
25
|
|
|
$
|
3,350
|
|
|
$
|
1,150
|
|
|
$
|
4,611
|
|
CGP
|
12
|
|
|
21
|
|
|
25
|
|
|
200
|
|
|
300
|
|
|
1,786
|
|
|
2,344
|
|
|||||||
Total principal
|
32
|
|
|
62
|
|
|
50
|
|
|
225
|
|
|
3,650
|
|
|
2,936
|
|
|
6,955
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Estimated Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
CERP
|
190
|
|
|
380
|
|
|
380
|
|
|
380
|
|
|
380
|
|
|
120
|
|
|
1,830
|
|
|||||||
CGP
|
90
|
|
|
180
|
|
|
180
|
|
|
180
|
|
|
150
|
|
|
150
|
|
|
930
|
|
|||||||
Total interest
|
280
|
|
|
560
|
|
|
560
|
|
|
560
|
|
|
530
|
|
|
270
|
|
|
2,760
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Principal and Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
CERP
|
210
|
|
|
421
|
|
|
405
|
|
|
405
|
|
|
3,730
|
|
|
1,270
|
|
|
6,441
|
|
|||||||
CGP
|
102
|
|
|
201
|
|
|
205
|
|
|
380
|
|
|
450
|
|
|
1,936
|
|
|
3,274
|
|
|||||||
Total principal and interest
|
$
|
312
|
|
|
$
|
622
|
|
|
$
|
610
|
|
|
$
|
785
|
|
|
$
|
4,180
|
|
|
$
|
3,206
|
|
|
$
|
9,715
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
(Dollars in millions)
|
Final
Maturity
|
|
Rate(s)
(1)
|
|
Face Value
|
|
Book Value
|
|
Book Value
|
||||||
CERP Credit Facility
|
|
|
|
|
|
|
|
|
|
||||||
CERP Term Loan
(2)
|
2020
|
|
7.00%
|
|
$
|
2,438
|
|
|
$
|
2,395
|
|
|
$
|
2,403
|
|
CERP Revolving Credit Facility
(3)
|
2018
|
|
variable
|
|
15
|
|
|
15
|
|
|
80
|
|
|||
CERP Notes
|
|
|
|
|
|
|
|
|
|
||||||
CERP First Lien Notes
|
2020
|
|
8.00%
|
|
1,000
|
|
|
992
|
|
|
992
|
|
|||
CERP Second Lien Notes
|
2021
|
|
11.00%
|
|
1,150
|
|
|
1,139
|
|
|
1,138
|
|
|||
Capital lease obligations and other
|
2016 to 2017
|
|
various
|
|
8
|
|
|
8
|
|
|
14
|
|
|||
Total CERP Debt
|
|
4,611
|
|
|
4,549
|
|
|
4,627
|
|
||||||
Current Portion of CERP Long-Term Debt
|
|
(48
|
)
|
|
(48
|
)
|
|
(117
|
)
|
||||||
CERP Long-Term Debt
|
|
$
|
4,563
|
|
|
$
|
4,501
|
|
|
$
|
4,510
|
|
(1)
|
Interest rate is fixed, except where noted.
|
(2)
|
Variable interest rate calculated as a fixed rate plus the greater of LIBOR or a 1% floor. The rate is set at the 1% floor as of June 30, 2016.
|
(3)
|
Variable interest rate for amounts currently borrowed is determined by adding LIBOR to a base rate of 6.00%.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
(Dollars in millions)
|
Final
Maturity
|
|
Rate(s)
(1)
|
|
Face Value
|
|
Book Value
|
|
Book Value
|
||||||
CGPH Credit Facilities
|
|
|
|
|
|
|
|
|
|
||||||
CGPH Senior Secured Term Loan
(2)
|
2021
|
|
6.25%
|
|
$
|
1,151
|
|
|
$
|
1,122
|
|
|
$
|
1,126
|
|
CGPH Senior Secured Revolving Credit Facility
(3)
|
2019
|
|
variable
|
|
—
|
|
|
—
|
|
|
45
|
|
|||
CGPH Notes
|
2022
|
|
9.38%
|
|
675
|
|
|
661
|
|
|
660
|
|
|||
Horseshoe Baltimore Credit and FF&E Facilities
|
|
|
|
|
|
|
|
|
|
||||||
Horseshoe Baltimore Credit Facility
(4)
|
2020
|
|
8.25%
|
|
299
|
|
|
287
|
|
|
288
|
|
|||
Horseshoe Baltimore Revolving Facility Loan
(5)
|
2018
|
|
variable
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Horseshoe Baltimore FF&E Facility
(4)(6)
|
2019
|
|
8.75%
|
|
24
|
|
|
25
|
|
|
27
|
|
|||
Cromwell Credit Facility
(4)
|
2019
|
|
11.00%
|
|
174
|
|
|
169
|
|
|
169
|
|
|||
Other Secured Debt
|
2018
|
|
8.00%
|
|
4
|
|
|
4
|
|
|
4
|
|
|||
Special Improvement District Bonds
|
2037
|
|
5.30%
|
|
14
|
|
|
14
|
|
|
14
|
|
|||
Capital lease obligations and other
|
2016 to 2017
|
|
various
|
|
3
|
|
|
3
|
|
|
4
|
|
|||
Total CGP Debt
|
|
2,344
|
|
|
2,285
|
|
|
2,337
|
|
||||||
Current Portion of CGP Long-Term Debt
|
|
(23
|
)
|
|
(23
|
)
|
|
(70
|
)
|
||||||
CGP Long-Term Debt
|
|
$
|
2,321
|
|
|
$
|
2,262
|
|
|
$
|
2,267
|
|
(1)
|
Interest rate is fixed, except where noted.
|
(2)
|
Variable interest rate calculated as a fixed rate plus the greater of LIBOR or a 1% floor. The rate is set at the 1% floor as of June 30, 2016.
|
(3)
|
Variable interest rate calculated as LIBOR plus 5.00%.
|
(4)
|
Variable interest rate calculated as a fixed rate plus the greater of LIBOR or a 1.25% floor. The rate is set at the 1.25% floor as of June 30, 2016.
|
(5)
|
Variable interest rate calculated as LIBOR plus 7.00%.
|
(6)
|
This represents an equipment financing term loan facility.
|
Credit Facility
|
|
Covenant Type
|
|
Effective Period
|
|
Requirement
|
|
CERP Credit Facility
|
|
CERP Maximum SSLR
|
|
From inception
|
|
8.00
|
to 1.00
|
CGPH Senior Secured Term Loan
|
|
CGPH Maximum SSLR
|
|
From inception
|
|
6.00
|
to 1.00
|
Horseshoe Baltimore Credit and FF&E Facilities
(1)
|
|
CBAC Maximum SSLR
|
|
Q1 - Q4 2016
|
|
7.50
|
to 1.00
|
|
CBAC Maximum SSLR
|
|
Q1 - Q4 2017
|
|
6.00
|
to 1.00
|
|
|
CBAC Maximum SSLR
|
|
Q1 2018 and thereafter
|
|
4.75
|
to 1.00
|
|
Cromwell Credit Facility
(2)
|
|
Cromwell Maximum SSLR
|
|
Q2 2015 - Q1 2016
|
|
5.25
|
to 1.00
|
|
Cromwell Maximum SSLR
|
|
Q2 2016 - Q1 2017
|
|
5.00
|
to 1.00
|
|
|
Cromwell Maximum SSLR
|
|
Q2 2017 and thereafter
|
|
4.75
|
to 1.00
|
(1)
|
CBAC Borrower, LLC (“CBAC”) is a joint venture in which Caesars Baltimore Investment Company, LLC (“CBIC”) holds an interest. CBIC is a wholly owned subsidiary of CGP.
|
(2)
|
As of
June 30, 2016
, the Cromwell’s SSLR was
4.90
to 1.00.
|
Basic and Dilutive Net Earnings Per Share Reconciliation
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions, except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income/(loss) from continuing operation, net of income taxes
|
$
|
(2,077
|
)
|
|
$
|
15
|
|
|
$
|
(2,385
|
)
|
|
$
|
6,794
|
|
Loss from discontinued operation, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||
Net income/(loss) attributable to Caesars
|
$
|
(2,077
|
)
|
|
$
|
15
|
|
|
$
|
(2,385
|
)
|
|
$
|
6,787
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common share outstanding
|
146
|
|
|
145
|
|
|
146
|
|
|
145
|
|
||||
Dilutive potential common shares: Stock options
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Weighted average common shares and dilutive potential common shares
|
146
|
|
|
147
|
|
|
146
|
|
|
147
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic income/(loss) per share from continuing operations
|
$
|
(14.25
|
)
|
|
$
|
0.10
|
|
|
$
|
(16.39
|
)
|
|
$
|
46.93
|
|
Basic loss per share from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.04
|
)
|
||||
Basic income/(loss) per share
|
$
|
(14.25
|
)
|
|
$
|
0.10
|
|
|
$
|
(16.39
|
)
|
|
$
|
46.89
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted income/(loss) per share from continuing operations
|
$
|
(14.25
|
)
|
|
$
|
0.10
|
|
|
$
|
(16.39
|
)
|
|
$
|
46.31
|
|
Diluted loss per share from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.04
|
)
|
||||
Diluted income/(loss) per share
|
$
|
(14.25
|
)
|
|
$
|
0.10
|
|
|
$
|
(16.39
|
)
|
|
$
|
46.27
|
|
Weighted-Average Number of Anti-Dilutive Shares Excluded from Calculation of EPS
|
|||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
(In millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Stock options
|
10
|
|
|
4
|
|
|
10
|
|
|
4
|
|
Restricted stock units and awards
|
10
|
|
|
1
|
|
|
8
|
|
|
—
|
|
Total anti-dilutive common shares
|
20
|
|
|
5
|
|
|
18
|
|
|
4
|
|
Estimated Retail Value of Casino Promotional Allowances
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Food and Beverage
|
$
|
68
|
|
|
$
|
69
|
|
|
$
|
141
|
|
|
$
|
140
|
|
Rooms
|
57
|
|
|
57
|
|
|
117
|
|
|
114
|
|
||||
Other
|
7
|
|
|
7
|
|
|
14
|
|
|
35
|
|
||||
|
$
|
132
|
|
|
$
|
133
|
|
|
$
|
272
|
|
|
$
|
289
|
|
Estimated Cost of Providing Casino Promotional Allowances
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Food and Beverage
|
$
|
41
|
|
|
$
|
42
|
|
|
$
|
84
|
|
|
$
|
84
|
|
Rooms
|
20
|
|
|
20
|
|
|
40
|
|
|
40
|
|
||||
Other
|
5
|
|
|
4
|
|
|
8
|
|
|
8
|
|
||||
|
$
|
66
|
|
|
$
|
66
|
|
|
$
|
132
|
|
|
$
|
132
|
|
Grants During 2016
|
||||||
|
June 30, 2016
|
|||||
|
Quantity
|
|
Wtd Avg
(1)
|
|||
CEC
|
|
|
|
|||
Restricted stock units
|
5,141,653
|
|
|
$
|
6.28
|
|
CIE
|
|
|
|
|||
Stock options
|
377
|
|
|
19,166.18
|
|
|
Restricted stock units
|
103
|
|
|
16,452.14
|
|
Income Tax Allocation
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income/(loss) from continuing operations, before income taxes
|
$
|
(2,012
|
)
|
|
$
|
46
|
|
|
$
|
(2,246
|
)
|
|
$
|
7,042
|
|
Income tax benefit/(provision)
|
$
|
(31
|
)
|
|
$
|
4
|
|
|
$
|
(71
|
)
|
|
$
|
(188
|
)
|
Effective tax rate
|
(1.5
|
)%
|
|
(8.7
|
)%
|
|
(3.2
|
)%
|
|
2.7
|
%
|
Condensed Statements of Operations - By Segment
|
|||||||||||||||||||||||
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||
(In millions)
|
CERP
|
|
CGP Casinos
|
|
CIE
(1)
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||
Other revenues
|
$
|
79
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
(4
|
)
|
|
$
|
130
|
|
Net revenues
|
562
|
|
|
423
|
|
|
249
|
|
|
2
|
|
|
(6
|
)
|
|
1,230
|
|
||||||
Depreciation and amortization
|
59
|
|
|
42
|
|
|
9
|
|
|
(1
|
)
|
|
—
|
|
|
109
|
|
||||||
Income/(loss) from operations
|
111
|
|
|
67
|
|
|
20
|
|
|
(34
|
)
|
|
—
|
|
|
164
|
|
||||||
Interest expense
|
99
|
|
|
49
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
150
|
|
||||||
Deconsolidation and restructuring of CEOC and other
|
—
|
|
|
1
|
|
|
—
|
|
|
(2,027
|
)
|
|
—
|
|
|
(2,026
|
)
|
||||||
Income tax provision
|
(4
|
)
|
|
—
|
|
|
(24
|
)
|
|
(3
|
)
|
|
—
|
|
|
(31
|
)
|
(1)
|
Includes foreign net revenues of
$209 million
.
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||||||
(In millions)
|
CERP
|
|
CGP Casinos
|
|
CIE
(1)
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||
Other revenues
|
$
|
78
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
(15
|
)
|
|
$
|
121
|
|
Net revenues
|
566
|
|
|
390
|
|
|
186
|
|
|
14
|
|
|
(15
|
)
|
|
1,141
|
|
||||||
Depreciation and amortization
|
49
|
|
|
38
|
|
|
8
|
|
|
1
|
|
|
—
|
|
|
96
|
|
||||||
Income/(loss) from operations
|
126
|
|
|
44
|
|
|
54
|
|
|
(38
|
)
|
|
—
|
|
|
186
|
|
||||||
Interest expense
|
98
|
|
|
47
|
|
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
147
|
|
||||||
Deconsolidation and restructuring of CEOC and other
|
—
|
|
|
1
|
|
|
—
|
|
|
7
|
|
|
(1
|
)
|
|
7
|
|
||||||
Income tax benefit/(provision)
|
(11
|
)
|
|
—
|
|
|
(14
|
)
|
|
29
|
|
|
—
|
|
|
4
|
|
(1)
|
Includes foreign net revenues of
$148 million
.
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||||
(In millions)
|
CERP
|
|
CGP Casinos
|
|
CIE
(1)
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||
Other revenues
|
$
|
152
|
|
|
$
|
99
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
(9
|
)
|
|
$
|
245
|
|
Net revenues
|
1,090
|
|
|
839
|
|
|
477
|
|
|
3
|
|
|
(11
|
)
|
|
2,398
|
|
||||||
Depreciation and amortization
|
132
|
|
|
81
|
|
|
16
|
|
|
(1
|
)
|
|
—
|
|
|
228
|
|
||||||
Income/(loss) from operations
|
189
|
|
|
130
|
|
|
74
|
|
|
(75
|
)
|
|
—
|
|
|
318
|
|
||||||
Interest expense
|
198
|
|
|
100
|
|
|
1
|
|
|
3
|
|
|
(1
|
)
|
|
301
|
|
||||||
Deconsolidation and restructuring of CEOC and other
|
(1
|
)
|
|
2
|
|
|
—
|
|
|
(2,263
|
)
|
|
(1
|
)
|
|
(2,263
|
)
|
||||||
Income tax benefit/(provision)
|
2
|
|
|
—
|
|
|
(56
|
)
|
|
(17
|
)
|
|
—
|
|
|
(71
|
)
|
(1)
|
Includes foreign net revenues of
$397 million
.
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||||||||||
(In millions)
|
CEOC
|
|
CERP
|
|
CGP Casinos
|
|
CIE
(1)
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||||
Other revenues
|
$
|
24
|
|
|
$
|
150
|
|
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
(25
|
)
|
|
$
|
246
|
|
Net revenues
|
164
|
|
|
1,095
|
|
|
780
|
|
|
363
|
|
|
18
|
|
|
(25
|
)
|
|
2,395
|
|
|||||||
Depreciation and amortization
|
11
|
|
|
99
|
|
|
71
|
|
|
16
|
|
|
1
|
|
|
—
|
|
|
198
|
|
|||||||
Income/(loss) from operations
|
9
|
|
|
233
|
|
|
208
|
|
|
95
|
|
|
(215
|
)
|
|
—
|
|
|
330
|
|
|||||||
Interest expense
|
87
|
|
|
200
|
|
|
94
|
|
|
3
|
|
|
3
|
|
|
(3
|
)
|
|
384
|
|
|||||||
Deconsolidation and restructuring of CEOC and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,099
|
|
|
(3
|
)
|
|
7,096
|
|
|||||||
Income tax provision
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(27
|
)
|
|
(148
|
)
|
|
—
|
|
|
(188
|
)
|
(1)
|
Includes foreign net revenues of
$289 million
.
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||
(In millions)
|
CERP
|
|
CGP Casinos
|
|
CIE
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||
Net income/(loss) attributable to company
|
$
|
8
|
|
|
$
|
17
|
|
|
$
|
(5
|
)
|
|
$
|
(2,097
|
)
|
|
$
|
—
|
|
|
$
|
(2,077
|
)
|
Net income attributable to noncontrolling interests
|
—
|
|
|
2
|
|
|
1
|
|
|
31
|
|
|
—
|
|
|
34
|
|
||||||
Income tax provision
|
4
|
|
|
—
|
|
|
24
|
|
|
3
|
|
|
—
|
|
|
31
|
|
||||||
Deconsolidation and restructuring of CEOC and other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
2,027
|
|
|
—
|
|
|
2,026
|
|
||||||
Interest expense
|
99
|
|
|
49
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
150
|
|
||||||
Depreciation and amortization
|
59
|
|
|
42
|
|
|
9
|
|
|
(1
|
)
|
|
—
|
|
|
109
|
|
||||||
Corporate expense
|
11
|
|
|
8
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
41
|
|
||||||
Other operating costs
|
3
|
|
|
—
|
|
|
3
|
|
|
15
|
|
|
—
|
|
|
21
|
|
||||||
Property EBITDA
|
$
|
184
|
|
|
$
|
117
|
|
|
$
|
32
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
335
|
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||||||
(In millions)
|
CERP
|
|
CGP Casinos
|
|
CIE
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||
Net income/(loss) attributable to company
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
33
|
|
|
$
|
(37
|
)
|
|
$
|
—
|
|
|
$
|
15
|
|
Net income/(loss) attributable to noncontrolling interests
|
—
|
|
|
(4
|
)
|
|
6
|
|
|
33
|
|
|
—
|
|
|
35
|
|
||||||
Income tax (benefit)/provision
|
11
|
|
|
—
|
|
|
14
|
|
|
(29
|
)
|
|
—
|
|
|
(4
|
)
|
||||||
Deconsolidation and restructuring of CEOC and other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|
1
|
|
|
(7
|
)
|
||||||
Interest expense
|
98
|
|
|
47
|
|
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
147
|
|
||||||
Depreciation and amortization
|
49
|
|
|
38
|
|
|
8
|
|
|
1
|
|
|
—
|
|
|
96
|
|
||||||
Corporate expense
|
10
|
|
|
11
|
|
|
—
|
|
|
33
|
|
|
(9
|
)
|
|
45
|
|
||||||
Other operating costs
|
1
|
|
|
7
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
24
|
|
||||||
Property EBITDA
|
$
|
186
|
|
|
$
|
100
|
|
|
$
|
62
|
|
|
$
|
12
|
|
|
$
|
(9
|
)
|
|
$
|
351
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||||
(In millions)
|
CERP
|
|
CGP Casinos
|
|
CIE
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||
Net income/(loss) attributable to company
|
$
|
(8
|
)
|
|
$
|
30
|
|
|
$
|
12
|
|
|
$
|
(2,419
|
)
|
|
$
|
—
|
|
|
$
|
(2,385
|
)
|
Net income attributable to noncontrolling interests
|
—
|
|
|
2
|
|
|
5
|
|
|
61
|
|
|
—
|
|
|
68
|
|
||||||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Income tax (benefit)/provision
|
(2
|
)
|
|
—
|
|
|
56
|
|
|
17
|
|
|
—
|
|
|
71
|
|
||||||
Deconsolidation and restructuring of CEOC and other
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
2,263
|
|
|
1
|
|
|
2,263
|
|
||||||
Interest expense
|
198
|
|
|
100
|
|
|
1
|
|
|
3
|
|
|
(1
|
)
|
|
301
|
|
||||||
Depreciation and amortization
|
132
|
|
|
81
|
|
|
16
|
|
|
(1
|
)
|
|
—
|
|
|
228
|
|
||||||
Corporate expense
|
22
|
|
|
15
|
|
|
—
|
|
|
46
|
|
|
(1
|
)
|
|
82
|
|
||||||
Other operating costs
|
5
|
|
|
1
|
|
|
3
|
|
|
34
|
|
|
—
|
|
|
43
|
|
||||||
Property EBITDA
|
$
|
348
|
|
|
$
|
227
|
|
|
$
|
93
|
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
671
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||||||||||
(In millions)
|
CEOC
|
|
CERP
|
|
CGP Casinos
|
|
CIE
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||||
Net income/(loss) attributable to company
|
$
|
(85
|
)
|
|
$
|
20
|
|
|
$
|
123
|
|
|
$
|
54
|
|
|
$
|
6,675
|
|
|
$
|
—
|
|
|
$
|
6,787
|
|
Net income/(loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
11
|
|
|
58
|
|
|
—
|
|
|
60
|
|
|||||||
Loss from discontinued operations, net of income taxes
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||||
Income tax provision
|
—
|
|
|
13
|
|
|
—
|
|
|
27
|
|
|
148
|
|
|
—
|
|
|
188
|
|
|||||||
Deconsolidation and restructuring of CEOC and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,099
|
)
|
|
3
|
|
|
(7,096
|
)
|
|||||||
Interest expense
|
87
|
|
|
200
|
|
|
94
|
|
|
3
|
|
|
3
|
|
|
(3
|
)
|
|
384
|
|
|||||||
Depreciation and amortization
|
11
|
|
|
99
|
|
|
71
|
|
|
16
|
|
|
1
|
|
|
—
|
|
|
198
|
|
|||||||
Corporate expense
|
7
|
|
|
22
|
|
|
19
|
|
|
—
|
|
|
52
|
|
|
(9
|
)
|
|
91
|
|
|||||||
Other operating costs
|
4
|
|
|
2
|
|
|
(108
|
)
|
|
—
|
|
|
174
|
|
|
—
|
|
|
72
|
|
|||||||
Property EBITDA
|
$
|
31
|
|
|
$
|
356
|
|
|
$
|
190
|
|
|
$
|
111
|
|
|
$
|
12
|
|
|
$
|
(9
|
)
|
|
$
|
691
|
|
Condensed Balance Sheets - By Segment
|
|||||||||||||||||||||||
|
As of June 30, 2016
|
||||||||||||||||||||||
(In millions)
|
CERP
|
|
CGP Casinos
|
|
CIE
(1)
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||
Total assets
|
$
|
6,996
|
|
|
$
|
4,142
|
|
|
$
|
505
|
|
|
$
|
1,300
|
|
|
$
|
(826
|
)
|
|
$
|
12,117
|
|
Total liabilities
|
6,001
|
|
|
2,528
|
|
|
291
|
|
|
3,450
|
|
|
(57
|
)
|
|
12,213
|
|
(1)
|
Includes foreign assets of
$301 million
and foreign liabilities of
$68 million
.
|
|
As of December 31, 2015
|
||||||||||||||||||||||
(In millions)
|
CERP
|
|
CGP Casinos
|
|
CIE
(1)
|
|
Other
|
|
Elimination
|
|
Caesars
|
||||||||||||
Total assets
|
$
|
7,028
|
|
|
$
|
4,174
|
|
|
$
|
485
|
|
|
$
|
1,409
|
|
|
$
|
(901
|
)
|
|
$
|
12,195
|
|
Total liabilities
|
6,073
|
|
|
2,583
|
|
|
269
|
|
|
1,155
|
|
|
(118
|
)
|
|
9,962
|
|
(1)
|
Includes foreign assets of
$281 million
and foreign liabilities of
$57 million
.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Transactions with Sponsors and their affiliates
|
|
|
|
|
|
|
|
||||||||
Reimbursements and expenses
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
2
|
|
Expenses paid to Sponsors’ portfolio companies
|
1
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Expenses paid on behalf of CAC
|
7
|
|
|
8
|
|
|
13
|
|
|
18
|
|
||||
Transactions with CEOC
|
|
|
|
|
|
|
|
||||||||
Shared services allocated expenses to CEOC
|
86
|
|
|
82
|
|
|
177
|
|
|
157
|
|
||||
Shared services allocated expenses from CEOC
|
25
|
|
|
30
|
|
|
50
|
|
|
59
|
|
||||
Management fees incurred
|
12
|
|
|
10
|
|
|
22
|
|
|
19
|
|
||||
Octavius Tower lease revenue
|
9
|
|
|
9
|
|
|
18
|
|
|
16
|
|
||||
Other expenses incurred
|
7
|
|
|
4
|
|
|
14
|
|
|
7
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Caesars Entertainment Resort Properties (“CERP”);
|
•
|
Caesars Growth Partners Casino Properties and Developments (“CGP Casinos”); and
|
•
|
Caesars Interactive Entertainment (“CIE”).
|
•
|
we have limited cash available to meet financial commitments of CEC, primarily resulting from significant expenditures made to (1) defend against the litigation matters disclosed below and (2) support a plan of reorganization for CEOC (the “Restructuring”);
|
•
|
we have made material future commitments to support the Restructuring described below; and
|
•
|
we are a defendant in litigation relating to certain CEOC transactions dating back to 2010 and other legal matters (see
Note 3
) that could result in one or more adverse rulings against us.
|
|
Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||||
|
2016
|
|
2015
|
|
|
|
|
|||||||||||||||
|
(A)
|
|
(B)
|
|
|
|
|
|
(A) vs. (B)
|
|||||||||||||
|
CERP, CGP Casinos and CIE
(1)
|
|
CERP, CGP Casinos and CIE
(1)
|
|
CEOC
(2)
|
|
Consolidated Caesars
|
|
Fav/(Unfav)
|
|||||||||||||
(Dollars in millions)
|
|
$
|
|
%
|
||||||||||||||||||
Casino revenues
|
$
|
1,075
|
|
|
$
|
1,085
|
|
|
$
|
118
|
|
|
$
|
1,203
|
|
|
$
|
(10
|
)
|
|
(0.9
|
)%
|
Net revenues
|
$
|
2,398
|
|
|
$
|
2,237
|
|
|
$
|
158
|
|
|
$
|
2,395
|
|
|
$
|
161
|
|
|
7.2
|
%
|
Income from operations
|
$
|
318
|
|
|
$
|
321
|
|
|
$
|
9
|
|
|
$
|
330
|
|
|
$
|
(3
|
)
|
|
(0.9
|
)%
|
Deconsolidation and restructuring of CEOC and other
|
$
|
(2,263
|
)
|
|
$
|
7,096
|
|
|
$
|
—
|
|
|
$
|
7,096
|
|
|
$
|
(9,359
|
)
|
|
*
|
|
Income/(loss) from continuing operations, net of income taxes
|
$
|
(2,317
|
)
|
|
$
|
6,932
|
|
|
$
|
(78
|
)
|
|
$
|
6,854
|
|
|
$
|
(9,249
|
)
|
|
*
|
|
Loss from discontinued operations, net of income taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
—
|
%
|
Net income/(loss) attributable to Caesars
|
$
|
(2,385
|
)
|
|
$
|
6,872
|
|
|
$
|
(85
|
)
|
|
$
|
6,787
|
|
|
$
|
(9,257
|
)
|
|
*
|
|
Property EBITDA
(3)
|
$
|
671
|
|
|
$
|
660
|
|
|
$
|
31
|
|
|
$
|
691
|
|
|
$
|
11
|
|
|
1.7
|
%
|
Operating margin
(4)
|
13.3
|
%
|
|
14.3
|
%
|
|
5.7
|
%
|
|
13.8
|
%
|
|
—
|
|
|
(1.0) pts
|
|
*
|
Not meaningful.
|
(1)
|
Includes CERP, CGP Casinos, CIE, and associated parent company and elimination adjustments that represent the Caesars structure as of
June 30, 2016
, and for subsequent periods.
|
(2)
|
Includes eliminations of intercompany transactions and other consolidating adjustments. Since CEOC was deconsolidated effective
January 15, 2015
, CEOC’s operations are included in our consolidated results for the first 15 days of 2015, but there are no comparable amounts for 2016.
|
(3)
|
See the Reconciliation of Non-GAAP Financial Measures discussion later in this
MD&A for a reconciliation of
Property EBITDA.
|
(4)
|
Operating margin is calculated as income from operations divided by net revenues.
|
Net Revenues by Category - CERP, CGP Casinos & CIE
|
|||||||||||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Fav/(Unfav)
|
|
Six Months Ended June 30,
|
|
Fav/(Unfav)
|
||||||||||||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
Casino
|
$
|
545
|
|
|
$
|
543
|
|
|
$
|
2
|
|
|
0.4
|
%
|
|
$
|
1,075
|
|
|
$
|
1,085
|
|
|
$
|
(10
|
)
|
|
(0.9
|
)%
|
Food and beverage
|
204
|
|
|
203
|
|
|
1
|
|
|
0.5
|
%
|
|
410
|
|
|
404
|
|
|
6
|
|
|
1.5
|
%
|
||||||
Rooms
|
235
|
|
|
221
|
|
|
14
|
|
|
6.3
|
%
|
|
464
|
|
|
425
|
|
|
39
|
|
|
9.2
|
%
|
||||||
Interactive entertainment
|
248
|
|
|
186
|
|
|
62
|
|
|
33.3
|
%
|
|
476
|
|
|
363
|
|
|
113
|
|
|
31.1
|
%
|
||||||
Other
|
130
|
|
|
121
|
|
|
9
|
|
|
7.4
|
%
|
|
245
|
|
|
228
|
|
|
17
|
|
|
7.5
|
%
|
||||||
Less: casino promotional allowances (“Casino promo”)
|
(132
|
)
|
|
(133
|
)
|
|
1
|
|
|
0.8
|
%
|
|
(272
|
)
|
|
(268
|
)
|
|
(4
|
)
|
|
(1.5
|
)%
|
||||||
Net revenues
|
$
|
1,230
|
|
|
$
|
1,141
|
|
|
$
|
89
|
|
|
7.8
|
%
|
|
$
|
2,398
|
|
|
$
|
2,237
|
|
|
$
|
161
|
|
|
7.2
|
%
|
Net Revenues - Segment
|
|||||||||||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Fav/(Unfav)
|
|
Six Months Ended June 30,
|
|
Fav/(Unfav)
|
||||||||||||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
CERP
|
$
|
562
|
|
|
$
|
566
|
|
|
$
|
(4
|
)
|
|
(0.7
|
)%
|
|
$
|
1,090
|
|
|
$
|
1,095
|
|
|
$
|
(5
|
)
|
|
(0.5
|
)%
|
CGP Casinos
|
423
|
|
|
390
|
|
|
33
|
|
|
8.5
|
%
|
|
839
|
|
|
780
|
|
|
59
|
|
|
7.6
|
%
|
||||||
CIE
|
249
|
|
|
186
|
|
|
63
|
|
|
33.9
|
%
|
|
477
|
|
|
363
|
|
|
114
|
|
|
31.4
|
%
|
||||||
Other
|
(4
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
*
|
|
|
(8
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
*
|
|
||||||
Total CERP, CGP Casinos & CIE
|
1,230
|
|
|
1,141
|
|
|
89
|
|
|
7.8
|
%
|
|
2,398
|
|
|
2,237
|
|
|
161
|
|
|
7.2
|
%
|
||||||
CEOC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
164
|
|
|
(164
|
)
|
|
*
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
6
|
|
|
*
|
|
||||||
Total CEOC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|
(158
|
)
|
|
*
|
|
||||||
Consolidated Caesars
|
$
|
1,230
|
|
|
$
|
1,141
|
|
|
$
|
89
|
|
|
7.8
|
%
|
|
$
|
2,398
|
|
|
$
|
2,395
|
|
|
$
|
3
|
|
|
*
|
|
*
|
Not meaningful.
|
Cash ADR
(1)
|
||||
Three Months Ended June 30, 2016 versus 2015
|
|
Six Months Ended June 30, 2016 versus 2015
|
(1)
|
Average cash daily rate (“cash ADR”) is a key indicator by which we evaluate the performance of our properties and is determined by room revenue and rooms occupied.
|
•
|
CERP’s gaming volumes declined an aggregate 4% and 6% during the three and
six months ended
June 30, 2016
, respectively.
|
•
|
Expansion of resort fees to all properties in our portfolio during 2015, improved hotel yield, and the opening of the Harrah’s Atlantic City Waterfront Conference Center (the “Atlantic City Conference Center”) in the third quarter of 2015 drove an increase in CERP’s hotel average cash daily rate (“cash ADR”) to
$123
for the
second quarter
of
2016
from
$114
in 2015 and
$123
for the first half of
2016
from
$113
in 2015.
|
•
|
CERP rooms revenue was negatively affected by scheduled room renovations at Harrah’s Las Vegas, which resulted in over
10,000
room nights out of service during the second quarter of 2016 and nearly
50,000
room nights during the first half of 2016.
|
•
|
Horseshoe Baltimore contributed increases of $16 million and $20 million in casino revenues for the second quarter and the first half of 2016, respectively, as the area recovered from poor performance experienced in the second quarter of 2015 resulting from the period of civil unrest in Baltimore. Horseshoe Baltimore benefitted from increases in gaming volumes of 14% and 6% during the three and
six months ended
June 30, 2016
, respectively.
|
•
|
Room renovations at The LINQ Hotel & Casino (“The LINQ Hotel”) were substantially completed and available to guests in early May 2015, which contributed $6 million increase in rooms revenue during the second quarter of 2016 and $20 million during the first half of 2016. This was driven by increases in available and occupied rooms and improved hotel yield, resulting in increased hotel cash ADR. The higher volume of guests and visitors subsequent to renovation also led to slight increases in both food and beverage revenues and casino revenues.
|
•
|
An increase in other revenues in
2016
was driven by increases at Planet Hollywood Resort & Casino, which contributed to higher entertainment revenue of
$10 million
for the second quarter of 2016 and
$20 million
for the first half of 2016.
|
•
|
Harrah’s New Orleans experienced a decrease of $14 million in casino revenues for the first half of 2016, which was in part caused by the New Orleans smoking ban that was enacted in April 2015. Gaming volumes declined 14% for the first half of 2016.
|
CIE Key Performance Indicators
|
||||
Three Months Ended June 30, 2016 versus 2015
|
|
Six Months Ended June 30, 2016 versus 2015
|
||
Average Daily Active Users
|
Average Monthly Unique Payers
|
Income/(Loss) from Operations - Segment
|
|||||||||||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Fav/(Unfav)
|
|
Six Months Ended June 30,
|
|
Fav/(Unfav)
|
||||||||||||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
CERP
|
$
|
111
|
|
|
$
|
126
|
|
|
$
|
(15
|
)
|
|
(11.9
|
)%
|
|
$
|
189
|
|
|
$
|
233
|
|
|
$
|
(44
|
)
|
|
(18.9
|
)%
|
CGP Casinos
|
67
|
|
|
44
|
|
|
23
|
|
|
52.3
|
%
|
|
130
|
|
|
208
|
|
|
(78
|
)
|
|
(37.5
|
)%
|
||||||
CIE
|
20
|
|
|
54
|
|
|
(34
|
)
|
|
(63.0
|
)%
|
|
74
|
|
|
95
|
|
|
(21
|
)
|
|
(22.1
|
)%
|
||||||
Other
|
(34
|
)
|
|
(38
|
)
|
|
4
|
|
|
10.5
|
%
|
|
(75
|
)
|
|
(215
|
)
|
|
140
|
|
|
65.1
|
%
|
||||||
Total CERP, CGP Casinos & CIE
|
164
|
|
|
186
|
|
|
(22
|
)
|
|
(11.8
|
)%
|
|
318
|
|
|
321
|
|
|
(3
|
)
|
|
(0.9
|
)%
|
||||||
CEOC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
(9
|
)
|
|
*
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total CEOC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
(9
|
)
|
|
*
|
|
||||||
Consolidated Caesars
|
$
|
164
|
|
|
$
|
186
|
|
|
$
|
(22
|
)
|
|
(11.8
|
)%
|
|
$
|
318
|
|
|
$
|
330
|
|
|
$
|
(12
|
)
|
|
*
|
|
*
|
Not meaningful.
|
*
|
Not meaningful.
|
Other Factors Affecting Net Income/(Loss) - Consolidated
|
||||||||||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Fav/(Unfav)
|
|
Six Months Ended June 30,
|
|
Fav/(Unfav)
|
|||||||||||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||||||||
Deconsolidation and restructuring of CEOC and other
|
$
|
(2,026
|
)
|
|
$
|
7
|
|
|
$
|
(2,033
|
)
|
|
*
|
|
$
|
(2,263
|
)
|
|
$
|
7,096
|
|
|
$
|
(9,359
|
)
|
|
*
|
|
Income tax benefit/(provision)
|
(31
|
)
|
|
4
|
|
|
(35
|
)
|
|
*
|
|
(71
|
)
|
|
(188
|
)
|
|
117
|
|
|
62.2
|
%
|
*
|
Not meaningful.
|
Cash and Available Revolver Capacity
|
|||||||||||||||
|
June 30, 2016
|
||||||||||||||
(In millions)
|
CERP
|
|
CES
|
|
CGP
|
|
Other
|
||||||||
Cash and cash equivalents
(1)
|
$
|
191
|
|
|
$
|
104
|
|
|
$
|
1,029
|
|
|
$
|
201
|
|
Revolver capacity
|
270
|
|
|
—
|
|
|
160
|
|
|
—
|
|
||||
Revolver capacity drawn or committed to letters of credit
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
446
|
|
|
$
|
104
|
|
|
$
|
1,189
|
|
|
$
|
201
|
|
(1)
|
CGP’s cash and cash equivalents includes
$107 million
held by foreign subsidiaries.
|
Annual Estimated Debt Service Requirements
|
|||||||||||||||||||||||||||
(In millions)
|
Remaining
2016 |
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
CERP
|
$
|
210
|
|
|
$
|
421
|
|
|
$
|
405
|
|
|
$
|
405
|
|
|
$
|
3,730
|
|
|
$
|
1,270
|
|
|
$
|
6,441
|
|
CGP
|
102
|
|
|
201
|
|
|
205
|
|
|
380
|
|
|
450
|
|
|
1,936
|
|
|
3,274
|
|
|||||||
Total
|
$
|
312
|
|
|
$
|
622
|
|
|
$
|
610
|
|
|
$
|
785
|
|
|
$
|
4,180
|
|
|
$
|
3,206
|
|
|
$
|
9,715
|
|
Summary of Capital Expenditures
|
|||||||||||
|
Six Months Ended June 30,
|
|
Increase/
(Decrease) |
||||||||
(In millions)
|
2016
|
|
2015
|
|
|||||||
Development
|
$
|
3
|
|
|
$
|
75
|
|
|
$
|
(72
|
)
|
Renovation/refurbishment
|
86
|
|
|
142
|
|
|
(56
|
)
|
|||
Other
|
17
|
|
|
10
|
|
|
7
|
|
|||
Total capital expenditures
|
$
|
106
|
|
|
$
|
227
|
|
|
$
|
(121
|
)
|
|
|
|
|
|
|
||||||
Included in capital expenditures:
|
|
|
|
|
|
||||||
Capitalized payroll costs
|
$
|
2
|
|
|
$
|
3
|
|
|
|
||
Capitalized interest
|
—
|
|
|
9
|
|
|
|
•
|
remodel projects at CERP’s Harrah’s Las Vegas and Paris Las Vegas;
|
•
|
remodel projects at CGP’s Planet Hollywood;
|
•
|
hospitality and maintenance projects; and
|
•
|
IT, marketing, analytics, accounting, payroll, and other projects that benefit the operating structures.
|
Reconciliation of Property EBITDA
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income/(loss) attributable to Caesars
|
$
|
(2,077
|
)
|
|
$
|
15
|
|
|
$
|
(2,385
|
)
|
|
$
|
6,787
|
|
Net income attributable to noncontrolling interests
|
34
|
|
|
35
|
|
|
68
|
|
|
60
|
|
||||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Income tax (benefit)/provision
|
31
|
|
|
(4
|
)
|
|
71
|
|
|
188
|
|
||||
Deconsolidation and restructuring of CEOC and other
|
2,026
|
|
|
(7
|
)
|
|
2,263
|
|
|
(7,096
|
)
|
||||
Interest expense
|
150
|
|
|
147
|
|
|
301
|
|
|
384
|
|
||||
Depreciation and amortization
|
109
|
|
|
96
|
|
|
228
|
|
|
198
|
|
||||
Corporate expense
|
41
|
|
|
45
|
|
|
82
|
|
|
91
|
|
||||
Other operating costs
|
21
|
|
|
24
|
|
|
43
|
|
|
72
|
|
||||
Property EBITDA
|
$
|
335
|
|
|
$
|
351
|
|
|
$
|
671
|
|
|
$
|
691
|
|
Segment Property EBITDA
(1)
|
|||||||||||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Fav/(Unfav)
|
|
Six Months Ended June 30,
|
|
Fav/(Unfav)
|
||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||
(Dollars in millions)
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
CERP
|
$
|
184
|
|
|
$
|
186
|
|
|
$
|
(2
|
)
|
|
(1.1
|
)%
|
|
$
|
348
|
|
|
$
|
356
|
|
|
$
|
(8
|
)
|
|
(2.2
|
)%
|
CGP Casinos
|
117
|
|
|
100
|
|
|
17
|
|
|
17.0
|
%
|
|
227
|
|
|
190
|
|
|
37
|
|
|
19.5
|
%
|
||||||
CIE
(2)
|
32
|
|
|
62
|
|
|
(30
|
)
|
|
(48.4
|
)%
|
|
93
|
|
|
111
|
|
|
(18
|
)
|
|
(16.2
|
)%
|
||||||
Other
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
(33.3
|
)%
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
%
|
||||||
Total CERP, CGP Casinos, and CIE
|
335
|
|
|
351
|
|
|
(16
|
)
|
|
(4.6
|
)%
|
|
671
|
|
|
660
|
|
|
11
|
|
|
1.7
|
%
|
||||||
CEOC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
31
|
|
|
(31
|
)
|
|
*
|
|
||||||
Total Consolidated Caesars
|
$
|
335
|
|
|
$
|
351
|
|
|
$
|
(16
|
)
|
|
(4.6
|
)%
|
|
$
|
671
|
|
|
$
|
691
|
|
|
$
|
(20
|
)
|
|
*
|
|
*
|
Not meaningful due to the deconsolidation of CEOC.
|
(1)
|
See reconciliation of net income/(loss) to Property EBITDA by segment at
Note 14
.
|
(2)
|
CIE recognized expenses of
$66 million
for the second quarter of
2016
and
$94 million
first half of 2016 resulting from adjustments in the fair value of their stock-based compensation awards, which negatively affected CIE property EBITDA.
|
•
|
the outcome of currently pending or threatened litigation and demands for payment by certain creditors and by the National Retirement Fund against CEC;
|
•
|
the effects of CEOC’s bankruptcy on CEOC and its subsidiaries and affiliates, including us, and the interest of various creditors, equity holders and other constituents;
|
•
|
CEC’s limited cash balances and sources of available cash, including CEC’s ability (or inability) to secure additional liquidity to meet its ongoing obligations and its commitments to support the CEOC Restructuring as necessary and CEC’s financial obligations exceeding or becoming due earlier than what is currently forecast;
|
•
|
the event that the RSAs may not be consummated in accordance with their terms, or persons not party to the RSAs may successfully challenge the implementation thereof;
|
•
|
the length of time CEOC will operate in the Chapter 11 cases and CEOC’s failure to comply with the milestones previously provided by the First Lien RSA or that may be included in the RSAs or other agreements relating to the Restructuring;
|
•
|
risks associated with third party motions in the Chapter 11 cases, which may hinder or delay CEOC’s ability to consummate the restructuring as contemplated by the RSAs;
|
•
|
the adverse effects of the Chapter 11 proceedings and related litigation on our liquidity or results of operations;
|
•
|
the effects of local and national economic, credit and capital market conditions on the economy, in general, and on the gaming industry, in particular, including reductions in consumer discretionary spending due to economic downturns or other factors;
|
•
|
the financial results of our consolidated businesses;
|
•
|
the impact of our substantial indebtedness and the restrictions in our debt agreements;
|
•
|
access to available and reasonable financing on a timely basis, including our ability to refinance our indebtedness on acceptable terms;
|
•
|
the ability of CEOC’s customer tracking, customer loyalty, and yield management programs to continue to increase customer loyalty and same-store or hotel sales;
|
•
|
changes in the extensive governmental regulations to which we are subject, and changes in laws, including increased tax rates, smoking bans, gaming regulations or accounting standards, third-party relations and approvals, and decisions, disciplines and fines of courts, regulators and governmental bodies;
|
•
|
our ability to recoup costs of capital investments through higher revenues;
|
•
|
abnormal gaming holds ("gaming hold" is the amount of money that is retained by the casino from wagers by customers);
|
•
|
the effects of competition, including locations of competitors, growth of online gaming, competition for new licenses, and operating and market competition;
|
•
|
the ability to timely and cost-effectively integrate companies that we acquire into our operations;
|
•
|
the potential difficulties in employee retention and recruitment as a result of our substantial indebtedness, any ongoing weakness in the gaming industry, the Restructuring of CEOC, or any other factors;
|
•
|
differences in our interests and those of our Sponsors;
|
•
|
construction factors, including delays, increased costs of labor and materials, availability of labor and materials, zoning issues, environmental restrictions, soil and water conditions, weather and other hazards, site access matters, and building permit issues;
|
•
|
litigation outcomes and judicial and governmental body actions, including gaming legislative action, referenda, regulatory disciplinary actions, and fines and taxation;
|
•
|
acts of war or terrorist incidents, severe weather conditions, uprisings or natural disasters, including losses therefrom, including losses in revenues and damage to property, and the impact of severe weather conditions on our ability to attract customers to certain of our facilities;
|
•
|
the effects of environmental and structural building conditions relating to our properties;
|
•
|
access to insurance on reasonable terms for our assets;
|
•
|
our dependence on CES and its management for services pursuant to the Omnibus License and Enterprise Services Agreement, access to intellectual property rights, the Total Rewards loyalty program, its customer database and other services, rights and information, and our dependence on Caesars Entertainment’s management;
|
•
|
the impact of a bankruptcy by other third parties that we depend on;
|
•
|
continued growth in consumer demand for non-gaming activities replacing demand for gambling;
|
•
|
CERP’s ability to renew our agreement to host the World Series of Poker’s Main Event;
|
•
|
our ability to retain our resident performers on acceptable terms;
|
•
|
uncertainty in the completion of projects neighboring our properties that are expected to be beneficial to our properties;
|
•
|
our ability to realize any or all of our projected cost savings; any impairments to goodwill, indefinite-lived intangible assets, or long- lived assets that we may incur;
|
•
|
fluctuations in energy prices;
|
•
|
our ability to recover on credit extended to our customers;
|
•
|
damage caused to our brands due to the unauthorized use of our brand names by third parties;
|
•
|
the failure of CES and CEOC to protect the trademarks that are licensed to us;
|
•
|
the effects of compromises to our information systems or unauthorized access to confidential information or our customers’ personal information;
|
•
|
the effects of deterioration in the success of third parties adjacent to our business;
|
•
|
the impact, if any, of unfunded pension benefits under multi-employer pension plans; and
|
•
|
the other factors set forth under “Risk Factors” in our 2015 10-K.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
•
|
Litigation commenced by Wilmington Savings Fund Society, FSB on August 4, 2014 (the “Delaware Second Lien Lawsuit”)
|
•
|
Litigation commenced by parties on September 3, 2014 and October 2, 2014 (the “Senior Unsecured Lawsuits”)
|
•
|
Litigation commenced by UMB Bank on November 25, 2014 (the “Delaware First Lien Lawsuit”)
|
•
|
Demands for payment made by Wilmington Savings Fund Society, FSB on February 13, 2015 (the “February 13 Notice”)
|
•
|
Demands for payment made by BOKF, N.A., on February 18, 2015 (the “February 18 Notice”)
|
•
|
Litigation commenced by BOKF, N.A. on March 3, 2015 (the “New York Second Lien Lawsuit”)
|
•
|
Litigation commenced by UMB Bank on June 15, 2015 (the “New York First Lien Lawsuit”)
|
•
|
Litigation commenced by Wilmington Trust, National Association on October 20, 2015 (the “New York Senior Notes Lawsuit”)
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Filed Herewith
|
|
Form
|
|
Period Ending
|
|
Exhibit
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1
|
|
Amended and Restated Agreement and Plan of Merger, dated as of July 9, 2016, between Caesars Acquisition Company and Caesars Entertainment Corporation.
|
|
—
|
|
8-K
|
|
—
|
|
2.1
|
|
7/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.1
|
|
Amendment No. 1 Employment Agreement between Caesars Enterprise Services, LLC and Tariq Shaukat.
|
|
—
|
|
8-K
|
|
—
|
|
10.1
|
|
4/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.2
|
|
Amendment No. 3 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan.
|
|
—
|
|
8-K
|
|
—
|
|
10.1
|
|
5/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.3
|
|
Amendment No. 4 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.4
|
|
Form of Cash Award Agreement under 2012 Performance Incentive Plan.
|
|
—
|
|
8-K
|
|
—
|
|
10.1
|
|
5/27/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.5
|
|
Amendment No. 2 to Employment Agreement among Caesars Entertainment Corporation, Caesars Enterprise Services, LLC, Caesars Acquisition Company and Mark Frissora
|
|
—
|
|
8-K
|
|
—
|
|
10.1
|
|
7/6/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.6
|
|
Restricted Stock Unit Award between Mark Frissora and Caesars Entertainment Corporation
|
|
—
|
|
8-K
|
|
—
|
|
10.2
|
|
7/6/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.7
|
|
Restricted Stock Unit Award dated as of June 29, 2016 between Mark Frissora and Caesars Acquisition Company
|
|
—
|
|
8-K
|
|
—
|
|
10.3
|
|
7/6/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.8
|
|
Form of Restricted Stock Unit Award Agreement (July 2016 Retention Awards)
|
|
—
|
|
8-K
|
|
—
|
|
10.4
|
|
7/6/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.9
|
|
Form of Cash Award Agreement (July 2016 Retention Awards)
|
|
—
|
|
8-K
|
|
—
|
|
10.5
|
|
7/6/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10
|
|
Restructuring Support and Forbearance Agreement, dated as of June 6, 2016, among Caesars Entertainment Operating Company,
In
c., on behalf of itself and each of the debtors in the Chapter 11 Cases, Caesars Entertainment Corporation and each of the holders of SGN Claims party thereto.
|
|
—
|
|
8-K
|
|
—
|
|
10.1
|
|
6/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Filed Herewith
|
|
Form
|
|
Period Ending
|
|
Exhibit
|
|
Filing Date
|
10.11
|
|
Restructuring Support, Settlement and Contribution Agreement, dated as of June 7, 2016, among Caesars Entertainment Operating Company, Inc., on behalf of itself, each of the debtors in the Chapter 11 Cases and its other direct and indirect subsidiaries and Caesars Entertainment Corporation.
|
|
—
|
|
8-K
|
|
—
|
|
10.2
|
|
6/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12
|
|
First Amended Restructuring Support and Forbearance Agreement, dated as of June 20, 2016, among Caesars Entertainment Operating Company, Inc., on behalf of itself and the subsidiary loan parties party thereto, Caesars Entertainment Corporation and each of the holders of First Lien Bank Claims party thereto.
|
|
—
|
|
8-K
|
|
—
|
|
10.1
|
|
6/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
Restructuring Support and Settlement Agreement, dated as of June 22, 2016, among Caesars Entertainment Operating Company, Inc., on behalf of itself and each of the debtors in the Chapter 11 Cases, Caesars Entertainment Corporation and the statutory unsecured claimholders’ committee in the Chapter 11 Cases.
|
|
—
|
|
8-K
|
|
—
|
|
10.1
|
|
6/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14
|
|
Voting Agreement, dated as of July 9, 2016, among Caesars Entertainment Corporation, Hamlet Holdings LLC and the Holders party thereto.
|
|
—
|
|
8-K
|
|
—
|
|
10.1
|
|
7/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
First Amended and Restated Restructuring Support, Settlement and Contribution Agreement, dated as of July 9, 2016, between Caesars Entertainment Corporation and Caesars Entertainment Operating Company, Inc.
|
|
—
|
|
8-K
|
|
—
|
|
10.2
|
|
7/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*32.1
|
|
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Filed Herewith
|
|
Form
|
|
Period Ending
|
|
Exhibit
|
|
Filing Date
|
*32.2
|
|
Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
The following financial statements from the Company’s Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL: (i) Consolidated Condensed Balance Sheets, (ii) Consolidated Condensed Statements of Operations, (iii) Consolidated Condensed Statements of Comprehensive Loss, (iv) Consolidated Condensed Statement of Stockholders’ Equity, (v) Consolidated Condensed Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements.
|
|
X
|
|
|
|
|
|
|
|
|
† Denotes a management contract or compensatory plan or arrangement.
|
* Furnished herewith.
|
|
|
|
|
CAESARS ENTERTAINMENT CORPORATION
|
|
|
|
|
August 2, 2016
|
By:
|
/S/ KEITH A. CAUSEY
|
|
|
Keith A. Causey
|
|
|
Senior Vice President and Chief Accounting Officer
|
8.5
|
Tax Withholding.
Upon any exercise, vesting, or payment of any award, or upon the disposition of shares of Common Stock acquired pursuant to the exercise of an ISO prior to satisfaction of the holding period requirements of Section 422 of the Code, or upon any other tax withholding event with respect to any award, the Corporation or one of its Subsidiaries shall have the right at its option to:
|
(a)
|
require the participant (or the participant’s personal representative or beneficiary, as the case may be) to pay or provide for payment of at least the minimum amount of any taxes which the Corporation or one of its Subsidiaries may be required to withhold with respect to such award event or payment; or
|
(b)
|
deduct from any amount otherwise payable in cash (whether related to the award or otherwise) to the participant (or the participant’s personal representative or beneficiary, as the case may be) the amount of any taxes which the Corporation or one of its Subsidiaries may be required to withhold with respect to such award event or payment.
|
2.
|
Except as otherwise expressly set forth in this Amendment, all other Articles, Sections, terms and conditions of the Plan remain unchanged and in full force and effect.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Caesars Entertainment Corporation;
|
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 officers 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 (the registrant's fourth fiscal quarter in the case of an annual report) 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 officers 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 the 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.
|
/S/ MARK P. FRISSORA
|
Mark P. Frissora
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Caesars Entertainment Corporation;
|
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 officers 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 (the registrant's fourth fiscal quarter in the case of an annual report) 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 officers 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 the 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.
|
/S/ ERIC HESSION
|
Eric Hession
|
Executive Vice President and Chief Financial Officer
|
/S/ MARK P. FRISSORA
|
Mark P. Frissora
|
President and Chief Executive Officer
|
/S/ ERIC HESSION
|
Eric Hession
|
Executive Vice President and Chief Financial Officer
|