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 September 30, ~~2020~~2021


☐			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)


Delaware			46-3657681
(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)

(775) 328-0100

(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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.00001 par value	CZR	NASDAQ 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 October ~~30, 2020~~29, 2021 was ~~208,277,138.~~213,774,052.

CAESARS ENTERTAINMENT, INC.

~~QUARTERLY REPORT FOR THE THREE MONTHS ENDED~~

~~SEPTEMBER 30, 2020~~

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION		2
Item 1.	~~FINANCIAL STATEMENTS~~Unaudited Financial Statements	2
	Consolidated Condensed Balance Sheets ~~at September 30, 2020 (unaudited) and December 31, 2019~~	2
	Consolidated Condensed Statements of Operations	3
	Consolidated Condensed Statements of ~~Operations for the Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)~~Comprehensive Income (Loss)	4
	Consolidated Condensed Statements of ~~Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)~~Stockholders’ Equity	5
	Consolidated Condensed Statements of ~~Stockholders’ Equity for the Nine Months Ended September 30, 2020 and 2019 (unaudited)~~Cash Flows	67
	~~Consolidated~~ ~~Condensed~~ ~~Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (unaudited)~~	8
	Notes to Consolidated Condensed Financial Statements ~~(unaudited)~~	9
Item 2.	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	4443
Item 3.	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	~~CONTROLS AND PROCEDURES~~Controls and Procedures	6566

PART II. OTHER INFORMATION		67
Item 1.	~~LEGAL PROCEEDINGS~~Legal Proceedings	67
Item 1A.	~~RISK FACTORS~~Risk Factors	7068
Item 2.	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~Unregistered Sales of Equity Securities and Use of Proceeds	7371
Item 3.	~~DEFAULTS UPON SENIOR SECURITIES~~Defaults Upon Senior Securities	7371
Item 4.	~~MINE SAFETY DISCLOSURES~~Mine Safety Disclosures	7372
Item 5.	~~OTHER INFORMATION~~Other Information	7372
Item 6.	~~EXHIBITS~~Exhibits	73

~~SIGNATURES~~Signatures		7874

PART ~~I-FINANCIAL~~I - FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

September 30,
2020 December 31,
2019
(Dollars in millions) (unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($8 and $0 attributable to our VIEs) $ 1,037 $ 206
Restricted cash and investments 2,259 4
Accounts receivable, net 385 54
Due from affiliates 37 4
Inventories 49 18
Prepayments and other current assets ($5 and $0 attributable to our VIEs) 265 66
Assets held for sale 2,266 253
Total current assets 6,298 605
Investment in and advances to unconsolidated affiliates 170 136
Property and equipment, net ($84 and $0 attributable to our VIEs) 14,630 2,615
Gaming licenses and other intangibles, net 4,466 1,111
Goodwill 9,450 910
Other assets, net ($25 and $0 attributable to our VIEs) 1,224 264
Deferred income taxes 1 0
Total assets $ 36,239 $ 5,641
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 67 $ 246
Accounts payable ($98 and $0 attributable to our VIEs) 274 62
Accrued interest 241 36
Accrued other liabilities ($2 and $0 attributable to our VIEs) 1,371 307
Liabilities related to assets held for sale 517 37
Total current liabilities 2,470 688
Long-term financing obligation 12,547 971
Long-term debt, less current portion 15,203 2,325
Deferred income taxes 1,081 197
Other long-term liabilities ($19 and $0 attributable to our VIEs) 1,549 343
Total liabilities 32,850 4,524
Commitments and contingencies (Note 13)

STOCKHOLDERS' EQUITY:
Caesars stockholders’ equity 3,370 1,117
Noncontrolling interests 19 0
Total stockholders’ equity 3,389 1,117
Total liabilities and stockholders’ equity $ 36,239 $ 5,641
(UNAUDITED)


(In millions)	September 30, 2021		December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,072	$	1,776
Restricted cash and investments	302		2,021

Accounts receivable, net	438		342
Due from affiliates	—		44
Inventories	45		44
Prepayments and other current assets	256		253
Assets held for sale ($0 and $130 attributable to our VIEs)	3,812		1,583
Total current assets	5,925		6,063
Investment in and advances to unconsolidated affiliates	203		173
Property and equipment, net	14,529		14,735
Gaming rights and other intangibles, net	5,253		4,283
Goodwill	10,967		9,864
Other assets, net	2,085		1,267

Total assets	$	38,962	$	36,385
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	340	$	167
Accrued interest	216		229
Accrued other liabilities	1,686		1,263
Current portion of long-term debt	70		67
Liabilities related to assets held for sale ($0 and $130 attributable to our VIEs)	2,666		787
Total current liabilities	4,978		2,513
Long-term financing obligation	12,411		12,295
Long-term debt	14,453		14,073
Deferred income taxes	1,197		1,166
Other long-term liabilities	970		1,304
Total liabilities	34,009		31,351
Commitments and contingencies (Note 8)			0
0STOCKHOLDERS' EQUITY:
Caesars stockholders’ equity	4,890		5,016
Noncontrolling interests	63		18
Total stockholders’ equity	4,953		5,034
Total liabilities and stockholders’ equity	$	38,962	$	36,385

The accompanying notes are an integral part of these consolidated condensed financial statements.

3Table of Contents

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

~~(unaudited)~~(UNAUDITED)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share data)	(In millions, except per share data)	2020		2019		2020		2019		(In millions, except per share data)	2021		2020		2021		2020
REVENUES:	REVENUES:									REVENUES:
Casino and pari-mutuel commissions	Casino and pari-mutuel commissions	$	919	$	458	$	1,360	$	1,386	Casino and pari-mutuel commissions	$	1,510	$	981	$	4,308	$	1,422
Food and beverage	Food and beverage	125		78		188		229		Food and beverage	347		127		797		190
Hotel	Hotel	200		94		257		237		Hotel	511		200		1,122		257
Other	Other	133		33		172		84		Other	317		135		752		174

Net revenues	Net revenues	1,377		663		1,977		1,936		Net revenues	2,685		1,443		6,979		2,043
EXPENSES:	EXPENSES:									EXPENSES:
Casino and pari-mutuel commissions	Casino and pari-mutuel commissions	461		229		685		693		Casino and pari-mutuel commissions	830		493		2,111		717
Food and beverage	Food and beverage	91		60		153		180		Food and beverage	210		92		484		154
Hotel	Hotel	63		27		91		76		Hotel	130		63		317		91
Other	Other	52		12		62		34		Other	114		53		262		63

General and administrative	General and administrative	330		130		495		381		General and administrative	486		338		1,284		503

Corporate	Corporate	90		13		120		51		Corporate	86		90		228		120
Impairment charges	Impairment charges	0		0		161		1		Impairment charges	—		—		—		161
Depreciation and amortization	Depreciation and amortization	223		53		322		167		Depreciation and amortization	276		225		842		324
Transaction costs and other operating costs	Transaction costs and other operating costs	219		14		242		2		Transaction costs and other operating costs	21		220		113		243
Total operating expenses	Total operating expenses	1,529		538		2,331		1,585		Total operating expenses	2,153		1,574		5,641		2,376

Operating (loss) income		(152)		125		(354)		351
Operating income (loss)										Operating income (loss)	532		(131)		1,338		(333)
OTHER EXPENSE:	OTHER EXPENSE:									OTHER EXPENSE:
Interest expense, net	Interest expense, net	(473)		(72)		(608)		(217)		Interest expense, net	(579)		(485)		(1,734)		(620)
Loss on extinguishment of debt	Loss on extinguishment of debt	(173)		(1)		(173)		(1)		Loss on extinguishment of debt	(117)		(173)		(140)		(173)

Other (loss) income		9		3		(1)		0
Other income (loss)										Other income (loss)	(153)		9		(176)		(1)
Total other expense	Total other expense	(637)		(70)		(782)		(218)		Total other expense	(849)		(649)		(2,050)		(794)
(Loss) income from continuing operations before income taxes		(789)		55		(1,136)		133
Provision for income taxes		(135)		(18)		(64)		(39)
Net (loss) income from continuing operations, net of income taxes		(924)		37		(1,200)		94
Loss from continuing operations before income taxes										Loss from continuing operations before income taxes	(317)		(780)		(712)		(1,127)
Benefit (provision) for income taxes										Benefit (provision) for income taxes	90		(138)		167		(67)
Net loss from continuing operations, net of income taxes										Net loss from continuing operations, net of income taxes	(227)		(918)		(545)		(1,194)
Discontinued operations, net of income taxes	Discontinued operations, net of income taxes	(1)		0		(1)		0		Discontinued operations, net of income taxes	(4)		(7)		(38)		(7)
Net (loss) income		(925)		37		(1,201)		94
Net loss										Net loss	(231)		(925)		(583)		(1,201)
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(1)		0		(1)		0		Net income attributable to noncontrolling interests	(2)		(1)		(2)		(1)
Net (loss) income attributable to Caesars		$	(926)	$	37	$	(1,202)	$	94
Net (loss) income per share - basic and diluted:
Basic (loss) income per share from continuing operations		$	(6.09)	$	0.48	$	(11.55)	$	1.21
Net loss attributable to Caesars										Net loss attributable to Caesars	$	(233)	$	(926)	$	(585)	$	(1,202)

Net loss per share - basic and diluted:										Net loss per share - basic and diluted:
Basic loss per share from continuing operations										Basic loss per share from continuing operations	$	(1.08)	$	(6.04)	$	(2.60)	$	(11.49)
Basic loss per share from discontinued operations	Basic loss per share from discontinued operations	0		0		(0.01)		0		Basic loss per share from discontinued operations	(0.02)		(0.05)		(0.18)		(0.07)
Basic (loss) income per share		$	(6.09)	$	0.48	$	(11.56)	$	1.21
Diluted (loss) income per share from continuing operations		$	(6.09)	$	0.47	$	(11.55)	$	1.20
Basic loss per share										Basic loss per share	$	(1.10)	$	(6.09)	$	(2.78)	$	(11.56)
Diluted loss per share from continuing operations										Diluted loss per share from continuing operations	$	(1.08)	$	(6.04)	$	(2.60)	$	(11.49)
Diluted loss per share from discontinued operations	Diluted loss per share from discontinued operations	0		0		(0.01)		0		Diluted loss per share from discontinued operations	(0.02)		(0.05)		(0.18)		(0.07)
Diluted (loss) income per share		$	(6.09)	$	0.47	$	(11.56)	$	1.20
Diluted loss per share										Diluted loss per share	$	(1.10)	$	(6.09)	$	(2.78)	$	(11.56)
Weighted average basic shares outstanding	Weighted average basic shares outstanding	152		78		104		78		Weighted average basic shares outstanding	214		152		211		104
Weighted average diluted shares outstanding	Weighted average diluted shares outstanding	152		79		104		79		Weighted average diluted shares outstanding	214		152		211		104

The accompanying notes are an integral part of these consolidated condensed financial statements.

4Table of Contents

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ~~INCOME~~

~~(unaudited)~~(UNAUDITED)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)	2021		2020		2021		2020
Net (loss) income		$	(925)	$	37	$	(1,201)	$	94
Net loss										Net loss	$	(231)	$	(925)	$	(583)	$	(1,201)
Foreign currency translation adjustments	Foreign currency translation adjustments	1		0		1		0		Foreign currency translation adjustments	(33)		1		(44)		1
Change in fair market value of interest rate swaps, net of tax	Change in fair market value of interest rate swaps, net of tax	14		0		14		0		Change in fair market value of interest rate swaps, net of tax	11		14		33		14
Other comprehensive income, net of tax		15		0		15		0
Comprehensive (loss) income		(910)		37		(1,186)		94
Other										Other	(3)		—		(1)		—
Other comprehensive income (loss), net of tax										Other comprehensive income (loss), net of tax	(25)		15		(12)		15
Comprehensive loss										Comprehensive loss	(256)		(910)		(595)		(1,186)
Comprehensive income attributable to noncontrolling interests	Comprehensive income attributable to noncontrolling interests	(1)		0		(1)		0		Comprehensive income attributable to noncontrolling interests	(2)		(1)		(2)		(1)
Comprehensive (loss) income attributable to Caesars		$	(911)	$	37	$	(1,187)	$	94
Comprehensive loss attributable to Caesars										Comprehensive loss attributable to Caesars	$	(258)	$	(911)	$	(597)	$	(1,187)

The accompanying notes are an integral part of these consolidated condensed financial statements.

5Table of Contents

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

~~(unaudited)~~(UNAUDITED)


		Caesars Stockholders’ Equity													Caesars Stockholders’ Equity
		Common Stock									Treasury Stock								Common Stock									Treasury Stock
(In millions)	(In millions)	Shares	Amount		Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income		Amount		Non controlling Interests			Total Stockholders’ Equity		(In millions)	Shares	Amount		Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Amount		Non controlling Interests		Total Stockholders’ Equity
Balance, December 31, 2019		78	$	0	$	760	$	366	$	0	$	(9)	$	0		$	1,117
Balance, December 31, 2020																		Balance, December 31, 2020	208	$	—	$	6,382	$	(1,391)	$	34	$	(9)	$	18	$	5,034
Issuance of restricted stock units	Issuance of restricted stock units	0	—		6		—		—		—		—			6		Issuance of restricted stock units	—	—		23		—		—		—		—		23
Net loss	Net loss	—	—		—		(176)		—		—		—			(176)		Net loss	—	—		—		(423)		—		—		(1)		(424)
Other comprehensive income, net of tax																		Other comprehensive income, net of tax	—	—		—		—		11		—		—		11

Shares withheld related to net share settlement of stock awards	Shares withheld related to net share settlement of stock awards	0	—		(7)		—		—		—		—			(7)		Shares withheld related to net share settlement of stock awards	—	—		(14)		—		—		—		—		(14)
Balance, March 31, 2020		78	0		759		190		0		(9)		0			940

Balance, March 31, 2021																		Balance, March 31, 2021	208	—		6,391		(1,814)		45		(9)		17		4,630
Issuance of restricted stock units	Issuance of restricted stock units	0	—		4		—		—		—		—			4		Issuance of restricted stock units	—	—		21		—		—		—		—		21
Issuance of common stock, net	Issuance of common stock, net	21	—		772		—		—		—		—			772		Issuance of common stock, net	5	—		454		—		—		(14)		—		440
Net loss		—	—		—		(100)		—		—		—			(100)
Net income																		Net income	—	—		—		71		—		—		1		72

Balance, June 30, 2020		99	0		1,535		90		0		(9)		0			1,616
Issuance of restricted stock units		1	—		37		—		—		—		—			37
Issuance of common stock, net		7	—		235		—		—		—		—			235
Net (loss) income		—	—		—		(926)		—		—		1			(925)

Shares issued to Former Caesars shareholders		62	—		2,381		—		—		—		—			2,381
Former Caesars replacement awards		—	—		24		—		—		—		—			24
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—	—		—		—		15		—		—			15		Other comprehensive income, net of tax	—	—		—		—		2		—		—		2
Shares withheld related to net share settlement of stock awards	Shares withheld related to net share settlement of stock awards	0	—		1		—		—		—		—			1		Shares withheld related to net share settlement of stock awards	—	—		(13)		—		—		—		—		(13)
Acquired noncontrolling interests	Acquired noncontrolling interests	—	—		(18)		—		—		—		18			0		Acquired noncontrolling interests	—	—		—		—		—		—		10		10
Other		—	—		5		—		—		—		—			5
Balance, September 30, 2020		169	$	0	$	4,200	$	(836)	$	15	$	(9)	$	19		$	3,389

Balance, June 30, 2021																		Balance, June 30, 2021	213	—		6,853		(1,743)		47		(23)		28		5,162
Issuance of restricted stock units																		Issuance of restricted stock units	1	—		20		—		—		—		—		20

Net income (loss)																		Net income (loss)	—	—		—		(233)		—		—		2		(231)
Other comprehensive loss, net of tax																		Other comprehensive loss, net of tax	—	—		—		—		(25)		—		—		(25)
Shares withheld related to net share settlement of stock awards																		Shares withheld related to net share settlement of stock awards	—	—		(6)		—		—		—		—		(6)
Acquired noncontrolling interests																		Acquired noncontrolling interests	—	—		—		—		—		—		33		33

Balance, September 30, 2021																		Balance, September 30, 2021	214	$	—	$	6,867	$	(1,976)	$	22	$	(23)	$	63	$	4,953

6Table of Contents

Caesars Stockholders’ Equity
Common Stock Treasury Stock
(In millions) Shares Amount Paid-in
Capital Retained
Earnings (Accumulated Deficit) Accumulated
Other
Comprehensive
Income Amount Non controlling Interests Total Stockholders’ Equity
Balance, December 31, 2018 77 $ 0 $ 748 $ 290 $ 0 $ (9) $ 0 $ 1,029
Cumulative change in accounting principle, net of tax — — — (5) — — — (5)
Issuance of restricted stock units 0 — 5 — — — — 5
Net income — — — 38 — — — 38
Shares withheld related to net share settlement of stock awards 0 — (4) — — — — (4)
Balance, March 31, 2019 77 0 749 323 0 (9) 0 1,063
Issuance of restricted stock units 0 — 6 — — — — 6
Net income — — — 19 — — — 19
Shares withheld related to net share settlement of stock awards 0 — (3) — — — — (3)
Balance, June 30, 2019 77 0 752 342 0 (9) 0 1,085
Issuance of restricted stock units 0 — 4 — — — — 4
Net income — — — 37 — — — 37
Balance, September 30, 2019 77 $ 0 $ 756 $ 379 $ 0 $ (9) $ 0 $ 1,126


	Caesars Stockholders’ Equity
	Common Stock									Treasury Stock
(In millions)	Shares	Amount		Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Amount		Non controlling Interests		Total Stockholders’ Equity
Balance, December 31, 2019	78	$	—	$	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, 2020	78	—		759		190		—		(9)		—		940
Issuance of restricted stock units	—	—		4		—		—		—		—		4
Issuance of common stock	21	—		772		—		—		—		—		772
Net loss	—	—		—		(100)		—		—		—		(100)

Balance, June 30, 2020	99	—		1,535		90		—		(9)		—		1,616
Issuance of restricted stock units	1	—		37		—		—		—		—		37
Issuance of common stock, net	7	—		235		—		—		—		—		235
Net income (loss)	—	—		—		(926)		—		—		1		(925)
Shares issued to Former Caesars shareholders	62	—		2,381		—		—		—		—		2,381
Former Caesars replacement awards	—	—		24		—		—		—		—		24
Other comprehensive income, net of tax	—	—		—		—		15		—		—		15
Shares withheld related to net share settlement of stock awards	—	—		1		—		—		—		—		1
Acquired noncontrolling interests	—	—		(18)		—		—		—		18		—
Other	—	—		5		—		—		—		—		5
Balance, September 30, 2020	169	$	—	$	4,200	$	(836)	$	15	$	(9)	$	19	$	3,389

The accompanying notes are an integral part of these consolidated condensed financial statements.

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CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

~~(unaudited)~~(UNAUDITED)


		Nine Months Ended September 30,					Nine Months Ended September 30,
(In millions)	(In millions)	2020		2019		(In millions)	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:						CASH FLOWS FROM OPERATING ACTIVITIES:

Net cash (used in) provided by operating activities		$	(220)	$	260
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	$	974	$	(203)

CASH FLOWS FROM INVESTING ACTIVITIES:	CASH FLOWS FROM INVESTING ACTIVITIES:					CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net	Purchase of property and equipment, net	(94)		(135)		Purchase of property and equipment, net	(313)		(95)
Former Caesars acquisition, net of cash acquired						Former Caesars acquisition, net of cash acquired	—		(6,357)
Acquisition of William Hill, net of cash acquired						Acquisition of William Hill, net of cash acquired	(1,551)		—
Purchase of additional interest in Horseshoe Baltimore, net of cash consolidated						Purchase of additional interest in Horseshoe Baltimore, net of cash consolidated	(5)		—
Acquisition of gaming rights and trademarks						Acquisition of gaming rights and trademarks	(282)		(20)

Former Caesars acquisition, net of cash acquired		(6,374)		0
Acquisition of gaming rights		(20)		0
Sale of restricted investments		0		5
Proceeds from sale of businesses, property and equipment, net of cash sold	Proceeds from sale of businesses, property and equipment, net of cash sold	231		169		Proceeds from sale of businesses, property and equipment, net of cash sold	709		231
Investment in unconsolidated affiliates		(1)		(1)
Net cash (used in) provided by investing activities		(6,258)		38
Proceeds from the sale of investments						Proceeds from the sale of investments	206		—
Proceeds from insurance related to property damage						Proceeds from insurance related to property damage	44		—
Investments in unconsolidated affiliates						Investments in unconsolidated affiliates	(39)		(1)
Net cash used in investing activities						Net cash used in investing activities	(1,231)		(6,242)

CASH FLOWS FROM FINANCING ACTIVITIES:	CASH FLOWS FROM FINANCING ACTIVITIES:					CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities	Proceeds from long-term debt and revolving credit facilities	9,765		0		Proceeds from long-term debt and revolving credit facilities	1,308		9,765
Repayments of long-term debt and revolving credit facilities	Repayments of long-term debt and revolving credit facilities	(2,826)		(315)		Repayments of long-term debt and revolving credit facilities	(1,125)		(2,826)

Cash paid to settle convertible notes						Cash paid to settle convertible notes	(367)		(574)
Proceeds from sale-leaseback financing arrangement	Proceeds from sale-leaseback financing arrangement	3,219		0		Proceeds from sale-leaseback financing arrangement	—		3,219
Financing obligation payments	Financing obligation payments	(49)		0		Financing obligation payments	—		(49)
Debt issuance and extinguishment costs	Debt issuance and extinguishment costs	(356)		(1)		Debt issuance and extinguishment costs	(42)		(356)
Proceeds from issuance of common stock	Proceeds from issuance of common stock	772		0		Proceeds from issuance of common stock	—		772
Cash paid to settle convertible notes		(574)		0
Taxes paid related to net share settlement of equity awards	Taxes paid related to net share settlement of equity awards	(8)		(7)		Taxes paid related to net share settlement of equity awards	(33)		(8)

Net cash (used in) provided by financing activities		9,943		(323)
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	(259)		9,943

CASH FLOWS FROM DISCONTINUED OPERATIONS:	CASH FLOWS FROM DISCONTINUED OPERATIONS:					CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities	Cash flows from operating activities	23		0		Cash flows from operating activities	(55)		3
Cash flows from investing activities	Cash flows from investing activities	(4)		0		Cash flows from investing activities	(1,453)		(3)
Cash flows from financing activities						Cash flows from financing activities	591		—
Net cash used in discontinued operations						Net cash used in discontinued operations	(917)		—

Net cash from discontinued operations		19		0
Change in cash, cash equivalents and restricted cash classified as assets held for sale						Change in cash, cash equivalents and restricted cash classified as assets held for sale	10		—

Effect of foreign currency exchange rates on cash						Effect of foreign currency exchange rates on cash	31		—
Increase (decrease) in cash, cash equivalents and restricted cash	Increase (decrease) in cash, cash equivalents and restricted cash	3,484		(25)		Increase (decrease) in cash, cash equivalents and restricted cash	(1,392)		3,498
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	217		247		Cash, cash equivalents and restricted cash, beginning of period	4,280		217
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	3,701	$	222	Cash, cash equivalents and restricted cash, end of period	$	2,888	$	3,715

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONSOLIDATED CONDENSED BALANCE SHEETS:	RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONSOLIDATED CONDENSED BALANCE SHEETS:					RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONSOLIDATED CONDENSED BALANCE SHEETS:
Cash and cash equivalents	Cash and cash equivalents	$	1,037	$	209	Cash and cash equivalents	$	1,072	$	1,051
Restricted cash		2,251		6
Restricted cash included in restricted cash and investments						Restricted cash included in restricted cash and investments	302		2,251
Restricted and escrow cash included in other assets, net	Restricted and escrow cash included in other assets, net	413		7		Restricted and escrow cash included in other assets, net	1,166		413
Cash and cash equivalents and restricted cash - discontinued operations						Cash and cash equivalents and restricted cash - discontinued operations	348		—
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	3,701	$	222	Total cash, cash equivalents and restricted cash	$	2,888	$	3,715

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid		$	373	$	214
Income taxes paid, net		19		43
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Payables for capital expenditures		(44)		11
Exchange for sale-leaseback financing obligation		246		0
Shares issued to settle convertible notes		235		0
Shares issued to Former Caesars shareholders		2,381		0

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	Nine Months Ended September 30,
(In millions)	2021		2020
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	1,528	$	373
Income taxes paid (refunded), net	(6)		19
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Payables for capital expenditures	72		117

Exchange for sale-leaseback financing obligation	—		246
Convertible notes settled with shares	440		235
Land contributed to joint venture	61		—
Shares issued to Former Caesars shareholders	—		2,381

The accompanying notes are an integral part of these consolidated condensed financial statements.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

~~(unaudited)~~(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 Income (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 accompanying consolidated financial statements include the accounts of Caesars Entertainment, Inc., a Delaware corporation formerly known as Eldorado Resorts, Inc. (“ERI” or “Eldorado”), and its consolidated subsidiaries which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us” within these financial statements.

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”). ~~As a result~~

On April 22, 2021, the Company completed the acquisition of William Hill PLC for £2.9 billion, or approximately $3.9 billion (the “William Hill Acquisition”). See below for further discussion of the ~~Merger, the~~William Hill Acquisition.

The Company ~~currently~~ owns, leases, brands or manages an aggregate of 5653 domestic properties in 16 states with approximately ~~67,200~~56,000 slot machines, video lottery terminals ~~(“VLTs”)~~ and e-tables, approximately ~~3,500~~2,900 table games and approximately ~~48,800~~46,500 hotel rooms as of September 30, ~~2020. We also have international operations~~2021. The Company operates and conducts sports wagering across 18 states plus the District of Columbia, 14 of which are mobile for sports betting, and operates regulated online real money gaming businesses in 5 ~~countries outside of the U.S.~~states. 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, brand or manage 51 properties. ~~See Note 15.~~ The Company’s primary source of revenue is generated by our casino properties’ gaming operations, as well as online gaming, and the Company utilizes its hotels, restaurants, bars, entertainment, racing, sportsbook offerings, retail shops and other services to attract customers to its properties.

In connection with the Merger, Caesars Entertainment Corporation changed its name to “Caesars Holdings, Inc.” and Eldorado Resorts, Inc. converted into a Delaware corporation and changed its name to “Caesars Entertainment, Inc.” In addition, effective as of July 21, 2020 the Company’s ticker symbol on the NASDAQ Stock Market changed from “ERI” to “CZR”. In connection with the Merger, theThe Company ~~also~~previously entered into a Master Transaction Agreement (the “MTA”) with VICI Properties L.P., a Delaware limited partnership (“VICI”), pursuant to which, among other things, the Company agreed to consummate certain sale and leaseback transactions and amend certain lease agreements with VICI and/or its affiliates, with respect to certain property described in the MTA. See Note 2 for further discussion of the Merger and related transactions.

On January 11, 2019 and March 8, 2019, respectively, the Company completed its sales of Presque Isle Downs & Casino (“Presque”) and Lady Luck Casino Nemacolin (“Nemacolin”), which are both located in Pennsylvania. On December 6, 2019, the Company completed its sales of Mountaineer Casino, Racetrack and Resort (“Mountaineer”), Isle Casino Cape Girardeau (“Cape Girardeau”) and Lady Luck Casino Caruthersville (“Caruthersville”). Mountaineer is located in West Virginia and Cape Girardeau and Caruthersville are located in Missouri. On July 1, 2020, the Company completed the sales of Isle of Capri Casino Kansas City (“Kansas City”) and Lady Luck Casino Vicksburg (“Vicksburg”). Kansas City is located in Missouri and Vicksburg is located in Mississippi. On September 30, 2020, the Company completed the sale of Harrah’s Reno which is located in Nevada. See Note 4.

On April 24, 2020, the Company entered into a definitive purchase agreement with Twin River Worldwide Holdings, Inc. (“Twin River”) and certain of its affiliates for the sale of the equity interests of Eldorado Resort Casino Shreveport Joint Venture and Columbia Properties Tahoe, LLC, the entities that hold Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) and MontBleu Casino Resort & Spa (“MontBleu”), for aggregate consideration of $155 million, subject to a working capital adjustment. The definitive agreement provides that the consummation of the sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals. Eldorado Shreveport and MontBleu are expected to close in the first quarter of 2021.

In connection with its review of the Merger, the Indiana Gaming Commission determined on July 16, 2020 that the Company is required to divest three properties within the state of Indiana in order to avoid undue economic concentrations as conditions to the Indiana Gaming Commission’s approval of the Merger.

On October 27, 2020, the Company entered into an agreement to sell Tropicana Evansville (“Evansville”) to GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. (“GLPI”) and Twin River for $480 million in cash, 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. In addition, the Company plans to enter intoseveral agreements to divest of ~~Caesars Southern Indiana~~certain properties and ~~Horseshoe Hammond prior to December 31, 2020.~~other assets, including non-core properties and divestitures required by regulatory agencies. See Note 3 for a discussion of properties recently sold or currently held for sale and Note 15 for segment information.

Also on October 27, 2020, the Company’s subsidiaries, Isle of Capri Bettendorf, L.C. and IOC Black Hawk County, Inc (collectively, the “Exchanging Subsidiaries”) entered into an Exchange Agreement with GLPI pursuant to which the Exchanging Subsidiaries agreed to transfer the real estate relating to the Isle Casino & Hotels located in Bettendorf, Iowa and Waterloo, Iowa to GLPI in exchange for the real estate relating to Evansville. Following such exchange, the real estate relating to the Isle Casino & Hotels located in Bettendorf, Iowa and Waterloo, Iowa will be subject to the master lease with GLPI that we entered into in connection with the acquisition of Tropicana (the “GLPI Master Lease”).

~~On September 3, 2020, the Company and VICI entered into an agreement to sell~~ Harrah’s Louisiana Downs Casino, Racing & Entertainment (“Harrah’s Louisiana Downs”) with Rubico Acquisition Corp. for $22 million, subject to a customary working capital adjustment, where the 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 first half of 2021.

Former Caesars properties, including Harrah’s Louisiana Downs, Caesars Southern Indiana, Horseshoe Hammond, Harrah’s Reno, Caesars UK group, including Emerald Resort & Casino, and Bally’s Atlantic City, have met ~~or are expected to meet within a short period of time,~~ held for sale criteria as of the date of the closing of the Merger. ~~The sales~~Additionally, as described below, William Hill non-U.S. operations met held for sale criteria as of ~~these properties have or are expected to close within one year from~~ the date of the closing of the ~~Merger and the~~William Hill Acquisition. These properties are appropriately classified as discontinued operations.

~~Proposed Acquisition of William Hill~~

~~The~~On August 26, 2021, the Company ~~has entered into agreements, which became effective January 29, 2019, with William Hill plc and William Hill U.S. Holdco, Inc. (“William Hill US”),~~increased its U.S. subsidiary (together, “William Hill”) which granted to William Hill the right to conduct betting activities, including operating certain of 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 13.4 million ordinary shares~~CBAC Borrower, LLC (“Horseshoe Baltimore”), a property which it also manages, to approximately 75.8%. Caesars was subsequently determined to have a controlling financial interest in Horseshoe Baltimore and we began to consolidate the results of ~~William Hill plc, which carry certain time restrictions on when they can be sold.~~operations of the property following our change in ownership. See Note ~~6 related~~2. Our previously held investment was remeasured as of the date of our change in ownership and the Company recognized a gain of $40 million during the nine months ended September 30, 2021. Management fees received prior to the ~~investments~~consolidation event have been presented within our Managed and Branded segment. Following the increase in ~~William Hill. Additionally, the Company receives a profit share from~~ownership, the operations of ~~sports betting and other gaming activities associated with~~Horseshoe Baltimore are presented within the ~~Company’s properties.~~Regional segment.

William Hill Acquisition

On September 30, 2020, the Company announced that it had reached an agreement with William Hill ~~plc~~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~~

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(other than shares owned by the Company or held in treasury) of William Hill ~~plc,~~PLC, in an all-cash ~~transaction~~transaction. On April 20, 2021, a UK Court sanctioned the proposed acquisition and on April 22, 2021, the Company completed the acquisition of ~~approximately~~William Hill PLC for £2.9 billion, or ~~$3.7 billion~~. The transaction is conditioned on, among other things, the approval of William Hill plc shareholders and receipt of required regulatory approvals. To provide liquidity to fund the cash purchase price for the proposed acquisition, the Company entered into various financing transactions. On September 25, 2020, the Company borrowed $900 million under the CEI Revolving Credit Facility (defined below), which was repaid subsequent to September 30, 2020.approximately $3.9 billion. See Note ~~10.~~ ~~On September 28, 2020, the Company deposited $2.1 billion, which included the borrowings under the CEI Revolving Credit Facility, into an escrow account related to the William Hill offer. As of~~ ~~September 30, 2020,~~ ~~these funds in escrow were classified as restricted cash until certain regulatory approvals were received. In addition,~~ ~~on October 1, 2020, the Company raised an additional $1.9 billion through a public offering of Company Common Stock. See Note 5.~~

~~In order to~~ ~~manage the risk of appreciation of the GBP denominated purchase price the Company has entered into foreign exchange forward contracts. See~~ ~~Note 11~~.2.

In connection with the ~~proposed acquisition of~~ William Hill ~~plc,~~Acquisition, on ~~September 29, 2020,~~April 22, 2021, a newly formed subsidiary of the Company (the “Bridge Facility Borrower”) entered into a ~~debt financing commitment letter~~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 ~~have committed to arrange and provide a newly formed subsidiary of~~provided the ~~Company with~~Debt Financing (as defined below). The Bridge Credit Agreement provides for (a) a 540-day £1.0 billion ~~senior secured 540-day~~asset sale bridge ~~loan~~ facility, (b) a ~~£116~~60-day £503 million ~~senior secured 540-day revolving credit~~cash confirmation bridge facility and (c) a ~~£503~~540-day £116 million ~~senior secured 60-day bridge loan~~revolving credit facility (collectively, the “Debt Financing”). The proceeds of the ~~Debt Financing will be~~bridge loan facilities provided under the Bridge Credit Agreement were used (i) to pay a portion of the cash consideration for the ~~proposed~~ acquisition ~~(ii) to refinance certain of William Hill plc's~~ and ~~its subsidiaries' existing debt, (iii)~~(ii) to pay fees and expenses related to the acquisition and related ~~transactions and (iv)~~transactions. The proceeds of the revolving credit facility under the Bridge Credit Agreement may be used for working capital and general corporate purposes.

~~Pending negotiation of the loan agreement for the Debt Financing, on October 6, 2020, a newly formed subsidiary of the Company entered into a~~ The £1.5 billion Interim Facilities Agreement (the “Interim Facilities Agreement”) entered into on October 6, 2020 with Deutsche Bank 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 will be~~amended on December 11, 2020, was terminated upon the execution of the ~~loan~~Bridge Credit Agreement. On May 12, 2021, we repaid the £503 million cash confirmation bridge facility. On June 14, 2021, the Company drew down the full £116 million from the revolving credit facility and the proceeds, in addition to excess Company cash, were used to make a partial repayment of the asset sale bridge facility in the amount of £700 million. Outstanding borrowings under the Bridge Credit Agreement are expected to be repaid upon the sale of William Hill’s non-U.S. operations including the UK and international online divisions and the retail betting shops (collectively, “William Hill International”), all of which are held for sale and related activity is reflected within discontinued operations. Certain investments acquired have been excluded from the held for sale asset group. See Note 7 for investments in which the Company elected to apply the fair value option.

On September 8, 2021, the Company entered into an agreement to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion. After repayment of the ~~Debt Financing. Upon~~outstanding debt under the Bridge Credit Agreement, described above, and other working capital adjustments, the Company expects to receive approximately £835 million, or $1.2 billion. The sale is subject to satisfaction of customary conditions, including receipt of the approval of shareholders of 888 Holdings Plc and regulatory approvals, and is expected to close in the ~~restriction on the $2.1 billion funded as~~first quarter of September 30, 2020, was released and the Company transferred $1.4 billion of cash into the Company’s operating accounts and the outstanding balance of the CEI Revolving Credit Facility was repaid in full. Approximately $598 million of cash remains in an unrestricted account.2022. See Note 3.

Reclassifications

Certain reclassifications of prior year presentations have been made to conform to the current period presentation. ~~Marketing~~In June 2021, the Indiana Gaming Commission amended its order that previously required the Company to sell a third casino asset in the state. As a result, Caesars will not be required to sell Horseshoe Hammond and ~~promotions expense previously disclosed~~Horseshoe Hammond no longer meets the held for ~~the three~~sale criteria. The assets and ~~nine months ended September 30, 2019 has~~liabilities held for sale have been reclassified ~~to Casino~~as held and ~~pari-mutuel commissions expense and General and administrative expense based on~~used for all periods presented measured at the ~~nature~~lower of the ~~expense.~~carrying amount, adjusted for depreciation and amortization that would have been recognized had the assets been continuously classified as held and used, and the fair value at the date of the amended ruling. Additionally, amounts previously presented in discontinued operations have been reclassified into continuing operations for all periods presented.

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 (“~~U.S.~~ 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 ~~U.S.~~ 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.

The ~~executive decision maker~~William Hill Acquisition and rebranding of our interactive business (formerly, Caesars Interactive Entertainment “CIE” and now, inclusive of William Hill US, “Caesars Digital”) expands our access to conduct sports wagering and real online money gaming operations. As a result, the Company ~~reviews operating results, assesses performance and makes decisions on~~has made a “significant market” basis. Management views each of the Company’s casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Priorchange to the Merger, our principal operating activities occurred in five geographic regions and reportable segments: West, Midwest, South, East and Central. Following the Merger, the Company’s principal operating activities occur in 3 regionally-focusedcomposition of its reportable segments. The ~~reportable~~Las Vegas and Regional segments are ~~based on~~substantially unchanged, while the ~~similar characteristics~~former Managed, International and CIE reportable segment has been recast for all periods presented into two segments: Caesars Digital and Managed and Branded. As a result of the ~~operating segments with~~sale of Caesars Entertainment UK, including the ~~way management assesses these results~~interest in Emerald Resort & Casino (together, “Caesars UK Group”) and ~~allocates resources, which is a consolidated view that adjusts for~~ the ~~effect~~announced sale of ~~certain transactions between these reportable segments within Caesars: (1) Las Vegas, (2) Regional, and (3) Managed,~~William Hill International, ~~CIE, in addition to Corporate and Other.~~international operations are classified as discontinued operations. See Note 15 for a listing of properties included in each ~~segment.~~segment and the determination of our segments.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The presentation of financial information herein for the ~~period~~periods after the Company’s ~~acquisition~~acquisitions of Former Caesars on July 20, 2020, William Hill on April 22, 2021 and the acquisition of an additional interest in Horseshoe Baltimore on August 26, 2021 is not fully comparable to the periods prior to the ~~acquisition.~~respective acquisitions. In addition, the presentation of financial information herein for the periods after the Company’s sales of Presque and Nemacolin on January 11, 2019 and March 8, 2019, respectively, the Company’s sales of Mountaineer, Cape Girardeau and Caruthersville on December 6, 2019, and the Company’s sales of Kansas City and Vicksburg on July 1, 2020 arevarious properties is not fully comparable to the periods prior to their respective sale dates. See Note 4.

~~These unaudited consolidated condensed financial statements should be read in conjunction with~~2 for further discussion of the ~~consolidated financial statements~~acquisitions and ~~notes thereto included in the Company’s Annual Report on Form 10-K~~related transactions and Note 3 for ~~the year ended December 31, 2019.~~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 Entertainment, Inc. and its subsidiaries after elimination of all intercompany accounts and transactions.

We consolidate all subsidiaries in which we have a controlling financial interest and ~~VIEs~~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.

Consolidation of Korea Joint Venture

The Company ~~has~~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 iswas a VIE and the Company iswas the primary beneficiary, and therefore, we ~~consolidate~~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 ~~United States.~~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. On May 15, 2020,~~COVID-19. As of September 30, 2021, the Company ~~began reopening properties and~~ has resumed ~~certain~~ operations at all of its properties, ~~as of September 30, 2020,~~to the extent permitted by regulations governing the applicable jurisdiction, with the exception of The Cromwell, Planet Hollywood Resort and Casino (“Planet Hollywood”), Rio All-Suite Hotel & Casino, and Caesars Windsor. Planet Hollywood and Caesars Windsor reopened on October 8, 2020, and The Cromwell reopened on October 29, 2020. The COVID-19 public health emergency has had a material adverse effect onLake Charles which was severely damaged by Hurricane Laura (see Note 8). During the ~~Company’s business, financial condition and results of operations for the three and~~ nine months ended September 30, ~~2020.~~ 2021, most of our properties have experienced positive trends as restrictions on maximum capacities and amenities available have been 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 ~~September 30, 2020. Subsequently, the benefit coverage for~~their furloughed ~~employees was extended indefinitely. A portion of~~period. The Company has emphasized a focus on labor efficiencies as the Company’s workforce ~~has returned to service as the properties have resumed with limited capacities~~returns and operations resume in compliance with ~~operating restrictions imposed by~~ governmental or tribal orders, directives, and guidelines. ~~Due to a triggering event resulting from the~~

The COVID-19 public health emergency had a material adverse effect on the Company’s business, financial condition and results of operations for comparative periods in 2020, including the three and nine months ended September 30, 2020 which continued into the first quarter of 2021. The effects of COVID-19 resulted in a triggering event in the prior year and the Company recognized impairment charges of $116 million related to goodwill and trade names during the nine months ended September 30, 2020. ~~See Note 7~~On March 19, 2021, the Company filed a lawsuit against its insurance carriers for ~~details.~~

~~Due~~losses attributed to the ~~impact of the ongoing~~ COVID-19 public health emergency on the Company’s results of operations, in June 2020 the Company obtained waivers on the financial covenants in its former credit facility agreement and the GLPI Master Lease. In addition, Former Caesars obtained a waiver of the financial covenant in the credit agreement by and among Caesars Resort Collection, LLC and the lenders thereunder (the “CRC Credit Agreement”). Furthermore, the Company obtained waivers from VICI in relation to annual capital expenditure requirements during the period from June 1, 2020 until December 31, 2020.emergency. See Note ~~10 for details.~~8.

The Company has experienced positive operating trends thus far in 2021, with a continued focus on operational efficiencies which have resulted in net income, Adjusted EBITDA and Adjusted EBITDA margin exceeding pre-pandemic levels experienced in 2019 within our Las Vegas and Regional segments. However, certain revenue streams continue to be negatively

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impacted, including convention and entertainment revenues, and have yet to reach pre-pandemic levels as compared to 2019. 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, but the Company expects that it will continue to have a significant impact on its business, results of operations and financial condition.~~uncertain. The extent and duration of the negative impact of the COVID-19 public health emergency will ultimately depend on future developments, including but not limited to, the duration and severity of the outbreak or new variants, restrictions on operations imposed by governmental authorities, the potential for authorities reimposing stay at home orders, international and domestic travel restrictions 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 and maintain adequate staffing in response to increased customer demand, the impact on consumer demand and discretionary spending, the ~~length~~efficacy and acceptance of ~~time it takes for demand to return~~vaccines, and the Company’s ability to adjust its cost structures for the duration of ~~the outbreak’s effect on~~any such interruption of its operations.

Recently Issued Accounting Pronouncements

~~Pronouncements Implemented in 2020~~

~~In June 2016 (modified in November 2018), the~~The Financial Accounting Standards Board ~~(“FASB”~~(the “FASB”) issued ~~ASU No 2016-13, Financial Instruments – Credit Losses related to~~ the ~~timing of recognizing impairment losses on financial assets. The new~~following authoritative guidance ~~lowers~~amending the threshold on when losses are incurred, from a determination that a loss is probable to a determination that a loss is expected. The guidance is effective for interim and annual periods beginning after December 15, 2019. Adoption of the guidance required a modified-retrospective approach and a cumulative adjustment to retained earnings to the first reporting period that the update is effective. The Company adopted the new guidance onFASB Accounting Standards Codification.

Effective January 1, ~~2020. Adoption of this guidance did not have a material impact on the Company’s Consolidated Condensed Financial Statements.~~

~~In August 2018, the FASB issued ASU 2018-15, Customer’s~~2021, we adopted Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). This generally means that an intangible asset is recognized for the software license and, to the extent that the payments attributable to the software license are made over time, a liability also is recognized. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract. This generally means that the

fees associated with the hosting element (service) of the arrangement are expensed as incurred. The amendment was effective for annual and interim periods beginning after December 15, 2019. The Company adopted the new guidance on January 1, 2020. Adoption of this guidance did not have a material impact on the Company’s Consolidated Condensed Financial Statements.

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. This amendment modifies the disclosure requirements for fair value measurements and was effective for annual and interim periods beginning after December 15, 2019. The Company adopted the new guidance on January 1, 2020. Adoption of this guidance did not have a material impact on the Company’s Consolidated Condensed Financial Statements.

~~Pronouncements To Be Implemented In Future Periods~~

~~In August 2018, the FASB issued ASU No~~Standards Updates (“ASU”) 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General. This amendment improves disclosures over defined benefit plans and is effective for interim and annual periods ending after December 15, 2020 with early adoption allowed. The Company anticipates adopting this amendment during the first quarter of 2021, and currently doesGeneral, which did not ~~expect it to~~ have a ~~significant impact~~material effect on ~~its Consolidated Condensed Financial Statements.~~our financial statements.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. This amendment modifies accounting guidelines for income taxes and is effective for annual and interim periods beginning after December 15, 2020 with early adoption allowed. The ~~Company will adopt the new guidance on January 1, 2021. The Company is evaluating the qualitative and quantitative effect the new guidance will have on its Consolidated Condensed Financial Statements.~~following ASUs were not implemented as of September 30, 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. 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 ~~Consolidated Condensed~~ 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. As of September 30, 2021, all outstanding 5% Convertible Notes have been converted. The ~~Company is currently assessing the effect the~~ adoption of this standard ~~will~~is not expected to have a material impact on ~~our prospective financial statements.~~the Company’s Financial Statements.

Note 2. ~~Acquisition of Former Caesars~~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.

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(In millions)	Consideration
Cash consideration paid	$	6,090
Shares issued to Former Caesars shareholders(a)	2,381
Cash paid to retire Former Caesars debt	2,356
Other consideration paid	48
Total purchase consideration	$	10,875

____________________

Based on the closing price of $38.24 per share of the Company’s common stock, par value $0.00001 per share (“Company Common Stock”), reported on NASDAQ on July 20, 2020, the aggregate implied value of the aggregate merger consideration paid to former holders of Former Caesars common stock in connection with the Merger was approximately $8.5 billion, including approximately $2.4 billion in the Company Common Stock and approximately $6.1 billion in cash. The aggregate merger consideration transferred also included approximately $2.4 billion related to the repayment of certain outstanding debt balances of Former Caesars and approximately $48 million of other consideration paid which includes $19 million related to a transaction success fee, for the benefit of Former Caesars, and $29 million for the replacement of equity awards of certain employees attributable to services provided prior to the Merger.

~~Pursuant to the Merger, each share of~~ (a)Former Caesars common stock was converted into the right to receive ~~at the election of the holder thereof and subject to proration, approximately $12.41 of cash consideration or~~ approximately 0.3085 shares of ~~Company~~the Company’s Common Stock, with a value equal to approximately $12.41 in cash (based on the volume weighted average price per share of ~~Company~~the Company’s Common Stock for the 10ten trading days ending on July 16, 2020). Following the consummation of the Merger, stockholders of the Company and stockholders of Former Caesars held approximately 61% and 39%, respectively, of the outstanding shares of Company Common Stock.

~~Preliminary~~Final Purchase Price Allocation

The fair values are based on management’s analysis including ~~preliminary~~ work performed by ~~third party~~a third-party valuation ~~specialists,~~specialist, which ~~are subject to finalization~~were finalized 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 September 30, ~~2020:~~2021:


(In millions)	Fair Value
Current and other assets	$	~~4,264~~3,540
Property and equipment	~~12,730~~13,096

Goodwill	~~8,649~~9,064
Intangible assets (a)	~~3,549~~3,394
Other noncurrent assets	~~684~~710
Total assets	$	~~29,876~~29,804

Current liabilities	$	~~1,896~~1,771
Financing obligation	~~8,134~~8,149
Long-term debt	6,591
Noncurrent liabilities	~~2,362~~2,400
Total liabilities	~~18,983~~18,911
Noncontrolling interests	18
Net assets acquired	$	10,875

____________________

(a)Intangible assets consist of gaming ~~licenses~~rights valued at ~~$537~~$396 million, trade names valued at $2.1 billion, ~~and~~ Caesars Rewards programs valued at ~~$540~~$523 million and customer relationships ~~of $404~~valued at $425 million.

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 factors			2
Face value of financial assets	$	186

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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.

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,~~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 ~~7 years.~~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.~~years from the Merger date.

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. ~~Pushdown accounting, including the allocation of goodwill to our reportable segments, is not complete.~~

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 of $6 million and $107 million for the three months ended September 30, 2021 and 2020, respectively, and $21 million and $129 million for the ~~three and~~ nine months ended September 30, 2021 and 2020, respectively, ~~and $13 million and $17 million for~~in connection with the ~~three and nine months ended September 30, 2019, respectively. These~~Merger. Transaction costs were associated with legal, IT costs, internal labor and professional services and were ~~recognized as~~recorded in Transaction costs and other operating costs in our ~~Consolidated~~ Statements of ~~Comprehensive (Loss) Income.~~

Operations.

For the period of ~~July 20, 2020~~January 1, 2021 through September 30, ~~2020,~~2021, the properties of Former Caesars generated net revenues of ~~$924 million~~$5.3 billion, excluding discontinued operations, and a net loss of ~~$564~~$411 million.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information is presented to illustrate the estimated effects of the acquisition of Former Caesars as if it had occurred on January 1, ~~2019.~~2020. The pro forma amounts include the historical operating results of the Company and Former Caesars prior to the acquisition, with adjustments directly attributable to the acquisition. The pro forma results include adjustments and consequential tax effects to reflect incremental depreciation and amortization expense to be incurred based on preliminary fair values of the identifiable property and equipment and intangible assets acquired, the incremental interest expense associated with the issuance of debt to finance the acquisition and the adjustments to exclude acquisition related costs incurred during the three and nine months ended September 30, 2020 ~~and to recognize these costs during the nine months ended September 30, 2019~~ as if incurred in the first quarter of ~~2019.~~2020. The unaudited pro forma financial information is not necessarily indicative of ~~what~~ the ~~consolidated~~financial results ~~of operations~~that would have occurred had the Merger been consummated as of the ~~combined company were,~~dates indicated, nor is it indicative of any future results. In addition, the

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unaudited pro forma financial information does itnot reflect the expected realization of any synergies or cost savings associated with the ~~acquisition.~~Merger.


		Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Net revenues	Net revenues	$	1,639	$	2,607	$	4,145	$	7,652	Net revenues	$	1,639	$	4,145
Net loss	Net loss	(989)		(363)		(2,266)		(894)		Net loss	(989)		(2,266)
Net loss attributable to Caesars	Net loss attributable to Caesars	(927)		(362)		(2,200)		(892)		Net loss attributable to Caesars	(927)		(2,200)

Acquisition of William Hill

~~Note 3. Revenue Recognition~~On April 22, 2021, we completed the previously announced acquisition of William Hill PLC for cash consideration of approximately £2.9 billion, or approximately $3.9 billion, based on the GBP to USD exchange rate on the closing date.

Prior to the acquisition, William Hill PLC’s U.S. subsidiary, William Hill U.S. Holdco (“William Hill US” and together with William Hill PLC, “William Hill”) operated 37 sportsbooks at our properties in 8 states. Following the William Hill Acquisition, we conduct sports wagering in 18 states across the U.S. plus the District of Columbia. Additionally, we operate regulated online real money gaming businesses in 5 states 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, continued legalization in additional states, and growing bettor demand are driving the market for online sports betting platforms in the U.S. and the William Hill Acquisition positioned us to address this growing market. On September 8, 2021, the Company entered into an agreement to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion. The sale is subject to satisfaction of customary conditions, including receipt of the approval of shareholders and regulatory approvals, and is expected to close in the first quarter of 2022.

The Company recognizes as casino revenue the net win from gaming activities, which is the difference between gaming wins and losses, not the total amount wagered. Progressive jackpots are accrued and charged to revenue at the time the obligation to pay the jackpot is established. Gaming revenues are recognized net of certain cash and free play incentives. Pari-mutuel commissions consist of commissions earned from thoroughbred and harness racing and importing of simulcast signals from other race tracks and are recognized at the time wagers are made. Such commissions are a designated portion of the wagering handle as determined by state racing commissions and are shown net of the taxes assessed by state and local agencies, as well as purses and other contractual amounts paid to horsemen associations. The Company recognizes revenues from fees earned through the exporting of simulcast signals to other race tracks at the time wagers are made, which are recorded on a gross basis. Such fees are based upon a predetermined percentage of handle as contracted with the other race tracks.

The Company’s consolidated condensed statement of operations presents net revenue disaggregated by type or nature of the good or service. A summary of net revenues disaggregated by type of revenue and reportable segment is presented below. We recast previously reported segment amounts to conform to the way management assesses results and allocates resources for the current year. Refer to Note 1 and Note 15 for additional information on the Company’s reportable segments.

Three Months Ended September 30, 2020
(In millions) Las Vegas Regional Managed, International & CIE Corporate
and Other Total
Casino and pari-mutuel commissions $ 122 $ 774 $ 23 $ 0 $ 919
Food and beverage 52 72 1 0 125
Hotel 79 121 0 0 200
Other 51 33 45 4 133
Net revenues $ 304 $ 1,000 $ 69 $ 4 $ 1,377

Three Months Ended September 30, 2019
(In millions) Las Vegas Regional Managed, International & CIE Corporate
and Other Total
Casino and pari-mutuel commissions $ 0 $ 458 $ 0 $ 0 $ 458
Food and beverage 0 78 0 0 78
Hotel 0 94 0 0 94
Other 0 31 0 2 33
Net revenues $ 0 $ 661 $ 0 $ 2 $ 663

Nine Months Ended September 30, 2020
(In millions) Las Vegas Regional Managed, International & CIE Corporate
and Other Total
Casino and pari-mutuel commissions $ 122 $ 1,215 $ 23 $ 0 $ 1,360
Food and beverage 52 135 1 0 188
Hotel 79 178 0 0 257
Other 51 68 45 8 172
Net revenues $ 304 $ 1,596 $ 69 $ 8 $ 1,977

Nine Months Ended September 30, 2019
(In millions) Las Vegas Regional Managed, International & CIE Corporate
and Other Total
Casino and pari-mutuel commissions $ 0 $ 1,386 $ 0 $ 0 $ 1,386
Food and beverage 0 229 0 0 229
Hotel 0 237 0 0 237
Other 0 78 0 6 84
Net revenues $ 0 $ 1,930 $ 0 $ 6 $ 1,936

~~Accounts receivable, net include the following amounts:~~

Balance Sheet as of
(In millions) September 30, 2020 December 31, 2019
Casino and pari-mutuel commissions $ 121 $ 16
Food and beverage and hotel 27 17
Other 237 21
Accounts receivable, net $ 385 $ 54

~~Contract and Contract Related Liabilities~~

The Company records contract or contract-related liabilities related to differences between the timing of cash receipts from the customer and the recognition of revenue. The Company generally has three types of liabilities related to contracts with customers: (1) outstanding chip liability, which represents the amounts owed in exchange for gaming chips held by a customer,(2) player loyalty program obligations, subsequently combined as Caesars Rewards, which represents the deferred allocation of revenue relating to reward credits granted to Caesars Rewards members based on on-property spending, including gaming, hotel, dining, retail shopping, and player loyalty program incentives earned, and (3) customer deposits and other deferred revenue, which is primarily funds deposited by customers related to gaming play, advance payments received for goods and services yet to be provided (such as advance ticket sales, deposits on rooms and convention space or for unpaid wagers), and deferred revenues associated with the Company’s existing interestsan equity interest in William Hill PLC and William Hill US (see Note 6)4). ~~Except~~Accordingly, the acquisition is accounted for ~~deferred revenues related to~~as a business combination achieved in stages, or a “step acquisition.”

As mentioned above, the total purchase consideration for William Hill ~~these liabilities are generally expected~~was approximately $3.9 billion. The estimated purchase consideration in the acquisition was determined with reference to ~~be recognized~~its acquisition date fair value.


(In millions)	Consideration
Cash for outstanding William Hill common stock (a)	$	3,909
Fair value of William Hill equity awards	30
Settlement of preexisting relationships (net of receivable/payable)	7
Settlement of preexisting relationships (net of previously held equity investment and off-market settlement)	(34)
Total purchase consideration	$	3,912

____________________

(a)William Hill common stock of approximately 1.0 billion shares as ~~revenue within one year~~ of ~~being purchased, earned,~~the acquisition date was paid at £2.72 per share, or ~~deposited and are recorded within accrued other liabilities~~approximately $3.77 per share using the GBP to USD exchange rate on the ~~Company’s Consolidated Condensed Balance Sheets.~~acquisition date.

Preliminary Purchase Price Allocation

The purchase price allocation for William Hill is preliminary as it relates to determining the fair value of certain assets and liabilities, including goodwill, and is subject to change. 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 following table summarizes the ~~activity~~preliminary allocation of the purchase consideration to the identifiable assets acquired and liabilities assumed of William Hill, with the excess recorded as goodwill as of September 30, 2021:

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(In millions)	Fair Value
Other current assets	$	160
Assets held for sale	4,375
Property and equipment, net	55
Goodwill	1,102
Intangible assets (a)	565
Other noncurrent assets	307
Total assets	$	6,564

Other current liabilities	$	249
Liabilities related to assets held for sale (b)	2,130
Deferred income taxes	228
Other noncurrent liabilities	35
Total liabilities	2,642
Noncontrolling interests	10
Net assets acquired	$	3,912

____________________

(a)Intangible assets consist of gaming rights valued at $80 million, trademarks valued at $27 million, developed technology valued at $110 million, reacquired rights valued at $280 million and user relationships valued at $68 million.

(b)Includes debt of $1.1 billion related to ~~contract and contract-related liabilities:~~

Outstanding Chip Liability Caesars Rewards Customer Deposits and Other
Deferred Revenue
(In millions) 2020 2019 2020 2019 2020 2019
Balance at January 1 $ 10 $ 9 $ 13 $ 18 $ 172 $ 28
Balance at September 30 28 8 106 14 270 173
Increase / (decrease) $ 18 $ (1) $ 93 $ (4) $ 98 $ 145
William Hill International at the acquisition date.

The Company entered into an agreement on September 8, 2021 to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion. The assets and liabilities held for sale noted above are substantially all related to William Hill International. As noted above, the purchase price allocation was subject to a measurement period and, due to the agreement with 888 Holdings Plc, the estimates of fair values as of September 30, ~~2020 balances exclude~~2021 have been revised. Total purchase consideration decreased by $54 million related to the value of the preexisting relationships, specifically our previously held equity investment and off-market contract settlement. Additionally, the estimated fair value of the assets and liabilities ~~related~~held for sale at the time of the William Hill Acquisition have been adjusted to reflect the sale price with 888 Holdings Plc. The net impact of the changes was a decrease of $3 million in other current assets, a $521 million increase to assets held for sale, a $271 million decrease to goodwill, a $131 million decrease to intangible assets, a $27 million increase to liabilities held for sale, and a $143 million increase to deferred income taxes. The effect of these revisions resulted in a change in the estimated value of our previously held investment in William Hill US and we recorded a $54 million loss during the quarter, for a total loss of $75 million during the nine months ended September 30, 2021, which is included in Other income (loss) on the Statement 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 William Hill 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 William Hill acquisition date. Assets and liabilities held for sale substantially represent William Hill International which has been initially valued using a combination of approaches including a market approach based on valuation multiples and EBITDA, the relief from royalty method and the replacement cost method. In addition to the approaches described, our estimates have been updated to reflect the sale price of William Hill International in the proposed sale to 888 Holdings Plc, described above.

The acquired net assets of William Hill included certain investments in common stock. Investments with a publicly available share price were valued using the share price on the acquisition date. Investments without publicly available share data were valued at their carrying value, which approximated fair value.

Other personal property assets such as furniture, equipment, computer hardware, and fixtures were valued using a cost approach which determined that the carrying values represented fair value of those items at the William Hill acquisition date.

Trademarks and developed technology were valued using the relief from royalty method, which presumes that without ownership of such trademarks or technology, the Company would have to make a series of payments to the assets’ owner in return for the right to use their brand or technology. By virtue of their ownership of the respective intangible assets, the Company avoids any such payments and records the related intangible value. The estimated useful lives of the trademarks and developed technology are approximately 15 years and six years, respectively, from the acquisition date.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Online user relationships are valued using a cost approach based on the estimated marketing and promotional cost to acquire the new active user base if the user relationships were not already in place and needed to be replaced. We estimate the useful life of the user relationships to be approximately three years from the acquisition date.

Operating agreements with non-Caesars entities allowed William Hill to operate retail and online sportsbooks as well as online gaming within certain states. These agreements are valued using the excess earnings method, estimating the projected profits of the business attributable to the rights afforded through the agreements, adjusted for returns of other assets that contribute to the generation of this profit, such as working capital, fixed assets and other intangible assets. We estimate the useful life of these operating agreements to be approximately 20 years from the acquisition date.

The reacquired rights intangible asset represents the estimated fair value of the Company’s share of the William Hill’s forecasted profits arising from the prior contractual arrangement with the Company to operate retail and online sportsbooks and online gaming. This fair value estimate was determined using the excess earnings method, an income-based approach that reflects the present value of the future profit William Hill expected to earn over the remaining term of the contract, adjusted for returns of other assets that contribute to the generation of this profit, such as working capital, fixed assets and other intangible assets. The forecasted profit used within this valuation is adjusted for the settlement of the preexisting relationship noted previously in the calculation of the purchase consideration in order to avoid double counting of this settlement. Reacquired rights are amortizable over the remaining contractual period of the contract in which the rights were granted and estimated to be approximately 24 years from the acquisition date.

Goodwill is the result of expected synergies from the operations of the combined company and future customer relationships including the brand names and strategic partner relationships of Caesars and the technology and assembled workforce of William Hill. The goodwill acquired will not generate amortization deductions for income tax purposes.

The fair value of long-term debt assumed has been calculated based on market quotes.

The Company recognized acquisition-related transaction costs of $5 million and $60 million for the three and nine months ended September 30, 2021, respectively, excluding additional transaction costs associated with sale of William Hill International. These costs were associated with legal and professional services and were recorded in ~~2020~~Transaction costs and ~~2019~~other operating costs in our Statements of Operations.

For the period of April 22, 2021 through September 30, 2021, the operations of William Hill generated net revenues of $104 million, excluding discontinued operations (see Note 4)3), and a net loss of $205 million.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information is presented to illustrate the estimated effects of the William Hill Acquisition as if it had occurred on January 1, 2020. The pro forma amounts include the historical operating results of the Company and William Hill prior to the acquisition, with adjustments directly attributable to the acquisition. The pro forma results include adjustments and consequential tax effects to reflect incremental amortization expense to be incurred based on preliminary fair values of the identifiable intangible assets acquired, eliminate gains and losses related to certain investments and adjustments to the timing of acquisition related costs and expenses incurred during the three and nine months ended September 30, 2021 and to recognize these costs during the nine months ended September 30, 2020. The unaudited pro forma financial information is not necessarily indicative of the financial results that would have occurred had the William Hill Acquisition been consummated as of the dates indicated, nor is it indicative of any future results. The unaudited pro forma financial information does not include the operations of William Hill International as such operations were expected to be divested upon the acquisition date.


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Net revenues	$	2,685	$	1,484	$	7,106	$	2,131
Net loss	(155)		(980)		(427)		(1,473)
Net loss attributable to Caesars	(157)		(981)		(429)		(1,474)

Consolidation of Horseshoe Baltimore

On August 26, 2021, the Company increased its ownership interest in Horseshoe Baltimore, a property which it also manages, to approximately 75.8% for cash consideration of $55 million. Subsequent to the change in ownership, the Company was determined to have a controlling financial interest and has begun to consolidate the operations of Horseshoe Baltimore.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Prior to the purchase, the Company held an interest in Horseshoe Baltimore of approximately 44.3% which was accounted for as an equity method investment. Our previously held investment was remeasured as of the date of our change in ownership and the Company recorded a gain of approximately $40 million, which was recorded in Other income (loss) on the Statement of Operations.


(In millions)	Consideration
Cash for additional ownership interest	$	55
Preexisting relationships (net of receivable/payable)	18
Preexisting relationships (previously held equity investment)	81
Total purchase consideration	$	154

Preliminary Purchase Price Allocation

The purchase price allocation for Horseshoe Baltimore is preliminary as it relates to determining the fair value of certain assets and liabilities, including potential goodwill, and is subject to change. The estimated fair values are based on management’s analysis, including preliminary work performed by a third-party valuation specialist, which is subject to finalization over the one-year measurement period. The following table summarizes the preliminary allocation of the purchase consideration to the identifiable assets and liabilities of Horseshoe Baltimore, with any potential excess recorded as goodwill as of September 30, 2021:


(In millions)	Fair Value
Current assets	$	60
Property and equipment, net	215

Intangible assets(a)	241
Other noncurrent assets	136
Total assets	$	652

Current liabilities	$	26
Long-term debt	272
Other long-term liabilities	158
Total liabilities	456
Noncontrolling interests	42
Net assets acquired	$	154

____________________

(a)Intangible assets consist of gaming rights valued at $232 million and customer relationships valued at $9 million.

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 Horseshoe Baltimore 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.

Other personal property assets such as furniture, equipment, computer hardware, and fixtures were valued at the existing carrying values as they closely represented the estimated fair value of those items at the Horseshoe Baltimore acquisition date.

The right of use asset and operating lease liability related to a ground lease for the site on which Horseshoe Baltimore is located was recorded at carrying value, which approximates fair value.

The fair value of the gaming rights was determined using the excess earnings method, which is an income approach methodology that estimates the projected cash flows of the business attributable to the gaming license intangible asset, which is

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets. The acquired gaming rights are considered to have an indefinite life.

The fair value of long-term debt has been calculated based on market quotes.

For the period of August 26, 2021 through September 30, 2021, the operations of Horseshoe Baltimore generated net revenues of $18 million, and net income of $1 million.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information is presented to illustrate the estimated effects of the Horseshoe Baltimore consolidation as if it had occurred on January 1, 2020. The pro forma amounts included the historical operating results of the Company and Horseshoe Baltimore prior to the consolidation. The pro forma results include adjustments and consequential tax effects to reflect incremental amortization expense to be incurred based on preliminary fair values of the identifiable intangible assets acquired and adjustments to eliminate certain revenues and expenses which are considered intercompany activities. The unaudited pro forma financial information is not necessarily indicative of the financial results that would have occurred had the consolidation of Horseshoe Baltimore occurred as of the dates indicated, nor is it indicative of any future results. In addition, the unaudited pro forma financial information does not reflect the expected realization of any synergies or cost savings associated with the consolidation.


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Net revenues	$	2,718	$	1,495	$	7,102	$	2,148
Net loss	(265)		(924)		(611)		(1,219)
Net loss attributable to Caesars	(268)		(925)		(617)		(1,216)

Note 3. Assets Held for Sale

Held for sale - Continuing operations

Baton Rouge

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 ~~significant change~~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 ~~contract~~the fourth quarter of 2021. Baton Rouge met the requirements for presentation as assets held for sale as of September 30, 2021.

The assets and ~~contract-related~~ liabilities held for sale within continuing operations, accounted for at carrying value unless fair value is lower, were as follows as of September 30, 2021 and December 31, 2020:


	Baton Rouge
(In millions)	September 30, 2021		December 31, 2020
Assets:





Cash	$	3	$	2
Property and equipment, net	2		2


Other assets, net	1		1
Assets held for sale	$	6	$	5
Liabilities:
Current liabilities	$	3	$	2





Other long-term liabilities	1		1
Liabilities related to assets held for sale	$	4	$	3

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The following information presents the net revenues and net loss of our held for sale property, with operations included in continuing operations, that has not been sold:


	Baton Rouge
	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Net revenues	$	4	$	4	$	13	$	12
Net loss	(2)		(4)		(3)		(17)

Held for sale - Sold

Evansville, MontBleu, Eldorado Shreveport, Kansas City and Vicksburg Divestitures

On June 3, 2021, the Company consummated the sale of the real property and equity interests of Tropicana Evansville (“Evansville”) to Gaming and Leisure Properties, Inc. and Bally’s Corporation (formerly Twin River Worldwide Holdings, Inc.), respectively, for $480 million, subject to a customary working capital adjustment, resulting in a gain of approximately $12 million. Evansville was within the Regional segment.

On April 6, 2021, the Company consummated the sale of the equity interests of MontBleu Casino Resort & Spa (“MontBleu”) to Bally’s Corporation for $15 million, subject to a customary working capital adjustment, resulting in a gain of less than $1 million. The purchase price for MontBleu is due no later than the first anniversary of the consummation of the transaction.

As a result of the execution of the agreement to sell MontBleu, an impairment charge totaling $45 million was recorded during the nine months ended September 30, 2020 ~~was primarily~~ due to the ~~liabilities assumed subsequent~~carrying value exceeding the estimated net sales proceeds. The impairment charges resulted in a reduction to the ~~Merger with Former Caesars.~~ 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.

Prior to their respective closing dates in 2020, 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.

The ~~significant change in customer deposits~~following information presents the net revenues and net income (loss) of previously held for sale properties, which were recently sold:


	Nine Months Ended September 30, 2021
(In millions)		MontBleu		Evansville
Net revenues		$	11	$	58
Net income		4		26


	Three Months Ended September 30, 2020
(In millions)	Eldorado Shreveport		Kansas City		Vicksburg		MontBleu		Evansville
Net revenues	$	21	$	—	$	—	$	11	$	31
Net income (loss)	7		1		—		(3)		1


	Nine Months Ended September 30, 2020
(In millions)	Eldorado Shreveport		Kansas City		Vicksburg		MontBleu		Evansville
Net revenues	$	51	$	18	$	7	$	23	$	71
Net income (loss)	8		3		(1)		(43)		(7)

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

~~other deferred revenue~~The assets and liabilities held for sale were as follows as of December 31, 2020:


	December 31, 2020
(In millions)	MontBleu		Evansville
Assets:






Cash	$	3	$	7
Property and equipment, net	37		302
Goodwill	—		9
Gaming licenses and other intangibles, net	—		138
Other assets, net	32		49
Assets held for sale	$	72	$	505
Liabilities:
Current liabilities	$	8	$	12





Other long-term liabilities	63		24
Liabilities related to assets held for sale	$	71	$	36

Held for sale - Discontinued operations

On the closing date of the Merger, Harrah’s Louisiana Downs, Caesars UK Group, which includes Emerald Resorts & Casino, and Caesars Southern Indiana met held for sale criteria. The operations of these properties are presented within discontinued operations.

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. On November 1, 2021, the sale of Harrah’s Louisiana Downs was completed. The annual base rent payments under the Regional Master Lease between Caesars and VICI will remain unchanged.

On July 16, 2021, the Company completed the sale of Caesars UK Group, in which the buyer assumed all liabilities associated with the Caesars UK Group, and recorded an impairment of $14 million during the nine months ended September 30, ~~2019 was primarily attributed~~2021, within discontinued operations.

On December 24, 2020, the Company entered into an agreement to sell the equity interests of Caesars Southern Indiana to the ~~initial recognition~~Eastern Band of Cherokee Indians (“EBCI”) for $250 million, subject to customary purchase price adjustments. On September 3, 2021, the Company completed the sale of Caesars Southern Indiana, subject to a customary working capital adjustment, resulting in a gain of approximately $12 million. In connection with this transaction, the Company’s annual base rent payments to VICI Properties under the Regional Master Lease were reduced by $33 million. Additionally, the Company and EBCI extended their existing relationship by entering into a 10-year brand license agreement, with cancellation rights in exchange for a termination fee at the buyer’s discretion following the fifth anniversary of the ~~Company’s interests in~~agreement, for the continued use of the Caesars brand and Caesars Rewards loyalty program at Caesars Southern Indiana. Caesars Southern Indiana was previously reported within the Regional segment and subsequent to the sale, as a result of the license agreement relating to the continued use of the Caesars brand and Caesars Rewards loyalty program at Caesars Southern Indiana, is reported within the Managed and Branded segment.

At the time that the William Hill Acquisition was consummated, the Company’s intent was to divest William Hill International. Accordingly, the assets and liabilities of William Hill International are classified as held for sale with operations presented within discontinued operations. See Note 1 and Note 2.

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 and nine months ended September 30, 2021:


	Three Months Ended September 30, 2021
(In millions)	Harrah’s Louisiana Downs		Caesars UK Group		Caesars Southern Indiana		William Hill International
Net revenues	$	13	$	—	$	41	$	454
Net income (loss)	3		(1)		18		(39)

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)


	Nine Months Ended September 30, 2021
(In millions)	Harrah’s Louisiana Downs		Caesars UK Group		Caesars Southern Indiana		William Hill International
Net revenues	$	42	$	30	$	155	$	797
Net income (loss)	12		(30)		27		(41)

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 September 30, 2021 and December 31, 2020:


	September 30, 2021
(In millions)	Harrah’s Louisiana Downs
Assets:
Cash	$	7
Property and equipment, net	10
Goodwill	3
Gaming licenses and other intangibles, net	5

Assets held for sale	$	25
Liabilities:

Current liabilities	$	6
Other long-term liabilities (a)	5



Liabilities related to assets held for sale	$	11


	December 31, 2020
(In millions)	Harrah’s Louisiana Downs		Caesars UK Group		Caesars Southern Indiana
Assets:
Cash	$	6	$	32	$	8
Property and equipment, net	11		75		418
Goodwill	3		3		136
Gaming licenses and other intangibles, net	5		28		23
Other assets, net	—		117		4
Assets held for sale	$	25	$	255	$	589
Liabilities:

Current liabilities	$	6	$	73	$	13
Other long-term liabilities (a)	6		120		332



Liabilities related to assets held for sale	$	12	$	193	$	345

____________________

(a)As of September 30, 2021, we have included $5 million of deferred finance obligation as held for sale liabilities for Harrah’s Louisiana Downs and as of December 31, 2020, $336 million of deferred finance obligation was included as held for sale liabilities for Caesars Southern Indiana and Harrah’s Louisiana Downs. Deferred financing obligation represents our preliminary purchase price allocation of the liability which will be derecognized upon completion of the divestitures.

Not included in the above table are assets and liabilities held for sale of $3.8 billion and $2.7 billion, respectively, related to William Hill International. Liabilities held for sale include $612 million of debt related to the asset sale bridge facility and the revolving credit facility, which are expected to be repaid upon the sale of William Hill International, as described in Note 1. The Bridge Credit Agreement includes a financial covenant, of which the Company was in compliance as of September 30, 2021, requiring the Bridge Facility Borrower to maintain a maximum total net leverage ratio of 10.50 to 1.00. The borrowings under the Bridge Credit Agreement are guaranteed by the Bridge Facility Borrower and its material wholly-owned subsidiaries (subject to exceptions), and are secured by a pledge of substantially all of the existing and future property and assets of the Bridge Facility Borrower and the guarantors (subject to exceptions). In addition, $1.1 billion of debt, at book value which approximates fair value, is ~~recorded~~held for sale related to two trust deeds assumed in the William Hill Acquisition. One trust deed relates to £350 million aggregate principal amount of 4.750% Senior Notes due 2026, and the other ~~long-term liabilities~~trust deed relates to £350 million aggregate principal amount of 4.875% Senior Notes due 2023. Each of the trust deeds contain a put option due to a change in control which allowed noteholders to require the Company to purchase the notes at 101% of the principal amount

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

with interest accrued. The put period expired on July 26, 2021, and approximately £1 million of debt was repurchased. No financial covenants were noted related to the ~~Consolidated Condensed Balance Sheets (see Note 6).~~two trust deeds assumed in the William Hill Acquisition.

Note 4. ~~Assets Held~~Investments in and Advances to Unconsolidated Affiliates

William Hill

The Company previously entered into a 25-year agreement with William Hill, which became effective January 29, 2019 and granted to William Hill the right to conduct betting activities, including operating our sportsbooks, in retail channels under certain skins for ~~Sale~~

~~Held~~online channels with respect to the Company’s current and future properties, and conduct certain real money online gaming activities. On April 22, 2021, the Company consummated its previously announced acquisition of William Hill PLC in an all-cash transaction. Prior to the acquisition, the Company accounted for ~~sale - Continuing operations~~

~~Eldorado Shreveport, MontBleu~~its investment in William Hill PLC as an investment in equity securities. Additionally, we accounted for our investment in William Hill US as an equity method investment prior to the William Hill Acquisition. See Note 2 for further detail on the consideration transferred and ~~Evansville~~

~~In connection with its review~~the allocation of the ~~Merger, the Indiana Gaming Commission determined on July~~purchase price.

NeoGames

The acquired net assets of William Hill included an investment in NeoGames S.A. (“NeoGames”), a global leader of iLottery solutions and services to national and state-regulated lotteries, and other investments. On September 16, ~~2020 that~~2021, the Company ~~is required~~sold a portion of its shares of NeoGames common stock for $136 million which decreased Company’s ownership interest from 24.5% to divest three properties within the state of Indiana in order to avoid undue economic concentrations as conditions to the Indiana Gaming Commission’s approval of the Merger. On October 27, 2020, the Company entered into an agreement to sell Evansville to GLPI and Twin River for $480 million in cash, 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. In addition, the Company plans to enter into agreements to divest of Caesars Southern Indiana and Horseshoe Hammond prior to December 31, 2020. Evansville met the requirements for presentation as assets held for sale asapproximately 8.4%. As of September 30, ~~2020, while Caesars Southern Indiana and Horseshoe Hammond met the requirements for presentation as held for sale and discontinued operations.~~

~~On April 24, 2020,~~2021, the Company ~~entered into~~held approximately 2 million shares of NeoGames common stock with a ~~definitive purchase agreement with Twin River~~fair value of $79 million. The shares have a readily determinable fair value and, ~~certain of its affiliates for~~accordingly, the ~~sale of~~Company remeasures the ~~equity interests of Eldorado Resort Casino Shreveport Joint Venture and Columbia Properties Tahoe, LLC,~~investment based on the entities that hold Eldorado Shreveport and MontBleu, respectively, for aggregate consideration of $155 million, subject to a working capital adjustment. The definitive agreement provides that the consummation of the sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals. Eldorado Shreveport and MontBleu are expected to close in the first quarter of 2021.

Eldorado Shreveport and MontBleu met the requirements for presentation as assets held for sale as of September 30, 2020. However, the pending divestitures of Eldorado Shreveport and MontBleu did not meet the requirements for presentation as discontinued operations and are included in income from continuing operations in the periods presented.

As a result of the agreement to sell MontBleu, an impairment charge totaling $45 million was recorded during the nine months ended September 30, 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, goodwill and other intangibles totaling $18 million, $23 million and $4 million, respectively.publicly available share price (Level 1). See Note 7.

~~The assets and liabilities held for sale, accounted for at carrying value as it was lower than fair value, were as follows as of September 30, 2020:~~

September 30, 2020
(In millions) Shreveport MontBleu Evansville
Assets:
Property and equipment, net $ 85 $ 37 $ 302
Goodwill 0 0 9
Gaming licenses and other intangibles, net 21 0 138
Other assets, net 15 32 48
Assets held for sale $ 121 $ 69 $ 497
Current liabilities $ 21 $ 72 $ 36
Liabilities related to assets held for sale $ 21 $ 72 $ 36

~~The following information presents the net revenues and net (loss) income for the Company’s properties that are held for sale:~~

Three Months Ended September 30, 2020
(In millions) Shreveport MontBleu Evansville
Net revenues $ 21 $ 11 $ 31
Net (loss) income 7 (3) 1

Nine Months Ended September 30, 2020
(In millions) Shreveport MontBleu Evansville
Net revenues $ 51 $ 23 $ 71
Net (loss) income 8 (43) (7)

~~Held for sale - Sold~~

~~Kansas City, Vicksburg, Mountaineer, Caruthersville, Cape Girardeau, Presque and Nemacolin Divestitures~~

~~On July 1, 2020, the Company consummated the sale of the equity interests of the entities that hold Vicksburg and Kansas City to Twin River for $230 million resulting in a gain of $8 million~~. The sales of Mountaineer, Caruthersville and Cape Girardeau were consummated on December 6, 2019. The sale of Nemacolin closed on March 8, 2019 resulting in a gain on sale of $0.1 million, net of final working capital adjustments, for the nine months ended September 30, 2019. The sale of Presque closed on January 11, 2019 resulting in a gain on sale of $22 million, net of final working capital adjustments, for the nine months ended September 30, 2019. Prior to their respective closing dates, Vicksburg, Kansas City, Mountaineer, Caruthersville, Cape Girardeau, Nemacolin and Presque met the requirements for presentation as assets held for sale under generally accepted accounting principles. However, they did not meet the requirements for presentation as discontinued operations. All properties were previously reported in the Regional segment.

~~The following information presents the net revenues and net (loss) income of Kansas City and Vicksburg properties for~~ For the three and nine months ended September 30, ~~2020:~~2021, the Company recorded a loss of approximately $158 million and $35 million, respectively, which is included within Other income (loss) on the Statements of Operations.

Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020
(In millions) Kansas City Vicksburg Kansas City Vicksburg
Net revenues $ 0 $ 0 $ 18 $ 7
Net (loss) income 1 0 3 (1)
Pompano Joint Venture

~~The following information presents~~In April 2018, the ~~net revenues~~Company entered into a joint venture with Cordish Companies (“Cordish”) to plan and ~~net (loss) income~~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 ~~held for sale properties~~the various phases of the project. Additionally, Cordish will be responsible for the ~~three~~development of the master plan for the project with the Company’s input and ~~nine months ended~~will submit it for the Company’s review and approval. In June 2021, the joint venture issued a capital call and we contributed $3 million. The Company has made cash contributions totaling $4 million and has contributed land. On February 12, 2021, the Company contributed 186 acres to the joint venture with 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 September 30, ~~2019:~~2021. We entered into a short-term lease agreement in February 2021, which we can cancel at any time, to lease back a portion of the land from the joint venture.

Three Months Ended September 30, 2019
(In millions) Mountaineer Cape Girardeau Caruthersville Kansas City Vicksburg Presque Nemacolin
Net revenues $ 33 $ 14 $ 9 $ 15 $ 6 $ 0 $ 0
Net income 3 2 1 1 0 0 0
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 September 30, 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.

Nine Months Ended September 30, 2019
(In millions) Mountaineer Cape Girardeau Caruthersville Kansas City Vicksburg Presque Nemacolin
Net revenues $ 96 $ 44 $ 26 $ 48 $ 16 $ 3 $ 5
Net (loss) income 7 6 5 8 (1) 0 (1)

Note 5. Property and Equipment


(In millions)	September 30, 2021		December 31, 2020
Land and improvements	$	2,124	$	2,187
Buildings, riverboats, and leasehold improvements	12,329		12,059
Furniture, fixtures, and equipment	1,558		1,419
Construction in progress	293		118
Total property and equipment	16,304		15,783
Less: accumulated depreciation	(1,775)		(1,048)
Total property and equipment, net	$	14,529	$	14,735

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Our property and equipment are 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 September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Depreciation expense	$	237	$	204	$	746	$	289

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 ~~held for sale, accounted for~~assumed based upon their estimated fair values at ~~carrying value as it was lower than fair value, were as follows as of December 31, 2019:~~

December 31, 2019
(In millions) Kansas City Vicksburg Total
Assets:
Property and equipment, net $ 39 $ 31 $ 70
Goodwill 40 9 49
Gaming licenses and other intangibles, net 91 3 94
Other assets, net 36 4 40
Assets held for sale $ 206 $ 47 $ 253
Current liabilities $ 3 $ 2 $ 5
Other long-term liabilities 33 0 33
Liabilities related to assets held for sale $ 36 $ 2 $ 38

~~These amounts include historical operating results, adjusted to eliminate the internal allocation of interest expense that was not assumed by the buyer.~~

~~Held for sale - Discontinued operations~~

As result of the Merger, certain Former Caesars properties, including Harrah’s Louisiana Downs, Caesars Southern Indiana, Horseshoe Hammond, Harrah’s Reno, Caesars UK group, including Emerald Resorts & Casino, and Bally’s Atlantic City (“Bally’s AC”) have met, or are expected to meet within a short period of time, held for sale criteria as of the date of acquisition. The Company determines the ~~closing~~estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices, and estimates made by management. To the extent the purchase price exceeds the fair value of the ~~Merger. The sales~~net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is recorded as goodwill.

Changes in Carrying Value of ~~these properties have or are expected to close within one year~~Goodwill and Other Intangible Assets


			Non-Amortizing Intangible Assets
(In millions)	Amortizing Intangible Assets		Goodwill		Other
December 31, 2020	$	501	$	9,864	$	3,782
Amortization	(96)		—		—
Acquired (a)	574		1,102		232
Acquisition of gaming rights and trademarks (b)	253		—		20
Other	—		1		(13)
September 30, 2021	$	1,232	$	10,967	$	4,021

____________________

(a)Includes goodwill and intangible assets from the ~~date of the closing of the Merger~~William Hill Acquisition and the ~~properties are classified as discontinued operations.~~consolidation of Horseshoe Baltimore. See Note 2 for further detail.

~~On September 30, 2020, the Company~~(b)Includes acquired royalty-free license of Planet Hollywood Trademark with an estimated useful life of 15 years and ~~VICI completed the sale~~other gaming rights.

Gross Carrying Value and Accumulated Amortization of ~~Harrah’s Reno for $42 million. The proceeds from the sale were split between the Company and VICI, and the Company received $8 million~~Intangible Assets Other Than Goodwill


	September 30, 2021							December 31, 2020
(Dollars in millions)	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizing intangible assets
Customer relationships	3 - 7 years	$	587	$	(163)	$	424	$	510	$	(92)	$	418
Gaming rights and other	20 - 34 years	174		(5)		169		84		(1)		83
Trademarks	15 years	270		(8)		262		—		—		—
Reacquired rights	24 years	280		(5)		275		—		—		—
Technology	6 years	110		(8)		102		—		—		—
		$	1,421	$	(189)	1,232		$	594	$	(93)	501

Non-amortizing intangible assets
Trademarks						2,148						2,161
Gaming rights						1,350						1,098
Caesars Rewards						523						523

						4,021						3,782
Total amortizing and non-amortizing intangible assets, net						$	5,253					$	4,283

Table of ~~net proceeds.~~Contents

~~The following information presents the net revenues and net (loss) income for the Company’s properties that are part of discontinued operations~~24

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Amortization expense with respect to intangible assets for the three months ended September 30, ~~2020:~~

Three Months Ended September 30, 2020
(In millions) Harrah’s Louisiana Downs Harrah’s Reno Horseshoe Hammond Caesars UK Bally’s AC Caesars Southern Indiana
Net revenues $ 9 $ 0 $ 66 $ 11 $ 31 $ 39
Net (loss) income 2 (4) 9 (11) 5 1

~~The assets~~2021 and ~~liabilities held for sale as a discontinued operation, accounted for at carrying value as it was lower than fair value, were as follows as of September 30, 2020:~~

September 30, 2020
(In millions) Harrah’s Louisiana Downs Horseshoe Hammond Caesars UK Bally’s AC Caesars Southern Indiana
Assets:
Cash $ 9 $ 14 $ 36 $ 10 $ 7
Property and equipment, net 11 404 69 25 413
Goodwill 3 138 35 0 136
Gaming licenses and other intangibles, net 5 30 50 0 23
Other assets, net 1 43 107 6 4
Assets held for sale $ 29 $ 629 $ 297 $ 41 $ 583
Current liabilities $ 6 $ 34 $ 89 $ 14 $ 20
Other long-term liabilities (a)
6 73 125 20 1
Liabilities related to assets held for sale $ 12 $ 107 $ 214 $ 34 $ 21

~~____________________~~

~~(a)~~2020 totaled ~~We have included $25~~$39 million ~~of deferred finance obligation as held for sale liabilities for Bally’s Atlantic City~~ and 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 or Caesars Southern Indiana 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 5. Stock-Based Compensation and Stockholders’ Equity~~

~~Common Stock Offering~~

On June 19, 2020, the Company completed the public offering of 20,700,000 shares (including the shares sold pursuant to the underwriters’ overallotment option) of Company Common Stock, at an offering price of $39.00 per share, which provided $772$21 million, ~~of proceeds, net of fees and estimated expenses of $35 million.~~

On October 1, 2020, the Company completed the public offering of 35,650,000 shares (including the shares sold pursuant to the underwriters’ overallotment option) of Company Common Stock, at an offering price of $56.00 per share, which provided $1.9 billion of proceeds, net of fees and estimated expenses of $50 million.

~~Share Repurchase Program~~

In November 2018, the Company’s Board of Directors authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which the Company may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no minimum number of shares of common stock that the Company is required to repurchase under the Share Repurchase Program.

As of September 30, 2020, the Company acquired 223,823 shares of common stock under the Share Repurchase Program at an aggregate value of $9 million and an average of $40.80 per share. NaN shares were repurchased during the nine months ended September 30, 2020 and 2019.

~~Stock-Based Compensation~~

The Company maintains long-term incentive plans for management, other personnel, and key service providers. The plans allow for granting stock-based compensation awards, based on Company Common Stock, including time-based and performance-based stock options, restricted stock units (“RSUs”), performance stock units, market-based stock units (“MSUs”), restricted stock awards, stock grants, or a combination of awards. Forfeitures are recognized in the period in which they occur.

Total stock-based compensation expense in the accompanying Consolidated Condensed Statements of Operations totaled $45 million and $4 million during the three months ended September 30, 2020 and 2019, respectively, and $55 million and $16 million during the nine months ended September 30, 2020 and 2019, respectively. These amounts are included in corporate expenses and, in the case of certain property positions, general and administrative expenses in the Company’s Consolidated Condensed Statements of Operations.

In connection with the Merger, Former Caesars’ outstanding performance-based stock options ceased to represent an option or right to acquire shares of Former Caesars common stock and were converted into an option or right to purchase shares of Company Common Stock on the same terms and conditions as were applicable to such option immediately prior to the consummation of the Merger. Former Caesars’ unvested RSUs and MSUs were converted into a number of RSUs or MSUs, as applicable, in respect of shares of Company Common Stock and remained subject to the same terms and conditions as were applicable to such RSUs and MSUs immediately prior to the consummation of the Merger.

In addition, during the three months ended September 30, 2020, the Company granted both RSUs and MSUs to members of management. Vesting of the awards varies, and includes awards that cliff vest after a two or three year service period, as well as awards that vest ratably on each anniversary during the three year service period. In addition, awards were granted to certain key individuals related to their efforts and the related shareholder return from potential transactions. Vesting of the awards is subject to various service and performance conditions and will accelerate and vest immediately upon the closing of a qualifying transaction as defined by the agreements. Certain awards contained a market-based performance condition with which the fair value of the awards was determined based on a Monte Carlo simulation. The grant date fair value for these awards with a market-based performance condition was approximately $7 million.

~~Restricted Stock Unit Activity~~

During the three and nine months ended September 30, 2020, as part of the annual incentive program, the Company granted RSUs to employees of the Company with an aggregate fair value of $42 million and $59 million, respectively. Each RSU represents the right to receive payment in respect of one share of the Company’s Common Stock.

In connection with the Merger, on July 20, 2020, each Former Caesars’ RSU that was eligible to vest based solely on the passage of time that was outstanding as of immediately prior to the consummation of the Merger was converted into a RSU in respect of Company Common Stock and remained subject to the same terms and conditions as were applicable as of immediately prior to the consummation of the Merger.

~~A summary of the RSUs activity, including performance awards,~~ for the nine months ended September 30, 2021 and 2020 totaled $96 million and $35 million, respectively, which is ~~presented~~included in depreciation and amortization in the ~~following table:~~

Units
Weighted-
Average Grant
Date
Fair Value (a)
Unvested outstanding as of December 31, 2019 1,246,641 $ 35.56
Granted (b)
1,222,736 48.17
Acquired (c)
1,876,969 38.24
Vested (1,068,509) 33.22
Forfeited (22,912) 41.89
Unvested outstanding as of September 30, 2020 3,254,925 42.56

~~___________________~~

~~(a)Represents the weighted-average grant date fair value~~Statements of ~~RSUs, which is the share price of our common stock on the grant date.~~Operations.

~~(b)Included are 20,615 RSUs granted to non-employee members of the Board of Directors during the nine months ended September 30, 2020.~~

~~(c)Assumed RSU shares of Former Caesars as of the Merger date.~~

~~Market-Based Stock Unit Activity~~

During the quarter ended September 30, 2020, the Company granted approximately 185,639 MSUs that are scheduled to cliff vest in three years. On the vesting date, recipients will receive between 0% and 200% of the granted MSUs in the form of Company Common Stock based on the achievement of specified market and service conditions. Based on the terms and conditions of the awards, the grant date fair value of the MSUs was determined using a Monte-Carlo simulation model. Key assumptions for the Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation coefficient. The effect of market conditions is considered in determining the grant date fair value, which is not subsequently revised based on actual performance. The aggregate value of MSUs granted during the nine months ended September 30, 2020 was $13 million.

In connection with the Merger, on July 20, 2020, each MSU of Former Caesars was converted into a MSU in respect of shares of Company Common Stock and remained subject to the same terms and conditions as were applicable as of immediately prior to the consummation of the Merger.

Units
Weighted- Average Fair Value (a)
Unvested outstanding as of December 31, 2019 0 $ 0
Granted 185,639 70.26
Acquired (b)
124,984 63.36
Vested (61,322) 63.36
Forfeited 0 0
Unvested outstanding as of September 30, 2020 249,301 68.50

~~____________________~~

~~(a)Represents the fair value determined using a Monte-Carlo simulation model.~~

~~(b)Assumed MSU shares of Former Caesars as of the Merger date.~~

~~Stock Option Activity~~

~~There were 26,900 stock options exercised for the nine months ended September 30, 2020. Outstanding options as of September 30, 2020 totaled 220,432, of which 104,257 options were exercisable.~~

~~Unrecognized Compensation Cost~~

~~As of September 30, 2020, the Company had $103 million of unrecognized compensation expense, which is expected to be recognized over a weighted-average period of 1.7 years.~~


Estimated Five-Year Amortization
	Remaining 2021		Years Ended December 31,
(In millions)			2022		2023		2024		2025		2026
Estimated annual amortization expense	$	37	$	144	$	139	$	124	$	117	$	117

Note 6.7. Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis: The following table sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the Balance Sheets at September 30, 2021 and December 31, 2020:


	September 30, 2021
(In millions)	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash and investments	$	1	$	1	$	—	$	2
Marketable securities	88		8		—		96
Derivative instruments - FX forward	—		21		—		21
Total assets at fair value	$	89	$	30	$	—	$	119
Liabilities:


Derivative instruments - interest rate swaps	$	—	$	47	$	—	$	47


Total liabilities at fair value	$	—	$	47	$	—	$	47


	December 31, 2020
(In millions)	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash and investments	$	1	$	3	$	44	$	48
Marketable securities	23		10		—		33
Derivative instruments - FX forward	—		40		—		40
Total assets at fair value	$	24	$	53	$	44	$	121
Liabilities:
Derivative instruments - 5% Convertible Notes	$	—	$	326	$	—	$	326
Derivative instruments - interest rate swaps	—		90		—		90
Total liabilities at fair value	$	—	$	416	$	—	$	416

The change in restricted cash and investments valued using Level 3 inputs for the nine months ended September 30, 2021 is as follows:


(In millions)	Level 3 Investments
Fair value of investment at December 31, 2020	$	44
Change in fair value	7
Acquisition of William Hill	(51)
Fair value at September 30, 2021	$	—

Restricted Cash and Investments

The estimated fair values of the Company’s restricted cash and investments are based upon quoted prices available in active markets (Level 1), or quoted prices for similar assets in active and ~~Advances~~inactive markets (Level 2), or quoted prices available in active markets adjusted for time restrictions related to ~~Unconsolidated Affiliates~~the sale of the investment (Level 3) and represent the amounts the Company would expect to receive if the Company sold the restricted cash and investments. Restricted cash classified as Level 1 includes cash equivalents held in short-term certificate of deposit accounts or money market type funds. Restricted cash that is not subject to remeasurement on a recurring basis is not included in the table above. Restricted investments included shares acquired in conjunction with the Company’s sports betting agreements that contained restrictions related to the ability to

Table of Contents

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

liquidate shares within a specified timeframe. As a result of the William Hill Acquisition, no restricted investments are held as of September 30, 2021.

Marketable Securities

Marketable securities consist primarily of trading securities held by the Company’s captive insurance subsidiary and investments acquired in the William Hill Acquisition (see Note 4). These investments also include collateral for several escrow and trust agreements with third-party beneficiaries. The estimated fair values of the Company’s marketable securities are determined on an individual asset basis based upon quoted prices of identical assets available in active markets (Level 1), quoted prices of identical assets in inactive markets, or quoted prices for similar assets in active and inactive markets (Level 2), and represent the amounts the Company would expect to receive if the Company sold these marketable securities.

In November 2018, the Company entered into an agreement with The Stars Group Inc., which was subsequently acquired by Flutter Entertainment PLC (“Flutter”) to provide options to obtain access to 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 skinssecond skin for online ~~channels~~sports wagering and third skin for real money online gaming and poker with respect to the Company’s ~~current and future~~ properties ~~and conduct certain real money online gaming activities. The~~in the U.S. Under the terms of the agreement, the Company received common shares, as a 20% ownership interest in William Hill US as well as 13 million ordinary shares of William Hill plc, which carry certain time restrictions on when they can be sold. Additionally, the Company receives a profitrevenue share from ~~the~~certain operations of ~~sports betting and other gaming activities associated with~~Flutter under 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.

~~On September 30, 2020, the Company announced its intention to acquire William Hill plc in an all-cash transaction. See Note 1.~~

licenses. As of ~~September 30, 2020 and~~ December 31, ~~2019, the Company’s receivable from William Hill totaled $1 million and $4 million, respectively, and is reflected in Due from affiliates on the Consolidated Condensed 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 September 30, 2020, and December 31, 2019, the carrying value of the Company’s interest in William Hill US totaled $126 million and $127 million, respectively, and is recorded in Investment in and advances to unconsolidated affiliates on the Consolidated Condensed Balance Sheets.

~~As of September 30, 2020 and December 31, 2019,~~ the fair value of ~~the William Hill plc~~ shares ~~totaled $43~~held was $10 million, and ~~$29 million, respectively, net of cumulative unrealized gains of $15~~was included in Prepayments and other current assets on the Balance Sheets. On July 7, 2021, the Company sold these shares for $9 million and ~~$2 million, respectively, and is included in Investment in and advances to unconsolidated affiliates on the Consolidated Condensed Balance Sheets. The Company~~ recorded ~~an unrealized gain of $26 million and an unrealized~~a realized loss of ~~$4 million during the three months ended September 30, 2020 and 2019, respectively. The Company recorded an unrealized gain of $13~~$1 million during the nine months ended September 30, ~~2020. The Company recorded a loss of less than $1 million for the nine months ended September 30, 2019~~

As described above, the Company granted William Hill the right to the use of certain skins in exchange for an equity method investment. The fair value of the William Hill US and William Hill plc shares received has been deferred and is recognized as revenue on a straight-line basis over the 25-year agreement term. The Company recognized revenue of $2 million for both of the three months ended September 30, 2020 and 2019, and $7 million and $4 million during the nine months ended September 30, 2020 and 2019, respectively and is recorded in Other revenue in the Consolidated Condensed Statement of

Operations. As of September 30, 2020 and December 31, 2019, the balance of the William Hill deferred revenue totaled $135 million and $142 million, respectively, and is recorded in other long-term liabilities on the Consolidated Condensed Balance Sheets.

~~Note 7. 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 the estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices, and estimates made by management. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is recorded as goodwill.

~~Changes in Carrying Value of Goodwill and Other Intangible Assets~~

Non-Amortizing Intangible Assets
(In millions) Amortizing Intangible Assets Goodwill Other
December 31, 2019 $ 53 $ 910 $ 1,058
Amortization (35) — —
Impairments 0 (100) (20)
Acquired (a)
488 8,649 3,081
Assets held for sale (see Note 4) (5) (9) (154)
September 30, 2020 $ 501 $ 9,450 $ 3,965

~~____________________~~

~~(a)Includes intangible assets and goodwill acquired upon Merger and $20 million of acquisition of gaming rights. See Note 2 and Note 13 for further detail.~~

~~Gross Carrying Value and Accumulated Amortization of Intangible Assets Other Than Goodwill~~

September 30, 2020 December 31, 2019
(Dollars in millions) Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Amortizing intangible assets
Customer relationships 3 - 7 years $ 488 $ (71) $ 417 $ 101 $ (48) $ 53
Gaming rights and others 34.2 years 84 0 84 0 0 0
$ 572 $ (71) 501 $ 101 $ (48) 53
Non-amortizing intangible assets
Trademarks 2,202 165
Gaming rights 1,223 893
Caesars Rewards 540 0
3,965 1,058
Total amortizing and non-amortizing intangible assets, net $ 4,466 $ 1,111

Gaming rights represent intangible assets acquired from the purchase of a gaming entity located in a gaming jurisdiction where competition is limited, such as when only a limited number of gaming operators are allowed to operate in the jurisdiction. These gaming license rights are not subject to amortization as the Company has determined that they have indefinite useful lives. For gaming jurisdictions with high barriers of renewal of the gaming rights, such as material costs of renewal, the gaming rights are deemed to have a finite useful life and are amortized over the expected useful life.

During the nine months ended September 30, 2020, the Company recognized impairment charges in our Regional segment related to goodwill and trade names totaling $100 million and $16 million, respectively, due to declines in recent performance and the expected impact on future cash flows as a result of COVID-19.

Additionally, in conjunction with the classification of MontBleu’s operations as assets held for sale as of September 30, 2020 (see Note 4) as a result of the announced sale, an impairment charge totaling $45 million was recorded due to the carrying value exceeding the estimate sales proceeds. Trade names, property, plant and equipment and other assets were impaired by $4 million, $23 million and $18 million, respectively, recorded in the Regional segment.

Amortization expense with respect to intangible assets for the three months ended September 30, 2020 and 2019 totaled $21 million and $8 million, respectively, and $35 million and $23 million for the nine months ended September 30, 2020 and 2019, respectively, which is included in depreciation and amortization in the Consolidated Condensed Statements of Operations.

Estimated Five-Year Amortization
Years Ended December 31,
(In millions) Remaining 2020 2021 2022 2023 2024 2025
Estimated annual amortization expense $ 20 $ 78 $ 64 $ 60 $ 60 $ 60

~~Note 8. Income Taxes~~

~~Income Tax Allocation~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2020 2019 2020 2019
(Loss) income from continuing operations before income taxes $ (789) $ 55 $ (1,136) $ 133
Provision for income taxes (135) (18) (64) (39)
Effective tax rate (17.1) % 32.7 % (5.6) % 29.3 %

We classify accruals for uncertain tax positions within Other long-term liabilities on the Balance Sheets separate from any related income tax payable which is reported within Accrued other liabilities. The accrual amounts relate to any potential income tax liabilities resulting from uncertain tax positions as well as potential interest or penalties associated with those liabilities.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. We have provided a valuation allowance on certain federal, state and foreign deferred tax assets that were not deemed realizable based upon estimates of future taxable income.

As a result of the Merger, the Company acquired $779 million of additional net deferred tax liabilities net of necessary valuation allowances, plus $24 million in additional accruals for uncertain tax positions. The income tax expense for the three and nine months ended September 30, 2020 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to an increase in the valuation allowance against the deferred tax assets due to the series of transactions with VICI during the quarter. The income tax expense for the three and nine months ended September 30, 2019 differed from the expected income tax expense based on the federal tax rate of 21% primarily due to excess tax benefits associated with stock compensation, state and local income taxes and changes in the valuation allowance against deferred tax assets.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020. The CARES Act includes, among other things, refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, and technical amendments regarding the income tax depreciation of qualified improvement property placed in service after December 31, 2017. These amendments allow for retroactive accelerated income tax depreciation on certain of the Company’s leasehold improvement assets. The financial impact of these technical amendments on the business was recorded in the three month period ended September 30, 2020 but had no impact on the income tax provision.

The Company, including its subsidiaries, files tax returns with federal, state, and foreign jurisdictions. The Company does not have tax sharing agreements with the other members within its consolidated group. The Company is subject to exam by various state and foreign tax authorities. With few exceptions, the Company is no longer subject to examinations by tax authorities for years before 2016, and it is possible that the amount of the liability for unrecognized tax benefits could change during the next 12 months.

~~Note 9. Leases~~

The Company has operating and finance leases for various real estate and equipment. Certain of the Company’s lease agreements include rental payments based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation and rental payments based on usage. The Company’s leases include options to extend the lease term one month to 60 years. The Company’s lease agreements do not contain any material restrictive covenants, other than those described below.

~~Financing Obligations~~

~~VICI Leases & Golf Course Use Agreement~~

Upon consummation of the Merger, CEI assumed obligations of certain real property assets leased from VICI by Former Caesars under the following agreements: (i) for a portfolio of properties at various locations throughout the United States (the “Non-CPLV lease”), (ii) for Caesars Palace Las Vegas (the “CPLV lease”), (iii) for Harrah’s Joliet Hotel & Casino (the “Joliet Lease”) and (iv) for Harrah’s Las Vegas (the “HLV Lease”). These lease agreements provided for annual fixed rent (subject to escalation) of $773 million during an initial period, then rent consisting of both base rent and variable rent elements. The lease agreements had a 15-year initial term and 4 five-year renewal options. The lease agreements included escalation provisions beginning in year two of the initial term and continuing through the renewal terms. The lease agreements also included provisions for variable rent payments calculated, in part, based on increases or decreases of net revenue of the underlying lease properties, commencing in year eight of the initial term and continuing through the renewal terms.

In connection with the closing of the Merger on July 20, 2020, the Company and certain of its affiliates consummated a series of transactions with VICI in accordance with the MTA and the purchase and sales agreements entered on September 26, 2019. The Company and certain of its affiliates consummated sale leaseback transactions related to Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Resort Atlantic City, including the Harrah’s Atlantic City Waterfront Conference Center, for approximately $1.8 billion of net proceeds. The Non-CPLV lease was amended to include these properties (as amended, the “Regional Lease”), and was further amended to increase the annual rent thereunder by $154 million in the aggregate related to such added properties and extend the term of such lease so that following the amendment of such lease there will be 15 years remaining until the expiration of the initial term. The Joliet Lease term was also amended such that 15 years remain until the expiration of the initial term.

Former Caesars entered into a Golf Course Use Agreement with VICI, which has a 35-year term (inclusive of all renewal periods), pursuant to which such affiliates of the Company agreed to pay (i) an annual payment of $10 million, subject to escalation, (ii) an annual use fee of $3 million, subject to escalation beginning in the second year, and (iii) certain per-round fees, all as more particularly set forth in the Golf Course Use Agreement. Furthermore, the term of the Golf Course Use Agreement was extended such that there will be 15 years remaining until the expiration of the initial term.

The amendment to the Regional Lease also contains a put-call agreement related to the Centaur properties, which are Hoosier Park and Indiana Grand, pursuant to which the Company may require VICI to purchase and lease back (as lessor) the real estate components of the gaming and racetrack facilities of Hoosier Park and Indiana Grand and VICI may require the Company to sell to VICI and lease back (as lessee) the real estate components of such gaming and racetrack facilities. Election by either party to put or call the Centaur properties must be made during the election period beginning January 1, 2022 and ending December 31, 2024. Upon either party exercising their option, the Centaur properties would be sold at the price in accordance with the agreement and subsequently leased back to CEI by adding the leaseback to the pre-existing Regional lease agreement. As such, the Centaur properties would be leased back over the remaining term of the Regional lease agreement and the Regional lease agreement annual rental payments would be increased by the amount of rent required to achieve a rent coverage ratio of 1.3 as of the exercise date. A liability of $6 million associated with this agreement has been recorded within Other long-term liabilities.

Additionally, in connection with the Merger, the Company received a one-time payment from VICI of approximately $1.4 billion for amendments to the CPLV Lease (as amended, the “Las Vegas Lease”) to, among other things, (i) add the land and improvements of HLV to the lease and terminate the HLV Lease (ii) add the rent payable with respect to the HLV Lease and further increase the annual rent payable with respect to HLV by approximately $15 million, (iii) increase the annual rent with respect to CPLV by approximately $84 million and (iv) extend the term of such lease so that following the amendment of such lease there will be 15 years remaining until the expiration of the initial term.

In connection with the Merger, the land and building components subject to the lease amendments described above did not qualify for sale-leaseback accounting and are accounted for as post-combination debt modifications.

~~GLPI Leases~~

The fair value of the real estate assets and the related failed sale-leaseback financing obligations were estimated based on the present value of the estimated future lease payments over the lease term of 35 years, including renewal options, using an imputed discount rate of approximately 10.2%. The value of the failed sale-leaseback financing obligations is dependent upon assumptions regarding the amount of the lease payments and the estimated discount rate of the lease payments required by a market participant.

The GLPI Master Lease provides for the lease of land, buildings, structures and other improvements on the land (including barges and riverboats), easements and similar appurtenances to the land and improvements relating to the operation of the leased properties. The GLPI Master Lease provides for an initial term of 20 (as amended below) with no purchase option. At the Company’s option, the GLPI Master Lease may be extended for up to 4 five-year renewal terms beyond the initial 20 years-year term (as amended below).

On June 15, 2020, the Company entered into an Amended and Restated Master Lease with GLPI, which, among other things, (i) extended the initial term from 15 to 20 years (through September 2038), with 4 five-year renewals at the Company’s option, (ii) commencing October 1, 2020, removed the percentage rent payable in exchange for an increase to the non-escalating portion of land base rent to $24 million, (iii) amended the dates on which, and the amounts by which, the escalating portion of base rent escalates, and (iv) provided certain relief under the operating, capital expenditure and financial covenants in the event of facility closures due to public health emergencies, governmental restrictions and certain other instances of unavoidable delay. The amendment to the GLPI Master Lease became effective on July 17, 2020 following receipt of required regulatory approvals. If the Company elects to renew the term of the GLPI Master Lease, the renewal will be effective as to all, but not less than all, of the leased property then subject to the GLPI Master Lease. The GLPI Master Lease does not provide the Company with the option to purchase the leased property and the Company does not have the ability to terminate its obligations under the GLPI Master Lease prior to its expiration without GLPI’s consent.

On September 29, 2020, Company entered into a sale-leaseback transaction with GLPI for the Lumière property. On October 1, 2018, the Company borrowed $246 million from GLPI to fund the purchase price of the real estate underlying Lumière. As part of the consideration for the purchase of the property, GLPI cancelled the $246 million loan. The lease (the “Lumiere Lease”) has an initial term that ends on October 31, 2033 and 4 five-year renewal options.

Following the amendments and transactions above, the land and building components subject to the lease amendments described above did not qualify for sale-leaseback accounting and are accounted for as post-combination debt modifications.

~~The future minimum payments related to the GLPI leases, including the Lumière Lease, and VICI leases financing obligation, as amended, at September 30, 2020 were as follows:~~

(In millions) GLPI Leases VICI Leases
2020 (excluding the nine months ended September 30, 2020) $ 27 $ 268
2021 109 1,079
2022 109 1,097
2023 111 1,119
2024 112 1,139
Thereafter 4,880 46,737
Total future payments 5,348 51,439
Less: Amounts representing interest (4,522) (41,020)
Plus: Residual values 399 906
Financing obligation $ 1,225 $ 11,325

~~Cash payments made relating to our long-term financing obligations during the three and nine months ended September 30, 2020 and 2019 are as follows:~~

GLPI Leases (a)
VICI Leases
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2020 2019 2020 2019 2020 2019 2020 2019
Cash paid for principal $ 22 $ 22 $ 66 $ 66 $ 49 $ 0 $ 49 $ 0
Cash paid for interest 24 25 74 74 128 0 128 0

~~____________________~~

~~(a)~~For the initial periods of the GLPI Leases, cash payments are less than the interest expense recognized, which causes the failed-sale leaseback obligation to increase during the initial years of the lease term.

~~Lease Covenants~~

The GLPI Leases and VICI leases contains certain operating, capital expenditure and financial covenants thereunder, and the Company’s ability to maintain compliance with these covenants was also negatively impacted. On June 15, 2020, the Company entered into an amendment to the GLPI Master Lease which provides certain relief under these covenants in the event of facility closures due to public health emergencies, governmental restrictions and certain other instances of unavoidable delay. Furthermore, the Company obtained waivers from VICI with relation to annual capital expenditure requirements the leases with VICI starting with the annual period ending December 31, 2020.

~~Lessor Arrangements~~

~~Lodging Arrangements~~

Lodging arrangements are considered short-term and generally consist of lease and nonlease components. The lease component is the predominant component of the arrangement and consists of the fees charged for lodging. The nonlease components primarily consist of resort fees and other miscellaneous items. As the timing and pattern of transfer of both the lease and nonlease components are over the course of the lease term, we have elected to combine the revenue generated from lease and nonlease components into a single lease component based on the predominant component in the arrangement.2021. During the three and nine months ended September 30, 2020, ~~we recognized approximately $200~~the Company recorded an unrealized gain of $5 million and ~~$257~~$8 million, ~~respectively, in lease revenue related to lodging arrangements, which is included in Rooms revenue in the Statement of Operations.~~

~~Conventions~~

~~Convention arrangements are considered short-term~~respectively. Gains and generally consist of lease and nonlease components. The lease component is the predominant component of the arrangement and consists of fees charged for the use of meeting space. The nonlease components primarily consist of food and beverage and audio/visual services. Revenue from conventions islosses have been included in Other ~~revenue~~income (loss) on the Statements of Operations.

Derivative Instruments

The Company does not purchase or hold any derivative financial instruments for trading purposes.

5% Convertible Notes - Derivative Liability

On October 6, 2017, Former Caesars issued $1.1 billion aggregate principal amount of 5% Convertible Notes which contained a derivative liability. On June 29, 2021, all outstanding 5% Convertible Notes were converted as a result of our mandatory conversion. See Note 9 for further discussion. The derivative liability associated with the conversion feature no longer exists following the mandatory conversion.

Forward contracts

The Company has entered into several foreign exchange forward contracts with third parties to hedge the risk of fluctuations in the foreign exchange rates between USD and GBP and to fix the exchange rate for a portion of the funds used in the William Hill Acquisition, repayment of related debt and expected proceeds of the sale. On April 23, 2021, the Company entered into a foreign exchange forward contract to purchase £237 million at a contracted exchange rate, which was settled on June 11, 2021, resulting in a realized gain of $6 million, which was recorded in the Other income (loss) on the Statements of Operations. Similarly, the Company has entered into foreign exchange forward contracts to sell £717 million at a contracted exchange rate. These contracts are also to hedge the risk of fluctuations in the foreign exchange rates related to the expected proceeds from the sale of William Hill International. The forward term of the contracts ends on December 31, 2021 and March 31, 2022. The Company recorded an unrealized gain of $16 million and $20 million during the three and nine months ended September 30, 2021, respectively, related to forward contracts, which was recorded in the Other income (loss) on the Statements of Operations.

Interest Rate Swap Derivatives

We assumed Former Caesars interest rate swaps to manage the mix of assumed debt between fixed and variable rate instruments. As of September 30, 2021, we have 7 interest rate swap agreements to fix the interest rate on $2.3 billion of variable rate debt related to the Caesars Resort Collection (“CRC”) Credit Agreement. The interest rate swaps are designated as cash flow hedging instruments. The difference to be paid or received under the terms of the interest rate swap agreements is accrued as interest rates change and recognized as an adjustment to interest expense at settlement. Changes in the variable interest rates to be received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The major terms of the interest rate swap agreements as of September 30, 2021 are as follows:


Effective Date	Notional Amount (In millions)	Fixed Rate Paid	Variable Rate Received as of September 30, 2021	Maturity Date
1/1/2019	250	2.196%	0.0846%	12/31/2021
12/31//2018	250	2.274%	0.0846%	12/31/2022
1/1/2019	400	2.788%	0.0846%	12/31/2021
12/31//2018	200	2.828%	0.0846%	12/31/2022
1/1/2019	200	2.828%	0.0846%	12/31/2022
12/31//2018	600	2.739%	0.0846%	12/31/2022
1/2/2019	400	2.707%	0.0846%	12/31/2021

Valuation Methodology

The estimated fair values of our interest rate swap derivative instruments are derived from market prices obtained from dealer quotes for similar, but not identical, assets or liabilities. Such quotes represent the estimated amounts we would receive or pay to terminate the contracts. The interest rate swap derivative instruments are included in either Other assets, net or Other long-term liabilities on our Balance Sheets. Our derivatives are recorded at their fair values, adjusted for the credit rating of the counterparty if the derivative is an asset, or adjusted for the credit rating of the Company if the derivative is a liability. None of our derivative instruments are offset and all were classified as Level 2.

Financial Statement Effect

The effect of ~~Operations,~~derivative instruments designated as hedging instruments on the Balance Sheets for amounts transferred into Accumulated other comprehensive income (loss) (“AOCI”) before tax was a gain of $15 million and $18 million during the three months ended September 30, 2021 and 2020, respectively, and a gain of $44 million and $18 million during the nine months ended September 30, 2021 and 2020, respectively. AOCI reclassified to Interest expense on the Statements of Operations was $15 million and $12 million for the three months ended September 30, 2021 and 2020, respectively, and $44 million and $12 million for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, the interest rate swaps derivative liability of $47 million was recorded in Other long-term liabilities. Net settlement of these interest rate swaps results in the reclassification of deferred gains and losses within AOCI to be reclassified to the income statement as a component of interest expense as settlements occur. The estimated amount of existing gains or losses that are reported in AOCI at the reporting date that are expected to be reclassified into earnings within the next 12 months is approximately $39 million.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Accumulated Other Comprehensive Income (Loss)

The changes in AOCI by component, net of tax, for the periods through September 30, 2021 and 2020 are shown below.


(In millions)	Unrealized Net Gains on Derivative Instruments		Foreign Currency Translation Adjustments		Other		Total
Balances as of December 31, 2019 (a)	$	—	$	—	$	—	$	—
Other comprehensive income before reclassifications	2		1		—		3
Amounts reclassified from accumulated other comprehensive income	12		—		—		12
Total other comprehensive income, net of tax	14		1		—		15
Balances as of September 30, 2020	$	14	$	1	$	—	$	15

Balances as of December 31, 2020	$	26	$	8	$	—	$	34
Other comprehensive loss before reclassifications	(2)		—		(1)		(3)
Amounts reclassified from accumulated other comprehensive income	14		—		—		14
Total other comprehensive income (loss), net of tax	12		—		(1)		11
Balances as of March 31, 2021	38		8		(1)		45
Other comprehensive income (loss) before reclassifications	(5)		(11)		3		(13)
Amounts reclassified from accumulated other comprehensive income	15		—		—		15
Total other comprehensive income (loss), net of tax	10		(11)		3		2
Balances as of June 30, 2021	48		(3)		2		47
Other comprehensive loss before reclassifications	(4)		(33)		(3)		(40)
Amounts reclassified from accumulated other comprehensive income	15		—		—		15
Total other comprehensive income (loss), net of tax	11		(33)		(3)		(25)
Balances as of September 30, 2021	$	59	$	(36)	$	(1)	$	22

____________________

(a)Prior to the Merger, there was no AOCI activity.

Note 8. Litigation, Commitments and Contingencies

Litigation

General

We are a party to various legal proceedings, which have arisen in the normal course of our business. Such proceedings can be costly, time consuming and unpredictable and, therefore, no assurance can be given that the final outcome of such proceedings will not materially impact our consolidated financial condition or results of operations. Estimated losses are accrued for these proceedings when the loss is probable and can be estimated. While we ~~recognized approximately~~maintain insurance coverage that we believe is adequate to mitigate the risks of such proceedings, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters. The current liability for the estimated losses associated with these proceedings is not material to our consolidated financial condition and those estimated losses are not expected to have a material impact on our results of operations.

COVID-19 Insurance Claims

The COVID-19 public health emergency had a significant impact on the Company’s business and employees, as well as the communities where the Company operates and serves. The Company purchased broad property insurance coverage to protect against “all risk of physical loss or damage” and resulting business interruption, unless specifically excluded by policies. The Company submitted claims for losses incurred as a result of the COVID-19 public health emergency which are expected to exceed $2 billion. The insurance carriers under the Company’s insurance policies have asserted that the policies do not cover losses incurred by the Company as a result of the COVID-19 public health emergency and have refused to make payments under the applicable policies. Therefore, on March 19, 2021, the Company filed a lawsuit against its insurance carriers in the

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

state court in Clark County, Nevada. On June 8, 2021, the Company filed an amended complaint. Litigation is proceeding and there can be no assurance as to the outcome of the litigation.

Contractual Commitments

The following contractual commitments were assumed by the Company associated with Former Caesars as result of the consummation of the Merger.

Capital Commitments

Harrah’s New Orleans

In April 2020, the Company and the State of Louisiana, by and through the Louisiana Gaming Control Board, entered into an Amended and Restated Casino Operating Contract. Additionally, the Company, New Orleans Building Corporation and the City entered into a Second Amended and Restated Lease Agreement (the “Ground Lease”). Based on these amendments related to Harrah’s New Orleans, the Company is required to make certain payments and to make a capital investment of $325 million on or around Harrah’s New Orleans by July 15, 2024. In connection with the capital investment in Harrah’s New Orleans, we expect to rebrand the property as Caesars New Orleans.

Atlantic City

As required by the New Jersey Gaming Control Board in connection with its approval of the Merger, we have funded $400 million in ~~lease revenue~~escrow to provide funds for a three year capital expenditure plan in the state of New Jersey. This amount is currently included in restricted cash in Other assets, net. As of September 30, 2021, our restricted cash balance in the escrow account is $328 million for future capital expenditures in New Jersey.

Sports Sponsorship/Partnership Obligations

We have agreements with certain professional sports leagues and teams, sporting event facilities and sports television networks for tickets, suites, and advertising, marketing, promotional and sponsorship opportunities including communication with partner customer databases. Additionally, a selection of such partnerships provide Caesars with exclusivity to access the aforementioned rights within the casino and/or sports betting category. As of September 30, 2021, obligations related to ~~conventions.~~these agreements were $866 million, which include obligations assumed in the William Hill Acquisition, with contracts extending through 2041. These obligations include leasing of event suites that are generally considered short term leases for which we do not record a right of use asset or lease liability. We recognize expenses in the period services are rendered in accordance with the various agreements. In addition, assets or liabilities may be recorded related to the timing of payments as required by the respective agreement.

Self-Insurance

We are self-insured for workers compensation and other risk insurance, as well as health insurance and general liability. Our total estimated self-insurance liability as of September 30, 2021 and December 31, 2020 was $226 million and $223 million, respectively, which is included in Accrued other liabilities in our Balance Sheets.

The assumptions, including those related to the COVID-19 public health emergency, utilized by our actuaries are subject to significant uncertainty and if outcomes differ from these assumptions or events develop or progress in a negative manner, the Company could experience a material adverse effect and additional liabilities may be recorded in the future.

Contingencies

Weather disruption - Lake Charles

On August 27, 2020, Hurricane Laura made landfall on Lake Charles as a Category 4 storm severely damaging the Isle of Capri Casino Lake Charles. During the nine months ended September 30, 2021, the Company received insurance proceeds of approximately $44 million related to damaged fixed assets and remediation costs. The Company also recorded a gain of approximately $22 million as proceeds received for the cost to replace damaged property were in excess of the respective carrying value of the assets. The property will remain closed until the second half of 2022 when construction of a new land-based casino is expected to be complete.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Note ~~10.~~9. Long-Term Debt

Long-term debt consisted of the following:


		September 30, 2020						December 31, 2019			September 30, 2021						December 31, 2020
(Dollars in millions)	(Dollars in millions)	Final Maturity	Rates	Face Value		Book Value		Book Value		(Dollars in millions)	Final Maturity	Rates	Face Value		Book Value		Book Value
Secured Debt	Secured Debt									Secured Debt
CRC Revolving Credit Facility										CRC Revolving Credit Facility	2022	variable	$	—	$	—	$	—

Baltimore Revolving Credit Facility										Baltimore Revolving Credit Facility	2022	variable	—		—		—
CRC Term Loan										CRC Term Loan	2024	variable	4,524		4,176		4,133
Baltimore Term Loan										Baltimore Term Loan	2024	variable	283		275		—
CEI Revolving Credit Facility										CEI Revolving Credit Facility	2025	variable	—		—		—
CRC Incremental Term Loan										CRC Incremental Term Loan	2025	variable	1,782		1,705		1,707
CRC Senior Secured Notes										CRC Senior Secured Notes	2025	5.75%	1,000		983		981
CEI Senior Secured Notes	CEI Senior Secured Notes	2025	6.25%	$	3,400	$	3,330	$	0	CEI Senior Secured Notes	2025	6.25%	3,400		3,343		3,333
CEI Revolving Credit Facility		2025	variable (a)	900		880		0
ERI Term Loan		N/A	N/A	0		0		491
CRC Term Loan B		2024	variable (b)	4,571		4,120		0
CRC Term Loan B-1		2025	variable (c)	1,800		1,709		0
CRC Revolving Credit Facility		2022	variable (d)	0		0		0
CRC Senior Secured Notes		2025	5.75%	1,000		978		0
Convention Center Mortgage Loan	Convention Center Mortgage Loan	2025	7.70%	400		397		0		Convention Center Mortgage Loan	2025	7.70%	400		399		397
Lumière Loan		N/A	N/A	0		0		246
Unsecured Debt	Unsecured Debt									Unsecured Debt
5% Convertible Notes										5% Convertible Notes	2024	5.00%	—		—		288
CRC Notes										CRC Notes	2025	5.25%	811		728		1,499
CEI Senior Notes	CEI Senior Notes	2027	8.13%	1,800		1,767		0		CEI Senior Notes	2027	8.125%	1,724		1,696		1,768
CRC Notes		2025	5.25%	1,700		1,490		0
5% Convertible Notes		2024	5.00%	597		546		0
6% Senior Notes		2026	N/A	0		0		582
6% Senior Notes		2025	N/A	0		0		879
7% Senior Notes		2023	N/A	0		0		370
Senior Notes										Senior Notes	2029	4.625%	1,200		1,183		—
Special Improvement District Bonds	Special Improvement District Bonds	2037	4.30%	51		51		0		Special Improvement District Bonds	2037	4.30%	49		49		51
Long-term notes and other payables	Long-term notes and other payables			2		2		3		Long-term notes and other payables			2		2		2
Total debt	Total debt			16,221		15,270		2,571		Total debt			15,175		14,539		14,159
Current portion of long-term debt	Current portion of long-term debt			(67)		(67)		(246)		Current portion of long-term debt			(70)		(70)		(67)
Deferred finance charges associated with the CEI Revolving Credit Facility										Deferred finance charges associated with the CEI Revolving Credit Facility			—		(16)		(19)
Long-term debt	Long-term debt			$	16,154	$	15,203	$	2,325	Long-term debt			$	15,105	$	14,453	$	14,073

Unamortized premiums, discounts and deferred finance charges (e)						$	951	$	34
Unamortized premiums, discounts and deferred finance charges										Unamortized premiums, discounts and deferred finance charges					$	652	$	883
Fair value	Fair value			$	16,135					Fair value			$	15,632


Annual Estimated Debt Service Requirements as of September 30, 2021
	Remaining		Years Ended December 31,
(In millions)	2021		2022		2023		2024		2025		Thereafter		Total
Annual maturities of long-term debt	$	18	$	70	$	70	$	4,714	$	7,337	$	2,966	$	15,175
Estimated interest payments	90		810		790		820		580		520		3,610
Total debt service obligation (a)	$	108	$	880	$	860	$	5,534	$	7,917	$	3,486	$	18,785

____________________

(a)~~Prime~~Debt principal payments are estimated amounts based on contractual maturity and repayment dates. Interest payments are estimated based on the forward-looking LIBOR curve, where applicable, and include the estimated impact of the 7 interest rate ~~plus 2.25%.~~

~~(b)LIBOR plus 2.75%.~~

~~(c)$1.2 billion at 1 month LIBOR plus 4.50% and $600 million at 3 month LIBOR plus 4.50%.~~

~~(d)LIBOR plus 2.00%.~~

~~(e)Approximately $7 million of deferred financing costs~~swap agreements related to our ~~revolving credit facilities are included within Other assets, net as of December 31, 2019.~~CRC Credit Facility (see Note 7). Actual payments may differ from these estimates.

Current Portion of Long-Term Debt

The current portion of long-term debt as of September 30, ~~2020~~2021 includes the principal payments on the term loans, other unsecured borrowings, and special improvement district bonds that are contractually due within 12 months. The Company may, from time to time, seek to repurchase its outstanding indebtedness. Any such purchases may be funded by existing cash balances or the incurrence of debt. The amount and timing of any repurchase will be based on business and market conditions, capital availability, compliance with debt covenants and other considerations.

Debt Discounts or Premiums and Deferred Finance Charges

Debt discounts or premiums and deferred finance charges incurred in connection with the issuance of debt are amortized to interest expense based on the related debt agreements primarily using the effective interest method. Unamortized discounts are written off and included in our gain or loss calculations to the extent we extinguish debt prior to its original maturity date.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Fair Value

The fair value of debt has been calculated primarily based on the borrowing rates available as of September 30, ~~2020~~2021 and based on market quotes of our publicly traded debt. We classify the fair value of debt within Level 1 and Level 2 in the fair value hierarchy.

Terms of Outstanding Debt

~~New Debt Transactions~~CRC Term Loans and CRC Revolving Credit Facility

~~The Company was~~CRC is party to ~~a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and~~ the ~~lenders party thereto~~Credit Agreement, dated as of ~~April 17,~~December 22, 2017 (as amended, the ~~“ERI~~“CRC Credit ~~Facility”~~Agreement”), ~~consisting of~~which included a ~~$1.5~~$1.0 billion ~~term loan facility (the “ERI Term Loan”) and a $500 million~~five-year revolving credit facility (the ~~“ERI~~“CRC Revolving Credit Facility”).

In and an effort to maintain liquidity and provide financial flexibility as the effects of COVID-19 continued to evolve and impact global financial markets, the Company borrowed $465 million under the revolving credit facility on March 16, 2020,initial $4.7 billion seven-year first lien term loan (the “CRC Term Loan”), which ~~we repaid in July 2020 utilizing, in part, proceeds from the sale of the Company’s interests in Kansas City and Vicksburg.~~

On July 6, 2020, Colt Merger Sub, Inc., a wholly-owned subsidiary of the Company (the “Escrow Issuer”), issued $3.4 billion aggregate principal amount of 6.25% Senior Secured Notes due 2025 (the “CEI Senior Secured Notes”),was increased by $1.8 billion aggregate principal amount of 8.125% Senior Notes due 2027 (the “CEI Senior Notes”) and $1.0 billion aggregate principal amount of 5.75% Senior Secured Notes due 2025 (the “CRC Senior Secured Notes”).

~~On July 20, 2020,~~pursuant to an incremental agreement executed in connection with the ~~closing~~Merger (the “CRC Incremental Term Loan”).

The CRC Term Loan matures in December 2024 and the CRC Incremental Term Loan matures in July 2025. The CRC Revolving Credit Facility matures in December 2022 and includes a $400 million letter of credit sub-facility. The CRC Term Loan and the CRC Incremental Term Loan require scheduled quarterly principal payments in amounts equal to 0.25% of the ~~Merger, the Company entered into a new credit agreement (“CEI Credit Agreement”), which provide a five-year senior secured revolving credit facility in an~~original aggregate principal amount, ~~of $1.2 billion (the “CEI Revolving~~with the balance due at maturity. The CRC Credit ~~Facility”). In addition, Caesars Resort Collection, LLC (“CRC”) entered into incremental amendments~~Agreement also includes customary voluntary and mandatory prepayment provisions, subject to certain exceptions.

Borrowings under the CRC Credit Agreement ~~(described below), which provided a $1.8 billion incremental term loan.~~

A portion of the proceeds from these arrangements was used to prepay in full the loans outstanding and terminate all commitments under the ERI Credit Facility, and to satisfy and discharge the Company’s 6% Senior Notes due 2025, 6% Senior Notes due 2026, and the 7% Senior Notes due 2023.

~~The 6% Senior Notes due 2025 were redeemed~~bear interest at a ~~redemption price~~rate equal to either (a) LIBOR adjusted for certain additional costs, subject to a floor of ~~104.5%~~0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the 7% Senior Notes due 2023 were redeemed at a redemption price of 103.5%, and $210 million aggregate principal amount of the 6% Senior Notes due 2026 was redeemed at a redemption price of 106% with the remaining balance redeemed at a redemption price of 100% of the aggregate principal amount thereof plus the Applicable Premium,prime rate as defined in the indenture for the 6% Senior Notes due 2026. The redemption of the senior notes resulted in a loss on extinguishment of debt of $132 million during the three and nine months ended September 30, 2020, which is recorded within Other (loss) income on the Statement of Operations.

~~CEI Senior Secured Notes due 2025~~

On July 6, 2020, the Escrow Issuer issued $3.4 billion in aggregate principal amount of 6.25% Senior Secured Notes due 2025 pursuant to an indenture dated July 6, 2020 (the “CEI Senior Secured Notes Indenture”),determined by and among the Escrow Issuer, U.S. Bank National Association, as trustee, and U.S. Bank National Association, as collateral agent. The Company assumed the rights and obligations under the CEI Senior Secured Notes and the Senior Secured Notes Indenture on July 20, 2020. The CEI Senior Secured Notes will mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year, commencing January 1, 2021.

~~CEI Senior Notes due 2027~~

~~CRC Senior Secured Notes due 2025~~

On July 6, 2020, the Company issued $1.0 billion in aggregate principal amount of 5.75% Senior Notes due 2025 pursuant to an indenture, dated July 6, 2020 (the “CRC Senior Secured Notes Indenture”), by and among the Escrow Issuer, U.S. Bank National Association, as trustee and Credit Suisse AG, Cayman Islands Branch, as ~~collateral agent. In connection with the consummation of the Merger, CRC assumed the rights and obligations~~administrative agent under the CRC ~~Senior Secured Notes~~Credit Agreement and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin shall be (a) with respect to the CRC ~~Senior Secured Notes Indenture.~~Term Loan, 2.75% per annum in the case of any LIBOR loan or 1.75% per annum in the case of any base rate loan, (b) with respect to the CRC Incremental Term Loan, 4.50% per annum in the case of any LIBOR loan or 3.50% in the case of any base rate loan and (c) in the case of the CRC Revolving Credit Facility, 2.25% per annum in the case of any LIBOR loan and 1.25% per annum in the case of any base rate loan, subject in the case of the CRC Revolving Credit Facility to two 0.125% step-downs based on CRC’s senior secured leverage ratio (“SSLR”), the ratio of first lien senior secured net debt to adjusted earnings before interest, taxes, depreciation and amortization. The CRC ~~Senior Secured Notes will mature~~Revolving Credit Facility is subject to a financial covenant discussed below. On September 21, 2021, CRC entered into a second amendment related to the CRC Incremental Term Loan to reduce the interest rate margins to 3.50% per annum in the case of any LIBOR loan or 2.50% per annum in the case of any base rate loan.

In addition, CRC is required to pay a commitment fee in respect of any commitments under the CRC Revolving Credit Facility in the amount of 0.50% of the principal amount of the commitments, subject to step-downs to 0.375% and 0.25% based upon CRC’s SSLR. CRC is also required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR borrowings on ~~July 1, 2025 with~~the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the daily stated amount of such letter of credit.

The Company had $1.0 billion of available borrowing capacity, after consideration of $70 million in outstanding letters of credit under CRC Revolving Credit Facility, as of September 30, 2021.

Baltimore Term Loan and Baltimore Revolving Credit Facility

As a result of the acquisition of an increased ownership interest ~~payable semi-annually~~ in ~~cash~~Horseshoe Baltimore, Horseshoe Baltimore’s outstanding indebtedness, including $284 million in ~~arrears on January 1~~the aggregate principal amount of a senior secured term loan facility (the “Baltimore Term Loan”) and ~~July 1~~amounts outstanding, if any, under Horseshoe Baltimore’s senior secured revolving credit facility (the “Baltimore Revolving Credit Facility”) has been consolidated in the Company’s financial statements. The Baltimore Term Loan matures in 2024 and is subject to a variable rate of ~~each year, commencing January 1, 2021.~~interest calculated as LIBOR plus 4.00%. The Baltimore Revolver Credit Facility has borrowing capacity of up to $10 million available and matures in 2022, subject to a variable rate of interest calculated as LIBOR plus 6.00%. As of September 30, 2021, there was $10 million of available borrowing capacity under the Baltimore Revolving Credit Facility.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CEI Revolving Credit Facility

On July 20, 2020, the Escrow Issuer entered into a new credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as collateral agent, and certain banks and other financial institutions and lenders party thereto, which provide for a five-year CEI Revolving Credit Facility in an aggregate principal amount of $1.2 ~~billion.~~billion (the “CEI Revolving Credit Facility”). The CEI Revolving Credit Facility matures in July 2025 and includes a letter of credit sub-facility of $250 million.

The interest rate per annum applicable under the CEI Revolving Credit Facility, at the Company’s option is either (a) LIBOR adjusted for certain additional costs, subject to a floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by JPMorgan Chase Bank, N.A. and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin shall be 3.25% per annum in the case of any LIBOR loan and 2.25% per annum in the case of any base rate loan, subject to three 0.25% step-downs based on the Company’s total leverage ratio.

Additionally, the Company is required to pay a commitment fee in respect of any unused commitments under CEI Revolving Credit Facility in the amount of 0.50% of principal amount of the commitments of all lenders, subject to a step-down to 0.375% based upon the Company’s total leverage ratio. The Company is also required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the daily stated amount of such letter of credit.

The Company had ~~$266 million~~$1.1 billion of available borrowing capacity, after consideration of ~~$19~~$22 million in outstanding letters of credit and $48 million committed for regulatory purposes under the CEI Revolving Credit Facility, as of September 30, 2021.

CRC Senior Secured Notes due 2025

CEI Senior Secured Notes due 2025

On July 6, 2020, the Escrow Issuer issued $3.4 billion in aggregate principal amount of 6.25% Senior Secured Notes due 2025 pursuant to an indenture dated July 6, 2020 (the “CEI Senior Secured Notes”), by and among the Escrow Issuer, U.S. Bank National Association, as trustee, and U.S. Bank National Association, as collateral agent. The Company assumed the rights and obligations under the CEI Senior Secured Notes and the indenture governing such notes on July 20, 2020. The ~~Company paid down $900 million subsequent to September 30, 2020.~~CEI Senior Secured Notes will mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year.

Convention Center Mortgage Loan

On September 18, 2020, the Company entered into a loan agreement with VICI to borrow a 5-year, $400 million Forum Convention Center mortgage loan (the “Mortgage Loan”). The Mortgage Loan bears interest at a rate of, initially, 7.7% per annum, which escalates annually to a maximum interest rate of 8.3% per annum.

~~Assumed Debt Activity~~

~~Former Caesars and its subsidiaries incurred~~ Beginning October 1, 2021, the ~~following indebtedness that remained outstanding following the consummation of the Merger.~~

~~CRC Term Loans and CRC Revolving Credit Facility~~

~~CRC is party to the Credit Agreement, dated as of December 22, 2017 (as amended, the “CRC Credit Agreement”), which included a $1.0 billion~~ ~~five-year revolving credit facility (the “CRC Revolving Credit Facility”) and an initial $4.7 billion~~ ~~seven-year first lien term loan, which was increased by $1.8 billion pursuant to an incremental agreement executed in connection with the Merger (the “CRC Term Loan”).~~

~~The CRC Term~~Mortgage Loan matures in 2024. The CRC Revolving Credit Facility matures in 2022 and includes a letter of credit sub-facility. The CRC Term Loan requires scheduled quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount, with the balance due at maturity. The CRC Credit Agreement also includes customary voluntary and mandatory prepayment provisions, subject to certain exceptions. As of September 30, 2020, approximately $64 million was committed to outstanding letters of credit. As of September 30, 2020, there were no borrowings outstanding under the CRC Revolving Credit Facility.

Borrowings under the CRC Credit Agreement bear interest at a rate equal to either (a) LIBOR adjusted for certain additional costs, subject to a floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by Credit Suisse AG, Cayman Islands Branch, as administrative agent under the CRC Credit Agreement and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin shall be (a) with respect to the CRC Term Loan, 2.75% per annum in the case of any LIBOR loan or 1.75% per annum in the case of any base rate loan, (b) with respect to the CRC Incremental Term Loan, 4.50% per annum in the case of any LIBOR loan or 3.50% in the case of any base rate loan and (c) in the case of the CRC Revolving Credit Facility, 2.25% per annum in the case of any LIBOR loan and 1.25% per annum in the case of any base rate loan, subject in the case of the CRC Revolving Credit Facility to two 0.125% step-downs based on CRC’s senior secured leverage ratio (“SSLR”), the ratio of first lien senior secured net debt to adjusted earnings before interest, taxes, depreciation and amortization. The CRC Revolving Credit Facility is subject to ~~a financial covenant discussed below.~~an interest rate of 7.854% for the next twelve months.

5% Convertible Notes

~~In addition, CRC is required to pay a commitment fee in respect of any commitments under the CRC Revolving Credit Facility in the amount of 0.50%~~The 5% Convertible Notes were convertible into approximately 0.014 shares of the Company’s Common Stock (“Company Common Stock”) and approximately $1.17 of cash per $1.00 principal amount of the ~~commitments, subject~~5% Convertible Notes. During the six months ended June 30, 2021, the Company converted the remaining outstanding aggregate principal amount of the 5% Convertible Notes, which resulted in cash payments of $367 million, net of approximately $12 million paid into our trust accounts and the issuance of approximately 5 million shares of Company Common Stock. The fair value of the shares contributed to, ~~step-downs to 0.375%~~ and ~~0.25% based upon CRC’s SSLR. CRC~~held in, the trust was $14 million, which is ~~also required to pay customary agency fees as well as letter~~included within Treasury stock. The Company recognized a loss on the change in fair value of ~~credit participation fees computed at~~the derivative liability of $16 million recorded in Other income (loss) and a ~~rate per annum equal~~$23 million loss on extinguishment of debt, related to the ~~applicable margin for LIBOR borrowings~~unamortized discount, on the ~~dollar equivalent~~Statement of ~~the daily stated amount~~Operations.

Table of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the daily stated amount of such letter of credit.Contents

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CRC Notes

On October 16, 2017, CRC issued $1.7 billion aggregate principal amount of 5.25% senior notes due 2025 (the “CRC Notes”).

~~Former Caesars 5% Convertible Notes~~

On ~~October 6, 2017, Former Caesars issued $1.1 billion aggregate principal amount of 5.00% convertible senior notes maturing in 2024 (the “5% Convertible Notes”).~~

The 5% Convertible Notes are convertible into the weighted average of the number of shares of Company Common Stock and amount of cash actually received per share by holders of common stock of Former Caesars that made elections for consideration in the Merger. As of September ~~30, 2020, we have paid approximately $574 million and issued approximately 6.8 million shares upon conversion of $487~~24, 2021, $889 million in aggregate principal amount of the ~~5% Convertible~~CRC Notes ~~during~~was repaid. The Company recognized a total of $106 million of loss on extinguishment of debt. The remaining $811 million in aggregate principal amount of the CRC Notes was redeemed on October 15, 2021 and the Company recognized approximately $93 million of loss on extinguishment of debt. The Company classified the cash used to repay the remaining aggregate principal balance as long-term restricted cash in Other assets, net as of September 30, 2021.

CEI Senior Notes due 2027

On July 6, 2020, the Escrow Issuer issued $1.8 billion in aggregate principal amount of 8.125% Senior Notes due 2027 pursuant to an indenture, dated July 6, 2020 (the “CEI Senior Notes”), by and between the Escrow Issuer and U.S. Bank National Association, as trustee. The Company assumed the rights and obligations under the CEI Senior Notes and the indenture governing such notes on July 20, 2020. ~~Through November 2, 2020, we paid~~The CEI Secured Notes will mature on July 1, 2027, with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year. In September 2021, the Company began to repurchase CEI Senior Notes on the open market and, as of September 30, 2021, a total of $76 million in principal amount of CEI Senior Notes was purchased and the Company recognized a $10 million of loss on the early extinguishment of debt. The Company purchased an additional ~~$328~~$24 million ~~and~~in aggregate principal amount of CEI Senior Notes subsequent to September 30, 2021.

Senior Notes due 2029

On September 24, 2021, the Company issued ~~3.9 million shares upon conversion~~$1.2 billion in aggregate principal amount of 4.625% Senior Notes due 2029 (the “Senior Notes”) pursuant to an ~~additional $281 million~~indenture dated as of ~~the 5% Convertible Notes.~~

The Company has determined that the 5% Convertible Notes contain derivative features that require bifurcation. The Company separately accounts for the liability component and equity conversion option of the 5% Convertible Notes. The differenceSeptember 24, 2021 between the ~~overall instrument value~~Company and ~~the value of the liability component was assumed to be the value of the equity conversion option component.~~U.S. Bank National Association, as Trustee. The ~~value of the liability is determined based on a discounted cash flow of the debt instrument. See Note 11 for more information on the 5% Convertible Notes’ fair value measurements.~~

Net amortization of the debt issuance costs and the discount and/or premium associated with the Company’s indebtedness totaled $34 million and $2 million for the three months ended September 30, 2020 and 2019, respectively, and $37 million and $6 million for the nine months ended September 30, 2020 and 2019 respectively. Amortization of debt issuance costs is computed using the effective interest method and is included in interest expense.

Annual Estimated Debt Service Requirements as of September 30, 2020
Remaining Years Ended December 31,
(In millions) 2020 2021 2022 2023 2024 Thereafter Total
Annual maturities of long-term debt $ 16 $ 67 $ 67 $ 67 $ 5,036 $ 10,968 $ 16,221
Estimated interest payments 200 850 820 790 790 690 4,140
Total debt service obligation (a)
$ 216 $ 917 $ 887 $ 857 $ 5,826 $ 11,658 $ 20,361

~~____________________~~

~~(a)~~Debt principal payments are estimated amounts based on maturity dates and potential borrowings under our revolving credit facilities. Interest payments are estimated based on the forward-looking LIBOR curve and include the estimated impact of the ten interest rate swap agreements related to our CRC Credit Facility (see Note 11). Actual payments may differ from these estimates.

~~Lumière Loan~~

~~The Company borrowed $246 million from GLPI to fund the purchase price of the real estate underlying Lumière, which was scheduled to~~Senior Secured Notes will mature on October ~~1, 2020. On June 24, 2020,~~15, 2029 with interest payable on April 15 and October 15 of each year, commencing April 15, 2022. Proceeds from the ~~Company received approval from Missouri Gaming Commission~~issuance of the Senior Notes, as well as cash on hand, was used to ~~sell Lumière to GLPI and leaseback~~repay the ~~property under a long-term financing obligation. As of September 30, 2020, the Lumière real estate has been refinanced under a financing obligation. See Note 9~~.CRC Notes, as described above.

Debt Covenant Compliance

The CRC Credit Agreement, the CEI Revolving Credit Facility, the Baltimore Term Loan and the indentures governing the CEI Senior Secured Notes, the CEI Senior Notes, the CRC Senior Secured Notes, Senior Notes and the ~~CRC's 5.25% senior notes due 2025 (the “CRC Notes”)~~CRC Notes contain covenants which are standard and customary for these types of agreements. These include negative covenants, which, subject to certain exceptions and baskets, limit the Company’s and its subsidiaries’ ability to (among other items) incur additional indebtedness, make investments, make restricted payments, including dividends, grant liens, sell assets and make acquisitions.

~~The indenture for the 5% Convertible Notes contained limited covenants as a result of amendments that became effective in connection with the consummation of the Merger.~~ The CRC Revolving Credit Facility and CEI Revolving Credit Facility include a maximum first-priority net senior secured leverage ratio financial covenant of 6.35:1, which is applicable solely to the extent that certain testing conditions are satisfied. The Baltimore Revolving Credit Facility includes a senior secured leverage ratio financial covenant of 5.0:1. Failure to comply with such covenants could result in an acceleration of the maturity of indebtedness outstanding under the relevant debt document.

The Company’s results of operations have been materially adversely affected by the impacts of the COVID-19 public health emergency. As a result, the current terms of the CEI Credit Agreement and the CRC Credit Agreement provide thatCompany is subject to the financial covenant ~~measurement period is not effective through~~for quarters beginning after September 30, ~~2021 so long as the Company and CRC, respectively, comply with a minimum liquidity requirement, which includes any such availability under the applicable revolving credit facilities.~~2021.

As of September 30, ~~2020,~~2021, the Company was in compliance with all of the applicable financial covenants ~~under the CEI Credit Agreement, the CRC Credit Agreement, CEI Senior Secured Notes, CEI Senior Notes, and CRC Senior Secured Notes, 5% Convertible Notes and CRC Notes.~~described above.

Guarantees

The CEI Revolving Credit Facility and the CEI Senior Secured Notes are guaranteed on a senior secured basis by each existing and future material wholly-owned domestic subsidiary of CEI (subject to certain exceptions) and are secured by substantially all of the existing and future property and assets of CEI and its subsidiary guarantors (subject to certain exceptions). The CEI Senior Notes and the Senior Notes are guaranteed on a senior unsecured basis by such subsidiaries.

The CRC Credit Agreement and the CRC Senior Secured Notes are ~~guarantees~~guaranteed on a senior secured basis by each existing and future material wholly-owned domestic subsidiary of CRC (subject to certain exceptions) and are secured by substantially all of the existing and future property and assets of ~~CEI~~CRC and its subsidiary guarantors (subject to certain exceptions). The CRC Credit Agreement and the CRC Senior Secured Notes are also guaranteed on a senior unsecured basis by CEI. The CRC Notes, paid off subsequent to September 30, 2021, were guaranteed on a senior unsecured basis by such subsidiaries.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Note ~~11. Fair Value Measurements~~10. Revenue Recognition

The Company’s Statements of Operations presents net revenue disaggregated by type or nature of the good or service. A summary of net revenues disaggregated by type of revenue and reportable segment is presented below. We recast previously reported segment amounts to conform to the way management assesses results and allocates resources following the Merger and the William Hill Acquisition. Refer to Note 15 for additional information on the Company’s reportable segments.


	Three Months Ended September 30, 2021
(In millions)	Las Vegas		Regional		Caesars Digital		Managed and Branded		Corporate and Other		Total
Casino and pari-mutuel commissions	$	329	$	1,096	$	85	$	—	$	—	$	1,510
Food and beverage	221		125		—		1		—		347
Hotel	303		208		—		—		—		511
Other	164		63		11		78		1		317


Net revenues	$	1,017	$	1,492	$	96	$	79	$	1	$	2,685


	Three Months Ended September 30, 2020
(In millions)	Las Vegas		Regional		Caesars Digital		Managed and Branded		Corporate and Other		Total
Casino and pari-mutuel commissions	$	122	$	825	$	34	$	—	$	—	$	981
Food and beverage	52		74		—		1		—		127
Hotel	79		121		—		—		—		200
Other	51		35		5		40		4		135
Net revenues	$	304	$	1,055	$	39	$	41	$	4	$	1,443

~~Items Measured at Fair Value~~


	Nine Months Ended September 30, 2021
(In millions)	Las Vegas		Regional		Caesars Digital		Managed and Branded		Corporate and Other		Total
Casino and pari-mutuel commissions	$	870	$	3,241	$	197	$	—	$	—	$	4,308
Food and beverage	476		318		—		3		—		797
Hotel	660		462		—		—		—		1,122
Other	363		152		24		203		10		752


Net revenues	$	2,369	$	4,173	$	221	$	206	$	10	$	6,979


	Nine Months Ended September 30, 2020
(In millions)	Las Vegas		Regional		Caesars Digital		Managed and Branded		Corporate and Other		Total
Casino and pari-mutuel commissions	$	122	$	1,247	$	53	$	—	$	—	$	1,422
Food and beverage	52		137		—		1		—		190
Hotel	79		178		—		—		—		257
Other	51		70		5		40		8		174
Net revenues	$	304	$	1,632	$	58	$	41	$	8	$	2,043

Accounts receivable, net include the following amounts:


(In millions)	September 30, 2021		December 31, 2020
Casino and pari-mutuel commissions	$	141	$	137
Food and beverage and hotel	91		25
Other	206		180
Accounts receivable, net	$	438	$	342

Contract and Contract Related Liabilities

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(2) Caesars Rewards player loyalty program obligations, which represent the deferred allocation of revenue relating to reward credits granted to Caesars Rewards members based on ~~a Recurring Basis~~: on-property spending, including gaming, hotel, dining, retail shopping, and player loyalty program incentives earned, and (3) customer deposits and other deferred revenue, which primarily represents funds deposited by customers related to gaming play and advance payments received for goods and services yet to be provided (such as advance ticket sales, deposits on rooms and convention space or for unpaid future racing and sports event wagers). These liabilities are generally expected to be recognized as revenue within one year of being purchased, earned, or deposited and are recorded within accrued other liabilities on the Company’s Balance Sheets.

The following table ~~sets forth~~summarizes the activity related to contract and contract-related liabilities:


	Outstanding Chip Liability				Caesars Rewards				Customer Deposits and Other Deferred Revenue
(In millions)	2021		2020		2021		2020		2021		2020
Balance at January 1	$	34	$	10	$	94	$	13	$	281	$	172
Balance at September 30	34		28		96		106		404		270
Increase / (decrease)	$	—	$	18	$	2	$	93	$	123	$	98

The September 30, 2021 balances exclude liabilities related to assets held for sale recorded in 2021 and ~~liabilities measured at fair value~~2020 (see Note 3).

Lease Revenue

Lodging Arrangements

Lodging arrangements are considered short-term and generally consist of lease and nonlease components. The lease component is the predominant component of the arrangement and consists of the fees charged for lodging. The nonlease components primarily consist of resort fees and other miscellaneous items. As the timing and pattern of transfer of both the lease and nonlease components are over the course of the lease term, we have elected to combine the revenue generated from lease and nonlease components into a single lease component based on ~~a recurring basis, by input level,~~the predominant component in the ~~Consolidated Condensed Balance Sheets at~~arrangement. During the three months ended September 30, 2021 and 2020, we recognized approximately $511 million and ~~December 31, 2019:~~$200 million, respectively, and during the nine months ended September 30, 2021 and 2020, we recognized approximately $1.1 billion and $257 million, respectively, in lease revenue related to lodging arrangements, which is included in Hotel revenues in the Statements of Operations.

(In millions) September 30, 2020
Assets: Level 1 Level 2 Level 3 Total
Restricted cash and investments $ 8 $ 3 $ 50 $ 61
Marketable securities 31 12 0 43
Total assets at fair value $ 39 $ 15 $ 50 $ 104
Liabilities:
Other liabilities related to restricted investments $ 0 $ 0 $ 4 $ 4
Derivative instruments - 5% Convertible Notes 0 575 0 575
Derivative instruments - interest rate swaps and FX forward 0 114 0 114
Total liabilities at fair value $ 0 $ 689 $ 4 $ 693
Conventions

December 31, 2019
Assets: Level 1 Level 2 Level 3 Total
Restricted cash and investments $ 11 $ 2 $ 29 $ 42
Marketable securities 27 8 0 35
Total assets at fair value $ 38 $ 10 $ 29 $ 77
Convention arrangements are considered short-term and generally consist of lease and nonlease components. The lease component is the predominant component of the arrangement and consists of fees charged for the use of meeting space. The nonlease components primarily consist of food and beverage and audio/visual services. Conventions substantially ceased in mid-March 2020 due to COVID-19 and have recently resumed but have yet to return to pre-pandemic levels. Revenue from conventions is included in Other revenue in the Statements of Operations, and during the three months ended September 30, 2021 and 2020, lease revenue related to conventions was approximately $4 million and $2 million, respectively, and during the nine months ended September 30, 2021 and 2020 lease revenue related to conventions was approximately $4 million and $2 million, respectively.

~~The change~~Real Estate Operating Leases

Real estate lease revenue is included in ~~restricted cash~~Other revenue in the Statements of Operations. During the three months ended September 30, 2021 and ~~investments~~2020, we recognized approximately $46 million and ~~liabilities valued using Level 3 inputs~~$15 million, respectively, of real estate lease revenue and during the nine months ended September 30, 2021 and 2020, we recognized approximately $111 million and $18 million, respectively, of real estate lease revenue.

Real estate lease revenue includes $16 million and $3 million of variable rental income for the three months ended September 30, 2021 and 2020, respectively, and $35 million and $3 million of variable rental income for the nine months ended September 30, 2021 and 2020, ~~is as follows:~~respectively.

Table of Contents

(In millions) Level 3 Investments Level 3
Other Liabilities
Fair value of investment and liabilities at December 31, 2019 $ 29 $ 0
Value of additional investment received 5 2
Unrealized gain 16 2
Fair value at September 30, 2020 $ 50 $ 4

~~There were 0 transfers in or out of Level 3 investments during the nine months ended September 30, 2020.~~

~~Restricted Investments~~

The estimated fair values of the Company’s restricted cash and investments are based upon quoted prices available in active markets (Level 1), or quoted prices for similar assets in active and inactive markets (Level 2), or quoted prices available in active markets adjusted for time restrictions related to the sale of the investment (Level 3) and represent the amounts the Company would expect to receive if the Company sold the restricted cash and investments. Restricted investments include shares acquired in conjunction with the Company’s sports betting agreements that contain restrictions related to the ability to liquidate shares within a specified timeframe.

In November 2018, the Company entered into a 20-year agreement with The Stars Group Inc. (“TSG”) to provide TSG with options to obtain access to a second skin for online sports wagering and third skin for real money online gaming and poker with respect to the Company’s properties in the United States. Under the terms of the agreement, the Company received 1 million TSG common shares as a revenue share from the operation of the applicable verticals by TSG under the Company’s licenses. The fair value of the shares received has been deferred and is recognized as revenue on a straight-line basis over the 20-year agreement term. All shares are subject to a one year restriction on transfer from the date they are received. On May 5, 2020, Flutter Entertainment PLC (“Flutter”) completed the acquisition of all of the issued and outstanding common shares of TSG in exchange for 0.2253 Flutter shares per common share of TSG.

As of September 30, 2020 and December 31, 2019, the fair value of unrestricted shares totaled $19 million and $14 million, respectively, net of cumulative unrealized gains of $9 million and $4 million, respectively, and is included in Prepayments and other current assets on the Consolidated Condensed Balance Sheet. In addition, as of September 30, 2020, the fair value of restricted shares in Flutter totaled $8 million, net of cumulative unrealized gains of $3 million, and is included in restricted cash and investments on the Consolidated Condensed Balance Sheet. The Company recorded unrealized gains of $5 million and $8 million during the three and nine months ended September 30, 2020, respectively, and unrealized loss of $2 million during the three months ended September 30, 2019. For the nine months ended September 30, 2019, the Company recorded an unrealized loss of less than a million.

~~Marketable Securities~~

Marketable securities consist primarily of trading securities held by the Company’s captive insurance subsidiary and unrestricted shares acquired in conjunction with the Company’s sports betting agreements. These investments also include collateral for several escrow and trust agreements with third-party beneficiaries. The estimated fair values of the Company’s marketable securities are determined on an individual asset basis based upon quoted prices of identical assets available in active markets (Level 1), quoted prices of identical assets in inactive markets, or quoted prices for similar assets in active and inactive markets (Level 2), and represent the amounts the Company would expect to receive if the Company sold these marketable securities.

~~Derivative Instruments~~

~~The Company does not purchase or hold any derivative financial instruments for trading purposes.~~

~~5% Convertible Notes - Derivative Liability~~

~~On October 6, 2017, Former Caesars issued $1.1 billion aggregate principal amount of 5% Convertible Notes.~~

The 5% Convertible Notes are convertible into the weighted average of the number of shares of Company Common Stock and amount of cash actually received per share by holders of common stock of Former Caesars that made elections for consideration in the Merger. As a result, the 5% Convertible Notes are convertible into a number of shares of Company Common Stock that is equal to approximately 0.014 shares of Company Common Stock and $1.17 of cash per $1.00 principal amount of 5% Convertible Notes. The 5% Convertible Notes are convertible at any time at the option of the holders thereof and, beginning in October 2020, are convertible at the option of the Company if the last reported sale price of Company Common Stock equals or exceeds 140% of the conversion price for the 5% Convertible Notes in effect on each of at least 20 trading days during any 30 consecutive trading day period. As of September 30, 2020, approximately $487 million of the 5% Convertible Notes have been converted into cash and shares resulting in a net gain of approximately $34 million which is recorded within other (loss) income on the Statement of Operations.

The outstanding balance of $607 million of which $10 million was held in trust as of September 30, 2020, would result in the issuance of an aggregate of 8.4 million shares of Company Common Stock and payment of $708 million upon conversion of the remaining outstanding 5% Convertible Notes. As of September 30, 2020, the remaining life of the 5% Convertible Notes is approximately 4 years.

~~Management analyzed the conversion features for derivative accounting consideration under ASC Topic 815,~~ ~~Derivatives and Hedging~~, (“ASC 815”) and determined that the 5% Convertible Notes contain bifurcated derivative features and qualify for derivative accounting. In accordance with ASC 815, the Company has bifurcated the conversion features of the 5% Convertible Notes and recorded a derivative liability. The 5% Convertible Notes derivative features are not designated as hedging instruments. The derivative features of the 5% Convertible Notes are carried on the Company’s Balance Sheet at fair value in Other long-term liabilities. The derivative liability is marked-to-market each measurement period and the changes in fair value as a result of fluctuations in the share price of our common stock resulted in a loss of $87 million for the three month ended September 30, 2020, which was recorded as a component of Other (loss) income in the Statement of Operations. The derivative liability associated with the 5% Convertible Notes will remain in effect until such time as the underlying convertible notes are exercised or terminated and the resulting derivative liability will be transitioned from a liability to equity as of such date.

~~Valuation Methodology~~

~~The 5% Convertible Notes had an initial face value of $1.1 billion, an initial term of 7 years, and a coupon rate of 5%.~~

As of September 30, 2020 we estimated the fair value of the 5% Convertible Notes using a market-based approach that incorporated the value of both the straight debt and conversion features of the 5% Convertible Notes. The valuation model incorporated actively traded prices of the 5% Convertible Notes as of the reporting date, and assumptions regarding the incremental cost of borrowing for CEI. The key assumption used in the valuation model is the actively traded price of 5% Convertible Notes and the incremental cost of borrowing is an indirectly observable input. The fair value for the conversion features of the 5% Convertible Notes is classified as Level 2 measurement.

~~Key Assumptions as of September 30, 2020:~~

•~~Actively traded price of 5% Convertible Notes - $193.00~~

•~~Incremental cost of borrowing - 6.0%~~

~~Forward contracts~~

In relation to the proposed acquisition of William Hill plc, on September 28, 2020, the Company entered into a foreign exchange forward contract to hedge the risk of appreciation of the GBP denominated purchase price. Under the agreement, the Company will purchase £1.3 billion at a contracted exchange rate. An unrealized loss of $5 million related to the change in fair value during the period from September 28, 2020 and ~~September 30, 2020~~ ~~was recorded in the consolidated condensed statement of operations. As of~~ ~~September 30, 2020, the forward derivative liability of $5 million was recorded in Other long-term liabilities.~~ ~~On October 1, 2020 the contract was cancelled.~~

On October 9, 2020, the Company entered into a foreign exchange forward contract to hedge the risk of appreciation of the GBP denominated purchase price. Under the agreement, the Company will purchase £536 million at a contracted exchange rate. The forward term of the contract ends on March 31, 2021.

~~Interest Rate Swap Derivatives~~

We use interest rate swaps to manage the mix of our debt between fixed and variable rate instruments. As of September 30, 2020, Former Caesars has entered into 10 interest rate swap agreements to fix the interest rate on $3.0 billion of variable rate debt related to the CRC Credit Agreement. The interest rate swaps are designated as cash flow hedging instruments. The

CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

difference to be paid or received under the terms of the interest rate swap agreements is accrued as interest rates change and recognized as an adjustment to interest expense at settlement. Changes in the variable interest rates to be received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows.

~~The major terms of the interest rate swap agreements as of September 30, 2020 are as follows:~~

Effective Date
Notional Amount
(In millions)
Fixed Rate Paid Variable Rate Received as of
September 30, 2020 Maturity Date
12/31/2018 250 2.274% 0.156% 12/31/2022
12/31/2018 200 2.828% 0.156% 12/31/2022
12/31/2018 600 2.739% 0.156% 12/31/2022
1/1/2019 250 2.153% 0.156% 12/31/2020
1/1/2019 250 2.196% 0.156% 12/31/2021
1/1/2019 400 2.788% 0.156% 12/31/2021
1/1/2019 200 2.828% 0.156% 12/31/2022
1/2/2019 250 2.172% 0.156% 12/31/2020
1/2/2019 200 2.731% 0.156% 12/31/2020
1/2/2019 400 2.707% 0.156% 12/31/2021

~~Valuation Methodology~~

The estimated fair values of our interest rate swap derivative instruments are derived from market prices obtained from dealer quotes for similar, but not identical, assets or liabilities. Such quotes represent the estimated amounts we would receive or pay to terminate the contracts. The interest rate swap derivative instruments are included in either Deferred charges and other assets or Deferred credits and other liabilities on our Balance Sheets. Our derivatives are recorded at their fair values, adjusted for the credit rating of the counterparty if the derivative is an asset, or adjusted for the credit rating of the Company if the derivative is a liability. None of our derivative instruments are offset and all were classified as Level 2.

~~Financial Statement Effect~~

The effect of derivative instruments designated as hedging instruments on the Balance Sheet for amounts transferred into Accumulated other comprehensive income/(loss) (“AOCI”) before tax was a gain of $18 million during the threemonths ended September 30, 2020. AOCI reclassified to Interest expense on the Statements of Operations was $12 million for the three months ended September 30, 2020. The estimated amount of existing losses that are reported in AOCI at the reporting date that are expected to be reclassified into earnings within the next 12 months is approximately $62 million. As of September 30, 2020, the interest rate swaps derivative liability of $109 million was recorded in Other long-term liabilities.

~~Accumulated Other Comprehensive Income~~

~~The changes in AOCI by component, net of tax, for the period through September 30, 2020 are shown below.~~

(In millions) Unrealized Net Gains on Derivative Instruments Foreign Currency Translation Adjustments Total
Balances as of December 31, 2019 $ 0 $ 0 $ 0
Other comprehensive income before reclassifications 2 1 3
Amounts reclassified from accumulated other comprehensive income 12 0 12
Total other comprehensive income, net of tax 14 1 15
Balances as of September 30, 2020 $ 14 $ 1 $ 15

Note ~~12.~~11. Earnings per Share

The following table illustrates the reconciliation of the numerators and denominators of the basic and diluted net ~~(loss) income~~loss per share computations for the three and nine months ended September 30, ~~2020~~2021 and ~~2019:~~2020:

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions, except per share data) 2020 2019 2020 2019
Net (loss) income attributable to Caesars $ (926) $ 37 $ (1,202) $ 94
Shares outstanding:
Weighted average shares outstanding – basic 152 78 104 78
Effect of dilutive securities:
Stock-based compensation awards — 1 — 1
Weighted average shares outstanding – diluted 152 79 104 79
Basic (loss) income per share from continuing operations $ (6.09) $ 0.48 $ (11.55) $ 1.21
Basic loss per share from discontinued operations 0 0 (0.01) 0
Net (loss) income per common share attributable to common stockholders – basic: $ (6.09) $ 0.48 $ (11.56) $ 1.21
Diluted (loss) income per share from continuing operations $ (6.09) $ 0.47 $ (11.55) $ 1.20
Diluted loss income per share from discontinued operations 0 0 (0.01) 0
Net (loss) income per common share attributable to common stockholders – diluted: $ (6.09) $ 0.47 $ (11.56) $ 1.20


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share data)	2021		2020		2021		2020
Net loss from continuing operations attributable to Caesars, net of income taxes	$	(229)	$	(919)	$	(547)	$	(1,195)
Discontinued operations, net of income taxes	(4)		(7)		(38)		(7)

Net loss attributable to Caesars	$	(233)	$	(926)	$	(585)	$	(1,202)
Shares outstanding:
Weighted average shares outstanding – basic	214		152		211		104




Weighted average shares outstanding – diluted	214		152		211		104

Basic loss per share from continuing operations	$	(1.08)	$	(6.04)	$	(2.60)	$	(11.49)
Basic loss per share from discontinued operations	(0.02)		(0.05)		(0.18)		(0.07)
Net loss per common share attributable to common stockholders – basic:	$	(1.10)	$	(6.09)	$	(2.78)	$	(11.56)

Diluted loss per share from continuing operations	$	(1.08)	$	(6.04)	$	(2.60)	$	(11.49)
Diluted loss per share from discontinued operations	(0.02)		(0.05)		(0.18)		(0.07)
Net loss per common share attributable to common stockholders – diluted:	$	(1.10)	$	(6.09)	$	(2.78)	$	(11.56)

For a period in which the Company generated a net loss, the weighted average shares outstanding - basic was used in calculating diluted loss per share because using diluted shares would have been anti-dilutive to loss per share.

Weighted-Average Number of Anti-Dilutive Shares Excluded from Calculation of EPS


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended September 30,		Nine Months Ended September 30,
(In millions)	(In millions)	2020	2019	2020	2019	(In millions)	2021	2020	2021	2020
Stock-based compensation awards	Stock-based compensation awards	3	0	7	0	Stock-based compensation awards	3	3	3	7
5% Convertible notes		8	0	8	0
5% Convertible Notes						5% Convertible Notes	—	8	—	8
Total anti-dilutive common stock	Total anti-dilutive common stock	11	0	15	0	Total anti-dilutive common stock	3	11	3	15

Note ~~13. Litigation, Commitments~~12. Stock-Based Compensation and ~~Contingencies~~Stockholders’ Equity

~~Litigation~~Stock-Based Awards

The Company ~~is a party~~maintains long-term incentive plans which allow for granting stock-based compensation awards for directors, employees, officers, and consultants or advisers who render services to various legal proceedings. Such proceedings can be costly, time consuming and unpredictable and, therefore, no assurance can be given that the final outcome of such proceedings will not materially impact the Company’s consolidated financial condition or results of operations. While the Company ~~maintains insurance coverage that the~~or its subsidiaries, based on Company believes is adequate to mitigate the risks of such proceedings, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters.

~~On July 14, 2020, the Company filed a lawsuit for damages~~Common Stock, including performance-based and declaratory relief in state court in New York relating to a transfer fee of $50 million that was assessed by the Indiana Gaming Commission upon the Company’s purchase of Hoosier Park Racino and Casino in 2017 from Centaur Holdings, LLC. Contemporaneous with the filing of the lawsuit, the Company notified Centaur that it was withholding payment of $50 million from Centaur Holdings that was otherwise due as a portion of a deferred payment for the purchase from Centaur. In the lawsuit, the Company seeks a declaration from the Court that the Sellers are required to indemnify Caesars for its losses arising out of or relating to payment of the transfer fee and that the Company is entitled to offset the $50 million transfer fee against payments otherwise due to Centaur.

~~General~~

In addition, the Company is a party to various legal and administrative proceedings, which have arisen in the normal course of its business. Estimated losses are accrued for these proceedings when the loss is probable and can be estimated. The current liability for the estimated losses associated with these proceedings is not material to the Company’s consolidated financial condition and those estimated losses are not expected to have a material impact on the Company’s results of operations.

~~Contractual Commitments~~

~~The following contractual commitments were assumed by the Company associated with Former Caesars as result of the consummation of the Merger.~~

~~Extension of Casino Operating Contract and Ground Lease for Harrah’s New Orleans~~

~~On April 1, 2020, the Company and the State of Louisiana, by and through the Louisiana Gaming Control Board (the “LGCB”~~incentive stock options, restricted stock, restricted stock units (“RSUs”), entered into an Amended and Restated Casino Operating Contract (as amended by a First Amendment to the Amended and Restated Casino Operating Contract dated April 9, 2020, the “Casino Operating Contract”) to amend and restate the casino operating contract between the Company and the LGCB with respect to Harrah’s New Orleans to, among other things: (a) extend the term of the Company’s authority to conduct gaming operations at Harrah’s New Orleans for thirty (30) years to 2054; (b) require the Company to make (i) a capital investment of $325 million on or around Harrah’s New Orleans by July 15, 2024 (subject to extensions for force majeure events) (the “Capital Investment”performance stock units (“PSUs”), ~~(ii) certain one-time payments totaling $65 million to the City of New Orleans (the “City”~~market-based performance stock units (“MSUs”) and the State of Louisiana, (iii) annual payments totaling $9 million to the City and the State of Louisiana and (iv) an annual license payment of $3 million to the LGCB starting April 1, 2022; and (c) delay the date by which the Company must deliver certain payments to the State of Louisiana and the City primarily driven by the reopening date of the casino.

On April 3, 2020, the Company, New Orleans Building Corporation (“NOBC”) and the City (collectively, the “Ground Lease Parties”) entered into a Second Amended and Restated Lease Agreement (as amended by a letter agreement of the same date, the “Ground Lease”) to amend and restate the ground lease among the Ground Lease Parties with respect to Harrah’s New Orleans to, among other things: (a) require the Company to make (i) the Capital Investment, (ii) certain payments to the City as also required by the Casino Operating Contract and (iii) certain one-time payments totaling $29 million to NOBC; (b) increase the minimum amount of certain annual payments to be made by the Company to NOBC; (c) provide that NOBC approves (subject to the satisfaction of certain conditions) of (i) the consummation of the Merger and (ii) a sale-leaseback transaction between the Company and an affiliate of VICI; and (d) delay the date by which the Company must deliver certain payments to the City and NOBC primarily driven by the reopening date of the casino.

~~As certain operations have resumed at Harrah’s New Orleans, under Former Caesars, approximately $61 million was paid of which $47 million reflected additional gaming~~, stock appreciation rights, and $14 million was operating costs, related to the payments described above. Subsequent to the Merger, the Company made additional payments totaling approximately $20 million of additional gaming rights as of,other stock-based awards or ~~for the period ended, September 30, 2020, related to the payments described above.~~

~~Sports Sponsorship/Partnership Obligations~~

We have agreements with certain professional sports leagues and teams, sporting event facilities and sports television networks for tickets, suites, and advertising, marketing, promotional and sponsorship opportunities. As of September 30, 2020, obligations related to these agreements were $318 million with contracts extending through 2035. We recognize expensesdividend equivalents. Forfeitures are recognized in the period ~~services are rendered~~ in accordance with the various agreements. In addition, assets or liabilities may be recorded related to the timing of payments as required by the respective agreement. On September 1, 2020, we amended our agreement with Turner Sports, Inc. for advertising and televised specials. On September 10, 2020, the Company entered into a multi-year agreement with ESPN including link integrations from ESPN’s website and app to sportsbooks with our sports betting partner, William Hill.which they occur.

~~Self-Insurance~~

~~We are self-insured for workers~~Total stock-based compensation ~~and other risk insurance, as well as health insurance. Our total estimated self-insurance liability was $235 million as of September 30, 2020.~~

~~Due to the novel nature of the disruption resulting from the COVID-19 public health emergency, actuarial data is limited for determining its effect.~~ The assumptions utilized by our actuaries are subject to significant uncertainty and if outcomes differ from these assumptions or events develop or progress in a negative manner, the Company could experience a material adverse effect and additional liabilities may be recordedexpense in the ~~future. Alternatively, as a result~~accompanying Statements of ~~the current work stoppages, a reduction of claims in future periods could be beneficial to our financial condition~~Operations totaled $21 million and ~~results of operations.~~

~~Contingent Liabilities~~

~~Uncertainties~~

Since 2009, Harrah’s New Orleans has undergone audits by state and local departments of revenue related to sales taxes on hotel rooms, parking and entertainment complimentaries. The periods that have been or are currently being audited are 2004 through 2016. In connection with these audits, certain periods have been paid under protest or are currently in various stages of litigation. On July 2, 2019, the judge denied Harrah’s New Orleans’ motion for partial summary judgment and granted the Department of Revenue’s (the “Department”) partial motion for summary judgment, finding that Harrah’s New Orleans owes state sales taxes, as well as district and New Orleans occupancy taxes to the Department on all discounted or complimentary

rooms furnished by Harrah’s New Orleans to patrons or guests at Harrah’s New Orleans hotel and certain third party hotels. On September 3, 2019, Harrah’s New Orleans filed a Motion for Suspensive Appeal, which was granted. Harrah’s filed its reply on February 3, 2020. Oral argument was on February 20, 2020. Under Former Caesars, $9$45 million ~~has been paid under protest and is being held in escrow by the Department. Harrah’s New Orleans had accrued contingent liabilities of $42 million on September 30, 2020.~~

~~Weather disruption - Lake Charles~~

On August 27, 2020 Hurricane Laura made landfall on Lake Charles as a Category 4 storm. The hurricane severely damaged the Isle of Capri Casino Lake Charles and the Company has recorded an insurance receivable of $31 million, of which $15 million related to fixed asset impairments and $16 million related to remediation costs and repairs that have been incurred in during the three months ended September 30, 2021 and 2020, respectively, and $64 million and $55 million during the nine months ended September 30, 2021 and 2020, respectively. These amounts are included in Corporate expense in the Company’s Statements of Operations.

2015 Equity Incentive Plan (“2015 Plan”)

During the nine months ended September 30, 2021, as part of the annual incentive program, the Company granted 642 thousand RSUs to employees of the Company with an aggregate fair value of $46 million and a ratable vesting period of either two~~. The property has remained closed.~~ or three years. Each RSU represents the right to receive payment in respect of 1 share of the Company’s Common Stock.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

During the nine months ended September 30, 2021, the Company also granted 81 thousand PSUs that are scheduled to vest in three years. On the vesting date, recipients will receive between 0% and 200% of the target number of PSUs granted, in the form of Company Common Stock, based on the achievement of specified performance and service conditions. The fair value of the PSUs is based on the market price of our common stock when a mutual understanding of the key terms and conditions of the awards between the Company and recipient is achieved. The awards are remeasured each period until such an understanding is reached. The aggregate value of PSUs granted during the year was $9 million as of September 30, 2021.

In addition, during the nine months ended September 30, 2021, the Company granted 147 thousand MSUs that are scheduled to cliff vest in three years. On the vesting date, recipients will receive between 0% and 200% of the target number of MSUs granted, in the form of Company Common Stock, based on the achievement of specified market and service conditions. The grant date fair value of the MSUs was determined using a Monte-Carlo simulation model. Key assumptions for the Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation coefficient. The effect of market conditions is considered in determining the grant date fair value, which is not subsequently revised based on actual performance. The aggregate value of MSUs granted during the nine months ended September 30, 2021 was $15 million.

During the nine months ended September 30, 2021, there were no grants of stock options and 110 thousand stock options were exercised. In addition, during the nine months ended September 30, 2021, 832 thousand, 162 thousand, and 208 thousand of RSUs, PSUs and MSUs, respectively, vested under the 2015 plan.

Outstanding at End of Period


	September 30, 2021			December 31, 2020
	Quantity	Wtd-Avg (a)		Quantity	Wtd-Avg (a)
Stock options	49,574	$	21.37	176,724	$	22.57
Restricted stock units	2,126,661	49.87		2,414,111	42.55
Performance stock units (b)	417,069	62.20		500,482	48.32
Market-based stock units	383,098	76.97		446,087	49.37

____________________

(a)Represents the weighted-average exercise price for stock options, weighted-average grant date fair value for RSUs, weighted-average grant date fair value for PSUs where the grant date has been achieved, the price of CEI common stock as of the balance sheet date for PSUs where a grant date has not been achieved, and the fair value of the MSUs determined using the Monte-Carlo simulation model.

(b)PSUs were presented with RSUs as of December 31, 2020 in the 2020 Annual Report.

Share Repurchase Program

As of September 30, 2021, the Company has acquired 223,823 shares of common stock under the Share Repurchase Program at an aggregate value of $9 million and an average of $40.80 per share. No shares were repurchased during the nine months ended September 30, 2021 and 2020.

Changes to the Authorized Shares

On June 17, 2021, following receipt of required shareholder approvals, the Company amended its Certificate of Incorporation to increase the number of authorized shares of common stock from 300 million to 500 million, and authorize the issuance of up to 150 million shares of preferred stock.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Note 13. Income Taxes

Income Tax Allocation


	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2021			2020			2021			2020
Loss from continuing operations before income taxes	$	(317)		$	(780)		$	(712)		$	(1,127)
Benefit (provision) for income taxes	90			(138)			167			(67)
Effective tax rate	28.4		%	(17.7)		%	23.5		%	(5.9)		%

As a result of the Merger, the Company assumed $767 million of additional net deferred tax liabilities net of necessary valuation allowances, plus $24 million in additional accruals for uncertain tax positions. As a result of the William Hill Acquisition, the Company assumed $356 million of additional net deferred tax liabilities net of necessary valuation allowances, plus $34 million in additional accruals for uncertain tax positions. $127 million of the additional deferred tax liabilities and $34 million of the accruals for uncertain tax positions relating to the William Hill Acquisition are presented in Liabilities related to assets held for sale.

The income tax benefit for the three months ended September 30, 2021 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to the realization of capital losses previously not tax benefited due to the acquisition of William Hill. The income tax benefit for the nine months ended September 30, 2021 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to state taxes and the reclassification of Horseshoe Hammond from held for sale, offset by nondeductible expense related to the 5% Convertible Notes conversion.

The income tax benefit for the three and nine months ended September 30, 2020 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to an increase in the valuation allowance against the deferred tax assets due to the series of transactions with VICI during the quarter.

The Company, including its subsidiaries, files tax returns with federal, state, and foreign jurisdictions. The Company does not have tax sharing agreements with the other members within its consolidated group. The Company is subject to exam by various state and foreign tax authorities. With few exceptions, the Company is no longer subject to examinations by tax authorities for years before 2017, and it is possible that the amount of the liability for unrecognized tax benefits could change during the next 12 months.

Note 14. Related Affiliates

REI

As of September 30, ~~2020,~~2021, Recreational Enterprises, Inc. (“REI”) owned approximately ~~5.1%~~4.0% of outstanding common stock of the Company. The directors of REI are the Company’s Executive Chairman of the Board, Gary L. Carano, its Chief Executive Officer and Board member, Thomas R. Reeg, and its former Senior Vice President of Regional Operations, Gene Carano. In addition, Gary L. Carano also serves as the Vice President of REI and Gene Carano also serves as the Secretary and Treasurer of REI. Members of the Carano family, including Gary L. Carano and Gene Carano, own the equity interests in REI. During the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, there were 0no related party transactions between the Company and the Carano family other than compensation, including salary and equity incentives, and the CSY Lease listed below.

C. S. & Y. Associates

The Company owns the entire parcel on which Eldorado Reno is located, except for approximately 30,000 square feet which is leased from C. S. & Y. Associates (“CSY”) which is an entity partially owned by REI (the “CSY Lease”). The CSY Lease expires on June 30, 2057. ~~Rent~~Annual rent pursuant to the CSY Lease is currently $0.6 million, ~~annually and~~ paid ~~quarterly during~~quarterly. Annual rent is

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

subject to periodic rent escalations through the ~~year.~~term of the lease. As of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, there were 0no amounts due to or from CSY.

Transactions with Horseshoe Baltimore

The Company ~~holds~~held an interest in Horseshoe Baltimore of approximately 44.3%, which iswas accounted for as an equity method investment, prior to our acquisition of an additional interest and ~~is considered to be a related party.~~subsequent consolidation on August 26, 2021. These related party transactions ~~include~~included items such as casino management fees, reimbursement of various costs incurred ~~by CEOC, LLC~~ on behalf of Horseshoe Baltimore, and the allocation of other general corporate expenses. ~~A summary~~

Transactions with NeoGames

The Company holds an interest in NeoGames (see Note 4). NeoGames provides the player account management system to our wholly-owned Liberty online gaming applications. We have a dedicated team of ~~the transactions with Horseshoe Baltimore~~programmers at NeoGames working on enhancements to our player account management system on our behalf, for which NeoGames is ~~provided in the table below.~~


~~(In millions)~~	Three Months Ended September 30, 2020



~~Transactions with Horseshoe Baltimore~~
~~Management fees~~	$	2
~~Allocated expenses~~	1

compensated under a services agreement.

Due from/to Affiliates

Amounts due from or to affiliates for each counterparty represent the net receivable or payable as of the end of the reporting period primarily resulting from the transactions described above and settled on a net basis by each counterparty in accordance with the legal and contractual restrictions governing transactions by and among the Company’s consolidated entities.

As of ~~September 30, 2020 and~~ December 31, ~~2019,~~2020, Due from affiliates, net was ~~$37~~$44 million, ~~and $4 million, respectively,~~ and represented transactions with Horseshoe Baltimore and William Hill. Amounts due from/to William Hill and Horseshoe Baltimore eliminate upon consolidation. See Note 2.

Note 15. Segment Information

The executive decision maker of the Company reviews operating results, assesses performance and makes decisions on a “significant market” basis. Management views each of the Company’s casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Prior to the ~~Merger,~~William Hill Acquisition, our principal operating activities occurred in ~~5 geographic regions and~~3 regionally-focused reportable segments: ~~West, Midwest, South, East~~Las Vegas, Regional, and ~~Central.~~Managed, International, CIE, in addition to Corporate and Other. Following the ~~Merger,~~William Hill Acquisition, the Company’s principal operating activities occur in ~~3 regionally-focused and~~4 reportable segments. The reportable segments are based on the similar

characteristics of the operating segments with the way management assesses these results and allocates resources, which is a consolidated view that adjusts for the effect of certain transactions between these reportable segments within ~~the regions in which they operate:~~Caesars: (1) Las Vegas, (2) Regional, (3) Caesars Digital, and ~~(3)~~(4) Managed ~~International, CIE,~~and Branded, in addition to Corporate and Other. See table below for a summary of these segments. Also, see Note 43 and Note 76 for a discussion of ~~the~~any impairment of intangibles ~~and~~or long-lived assets related to certain segments.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The following table sets forth certain information regarding our properties (listed by segment in which each property is reported) as of September 30, ~~2020:~~2021:

Las Vegas

Regional

Managed ~~International, CIE~~and Branded

~~(a)~~

Bally’s Las Vegas(a)

Eldorado Resort Casino Reno

~~(a)~~

Harrah’s Atlantic City

(a)

~~International~~Managed

Caesars Palace Las Vegas (a)

~~The Cromwell~~

Silver Legacy Resort Casino

~~(a)~~

Harrah’s Laughlin(a)

Harrah’s Ak-Chin (a)

~~Caesars Cairo~~

The Cromwell (a)

~~Flamingo Las Vegas~~

Circus Circus Reno

~~(a)~~

Harrah’s New Orleans(a)

Harrah’s Cherokee (a)

~~Ramses Casino~~

Flamingo Las Vegas (a)

~~The LINQ Hotel & Casino~~

MontBleu Casino Resort & Spa (c)

~~(a)~~

Hoosier Park ~~(f)~~(a)

~~(a)~~

~~Emerald Casino Resort~~Harrah’s Cherokee Valley River ~~(b)~~(a)

~~(a)~~

~~Paris~~Harrah’s Las Vegas(a)

Tropicana Laughlin Hotel & Casino

~~(a)~~

Indiana Grand ~~(g)~~(a)

~~(a)~~

~~Alea Glasgow~~Harrah’s Resort Southern California ~~(b)~~(a)

~~(a)~~

~~Planet Hollywood Resort~~The LINQ Hotel & Casino(a)

Isle Casino Hotel - ~~Blackhawk~~Black Hawk

~~(a)~~

~~Bally’s~~Caesars Atlantic City ~~(b)~~(a)

~~(a)~~

~~Alea Nottingham~~Caesars Windsor ~~(b)~~(a)

~~(a)~~

~~Caesars Palace~~Paris Las Vegas(a)

Lady Luck Casino - Black Hawk

Harrah’s Council Bluffs (a)

~~Caesars Atlantic City~~

~~(a)~~

~~The Empire Casino~~Caesars Dubai ~~(b)~~(a)

Planet Hollywood Resort & Casino (a)

~~Harrah’s Las Vegas~~

Isle Casino Waterloo

~~(a)~~

~~Caesars Southern Indiana~~Harrah’s Gulf Coast ~~(e)(b)~~(a)

~~(a)~~

~~Manchester235~~ ~~(b)~~

~~(a)~~

Rio All-Suite Hotel & Casino(a)

Isle Casino Bettendorf

~~(a)~~

Harrah’s ~~Council Bluffs~~Joliet (a)

~~(a)~~

~~Playboy Club London~~ Branded~~(b)~~

Isle of Capri Casino Boonville

~~(a)~~

Harrah’s ~~Gulf Coast~~Lake Tahoe (a)

~~(a)~~

~~Rendezvous Brighton~~Caesars Southern Indiana ~~(b)~~(a)(e)

~~Isle of Capri Casino Kansas City~~ Caesars Digital~~(d)~~

~~(a)~~

~~Harrah’s Joliet~~

~~(a)~~

~~Rendezvous Southend-on-Sea~~ ~~(j)(b)~~

Isle Casino Racing Pompano Park

~~(a)~~

~~Harrah’s Lake Tahoe~~

~~(a)~~

~~The Sportsman~~ ~~(b)~~

~~Eldorado Resort Casino Shreveport~~ ~~(c)~~

~~(a)~~

Harrah’s Louisiana Downs ~~(h)~~(a)(b)

~~Managed~~Harrah’s Northern California (a)

Caesars Digital

Isle of Capri Casino Hotel Lake Charles

~~(a)~~

Harrah’s Metropolis(a)

~~(a)~~

~~Harrah’s Ak-Chin~~

Belle of Baton Rouge Casino & Hotel(g)

~~(a)~~

Harrah’s North Kansas City(a)

~~(a)~~

~~Harrah’s Cherokee~~

Isle of Capri Casino Lula

~~(a)~~

Harrah’s Philadelphia

~~(a)~~

~~Harrah’s Cherokee Valley River~~

~~Lady Luck Casino Vicksburg~~ ~~(d)~~(a)

~~(a)~~

~~Harrah’s Reno~~ ~~(i)(b)~~

~~(a)~~

~~Harrah’s Resort Southern California~~

Trop Casino Greenville

~~(a)~~

Harveys Lake Tahoe(a)

~~(a)~~

~~Horseshoe Baltimore~~ ~~(k)~~

Eldorado Gaming Scioto Downs

~~(a)~~

Horseshoe ~~Bossier City~~Baltimore (a)(f)

~~(a)~~

~~Caesars Windsor~~

Tropicana Casino and Resort, Atlantic City

~~(a)~~

Horseshoe ~~Council Bluffs~~Bossier City (a)

~~(a)~~

~~Kings & Queens Casino~~

Grand Victoria Casino

~~(a)~~

Horseshoe ~~Hammond~~Council Bluffs ~~(e)(b)~~(a)

~~(a)~~

~~Caesars Dubai~~

Lumière Place Casino

~~(a)~~

Horseshoe ~~Tunica~~Hammond (a)

~~CIE~~

Tropicana Evansville ~~(e)~~(d)

Horseshoe Tunica (a)

~~(a)~~

~~Caesars Interactive Entertainment~~

___________________

(a)These properties were acquired from the Merger ~~with Former Caesars~~ on July 20, 2020.

(b)~~As a result of the Merger, the sales of these properties met the requirements for presentation as discontinued operations as of September 30, 2020.~~

~~(c)~~In April 2020, the Company entered into an agreement to sell Eldorado Shreveport and MontBleu, which are expected to close in the first quarter of 2021. As of September 30, 2020, the properties’ assets and liabilities were classified as held for sale.

~~(d)Kansas City and Vicksburg were sold on July 1, 2020.~~

~~(e)~~On October 27, 2020, the Company entered into an agreement to sell Evansville, which is expected to close mid-2021. In addition, the Company plans to enter into an agreement to divest of Caesars Southern Indiana and Horseshoe Hammond prior to December 31, 2020. As of September 30, 2020, Evansville’s assets and liabilities were classified as held for sale.

~~(f)Hoosier Park includes operations of our off-track betting locations, Winner’s Circle Indianapolis and Winner’s Circle New Haven.~~

~~(g)Indiana Grand includes operations of our off-track betting location, Winner’s Circle Clarksville.~~

~~(h)~~On September 3, 2020, the Company entered into an agreement to sell Harrah’s Louisiana Downs, which met the requirements for presentation as discontinued operations as of September 30, 2021. On November 1, 2021, the sale of Harrah’s Louisiana Downs was completed.

(c)In April 2020, the Company entered into an agreement to sell MontBleu. The sale of MontBleu closed on April 6, 2021.

(d)On October 27, 2020, the Company entered into an agreement to sell Evansville. The sale of Evansville closed on June 3, 2021.

(e)On December 24, 2020, the Company entered into an agreement to sell Caesars Southern Indiana. The sale of Caesars Southern Indiana closed on September 3, 2021. Additionally, the Company and Eastern Band of Cherokee Indians extended their existing relationship by entering into a long-term license agreement for the continued use of the Caesars brand and Caesars Rewards loyalty program at Caesars Southern Indiana.

(f)On August 26, 2021, the Company increased its ownership interest in Horseshoe Baltimore to 75.8% and began to consolidate the property in our Regional segment following the change in ownership. Management fees prior to the consolidation of Horseshoe Baltimore have been reflected in the Managed and Branded segment.

(g)On December 1, 2020, the Company entered into an agreement to sell Belle of Baton Rouge, which is expected to close in the fourth quarter of 2021.

The properties listed above exclude the discontinued operations, including previous international properties which have been sold, or we have entered into agreements to sell. The sale of Caesars UK Group closed on July 16, 2021, in which the buyer assumed all liabilities associated with the Caesars UK Group. Additionally, on September 8, 2021, the Company entered into an agreement to sell William Hill International, which is expected to close in the first ~~half~~quarter of ~~2021.~~2022.

~~(i)Harrah’s Reno was sold on September 30, 2020.~~

~~(j)Rendezvous Southend-on-Sea permanently closed in June 2020 following the recent closure due to the COVID-19 public health emergency.~~

~~(k)~~AsCertain of ~~September 30, 2020, Horseshoe Baltimore was 44.3% owned and held as an equity-method investment.~~

~~In addition to~~ our properties ~~listed above, other domestic~~operate off-track betting locations, including Hoosier Park, which operates Winner’s Circle Indianapolis and ~~international properties, including Harrah’s Northern California, are authorized~~Winner’s Circle New Haven, and Indiana Grand, which operates Winner’s Circle Clarksville. The LINQ Promenade is an open-air dining, entertainment, and retail promenade located on the east side of the Las Vegas Strip next to ~~use~~The LINQ Hotel & Casino (the “LINQ”) that features the ~~brands~~High Roller, a 550-foot observation wheel, and ~~marks of Caesars Entertainment, Inc.~~the Fly LINQ Zipline attraction. We also own the CAESARS FORUM conference

center, which is a 550,000 ~~sq. ft.~~square feet conference center with 300,000 ~~sq. ft.~~square feet of flexible meeting space, ~~and~~ 2 of the largest pillarless ~~ballrooms.~~ballrooms in the world and direct access to the LINQ.

“Corporate and Other” includes ~~parent~~certain unallocated corporate overhead costs and other adjustments, ~~and~~including eliminations of transactions among segments, to reconcile to the Company’s consolidated ~~Caesars~~ results.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The following table sets forth, for the periods indicated, certain operating data for the Company’s 34 reportable segments. We recast previously reported segment amounts to conform to the way management assesses results and allocates resources for the current year.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)	2021		2020		2021		2020
Revenues and expenses

Las Vegas:	Las Vegas:									Las Vegas:
Net revenues	Net revenues	$	304	$	0	$	304	$	0	Net revenues	$	1,017	$	304	$	2,369	$	304
Net loss attributable to Caesars		(162)		0		(162)		0

Adjusted EBITDA	Adjusted EBITDA	43		0		43		0		Adjusted EBITDA	500		43		1,085		43

Regional:	Regional:									Regional:
Net revenues	Net revenues	1,000		661		1,596		1,930		Net revenues	1,492		1,055		4,173		1,632
Net (loss) income attributable to Caesars		47		117		(175)		300

Adjusted EBITDA	Adjusted EBITDA	331		205		439		569		Adjusted EBITDA	554		350		1,549		449

Managed, International, CIE:
Caesars Digital:										Caesars Digital:
Net revenues	Net revenues	69		0		69		0		Net revenues	96		39		221		58
Net income attributable to Caesars		3		0		3		0
Adjusted EBITDA										Adjusted EBITDA	(164)		11		(171)		20
Managed and Branded:										Managed and Branded:
Net revenues										Net revenues	79		41		206		41

Adjusted EBITDA	Adjusted EBITDA	18		0		18		0		Adjusted EBITDA	22		12		69		12

Corporate and Other:	Corporate and Other:									Corporate and Other:
Net revenues	Net revenues	4		2		8		6		Net revenues	1		4		10		8
Net loss attributable to Caesars		(814)		(80)		(868)		(206)
Adjusted EBITDA		(41)		(8)		(59)		(27)

Total
Net revenues		$	1,377	$	663	$	1,977	$	1,936
Net (loss) income attributable to Caesars		$	(926)	$	37	$	(1,202)	$	94
Adjusted EBITDA	Adjusted EBITDA	$	351	$	197	$	441	$	542	Adjusted EBITDA	(42)		(41)		(123)		(59)

Reconciliation of Adjusted EBITDA - By Segment to Net Income (Loss) Attributable to Caesars

Adjusted EBITDA is presented as a measure of the Company’s performance. Adjusted EBITDA is defined as revenues less operating expenses and is comprised of net ~~income/~~income (loss) before (i) interest income and interest expense, net of interest capitalized, ~~and interest income,~~ (ii) income tax (benefit)/provision, (iii) depreciation and amortization, and (iv) certain items that we do not consider indicative of ~~its~~our ongoing operating performance at an operating property level.

In evaluating Adjusted EBITDA you should be aware that, in the future, we may incur expenses that are the same or similar to some of the adjustments in this presentation. The presentation of Adjusted EBITDA should not be construed as an inference that future results will be unaffected by unusual or unexpected items.

Adjusted EBITDA is a ~~non-GAAP~~ financial measure commonly used in our industry and should not be construed as an alternative to net ~~income/~~income (loss) as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies within the industry. Adjusted EBITDA is included because management uses Adjusted EBITDA to measure performance and allocate resources, and believes that Adjusted EBITDA provides investors with additional information consistent with that used by management.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Three Months Ended September 30, 2020
(In millions) Las Vegas Regional Managed, International, CIE Corporate and Other Total
Net (loss) income attributable to Caesars $ (162) $ 47 $ 3 $ (814) $ (926)
Net income attributable to noncontrolling interests 0 1 0 0 1
Net (income) loss from discontinued operations 0 (9) 10 0 1
Interest expense, net 92 157 0 224 473
Provision for income taxes (a)
0 0 0 135 135
Other loss (b)
0 0 0 164 164
Depreciation and amortization 91 117 0 15 223
Stock-based compensation 3 4 0 38 45
Transaction costs and other operating costs (c)
19 7 5 188 219
Other items (d)
0 7 0 9 16
Adjusted EBITDA $ 43 $ 331 $ 18 $ (41) $ 351

Three Months Ended September 30, 2019
(In millions) Las Vegas Regional Managed, International, CIE Corporate and Other Total
Net (loss) income attributable to Caesars $ 0 $ 117 $ 0 $ (80) $ 37
Provision for income taxes (a)
0 0 0 18 18
Other income 0 0 0 (2) (2)
Interest expense, net 0 35 0 37 72
Depreciation and amortization 0 51 0 2 53
Transaction costs and other operating costs 0 0 0 14 14
Stock-based compensation expense 0 0 0 4 4
Other items (d)
0 2 0 (1) 1
Adjusted EBITDA $ 0 $ 205 $ 0 $ (8) $ 197

Nine Months Ended September 30, 2020
(In millions) Las Vegas Regional Managed, International, CIE Corporate and Other Total
Net (loss) income attributable to Caesars $ (162) $ (175) $ 3 $ (868) $ (1,202)
Net income attributable to noncontrolling interests 0 1 0 0 1
Net (income) loss from discontinued operations 0 (9) 10 0 1
Provision for income taxes (a)
0 0 0 64 64
Other loss (b)
0 0 0 174 174
Interest expense, net 92 229 0 287 608
Depreciation and amortization 91 213 0 18 322
Impairment charges 0 161 0 0 161
Transaction costs and other operating costs (c)
19 8 5 210 242
Stock-based compensation expense 3 4 0 48 55
Other items (d)
0 7 0 8 15
Adjusted EBITDA $ 43 $ 439 $ 18 $ (59) $ 441

Nine Months Ended September 30, 2019
(In millions) Las Vegas Regional Managed, International, CIE Corporate and Other Total
Net (loss) income attributable to Caesars $ 0 $ 300 $ 0 $ (206) $ 94
Provision for income taxes (a)
0 0 0 39 39
Other loss 0 0 0 1 1
Interest expense, net 0 103 0 114 217
Depreciation and amortization 0 162 0 5 167
Impairment charges 0 0 0 1 1
Transaction costs and other operating costs 0 1 0 1 2
Stock-based compensation expense 0 0 0 16 16
Other items (d)
0 3 0 2 5
Adjusted EBITDA $ 0 $ 569 $ 0 $ (27) $ 542


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Adjusted EBITDA by Segment:
Las Vegas	$	500	$	43	$	1,085	$	43
Regional	554		350		1,549		449
Caesars Digital	(164)		11		(171)		20
Managed and Branded	22		12		69		12
Corporate and Other	(42)		(41)		(123)		(59)
	870		375		2,409		465
Reconciliation to net loss attributable to Caesars:
Net income attributable to noncontrolling interests	(2)		(1)		(2)		(1)
Net loss from discontinued operations	(4)		(7)		(38)		(7)
Benefit (provision) for income taxes	90		(138)		167		(67)
Other income (loss) (a)	(153)		9		(176)		(1)
Loss on extinguishment of debt	(117)		(173)		(140)		(173)
Interest expense, net	(579)		(485)		(1,734)		(620)
Depreciation and amortization	(276)		(225)		(842)		(324)
Impairment charges	—		—		—		(161)
Transaction costs and other operating costs (b)	(21)		(220)		(113)		(243)
Stock-based compensation expense	(21)		(45)		(64)		(55)
Other items (c)	(20)		(16)		(52)		(15)
Net loss attributable to Caesars	$	(233)	$	(926)	$	(585)	$	(1,202)

____________________

(a)~~Taxes are recorded at~~Other income (loss) for the ~~consolidated level~~three and ~~not estimated or recorded~~nine months ended September 30, 2021 primarily represents a loss on the change in fair value of investments held by the Company and a loss on the change in fair value of the derivative liability related to ~~our Las Vegas, Regional, and Managed, International, CIE segments.~~

~~(b)~~the 5% Convertible Notes. Other ~~loss~~income (loss) for the three and nine months ended September 30, 2020 primarily represents ~~loss on early repayment of debt in connection with the consummation of the Merger and~~ unrealized loss on the change in fair value of the derivative liability related to the 5% Convertible Notes, slightly offset by ~~a gain~~gains on ~~William Hill UK~~investments held by the Company and ~~Flutter stock and a~~ realized ~~gain~~gains on conversion of the 5% Convertible Notes.

~~(c)~~(b)Transaction costs and other operating costs for the three and nine months ended September 30, 2021 and 2020primarily represent costs related to the William Hill Acquisition and the Merger, various contract or license termination exit costs, professional services, other acquisition costs and severance costs.

~~(d)~~(c)Other items primarily represent ~~internal labor charges related to~~ certain ~~departed executives,~~consulting and legal fees, rent for non-operating assets, relocation expenses, retention bonuses, and business optimization ~~expenses and contract labor.~~expenses.


	Nine Months Ended September 30,
(In millions)	2021		2020
Capital Expenditures, net
Las Vegas	$	39	$	16
Regional (a)	199		62
Caesars Digital	43		—

Corporate and Other	34		20
Total	$	315	$	98

Nine Months Ended September 30,
(In millions) 2020 2019
Capital Expenditures, Net
Las Vegas $ 16 $ 0
Regional (a)
62 131
Managed, International, CIE (a)
1 0
Corporate and Other 19 4
Total $ 98 $ 135

~~___________________~~____________________

(a)Includes $4$2 million of capital expenditures related to properties classified as discontinued ~~operations.~~operations for the nine months ended September 30, 2021.


		Balance Sheet as of
(In millions)	(In millions)	September 30, 2020		December 31, 2019		(In millions)	September 30, 2021		December 31, 2020
Total Assets	Total Assets					Total Assets
Las Vegas	Las Vegas	$	21,552	$	0	Las Vegas	$	22,071	$	21,464
Regional	Regional	14,096		6,787		Regional	14,253		13,732
Managed, International, CIE		604		0
Caesars Digital						Caesars Digital	2,067		323
Managed and Branded						Managed and Branded	3,528		225
Corporate and Other(a)	Corporate and Other(a)	(13)		(1,146)		Corporate and Other(a)	(2,957)		641
Total	Total	$	36,239	$	5,641	Total	$	38,962	$	36,385

____________________

(a)Includes eliminations of transactions among segments, to reconcile to the Company’s consolidated results.

43Table of Contents

~~ITEM~~Item 2. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~You should read the~~The following discussion ~~together with~~and analysis of the financial ~~statements, including the related notes~~position and ~~the other financial information, contained in this Quarterly Report on Form 10-Q.~~

operating results of Caesars Entertainment, Inc., a Delaware corporation, ~~formerly known as Eldorado Resorts, Inc. (“ERI” or “Eldorado”), is~~and its consolidated subsidiaries, which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us,” for the ~~“Registrant,~~three and nine months ended September 30, 2021 and 2020 should be read in conjunction with the unaudited consolidated condensed financial statements and the notes thereto and other financial information included elsewhere in this Form 10-Q as well as our Annual Report on Form 10-K for the fiscal 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 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 Income (Loss) as our “Statements of Operations,” and ~~together~~(iv) our Consolidated Condensed Statements of Cash Flows as our “Statements of Cash Flows.” References to numbered “Notes” refer to Notes to Consolidated Condensed Financial Statements included in Item 1, “Unaudited Financial Statements.”

The statements in this discussion regarding our expectations of our future performance, liquidity and capital resources, and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. Our actual results may differ materially from those contained in or implied by any forward-looking statements. See “CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS” in this report.

Objective

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to be a narrative explanation of the financial statements and other statistical data that should be read in conjunction with ~~its subsidiaries may also~~the accompanying financial statements to enhance an investor’s understanding of our financial condition, changes in financial condition and results of operations. Our objectives are: (i) to provide a narrative explanation of our financial statements that will enable investors to see the Company through the eyes of management; (ii) to enhance the overall financial disclosure and provide the context within which financial information should be ~~referred~~analyzed; and (iii) to ~~as “we,” “us” or “our.”~~provide information about the quality of, and potential variability of, our earnings and cash flows so that investors can ascertain the likelihood of whether past performance is indicative of future performance.

Overview

We are 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. We partnered with MGM Resorts International to build Silver Legacy Resort Casino in Reno, Nevada in 1993 and, beginning in 2005, we 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 ~~(“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, we completed the merger with Caesars Entertainment Corporation (“Former Caesars”) pursuant to which Former Caesars became our wholly-owned subsidiary (the “Merger”). ~~As a result~~

On April 22, 2021, we completed the acquisition of ~~the Merger, we currently~~William Hill PLC for £2.9 billion, or approximately $3.9 billion (the “William Hill Acquisition”).

We own, lease, brand or manage an aggregate of 5653 domestic properties in 16 states with approximately ~~67,200~~56,000 slot machines, video lottery terminals ~~(“VLTs”)~~ and e-tables, approximately ~~3,500~~2,900 table games and approximately ~~48,800~~46,500 hotel rooms as of September 30, ~~2020. We also have international operations in five countries outside of the U.S.~~2021. 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 ~~that we will~~to continue to own, lease, brand or manage 51 properties. Our primary source of revenue is generated by our casino properties’ gaming operations, as well as online gaming, and we utilize our hotels, restaurants, bars, entertainment, racing, sportsbook offerings, retail shops and other services to attract customers to our properties.

~~In connection with~~We own 20 of our casinos and lease 27 casinos in the Merger, Caesars Entertainment Corporation changed its name to “Caesars Holdings, Inc.” and Eldorado Resorts, Inc. converted into a Delaware corporation and changed its name to “Caesars Entertainment, Inc.” In addition, effective as of July 21, 2020 our ticker symbol on the NASDAQ Stock Market changedU.S. We lease 19 casinos from ~~“ERI” to “CZR”. In connection with the Merger, we also entered into a Master Transaction Agreement (the “MTA”) with~~ VICI Properties L.P., a Delaware limited partnership (“VICI”), pursuant to ~~which, among other things,~~a regional lease, a Las Vegas lease and a Joliet lease. In addition, we ~~agreed to consummate certain sale and leaseback transactions and amend certain~~ lease ~~agreements with VICI and/or its affiliates, with respect to certain property described in the MTA.~~

~~As of September 30, 2020, we owned 23 of our~~seven casinos ~~and leased 28 casinos in the U.S. We have leases with~~from GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. (“GLPI”)~~, including our~~ pursuant to a Master Lease ~~that we entered into in connection with the Tropicana Acquisition on October 1, 2018~~ (as amended, the “GLPI Master Lease”) and ~~our Lumiere~~a Lumière lease. ~~Six~~Additionally, we lease the Rio All-Suite Hotel & Casino from a separate third party.

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We also operate and conduct sports wagering across 18 states plus the ~~leased casinos~~District of Columbia, 14 of which are mobile for sports betting, and operate regulated online real money gaming businesses in five states. Our recently launched Caesars Sportsbook app operates on the Liberty technology platform, which we acquired in the William Hill Acquisition along with other technology platforms that we intend to migrate to the Liberty technology platform in the future, subject to ~~leases with GLPI,~~required approvals. The map below illustrates Caesars Digital’s presence as of September 30, 2021:

Subsequent to September 30, 2021, we launched retail sports in Louisiana and ~~we lease an additional 22 casinos from~~are in the process of expanding our Caesars Digital footprint into other ~~third parties, including VICI. See descriptions under~~states in the ~~“GLPI Master Lease” and “VICI Leases”.~~near term.

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We periodically divest of assets in order to raise capital or as a result of a determination that the assets are not core to our business. We also divested certain assets ~~and are required to divest additional assets,~~ in connection with regulatory approvals related to closing of the Merger. A summary of recently completed and planned divestitures of our properties as of September 30, ~~2020~~2021 is as follows:

Segment

Property

Date Sold

Location

~~Regional~~

~~Presque Isle Downs & Casino (“Presque”)~~

~~January 11, 2019~~

~~Pennsylvania~~

~~Regional~~

~~Lady Luck Casino Nemacolin (“Nemacolin”)~~

~~March 8, 2019~~

~~Pennsylvania~~

~~Regional~~

~~Mountaineer Casino, Racetrack and Resort (“Mountaineer”)~~

~~December 6, 2019~~

~~West Virginia~~

~~Regional~~

~~Isle Casino Cape Girardeau (“Cape Girardeau”)~~

~~December 6, 2019~~

~~Missouri~~

~~Regional~~

~~Lady Luck Casino Caruthersville (“Caruthersville”)~~

~~December 6, 2019~~

~~Missouri~~

Regional

Isle of Capri Casino Kansas City (“Kansas City”)

July 1, 2020 ~~(a)~~

Missouri

Regional

Lady Luck Casino Vicksburg (“Vicksburg”)

July 1, 2020 ~~(a)~~

Mississippi

Regional

Eldorado Resort Casino Shreveport ~~(“Eldorado Shreveport”)~~

~~N/A (b)~~December 23, 2020 (a)

Louisiana

Regional

MontBleu Casino Resort & Spa (“MontBleu”)

~~N/A (b)~~April 6, 2021 (a)

Nevada

Regional

Tropicana Evansville (“Evansville”)

~~N/A (c)~~June 3, 2021 (b)

Indiana

Regional

~~Indiana~~Belle of Baton Rouge Casino & Hotel (“Baton Rouge”)

N/A (c)

Louisiana

Discontinued operations(d):

~~Regional~~

~~Harrah’s Reno~~

~~September 30, 2020 (e)~~

~~Nevada~~

~~Regional~~

~~Bally’s Atlantic City~~

~~N/A (f)~~

~~New Jersey~~

Regional

Harrah’s Louisiana Downs ~~Casino, Racing & Entertainment (“Harrah’s Louisiana Downs”)~~

~~N/A (g)~~November 1, 2021 (e)

Louisiana

Regional

Caesars Southern Indiana

~~N/A (c)~~September 3, 2021(b)(f)

Indiana

~~Regional~~

~~Horseshoe Hammond~~

N/A ~~(c)~~

~~Indiana~~

~~Managed, International, CIE~~

Emerald Resort & Casino

~~N/A~~July 16, 2021 (g)

South Africa

~~Managed, International, CIE~~N/A

Caesars Entertainment UK

July 16, 2021 (g)

United Kingdom

N/A

William Hill International

N/A (h)

United Kingdom

~~(a)We closed the sales of Kansas City and Vicksburg on July 1, 2020 and recorded a gain of approximately $8 million during the quarter ended September 30, 2020.~~___________________

~~(b)~~(a)On April 24, 2020, we entered into a definitive purchase agreement with Bally’s Corporation (formerly Twin River Worldwide Holdings, Inc. ~~(“Twin River”~~) and certain of its affiliates for the sale of the equity interests of Eldorado Resort Casino Shreveport Joint Venture and Columbia Properties Tahoe, LLC, the entities that hold Eldorado Shreveport and MontBleu for aggregate consideration of $155 million, subject to a customary working capital adjustment. The ~~definitive agreement provides that the consummation~~sale of Eldorado Shreveport closed on December 23, 2020 and the sale ~~is subject to satisfaction~~ of ~~customary conditions, including receipt of required regulatory approvals and Eldorado Shreveport and~~ MontBleu ~~are expected to close in the first quarter of~~closed on April 6, 2021. Eldorado Shreveport and MontBleu met the requirements for presentation as assets held for sale under generally accepted accounting principles as of September 30, 2020. In conjunction with the classification of MontBleu’s operations as assets held for sale asAs a result of the ~~announced~~ sale of MontBleu, an impairment charge totaling $45 million was recorded during the nine months ended September 30, 2020 due to the carrying value exceeding the estimated net sales ~~proceeds.~~proceeds from the sale.

~~(c)~~(b)In connection with its review of the Merger, the Indiana Gaming Commission (“IGC”) determined on July 16, 2020 that, as a condition to their approval of the Merger, we ~~are~~were initially required to divest three properties within the state of Indiana in order to avoid undue economic ~~concentrations as conditions to the Indiana Gaming Commission’s approval of the Merger.~~concentration. On October 27, 2020, the Company entered into an agreement to sell Evansville to GLPI and ~~Twin River~~Bally’s Corporation for $480 million in cash, subject to a customary working capital adjustment. The sale of Evansville closed on June 3, 2021. In addition, on December 24, 2020, the Company entered into an agreement to divest of Caesars Southern Indiana (see (f) below). On June 24, 2021, the IGC amended its order that previously required the Company to sell a third property and, as a result, we are not required to sell Horseshoe Hammond.

(c)On December 1, 2020, the Company entered into an agreement to sell the Baton Rouge to CQ Holding Company, Inc. Pursuant to the terms of the GLPI Master Lease, Baton Rouge will be removed from the GLPI Master Lease, and the rent payments to GLPI will remain unchanged. The transaction is expected to close in the fourth quarter of 2021 and is subject to regulatory approvals, and other customary closing conditions.

(d)These Former Caesars properties and William Hill’s non-U.S. operations met held for sale criteria as of their acquisition dates. These properties are classified as discontinued operations as of September 30, 2021.

(e)On September 3, 2020, the Company and VICI entered into an agreement with Rubico Acquisition Corp. to sell Harrah’s Louisiana Downs for $22 million, subject to a customary working capital adjustment, where the proceeds will be split between us and VICI. On November 1, 2021, the sale of Harrah’s Louisiana Downs was completed.

(f)On December 24, 2020, the Company entered into an agreement to sell Caesars Southern Indiana to the Eastern Band of Cherokee Indians (“EBCI”) for $250 million, subject to a customary working capital adjustment. Caesar’s annual payments to VICI under the regional lease will decline by $33 million upon closing of the transaction. Additionally, effective as of the closing of the transaction, Caesars and EBCI entered into a long-term license agreement for the continued use of the Caesars brand and Caesars Rewards loyalty program at Caesars Southern Indiana. The sale of Caesars Southern Indiana closed on September 3, 2021.

(g)On June 10, 2021, the Company entered into an agreement with Metropolitan Gaming Limited to sell Caesars Entertainment UK, including the interest in Emerald Resort & Casino (together, “Caesars UK Group”), in which the buyer assumed all liabilities associated with the Caesars UK Group. The sale closed on July 16, 2021.

(h)On September 8, 2021, the Company entered into an agreement with 888 Holdings Plc. to sell William Hill International for £2.2 billion, 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. In addition, we plan to enter into agreements to divest~~the first quarter of Caesars Southern Indiana, and Horseshoe Hammond prior to December 31, 2020. Evansville met the requirements for presentation as assets held for sale under generally accepted accounting principles as of September 30, 2020. See (d) below for Caesars Southern Indiana, and Horseshoe Hammond.2022.

~~(d)~~These Former Caesars properties met, or are expected to meet within a short period of time, held for sale criteria as of the acquisition date. The sales of these properties have or are expected to close within one year from the date of the closing of the Merger and ~~the properties are classified as discontinued operations.~~

~~(e)~~On September 30, 2020, we and VICI completed the sale of Harrah’s Reno to an affiliate of CAI Investments for $42 million, which proceeds were split between us and VICI. We received approximately $8 million of net proceeds.

~~(f)~~On April 24, 2020, Former Caesars reached an agreement with VICI to sell Bally’s Atlantic City Hotel & Casino to Twin River for approximately $25 million. Caesars will receive approximately $6 million from the sale. In addition, on October 9, 2020, we reached an agreement to sell the Bally’s brand to Twin River for $20 million, while retaining the right to use the brand within Bally’s Las Vegas into perpetuity.

~~(g)On September 3, 2020, we and VICI entered into agreement to sell Harrah’s Louisiana Downs with Rubico~~ Acquisition Corp. for $22 million, subject to a customary working capital adjustment, where the proceeds will be split between us and VICI. The sale is subject to satisfaction of customary conditions, including receipt of required regulatory approvals and is expected to close in the first half of 2021.

~~Merger~~ Related Activities

Merger with Caesars Entertainment Corporation

On July 20, 2020, the Merger was consummated and Former Caesars became a wholly-owned subsidiary of ours. 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

~~Based on the closing price~~

Table of ~~$38.24 per share of the Company’s common stock, par value $0.00001 per share (“Company Common Stock”), reported on NASDAQ on July 20, 2020, the aggregate implied value of the aggregate merger~~Contents

The total purchase consideration ~~paid to former holders of~~for Former Caesars ~~common stock~~was $10.9 billion. The estimated purchase consideration in the acquisition was determined with reference to its acquisition date fair value.

The Company recognized acquisition-related transaction costs in connection with the Merger ~~was approximately $8.5 billion, including approximately $2.4 billion in the Company Common Stock~~of $6 million and approximately $6.1 billion in cash. The aggregate merger consideration transferred also included approximately $2.4 billion related to the repayment of certain outstanding debt balances of Former Caesars and approximately $48 million of other consideration paid, which includes $19 million related to a transaction success fee, for the benefit of Former Caesars, and $29$107 million for the ~~replacement of equity awards of certain employees attributable to services provided prior to the Merger.~~

~~Pursuant to the Merger, each share of Former Caesars common stock was converted into the right to receive, at the election of the holder thereof~~three months ended September 30, 2021 and subject to proration, approximately $12.41 of cash consideration or 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 10 trading days ending on July 16, 2020). Following the consummation of the Merger, stockholders of the Company2020, respectively, and ~~stockholders of Former Caesars held approximately 61% and 39%, respectively, of the outstanding shares of Company Common Stock.~~

We recognized ~~acquisition-related transaction costs of $107~~$21 million and $129 million ~~for~~during the ~~three and~~ nine months ended September 30, 2021 and 2020, ~~respectively,~~respectively. These costs were associated with legal, IT costs, internal labor and ~~$13 million~~professional services and ~~$17 million for the three and nine months ended September 30, 2019, respectively.~~

~~Partnerships and Acquisition Opportunities~~

~~William Hill~~

In September 2018, we entered into a 25-year agreement, which became effective January 2019, with William Hill plc and William Hill U.S. Holdco, Inc. (“William Hill US”), its U.S. subsidiary (together, “William Hill”) pursuant to which we (i) granted to William Hill the right to conduct betting activities, including operating sportsbooks, in retail channels and under our first skin and third skin for online channels with respect to our current and future properties located in the United States and the territories and possessions of the United States, including Puerto Rico and the U.S. Virgin Islands and (ii) agreed that William Hill will have the right to conduct real money online gaming activities utilizing our second skin available with respect to properties in such territories. Pursuant to the terms of the agreement, we received a 20% ownership interest in William Hill US valued at approximately $129 million as well as 13 million ordinary shares of William Hill plc with an initial value of approximately $27 million upon closing of the transaction in January 2019. Our profit and losses attributable to William Hill US are includedwere recorded in Transaction costs and other operating costs ~~on the Consolidated Condensed~~in our Statements of Operations. ~~We granted~~

William Hill the right to the use of certain skins in exchange for an equity method investment. The fair value of the William Hill US and William Hill plc shares received has been deferred and is recognized as revenue on a straight-line basis over the 25-year agreement term. The amortization of deferred revenues associated with our equity interests is included in other revenue within our Corporate and Other segment. Additionally, we receive a profit share from the operations of betting and other gaming activities associated with our properties.Acquisition

On September 30, 2020, we announced that we had reached an agreement with William Hill ~~plc~~PLC on the terms of a recommended cash acquisition pursuant to which we would acquire the entire issued and to be issued share capital (other than shares owned by us or held in treasury) of William Hill ~~plc,~~PLC, in an all-cash ~~transaction of~~ transaction. On April 20, 2021, a UK Court sanctioned the William Hill Acquisition and on April 22, 2021, the Company completed the acquisition for approximately £2.9 billion, or ~~$3.7 billion~~. The transaction is conditioned on, among other things, the approval of William Hill plc shareholders and receipt of required regulatory approvals. To provide liquidity to fund the cash purchase price for the proposed acquisition, we entered into various

~~financing transactions. On September 25, 2020, we borrowed $900 million under the CEI Revolving Credit Facility (defined below), which was repaid subsequent to September 30, 2020.~~ ~~On September 28, 2020, we deposited $2.1 billion, which included borrowings under the CEI Revolving Credit Facility, into an escrow account related to the William Hill offer. As of~~ ~~September 30, 2020,~~ ~~these funds in escrow were classified as restricted cash until certain regulatory approvals were received. In addition,~~ ~~on October 1, 2020, we raised an additional $1.9 billion through a public offering of Company Common Stock.~~approximately $3.9 billion.

In connection with the ~~proposed acquisition of~~ William Hill ~~plc,~~Acquisition, on ~~September 29, 2020,~~April 22, 2021, a newly formed subsidiary of the Company entered into a ~~debt financing commitment letter~~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 ~~have committed to arrange and provide a newly formed subsidiary of~~provided the ~~Company with~~Debt Financing (as defined below). The Bridge Credit Agreement provides for (a) a 540-day £1.0 billion ~~senior secured 540-day~~asset sale bridge ~~loan~~ facility, (b) a ~~£116~~60-day £503 million ~~senior secured 540-day revolving credit~~cash confirmation bridge facility and (c) a ~~£503~~540-day £116 million ~~senior secured 60-day bridge loan~~revolving credit facility (collectively, the ~~"Debt Financing"~~“Debt Financing”). The proceeds of the ~~Debt Financing will be~~bridge loan facilities provided under the Bridge Credit Agreement were used (i) to pay a portion of the cash consideration for the ~~proposed~~ acquisition ~~(ii) to refinance certain of William Hill plc's~~ and ~~its subsidiaries' existing debt, (iii)~~(ii) to pay fees and expenses related to the acquisition and related ~~transactions and (iv)~~transactions. The proceeds of the revolving credit facility under the Bridge Credit Agreement may be used for working capital and general corporate purposes.

~~In order to~~ ~~manage the risk of appreciation of the GBP denominated purchase price the Company has entered into foreign exchange forward contracts.~~

~~In connection with the Debt Financing on October 6, 2020, our newly formed subsidiary entered into a~~ The £1.5 billion Interim Facilities Agreement (“Interim Facilities Agreement”) entered into on October 6, 2020 with Deutsche Bank AG, London Branch and JPMorgan Chase Bank, N.A. ~~to provide: (a) a 540-day £1.0 billion asset sale bridge facility~~, and ~~(b) a 60-day~~amended on December 11, 2020, was terminated upon the execution of the Bridge Credit Agreement. On May 12, 2021, the Company repaid the £503 million cash confirmation bridge facility. ~~Upon~~On June 14, 2021, the Company drew down the full £116 million from the revolving credit facility and the proceeds, in addition to excess Company cash, were used to make a partial repayment of the asset sale bridge facility in the amount of £700 million. Outstanding borrowings under the Bridge Credit Agreement are expected to be repaid upon the sale of William Hill’s non-U.S. operations including the UK and international online divisions and the retail betting shops (collectively, “William Hill International”), all of which are held for sale and related activity is reflected within discontinued operations. Certain investments acquired will be excluded from the held for sale group.

On September 8, 2021, we entered into an agreement to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion. After repayment of the outstanding debt under the Bridge Credit Agreement, described above, and other working capital adjustments, the Company expects to receive approximately £835 million, or $1.2 billion. The sale is subject to satisfaction of customary conditions, including receipt of the approval of shareholders of 888 Holdings Plc and regulatory approvals, and is expected to close in the ~~restriction~~first quarter of 2022.

We recognized acquisition-related transaction costs of $5 million and $60 million for the three and nine months ended September 30, 2021, respectively, excluding additional transaction cost associated with sale of William Hill International. These costs were associated with legal and professional services and were recorded in Transaction costs and other operating costs in our Statements of Operations.

Consolidation of Baltimore

On August 26, 2021, we increased our ownership interest in CBAC Borrower, LLC (“Horseshoe Baltimore”), a property which we also manage, to approximately 75.8%. We were subsequently determined to have a controlling financial interest in Horseshoe Baltimore and we began to consolidate the results of operations of the property following our change in ownership. As a result of the increase in our ownership interest, our previously held investment was remeasured and we recognized a gain of $40 million during the nine months ended September 30, 2021. Management fees received prior to the consolidation event have been presented within our Managed and Branded segment. Following the increase in our ownership the operations of Horseshoe Baltimore are presented within our Regional segment.

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Partnerships and Acquisition Opportunities

NeoGames

The acquired net assets of William Hill included an investment in NeoGames S.A. (“NeoGames”), a global leader of iLottery solutions and services to national and state-regulated lotteries, and other investments. On September 16, 2021, the Company sold a portion of its shares of NeoGames common stock for $136 million which decreased the Company’s ownership interest from 24.5% to approximately 8.4%. As of September 30, 2021, the Company held approximately 2 million shares of NeoGames common stock with a fair value of $79 million. The shares have a readily determinable fair value and, accordingly, the Company remeasures the investment based on the ~~$2.1 billion funded as of~~ publicly available share price (Level 1). For the three and nine months ended September 30, ~~2020~~ ~~was released~~2021, the Company recorded a loss of approximately $158 million and ~~we transferred $1.4 billion~~$35 million, respectively, which is included within Other income (loss) on the Statements of ~~cash into our operating accounts and the outstanding balance of the CEI Revolving Credit Facility was repaid in full. Approximately $598 million of cash remains in an unrestricted account.~~Operations.

The Stars Group/Flutter Entertainment

In November 2018, we entered into ~~a 20-year~~an agreement with The Stars Group Inc., which was subsequently acquired by Flutter Entertainment PLC (“~~TSG”~~Flutter”) ~~pursuant to which we agreed~~ to provide ~~TSG with~~ options to obtain access to our second skin for online sports wagering and third skin for real money online gaming and poker ~~in each case~~ with respect to our properties in the ~~United States.~~U.S. Under the terms of the agreement, we received 1 million TSG common shares. The fair value of the shares received has been deferred and is recognized as revenue on a straight-line basis over the 20-year agreement term. All shares are subject to a one year restriction on transfer from the date they are received. On May 5, 2020, Flutter Entertainment PLC (“Flutter”) completed the acquisition of all of the issued and outstanding common shares, ~~of TSG in exchange for 0.2253 Flutter shares per common share of TSG. In addition, we will receive~~as a revenue share from certain operations of Flutter under our licenses. As of December 31, 2020, the fair value of shares held was $10 million, and was included in Prepayments and other current assets on the Balance Sheets.

On July 7, 2021, the Company sold all remaining Flutter shares for $9 million. The Company recorded a realized loss of $1 million during the nine months ended September 30, 2021, and unrealized gains of $5 million and $8 million during the three and nine months ended September 30, 2020, respectively, which were included in Other income (loss) on the Statements of Operations.

Pompano Joint Venture

In April 2018, we 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 our 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 ~~applicable verticals by TSG under~~various phases of the project. Additionally, Cordish will be responsible for the development of the master plan for the project with our ~~licenses.~~input and will submit it for our review and approval. In June 2021, the joint venture issued a capital call and we contributed $3 million. We have made cash contributions totaling $4 million and have contributed land. On February 12, 2021, we contributed 186 acres to the joint venture with 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 we have no further obligation to contribute additional real estate or cash as of September 30, 2021. We entered into a short-term lease agreement in February 2021, which we can cancel at any time, to lease back a portion of the land from the joint venture.

While we hold a 50% variable interest in the joint venture, we are not the primary beneficiary. As such the investment in the joint venture is accounted for using the equity method. We participate 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. Our investment in the joint venture is recorded in Investment in and advances to unconsolidated affiliates on the Balance Sheets.

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Reportable Segments

The following table sets forth certain information regarding our properties (listed by segment in which each property is reported) as of September 30, ~~2020:~~2021:

Las Vegas

Regional

Managed ~~International, CIE~~and Branded

~~(a)~~

Bally’s Las Vegas(a)

Eldorado Resort Casino Reno

~~(a)~~

Harrah’s Atlantic City

(a)

~~International~~Managed

Caesars Palace Las Vegas (a)

~~The Cromwell~~

Silver Legacy Resort Casino

~~(a)~~

Harrah’s Laughlin(a)

Harrah’s Ak-Chin (a)

~~Caesars Cairo~~

The Cromwell (a)

~~Flamingo Las Vegas~~

Circus Circus Reno

~~(a)~~

Harrah’s New Orleans(a)

Harrah’s Cherokee (a)

~~Ramses Casino~~

Flamingo Las Vegas (a)

~~The LINQ Hotel & Casino~~

MontBleu Casino Resort & Spa (c)

~~(a)~~

Hoosier Park ~~(f)~~(a)

~~(a)~~

~~Emerald Casino Resort~~Harrah’s Cherokee Valley River ~~(b)~~(a)

~~(a)~~

~~Paris~~Harrah’s Las Vegas(a)

Tropicana Laughlin Hotel & Casino

~~(a)~~

Indiana Grand ~~(g)~~(a)

~~(a)~~

~~Alea Glasgow~~Harrah’s Resort Southern California ~~(b)~~(a)

~~(a)~~

~~Planet Hollywood Resort~~The LINQ Hotel & Casino(a)

Isle Casino Hotel - ~~Blackhawk~~Black Hawk

~~(a)~~

~~Bally’s~~Caesars Atlantic City ~~(b)~~(a)

~~(a)~~

~~Alea Nottingham~~Caesars Windsor ~~(b)~~(a)

~~(a)~~

~~Caesars Palace~~Paris Las Vegas(a)

Lady Luck Casino - Black Hawk

Harrah’s Council Bluffs (a)

~~Caesars Atlantic City~~

~~(a)~~

~~The Empire Casino~~Caesars Dubai ~~(b)~~(a)

Planet Hollywood Resort & Casino (a)

~~Harrah’s Las Vegas~~

Isle Casino Waterloo

~~(a)~~

~~Caesars Southern Indiana~~Harrah’s Gulf Coast ~~(e)(b)~~(a)

~~(a)~~

~~Manchester235~~ ~~(b)~~

~~(a)~~

Rio All-Suite Hotel & Casino(a)

Isle Casino Bettendorf

~~(a)~~

Harrah’s ~~Council Bluffs~~Joliet (a)

~~(a)~~

~~Playboy Club London~~ Branded~~(b)~~

Isle of Capri Casino Boonville

~~(a)~~

Harrah’s ~~Gulf Coast~~Lake Tahoe (a)

~~(a)~~

~~Rendezvous Brighton~~Caesars Southern Indiana ~~(b)~~(a)(e)

~~Isle of Capri Casino Kansas City~~ Caesars Digital~~(d)~~

~~(a)~~

~~Harrah’s Joliet~~

~~(a)~~

~~Rendezvous Southend-on-Sea~~ ~~(j)(b)~~

Isle Casino Racing Pompano Park

~~(a)~~

~~Harrah’s Lake Tahoe~~

~~(a)~~

~~The Sportsman~~ ~~(b)~~

~~Eldorado Resort Casino Shreveport~~ ~~(c)~~

~~(a)~~

Harrah’s Louisiana Downs ~~(h)~~(a)(b)

~~Managed~~Harrah’s Northern California (a)

Caesars Digital

Isle of Capri Casino Hotel Lake Charles

~~(a)~~

Harrah’s Metropolis(a)

~~(a)~~

~~Harrah’s Ak-Chin~~

Belle of Baton Rouge Casino & Hotel(g)

~~(a)~~

Harrah’s North Kansas City(a)

~~(a)~~

~~Harrah’s Cherokee~~

Isle of Capri Casino Lula

~~(a)~~

Harrah’s Philadelphia

~~(a)~~

~~Harrah’s Cherokee Valley River~~

~~Lady Luck Casino Vicksburg~~ ~~(d)~~(a)

~~(a)~~

~~Harrah’s Reno~~ ~~(i)(b)~~

~~(a)~~

~~Harrah’s Resort Southern California~~

Trop Casino Greenville

~~(a)~~

Harveys Lake Tahoe(a)

~~(a)~~

~~Horseshoe Baltimore~~ ~~(k)~~

Eldorado Gaming Scioto Downs

~~(a)~~

Horseshoe ~~Bossier City~~Baltimore (a)(f)

~~(a)~~

~~Caesars Windsor~~

Tropicana Casino and Resort, Atlantic City

~~(a)~~

Horseshoe ~~Council Bluffs~~Bossier City (a)

~~(a)~~

~~Kings & Queens Casino~~

Grand Victoria Casino

~~(a)~~

Horseshoe ~~Hammond~~Council Bluffs ~~(e)(b)~~(a)

~~(a)~~

~~Caesars Dubai~~

Lumière Place Casino

~~(a)~~

Horseshoe ~~Tunica~~Hammond (a)

~~CIE~~

Tropicana Evansville ~~(e)~~(d)

Horseshoe Tunica (a)

~~(a)~~

~~Caesars Interactive Entertainment~~

___________________

(a)These properties were acquired from the Merger ~~with Former Caesars~~ on July 20, 2020.

(b)~~As a result of the Merger, the sales of these properties met the requirements for presentation as discontinued operations as of September 30, 2020.~~

~~(d)Kansas City and Vicksburg were sold on July 1, 2020.~~

~~(e)~~On October 27, 2020, the Company entered into an agreement to sell Evansville, which is expected to close mid-2021. In addition, the Company plans to enter into an agreement to divest of Caesars Southern Indiana, and Horseshoe Hammond prior to December 31, 2020. As of September 30, 2020, Evansville’s assets and liabilities were classified as held for sale.

~~(f)Hoosier Park includes operations of our off-track betting locations, Winner’s Circle Indianapolis and Winner’s Circle New Haven.~~

~~(g)Indiana Grand includes operations of our off-track betting location, Winner’s Circle Clarksville.~~

(c)In April 2020, the Company entered into an agreement to sell MontBleu. The sale of MontBleu closed on April 6, 2021.

(d)On October 27, 2020, the Company entered into an agreement to sell Evansville. The sale of Evansville closed on June 3, 2021.

(f)On August 26, 2021, the Company increased its ownership interest in Horseshoe Baltimore to approximately 75.8%. The Company was subsequently determined to have a controlling financial interest and began to consolidate operations of the property following the change in ownership. Management fees prior to the consolidation of Horseshoe Baltimore have been reflected in the Managed and Branded segment.

(g)On December 1, 2020, the Company entered into an agreement to sell Belle of Baton Rouge, which is expected to close in the fourth quarter of 2021.

In addition to our properties listed above, international operations which have been sold, or we have agreements to sell, are classified as discontinued operations. The sale of Caesars UK Group closed on July 16, 2021, in which the buyer assumed all liabilities associated with the Caesars UK Group. On September 8, 2021, the Company entered into an agreement to sell William Hill International, which is expected to close in the first ~~half~~quarter of ~~2021.~~

~~(i)Harrah’s Reno was sold on September 30, 2020.~~

~~(j)Rendezvous Southend-on-Sea permanently closed in June 2020 following the recent closure due to the COVID-19 public health emergency.~~

~~(k)As of September 30, 2020, Horseshoe Baltimore was 44.3% owned and held as an equity-method investment.~~2022.

The executive decision maker of the Company reviews operating results, assesses performance and makes decisions on a “significant market” basis. Management views each of our casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Prior to the ~~Merger,~~William Hill Acquisition, our principal operating activities occurred in ~~five geographic regions and~~three regionally-focused reportable segments: ~~West, Midwest, South, East~~Las Vegas, Regional, and ~~Central. Following~~Managed, International, CIE, in addition to Corporate and Other.

The William Hill Acquisition and rebranding of our interactive business (formerly, Caesars Interactive Entertainment “CIE” and now, inclusive of William Hill US, “Caesars Digital”) expands our access to conduct sports wagering and real online

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money gaming operations. As a result, the ~~Merger,~~Company has made a change to the composition of its reportable segments. The Las Vegas and Regional segments are substantially unchanged, while the former Managed, International and CIE reportable segment has been recast for all periods presented into two segments; Caesars Digital and Managed and International. Accordingly, our principal operating activities occur in ~~three regionally-focused~~four reportable ~~segments.~~segments: (1) Las Vegas, (2) Regional, (3) Caesars Digital, and (4) Managed and Branded, in addition to Corporate and Other. The reportable segments ~~continue to be~~are based on the similar characteristics of the operating segments ~~within the regions in which they operate and align~~ with the way management assesses these results and allocates ~~resources. The Company’s~~resources, which is a consolidated view that adjusts for the effect of certain transactions between these reportable segments ~~are: (1) Las Vegas, (2) Regional, and (3) Managed, International, CIE, in addition to Corporate and Other.~~within Caesars.

Presentation of Financial Information

The financial information included in this Item 2 for the ~~period~~periods after our ~~acquisition~~acquisitions of Former Caesars on July 20, 2020, William Hill on April 22, 2021 and of the increase in our ownership percentage and subsequent consolidation of Horseshoe Baltimore on August 26, 2021, is not fully comparable to the periods prior to the ~~acquisition.~~acquisitions. In addition, the presentation of financial information herein for the periods after ~~our~~the Company’s sales of Presque and Nemacolin on January 11, 2019 and March 8, 2019, respectively, our sales of Mountaineer, Cape Girardeau and Caruthersville on December 6, 2019, and our sales of Kansas City and Vicksburg on July 1, 2020 arevarious properties is not fully comparable to the periods prior to their respective sale dates. See “Reportable Segments” above for a discussion of changes to the Company’s reportable segments.

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations (“~~This MD~~&A”)~~&A is intended to provide information to assist in better understanding and evaluating our financial condition and results of operations. Our historical operating results may not be indicative of our future results of operations because of these factors and the changing competitive landscape in each of our markets, as well as by factors discussed elsewhere herein. We recommend that you read this MD&A in conjunction with our unaudited consolidated condensed financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q.

Reclassifications

Certain reclassifications of prior year presentations have been made to conform to the current period presentation. In June 2021, the IGC amended its order that previously required the Company to sell a third casino asset in the state of Indiana. As a result, Caesars will not be required to sell Horseshoe Hammond and Horseshoe Hammond no longer meets the held for sale criteria. The assets and liabilities previously held for sale have been reclassified as held and used for all periods presented measured at the lower of the carrying amount, adjusted for depreciation and amortization that would have been recognized had the assets been continuously classified as held and used, and the fair value at the date of the amended ruling. Additionally, amounts previously presented in discontinued operations have been reclassified into continuing operations for all periods presented.

Key Performance Metrics

Our primary source of revenue is generated by our gaming operations ~~but~~and online gaming. Additionally we ~~use~~utilize our hotels, restaurants, bars, entertainment venues, retail shops, racing and sportsbook offerings and other services to attract customers to our properties. Our operating results are highly dependent on the volume and quality of customers visiting and staying at our ~~properties.~~ properties and using our sports betting and iGaming applications.

Key performance metrics include volume indicators such as ~~table games~~ drop ~~and slot~~or handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. Slot win percentage is typically in the range of approximately 9% to 10% of slot handle for both the Las Vegas and Regional segments. Table game hold percentage is typically in the range of approximately 14% to 23% of table game drop in the Las Vegas segment and 18% to 21% of table game drop in the Regional segment. Sports betting hold is typically in the range of 6% to 9% and iGaming hold typically ranges from 3% to 4%. In addition, hotel occupancy, which is the average percentage of available hotel rooms occupied during a period, is a key indicator for our hotel business in the Las Vegas segment. See “Results of Operations” section below. Complimentary rooms are treated as occupied rooms in our calculation of hotel occupancy. The key metrics we utilize to measure our profitability and performance are Adjusted EBITDA and Adjusted EBITDA margin.

~~Other Recent~~ Developments and Significant Factors Impacting Financial Results

The following summary highlights recent developments and significant factors impacting our financial results for the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020.

•COVID-19 Public Health Emergency – 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 ~~United States.~~U.S. All of our 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. On May 15, 2020,~~

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COVID-19. As of September 30, 2021, we ~~began reopening our properties and~~ have resumed ~~certain~~ operations at all of our properties, ~~as of September 30, 2020,~~to the extent permitted by regulations governing the applicable jurisdiction, with the exception of ~~The Cromwell, Planet Hollywood Resort and~~Isle of Capri Casino Hotel Lake Charles (“~~Planet Hollywood”~~Lake Charles”), Rio All-Suite Hotel & Casino (“Rio”), and Caesars Windsor. Planet Hollywood and Caesars Windsor reopened on October 8, 2020 and The Cromwell reopened on October 29, 2020. The COVID-19 public health emergency has had a material adverse effect on our business, financial condition and results of operations for the three and nine months ended September 30, 2020. which was severely damaged by Hurricane Laura (as described below).

We continued to pay our full-time employees through April 10, 2020, including tips and tokens. Effective April 11, 2020, we furloughed approximately 90% of our employees, implemented salary reductions and committed to continue to provide benefits to our employees through ~~September 30, 2020. Subsequently, the benefit coverage for~~their furloughed ~~employees was extended indefinitely. A portion of~~period. We have emphasized a focus on labor efficiencies as our workforce ~~has returned to service as the properties have resumed with limited capacities~~returns and operations resume in compliance with ~~operating restrictions imposed by~~ governmental or tribal orders, directives, and guidelines. Due to a triggering event resulting from the ~~impact of the ongoing~~ COVID-19 public health emergency, we recognized impairment charges of $116 million related to goodwill and trade names (described below) during the nine months ended September 30, 2020.

The COVID-19 public health emergency had a material adverse effect on ~~our~~the Company’s business, financial condition and results of operations ~~we obtained waivers on~~for comparative periods in 2020, including the three and nine months ended September 30, 2020 which continued into the first quarter of 2021. As a result, the terms of our debt arrangements provide that the financial ~~covenants~~covenant measurement period is not effective through September 30, 2021, so long as we comply with a minimum liquidity requirement. The Company is subject to the financial covenant for quarters beginning after September 30, 2021. In addition, on March 19, 2021, the Company filed a lawsuit against its insurance carriers for losses attributed to the COVID-19 public health emergency. There can be no assurance as to the outcome of the litigation.

We have experienced positive operating trends thus far in 2021, with a continued focus on operational efficiencies which have resulted in net income, Adjusted EBITDA and Adjusted EBITDA margin exceeding pre-pandemic levels experienced in 2019 within our ~~former credit facility agreement~~Las Vegas and ~~the GLPI Master Lease. Furthermore, we obtained waivers from VICI in relation~~Regional segments. However, certain revenue streams continue to ~~annual capital expenditure requirements under the leases with VICI.~~

be negatively impacted, including convention and entertainment revenues, and have yet to reach pre-pandemic levels as compared to 2019. The extent and duration of the ~~ongoing and future effects~~negative impact of the COVID-19 public health emergency on our business and the casino resort industry generally is uncertain, but we expect that it will continue to have a significant impact on our business, results of operations and financial condition. The extent and duration of the impact of COVID-19 will ultimately depend on future developments, including but not limited to, the duration and severity of the outbreak or new variants, restrictions on operations imposed by governmental authorities, the potential for authorities reimposing stay at home orders, international and domestic travel restrictions or additional restrictions in response to continued developments with the COVID-19 public health emergency, our ability to adapt to evolving operating procedures and maintain adequate staffing in response to increased customer demand, the impact on consumer demand and discretionary spending, the ~~length~~efficacy and acceptance of ~~time it takes for demand to return~~vaccines, and our ability to adjust our cost structures for the duration of ~~the outbreak’s effect on our operations.~~any such interruption of its operations

•Caesars Acquisition – The Merger closed on July 20, 2020. ~~Transaction~~The Company recognized acquisition-related transaction costs ~~related to our~~in connection with the Merger of $6 million and $107 million for the three months ended September 30, 2021 and 2020, respectively, $21 million and $129 million during the nine months ended September 30, 2021 and 2020, respectively.

•William Hill Acquisition – On April 22, 2021, the Company consummated its previously announced acquisition of ~~Former Caesars totaled $107~~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 billionor approximately $3.9 billion. We recognized acquisition-related transaction costs of approximately $5 million and ~~$129~~$60 million for the three and nine months ended September 30, ~~2020,~~2021, respectively, excluding additional transaction cost associated with sale of William Hill International. See “Reportable Segments” above for a description of our revised segments following the acquisition.

•Consolidation of Baltimore – On August 26, 2021, the Company increased the ownership interest in CBAC Borrower, LLC, a property which we also manage, to approximately 75.8%. Caesars was subsequently determined to have a controlling financial interest and ~~$13~~we began to consolidate the results of operations of the property following our change in ownership. As a result of the acquisition, the Company recognized a gain of $40 million ~~and $17 million for~~during the ~~three and~~ nine months ended September 30, ~~2019, respectively.~~2021.

•Discontinued Operations – ~~As result of the Merger,~~ Former Caesars properties, ~~including~~ Harrah’s Louisiana Downs, Caesars Southern Indiana, ~~Horseshoe Hammond, Harrah’s Reno,~~and Caesars UK ~~group including Emerald Resort & Casino, and Bally’s Atlantic City have~~Group met ~~or are expected to meet within a short period of time,~~ held for sale criteria as of the date of the closing of the Merger. ~~The sales~~On July 16, 2021, the Company completed the sale of ~~these properties have or are expected~~the Caesars UK Group, in which the buyer assumed all liabilities associated with the Caesars UK Group. On September 3, 2021, the Company completed the sale of Caesars Southern Indiana, subject to ~~close within one year from~~a customary working capital adjustment, resulting in a gain of approximately $12 million. Additionally, William Hill International met held for sale criteria as of the date of the closing of the ~~Merger~~William Hill Acquisition and ~~the properties are~~is classified as discontinued operations. ~~Additionally, we closed the sale of Harrah’s Reno on September 30, 2020.~~

•~~Proposed William Hill Acquisition –~~ On September ~~30, 2020, we announced that we had reached~~8, 2021, the Company entered into an agreement with ~~William Hill plc on the terms of a recommended cash acquisition pursuant~~888 Holdings Plc to ~~which we would acquire the entire issued and to be issued share capital (other than shares owned by us or held in treasury) of William Hill plc, in an all-cash transaction of~~ ~~approximately £2.9 billion, or $3.7 billion. The transaction is conditioned on, among other things, the~~ ~~approval of William Hill plc shareholders and receipt of required regulatory approvals.~~sell

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•~~ESPN Agreement~~– William Hill International for £2.2 billion. On ~~September 10, 2020, we entered into a multi-year agreement with ESPN including link integrations from ESPN’s website and app to sportsbooks with our sports betting partner, William Hill.~~November 1, 2021, the sale of Harrah’s Louisiana Downs was completed.

•Divestitures – We ~~closed~~have completed several divestitures including the sales of Kansas City, Vicksburg, Eldorado Shreveport, MontBleu, Evansville and ~~Vicksburg on July 1, 2020~~discontinued operations of Harrah’s Reno, Bally’s Atlantic City, Caesars Southern Indiana and recorded a gain of approximately $8 million during the quarter ended September 30, 2020. We closed the sales of Presque and Nemacolin on January 11, 2019 and March 8, 2019, respectively, and recorded a net gain of $22 million. We closed the sales of Mountaineer, Cape Girardeau and Caruthersville on December 6, 2019 and recorded a net gain of $29 million during the fourth quarter of 2019.Caesars UK Group. The properties that have been sold as of September 30, 2021, are collectively referred to as ~~the~~ “Divestitures.” ~~In conjunction with the classification~~The results of ~~MontBleu’s~~ operations ~~as assets held for sale as a result~~ of the announced sale, an impairment charge totaling $45 million was recorded during the nine months ended September 30, 2020 due to the carrying value exceeding the estimated net sales proceeds. None of the sales listed met requirements for presentationdivested entities, other than those identified as discontinued operations, ~~and~~ are included in income from continuing operations for the periods prior to their respective closing dates.

•Impairment Charges – ~~As a result~~During 2020, the effects of ~~declines~~the COVID-19 public health emergency resulted in ~~recent performance and the expected impact on~~changes to estimated future cash flows ~~as a result of COVID-19,~~utilized to estimate fair value and we recognized impairment charges in our Regional segment related to goodwill and trade names totaling $100 million and $16 million, respectively, during the nine months ended September 30, 2020. In addition, as a result of entering the agreement to sell MontBleu in our Regional segment, impairment charges totaling $45 million were recorded during the nine months ended September 30, 2020 due to the carrying value exceeding the net sales proceeds.

•Weather and Construction Disruption – ~~Our Regional segment was negatively impacted by severe weather, including flooding, during~~During the ~~first quarter of 2019 compared to the same current year period. Additionally,~~three months ended September 30, 2021, our Regional segment was negatively impacted by ~~disruption to our casino floor~~natural disasters including Hurricane Ida in Louisiana and ~~hotel availability associated with renovation projects at our Black Hawk properties during~~Mississippi and wildfires in the ~~construction period from January to June 2019. In~~Lake Tahoe area. Harrah’s New Orleans, Harrah’s Lake Tahoe and Harvey’s Lake Tahoe all experienced temporary closures which lasted slightly more than one week. Additionally, in late August 2020, our Regional segment was negatively impacted by Hurricane Laura, causing severe damage to ~~Isle of Capri Casino Hotel~~ Lake Charles, ~~(“Lake Charles”),~~ which ~~remains temporarily closed. We~~will remain closed until the second half of 2022 when construction of a new land-based casino is expected to be complete. ~~recorded an~~During the nine months ended September 30, 2021, we received insurance ~~receivable~~proceeds of ~~$31 million, of which $15~~approximately $44 million related to damaged fixed ~~asset impairments~~assets and ~~$16~~remediation costs. The Company also recorded a gain of approximately $22 million ~~related~~as proceeds received for the cost to ~~remediation~~replace damaged property were in excess of the respective carrying value of the assets.

•Post-Merger Synergies –We continue to identify operating and cost efficiencies, including savings from the purchasing power of the combined Caesars organization and targeted integrated marketing strategies, as well as the elimination of redundant costs such as accounting and professional expenses, certain payroll costs, and ~~repairs that~~other corporate costs. As a result, we have ~~been incurred~~seen margin improvements in our results of operations.

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Results of Operations

The following table highlights the results of our operations:


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2020			2019			2020			2019			(Dollars in millions)	2021			2020			2021			2020
Net revenues:	Net revenues:													Net revenues:
Las Vegas	Las Vegas	$	304		$	—		$	304		$	—		Las Vegas	$	1,017		$	304		$	2,369		$	304
Regional	Regional	1,000			661			1,596			1,930			Regional	1,492			1,055			4,173			1,632
Managed, International, CIE		69			—			69			—
Caesars Digital														Caesars Digital	96			39			221			58
Managed and Branded														Managed and Branded	79			41			206			41
Corporate and Other (a)	Corporate and Other (a)	4			2			8			6			Corporate and Other (a)	1			4			10			8
Total	Total	$	1,377		$	663		$	1,977		$	1,936		Total	$	2,685		$	1,443		$	6,979		$	2,043

Net (loss) income		$	(925)		$	37		$	(1,201)		$	94
Net loss														Net loss	$	(231)		$	(925)		$	(583)		$	(1,201)

Adjusted EBITDA (b):	Adjusted EBITDA (b):													Adjusted EBITDA (b):
Las Vegas	Las Vegas	$	43		$	—		$	43		$	—		Las Vegas	$	500		$	43		$	1,085		$	43
Regional	Regional	331			205			439			569			Regional	554			350			1,549			449
Managed, International, CIE		18			—			18			—
Caesars Digital														Caesars Digital	(164)			11			(171)			20
Managed and Branded														Managed and Branded	22			12			69			12
Corporate and Other (a)	Corporate and Other (a)	(41)			(8)			(59)			(27)			Corporate and Other (a)	(42)			(41)			(123)			(59)
Total	Total	$	351		$	197		$	441		$	542		Total	$	870		$	375		$	2,409		$	465

Net (loss) income margin (c)		(67.2)		%	5.6		%	(60.7)		%	4.9		%
Net loss margin														Net loss margin	(8.6)		%	(64.1)		%	(8.4)		%	(58.8)		%
Adjusted EBITDA margin	Adjusted EBITDA margin	25.5		%	29.7		%	22.3		%	28.0		%	Adjusted EBITDA margin	32.4		%	26.0		%	34.5		%	22.8		%

___________________

(a)Corporate and Other includes revenues related to certain licensing ~~revenue~~arrangements and various revenue sharing agreements. ~~Expenses incurred for corporate activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The~~Corporate and Other ~~category also~~Adjusted EBITDA includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees ~~travel expenses~~ and other general and administrative ~~expenses that do not directly relate to or have not otherwise been allocated to a property.~~expenses.

(b)See the “Supplemental Unaudited Presentation of Consolidated Adjusted Earnings ~~before~~Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)” discussion later in this MD&A for a definition of Adjusted EBITDA and a reconciliation of net income (loss) ~~income~~ to Adjusted ~~EBITDA related margins.~~

~~(c)Net (loss) income margin is calculated as net (loss) income divided by net revenues.~~EBITDA.

Consolidated comparison of the three and nine months ended September 30, ~~2020~~2021 and ~~2019~~2020

Net Revenues

Net revenues were as follows:


		Three Months Ended September 30,						Percent Change			Nine Months Ended September 30,										Percent Change			Three Months Ended September 30,							Percent Change		Nine Months Ended September 30,						Percent Change
(Dollars in millions)	(Dollars in millions)	2020		2019		Variance				2020			2019			Variance			(Dollars in millions)	2021					2020		Variance			2021			2020		Variance
Net Revenues:

Casino and pari-mutuel commissions	Casino and pari-mutuel commissions	$	919	$	458	$	461	100.7	%		$	1,360		$	1,386		$	(26)			(1.9)	%	Casino and pari-mutuel commissions	$	1,510	$	981	$	529		53.9	%	$	4,308	$	1,422	$	2,886	*
Food and beverage	Food and beverage	125		78		47		60.3	%		188			229			(41)				(17.9)	%	Food and beverage	347		127		220			173.2	%	797		190		607		*
Hotel	Hotel	200		94		106		112.8	%		257			237			20				8.4	%	Hotel	511		200		311			155.5	%	1,122		257		865		*
Other	Other	133		33		100		*			172			84			88				104.8	%	Other	317		135		182			134.8	%	752		174		578		*
Net Revenues	Net Revenues	$	1,377	$	663	$	714	107.7	%		$	1,977		$	1,936		$	41			2.1	%	Net Revenues	$	2,685	$	1,443	$	1,242		86.1	%	$	6,979	$	2,043	$	4,936	*

___________________

* Not meaningful.

Consolidated revenues increased for the three and nine months ended September 30, ~~2020 as a result of our acquisition of Former Caesars~~2021 primarily due to recent acquisitions including the Merger on July 20, ~~2020. This was~~2020, the William Hill Acquisition on April 22, 2021, and the consolidation of Horseshoe Baltimore on August 26, 2021, offset by ~~a decline in~~the divestiture of certain properties discussed above. In addition, net revenues ~~associated with~~for the three and nine months ended September 30, 2020 were negatively impacted by the COVID-19 public health ~~emergency and, to a lesser extent, divestitures~~emergency. All of ~~certain properties discussed earlier. Both we and Former Caesars began temporarily closing~~ our properties were temporarily closed for the period from mid-March ~~2020. We began reopening our~~2020 through mid-May 2020 and not all properties ~~on May 15, 2020. Former Caesars began opening properties on May 18, 2020. As~~reopened as of September 30, 2020 ~~all but The Cromwell, Planet Hollywood, Rio~~due to orders issued by various government agencies and ~~Caesars Windsor were reopened. Due~~tribal bodies as part of certain precautionary measures intended to help slow the ~~impact~~spread of ~~the COVID-19 public health emergency, including local~~COVID-19. Local and state regulations and the implementation of

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social distancing and health and safety protocols ~~our properties are subject~~in response to COVID-19 resulted in reduced gaming capacity and hotel occupancy ~~limited~~as well as limitations on the operation of food and beverage outlets, live entertainment events, and ~~group business.~~conventions. As ~~a result, gaming revenue represents a larger portion~~ of ~~our total revenues following the reopening~~September 30, 2021, all of our properties as compared to earlier periods, which we expect to continue until at least such time that social distancing and safety and health protocols, along with governmental capacity or other restrictions, are relaxed or no longer necessary.

~~Our diversified portfolio has yielded mixed results as the properties~~ have reopened under the conditions noted above. Net revenues for properties which have historically relied on a local customer base, not dependent on air travel or convention business, showed a smaller decrease as comparedresumed certain operations, to the ~~three months ended September 30, 2019 results. These properties’ gaming and hotel revenues have historically been~~extent permitted, with the ~~largest portion~~exception of ~~their total revenue. Properties in destination markets such as Las Vegas, Atlantic City, Northern Nevada and New Orleans,~~Lake Charles which have historically relied on a broader regional and national customer base or convention business have declined significantly from the prior year period. These properties have historically relied on a broader mix of revenue sources including convention, entertainment, and food and beverage offerings. As a result of reduced visitation, state and local restrictions on capacity, and social distancing and safety and health protocols, these sources of revenue have been materially reduced as compared to prior periods.was severely damaged by Hurricane Laura.

Operating Expenses

Operating expenses were as follows:


		Three Months Ended September 30,						Percent Change			Nine Months Ended September 30,										Percent Change			Three Months Ended September 30,							Percent Change		Nine Months Ended September 30,						Percent Change
(Dollars in millions)	(Dollars in millions)	2020		2019		Variance				2020			2019			Variance			(Dollars in millions)	2021					2020		Variance			2021			2020		Variance
Operating Expenses:

Casino and pari-mutuel commissions	Casino and pari-mutuel commissions	$	461	$	229	$	232	101.3	%		685			693			$	(8)			(1.2)	%	Casino and pari-mutuel commissions	$	830	$	493	$	337		68.4	%	$	2,111	$	717	$	1,394	194.4	%
Food and beverage	Food and beverage	91		60		31		51.7	%		153			180			(27)				(15.0)	%	Food and beverage	210		92		118			128.3	%	484		154		330		*
Hotel	Hotel	63		27		36		133.3	%		91			76			15				19.7	%	Hotel	130		63		67			106.3	%	317		91		226		*
Other	Other	52		12		40		*			62			34			28				82.4	%	Other	114		53		61			115.1	%	262		63		199		*

General and administrative	General and administrative	330		130		200		153.8	%		495			381			114				29.9	%	General and administrative	486		338		148			43.8	%	1,284		503		781		155.3	%

Corporate	Corporate	90		13		77		*			120			51			69				135.3	%	Corporate	86		90		(4)			(4.4)	%	228		120		108		90.0	%
Impairment charges	Impairment charges	—		—		—		*			161			1			160				*		Impairment charges	—		—		—			*		—		161		(161)		(100.0)	%
Depreciation and amortization	Depreciation and amortization	223		53		170		*			322			167			155				92.8	%	Depreciation and amortization	276		225		51			22.7	%	842		324		518		159.9	%
Transaction costs and other operating costs	Transaction costs and other operating costs	219		14		205		*			242			2			240				*		Transaction costs and other operating costs	21		220		(199)			(90.5)	%	113		243		(130)		(53.5)	%
Total operating expenses	Total operating expenses	$	1,529	$	538	$	991	184.2	%		$	2,331		$	1,585		$	754			47.6	%	Total operating expenses	$	2,153	$	1,574	$	579		36.8	%	$	5,641	$	2,376	$	3,265	137.4	%

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* Not meaningful.

Casino and pari-mutuel ~~expenses consist~~commissions expense consists primarily of ~~salaries~~payroll and ~~wages~~related costs associated with our gaming operations, marketing and promotions and gaming taxes. ~~Hotel expenses consist principally of salaries, wages and supplies associated with our hotel operations.~~ Food and beverage ~~expenses consist~~expense consists principally of salaries and wages and costs of goods sold associated with our food and beverage operations. Hotel expense consists principally of salaries, wages and supplies associated with our hotel operations. Other expenses consist principally of salaries and wages and costs of goods sold associated with our retail, entertainment and other operations.

Casino and pari-mutuel ~~hotel,~~commissions, food and beverage, hotel, and other expenses for the three and nine months ended September 30, ~~2020~~2021 increased year over year as a result of ~~our acquisition~~recent acquisitions, including the Merger, the William Hill Acquisition, and the consolidation of ~~Former Caesars. This was offset as a result~~Horseshoe Baltimore. In addition, the reopening of ~~the temporary closures of~~substantially all of our properties ~~due~~ to the ~~COVID-19 public health emergency, which reduced~~extent permitted by regulations governing the applicable jurisdiction and the partial return of our salaries and wages, gaming taxes, costs of goods sold, and other expenses. As discussed above, our reopened properties are operating with reduced gaming and hotel capacity and limited food and beverage options. As such, our properties are operating with a reduced workforce ~~which resulted in decreased salaries and wages. In addition, our properties~~contributed to the increased expenses noted. These increases have ~~reduced~~been offset as the Company continues to identify more efficient methods to manage marketing and promotional spend ~~resulting~~and reduce gaming expenses, as well as focus on labor efficiencies as described above. Additionally, the Company has managed recent increases in ~~further declines in gaming expenses.~~food costs and effectively improved margins by focusing on efficiencies within food and beverage venues and menu options.

General and administrative expenses include items such as ~~compliance,~~information technology, facility maintenance, utilities, property and liability insurance, expenses for administrative departments such as accounting, compliance, purchasing, human resources, legal and internal audit, and property taxes. Property, general and administrative expenses also include ~~stock-based compensation expense for certain property executives, sports sponsorships and~~ other marketing expenses not directly related to our gaming and non-gaming operations.

General and administrative expenses for the three and nine months ended September 30, ~~2020~~2021 increased year over year as the result of the reopening of all of our ~~acquisition~~properties to the extent permitted by regulations governing the applicable jurisdiction, the Merger, the William Hill Acquisition and the consolidation of ~~Former Caesars. This was~~Horseshoe Baltimore. These increases have been offset by ~~actions taken to reduce our~~a reduced cost structure implemented by the Company while our properties were temporarily closed ~~and during the period of reduced operations~~ due to the impact of the COVID-19 public health ~~emergency, which are discussed above~~emergency. Additionally, synergies associated with the combined companies from the Merger have also resulted in reductions to certain administrative costs while focusing on labor efficiencies and ~~implemented.~~opportunities to execute expense saving strategies.

Corporate expenses include unallocated expenses such as payroll, stock-based compensation, professional fees, and other various expenses not directly related to the Company’s operations. For the three ~~and nine~~ months ended September 30, ~~2020~~2021 compared to the same prior year period, corporate expense decreased primarily due to reductions to certain administrative and corporate payroll costs from synergies associated with the combined companies and the elimination of redundant expenses. For the nine

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months ended September 30, 2021 compared to the same prior year period, corporate expenses increased primarily due to the ~~acquisition~~recent acquisitions including the Merger, the William Hill Acquisition and the consolidation of ~~Former Caesars offset by reductions in salaries and wages~~Horseshoe Baltimore. In addition, payroll costs, including employee bonuses, have increased as compared to the prior year period as property performance continues to improve.

As described above, we recorded impairment charges of $116 million due to ~~reductions in workforce implemented as a result of~~ the ~~impact~~effects of the COVID-19 public health ~~emergency.~~emergency during the nine months ended September 30, 2020. In addition, $45 million of additional impairment charges related to the sale of MontBleu were recorded during the nine months ended September 30, 2020.

For the three and nine months ended September 30, ~~2020~~2021 compared to the same prior year period, depreciation and amortization expense increased mainly due to the ~~acquisition of Former Caesars offset by ceasing depreciation and amortization expense on assets held for sale~~recent acquisitions, including the Merger, the William Hill Acquisition, and the ~~Divestitures.~~consolidation of Horseshoe Baltimore.

For the three and nine months ended September 30, ~~2020~~2021 compared to the same prior year period, transaction costs and other operating costs ~~increased primarily due to~~decreased as the three and nine months ended September 30, 2020 included acquisition-related transaction costs in connection with the Merger. Offsetting these decreases are costs or fees incurred related to the ~~Merger, various project exit fees and related write offs, and higher severance expense related to synergies with the Merger.~~

William Hill Acquisition
.

Other income (expenses)

Other income (expenses) were as follows:


		Three Months Ended September 30,						Percent Change			Nine Months Ended September 30,										Percent Change			Three Months Ended September 30,							Percent Change		Nine Months Ended September 30,						Percent Change
(Dollars in millions)	(Dollars in millions)	2020		2019		Variance				2020			2019			Variance			(Dollars in millions)	2021					2020		Variance			2021			2020		Variance
Other income (expenses)

Interest expense, net	Interest expense, net	$	(473)	$	(72)	$	(401)	*			$	(608)		$	(217)		$	(391)			(180.2)	%	Interest expense, net	$	(579)	$	(485)	$	(94)		(19.4)	%	$	(1,734)	$	(620)	$	(1,114)	(179.7)	%
Loss on extinguishment of debt	Loss on extinguishment of debt	(173)		(1)		(172)		*			(173)			(1)			(172)				*		Loss on extinguishment of debt	(117)		(173)		56			32.4	%	(140)		(173)		33		19.1	%

Other (loss) income		9		3		6		200.0	%		(1)			—			(1)				*
Provision for income taxes		(135)		(18)		(117)		*			(64)			(39)			(25)				(64.1)	%
Other income (loss)																							Other income (loss)	(153)		9		(162)			*		(176)		(1)		(175)		*
Benefit (provision) for income taxes																							Benefit (provision) for income taxes	90		(138)		228			165.2	%	167		(67)		234		*

___________________

* Not meaningful.

For the three and nine months ended September 30, ~~2020,~~2021, interest expense, net increased year over year as a result of ~~our acquisition of Former Caesars.~~the Merger. Outstanding debt assumed, additional debt raised, and assumed financing obligations resulted in the increase in interest expense.

For the three months ended September 30, 2021, loss on extinguishment of debt was related to the early repayment and related discount of the CRC Notes and CEI Senior Notes in addition to the repricing of the CRC Incremental Term Loan. Additionally, for the nine months ended September 30, 2021, loss on extinguishment of debt was due to the early extinguishment of the 5% Convertible Notes and the related discount on the settlement date, which was June 29, 2021. The loss on extinguishment of debt for the three and nine months ended September 30, 2020 ~~the loss on extinguishment of debt increased year over year~~was due to the payment of outstanding debt as a result of ~~our~~the Merger.

For the three and nine months ended September 30, 2021, other loss increased year over year primarily due to a loss on the change in fair value of investments and a loss on the change in fair value of the derivative liability related to the 5% Convertible Notes.

The income tax benefit for the three months ended September 30, 2021 differed from the expected income tax expense based on the federal tax rate of 21% primarily due to the realization of capital losses previously not tax benefited due to the acquisition of ~~Former Caesars.~~William Hill. The income tax benefit for the nine months ended September 30, 2021 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to state taxes and the reclassification of Horseshoe Hammond from held for sale offset by nondeductible expense related to the convertible note conversion.

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Segment comparison of the three and nine months ended September 30, ~~2020~~2021 and ~~2019~~2020

Las Vegas Segment


		Three Months Ended September 30,								Percent Change		Nine Months Ended September 30,												Percent Change		Three Months Ended September 30,										Percent Change				Nine Months Ended September 30,									Percent Change
(Dollars in millions)	(Dollars in millions)	2020			2019			Variance			2020				2019				Variance			(Dollars in millions)	2021				2020				Variance				2021					2020			Variance
Revenues:	Revenues:																												Revenues:
Casino and pari-mutuel commissions	Casino and pari-mutuel commissions	$	122		$	—		$	122	*		$	122			$	—			$	122			*	Casino and pari-mutuel commissions	$	329			$	122		$	207			169.7		%		$	870		$	122		$	748		*
Food and beverage	Food and beverage	52			—			52		*		52				—				52				*	Food and beverage	221				52			169			*				476			52			424			*
Hotel	Hotel	79			—			79		*		79				—				79				*	Hotel	303				79			224			*				660			79			581			*
Other	Other	51			—			51		*		51				—				51				*	Other	164				51			113			*				363			51			312			*
Net Revenues	Net Revenues	$	304		$	—		$	304	*		$	304			$	—			$	304			*	Net Revenues	$	1,017			$	304		$	713		*				$	2,369		$	304		$	2,065		*

Table game drop																									Table game drop	$	805			$	510		$	295		57.8		%		$	2,174		$	510		$	1,664		*

Table game hold %																									Table game hold %	22.6		%		15.6		%				7 pts				20.0		%	15.6		%				4.4 pts
Slot handle																									Slot handle	$	2,676			$	1,700		$	976		57.4		%		$	7,261		$	1,700		$	5,561		*

Hotel occupancy																									Hotel occupancy	89.6		%		41.7		%				47.9 pts				80.3		%	41.7		%				38.6 pts

Adjusted EBITDA	Adjusted EBITDA	$	43		$	—		$	43	*		$	43			$	—			$	43			*	Adjusted EBITDA	$	500			$	43		$	457		*				$	1,085		$	43		$	1,042		*
Adjusted EBITDA margin	Adjusted EBITDA margin	14.1		%	—		%			14.1 pts		14.1		%		—		%						14.1 pts	Adjusted EBITDA margin	49.2		%		14.1		%				35.1 pts				45.8		%	14.1		%				31.7 pts

Net loss attributable to Caesars		$	(162)		$	—		$	(162)	*		$	(162)			$	—			$	(162)			*
Net income (loss) attributable to Caesars																									Net income (loss) attributable to Caesars	$	272			$	(162)		$	434		*				$	389		$	(162)		$	551		*

___________________

* Not meaningful.

Las Vegas segment’s net revenues and Adjusted EBITDA increased as a result of the ~~acquisition~~Merger and reopening of ~~Former Caesars. As~~all properties in accordance with state and local regulations as of September 30, 2020, all of our Las Vegas properties other than The Cromwell, Planet Hollywood and Rio were reopened. Planet Hollywood opened on October 8, 2020 and The Cromwell reopened on October 29, 2020. All of our properties within the Las Vegas segment reopened with reduced gaming and hotel capacity and with limited food and beverage offerings. As of September 30, 2020, entertainment and2021. In June 2021, convention venues ~~have not reopened due~~began to ~~capacity limitations.~~reopen with conventions held and future bookings received.

During the ~~third quarter of 2020 or in the period between properties reopening~~three and nine months ended September 30, ~~2020,~~2021, all of our reopened properties in the Las Vegas segment experienced ~~a significant decline~~an increase in net revenues and Adjusted EBITDA compared to Former Caesars’ prior year results for the same properties as all properties were temporarily closed during most of the same period in 2020. Slot win percentage in Las Vegas during both the three and nine months ended September 30, 2021 has been slightly higher than our typical range and hotel occupancy has been trending upward in recent quarters. Additionally, pent up demand has resulted in operations recovering at a faster rate than expected. These positive trends, however, may not be sustained due to the ~~general weakness~~uncertainty of the current COVID-19 environment, including fluctuations in positive cases, new variants and the ~~economic environment resulting from reduced visitation~~efficacy and travel to Las Vegas resulting from the COVID-19 public health emergency. Adjusted EBITDA margins for our Las Vegas properties were negatively impacted by greater declines in revenue than our Regional segment as well as rent expense associated with our Rio lease in our Las Vegas segment.acceptance of available vaccines.

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Regional Segment


		Three Months Ended September 30,								Percent Change			Nine Months Ended September 30,												Percent Change			Three Months Ended September 30,										Percent Change				Nine Months Ended September 30,									Percent Change
(Dollars in millions)	(Dollars in millions)	2020			2019			Variance				2020				2019				Variance			(Dollars in millions)	2021					2020				Variance				2021					2020			Variance
Revenues:	Revenues:																														Revenues:
Casino and pari-mutuel commissions	Casino and pari-mutuel commissions	$	774		$	458		$	316	69.0	%		$	1,215			$	1,386			$	(171)			(12.3)	%	Casino and pari-mutuel commissions	$	1,096			$	825		$	271			32.8		%		$	3,241		$	1,247		$	1,994		159.9		%
Food and beverage	Food and beverage	72			78			(6)		(7.7)	%		135				229				(94)				(41.0)	%	Food and beverage	125				74			51			68.9		%		318			137			181			132.1		%
Hotel	Hotel	121			94			27		28.7	%		178				237				(59)				(24.9)	%	Hotel	208				121			87			71.9		%		462			178			284			159.6		%
Other	Other	33			31			2		6.5	%		68				78				(10)				(12.8)	%	Other	63				35			28			80.0		%		152			70			82			117.1		%
Net Revenues	Net Revenues	$	1,000		$	661		$	339	51.3	%		$	1,596			$	1,930			$	(334)			(17.3)	%	Net Revenues	$	1,492			$	1,055		$	437		41.4		%		$	4,173		$	1,632		$	2,541		155.7		%

Table game drop																											Table game drop	$	1,198			$	1,112		$	86		7.7		%		$	3,315		$	1,412		$	1,903		134.8		%

Table game hold %																											Table game hold %	20.7		%		20.7		%				(0) pts				20.8		%	20.6		%				0.2 pts
Slot handle																											Slot handle	$	11,921			$	11,034		$	887		8.0		%		$	34,053		$	15,335		$	18,718		122.1		%

Adjusted EBITDA	Adjusted EBITDA	$	331		$	205		$	126	61.5	%		$	439			$	569			$	(130)			(22.8)	%	Adjusted EBITDA	$	554			$	350		$	204		58.3		%		$	1,549		$	449		$	1,100		*
Adjusted EBITDA margin	Adjusted EBITDA margin	33.1		%	31.0		%			2.1 pts			27.5		%		29.5		%						(2) pts		Adjusted EBITDA margin	37.1		%		33.2		%				3.9 pts				37.1		%	27.5		%				9.6 pts

Net (loss) income attributable to Caesars		$	47		$	117		$	(70)	(59.8)	%		$	(175)			300				$	(475)			(158.3)	%
Net income (loss) attributable to Caesars																											Net income (loss) attributable to Caesars	$	239			$	45		$	194		*				$	555		$	(186)		$	741		*

___________________

* Not meaningful.

Regional segment’s net revenues, Adjusted EBITDA and margin increased for the three and nine months ended September 30, ~~2020~~2021 compared to the same prior year period as a result of the ~~acquisition~~Merger and the consolidation of ~~Former Caesars. All~~Horseshoe Baltimore. The increase was slightly offset by closures of certain properties due to Hurricane Ida and the Caldor fire. As of September 30, 2021, all of our properties in our Regional segment have reopened, aswith the exception of ~~September 30, 2020. All of our properties within~~Lake Charles due to the weather disruption described above. Slot win percentage in the Regional segment ~~reopened with reduced gaming~~during both the three and ~~hotel capacity and with limited food and beverage offerings.~~

~~During the third quarter of 2020 or in the period between properties reopening and~~nine months ended September 30, ~~2020,~~2021 has been within our typical range. Additionally, pent up demand has resulted in operations recovering at a faster rate than expected. These positive trends, however, may not be sustained due to the uncertainty of the current COVID-19 environment, including fluctuations in positive cases, new variants and the efficacy and acceptance of available vaccines.

In our Regional ~~properties experienced a decline in~~segment, net revenues, asAdjusted EBITDA and Adjusted EBITDA margin increased compared to the prior ~~year. However, in the period between reopening and September 30, 2020 for~~year across all ~~of our Regional~~ properties, ~~other than Atlantic City, Northern Nevada and New Orleans. Adjusted EBITDA grew as compared to prior year, and~~including Former Caesars’ ~~prior year, for the same properties. Adjusted EBITDA margin for these properties were higher as compared to prior year~~, due to ~~operating with a reduced~~reductions in workforce ~~reducing~~and marketing costs, synergies from the purchasing power of the combined Caesars organization, and ~~limiting~~limitations on certain lower margin food and beverage ~~offerings~~offerings.

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Caesars Digital Segment


	Three Months Ended September 30,								Percent Change		Nine Months Ended September 30,								Percent Change
(Dollars in millions)	2021			2020			Variance				2021			2020			Variance
Revenues:
Casino and pari-mutuel commissions	$	85		$	34		$	51	150.0	%	$	197		$	53		$	144	*


Other	11			5			6		120.0	%	24			5			19		*
Net Revenues	$	96		$	39		$	57	146.2	%	$	221		$	58		$	163	*

Sports betting handle (a)	$	1,528		$	14		$	1,514	*		$	2,442		$	14		$	2,428	*



iGaming handle	$	1,467		$	962		$	505	52.5	%	$	3,754		$	1,649		$	2,105	127.7	%



Adjusted EBITDA	$	(164)		$	11		$	(175)	*		$	(171)		$	20		$	(191)	*
Adjusted EBITDA margin	(170.8)		%	28.2		%			*		(77.4)		%	34.5		%			*

Net income (loss) attributable to Caesars	$	(190)		$	11		$	(201)	*		$	(220)		$	20		$	(240)	*

___________________

* Not meaningful.

(a)Caesars Digital generated an additional $196 million and $325 million of sports betting handle, which is not included in this table for the three and nine months ended September 30, 2021, respectively, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all. or a share of, the net profits. Sports betting handle includes $14 million and $26 million for the three and nine months ended September 30, 2021, respectively, related to horse racing and pari-mutuel wagers.

Caesars Digital is a newly developed segment which includes Caesars operations for retail and mobile sports betting, online casino, and online poker. It is comprised of the Caesars interactive business acquired in the Merger, operations acquired in the William Hill Acquisition and historical iGaming at Tropicana Atlantic City. Caesars Digital’s sports betting handle, iGaming handle, and net revenues increased significantly for the three and nine months ended September 30, 2021 compared to the same prior year period due to the acquisitions and the recent marketing launch of our new sportsbook applications in nine states. However, net revenues for the three and nine months ended September 30, 2021 were negatively impacted by a sports betting hold percentage that was below our typical range. The low hold percentage was driven in part by increased odds and profit boosts, which are promotional enhancements that improve odds or wager payouts for customers. In addition, our hold percentage was negatively impacted by competitive pricing strategies and lower than typical hold in certain betting markets. iGaming hold percentage for the three and nine months ended September 30, 2021 was within our typical range.

In connection with the launch of our Caesars branded sportsbook and iGaming applications, we expect to continue to deploy a significant level of marketing spend to build brand awareness and acquire and retain customers. As sports betting and online casinos continue to expand through increased state legalization and customer adoption, growth in marketing and promotional costs in highly competitive markets have negatively impacted Caesars Digital EBITDA and EBITDA margins in comparison to prior periods.

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Managed and Branded Segment


	Three Months Ended September 30,								Percent Change		Nine Months Ended September 30,								Percent Change
(Dollars in millions)	2021			2020			Variance				2021			2020			Variance
Revenues:
Food and beverage	$	1		$	1		$	—	—	%	$	3		$	1		$	2	200.0	%
Other	78			40			38		95.0	%	203			40			163		*
Net Revenues	$	79		$	41		$	38	92.7	%	$	206		$	41		$	165	*

Adjusted EBITDA	$	22		$	12		$	10	83.3	%	$	69		$	12		$	57	*
Adjusted EBITDA margin	27.8		%	29.3		%			(1.5) pts		33.5		%	29.3		%			4.2 pts

Net income (loss) attributable to Caesars	$	38		$	(3)		$	41	*		$	40		$	(3)		$	43	*

___________________

* Not meaningful.

We manage several properties and license rights to the use of our brands. These revenue agreements typically include reimbursement of certain costs that we incur directly. Such costs are primarily related to payroll costs incurred on behalf of the properties under management. The revenue related to these reimbursable management costs has a direct impact on our evaluation of Adjusted EBITDA margin which, when excluded, reflects margins typically realized from such ~~as buffets.~~

~~Properties in Atlantic City, Northern Nevada and New Orleans experienced significant declines~~agreements. The table below presents the amount included in net revenues and ~~Adjusted EBITDA as compared~~total operating expenses related to ~~prior year and Former Caesars’ prior year for the same properties as they were all negatively impacted by reduced visitation and limitations on capacity due to the COVID-19 public health emergency.~~these reimbursable costs.

~~Managed, International & CIE Segment~~

Three Months Ended
September 30, Percent
Change Nine Months Ended
September 30, Percent
Change
(Dollars in millions) 2020 2019 Variance 2020 2019 Variance
Revenues:
Casino and pari-mutuel commissions $ 23 $ — $ 23 * $ 23 $ — $ 23 *
Food and beverage 1 — 1 * 1 — 1 *
Hotel — — — * — — — *
Other 45 — 45 * 45 — 45 *
Net Revenues $ 69 $ — $ 69 * $ 69 $ — $ 69 *
Adjusted EBITDA $ 18 $ — $ 18 * $ 18 $ — $ 18 *
Adjusted EBITDA margin 26.1 % — % 26.1 pts 26.1 % — % 26.1 pts
Net income attributable to Caesars $ 3 $ — $ 3 * $ 3 $ — $ 3 *


	Three Months Ended September 30,						Percent Change		Nine Months Ended September 30,						Percent Change
(Dollars in millions)	2021		2020		Variance				2021		2020		Variance
Reimbursable management revenue	$	57	$	25	$	32	128.0	%	$	137	$	25	$	112	*
Reimbursable management cost	57		25		32		128.0	%	137		25		112		*

___________________

* Not meaningful.

Managed ~~International, CIE~~and Branded segment’s net revenues and Adjusted EBITDA increased as a result of the ~~acquisition~~Merger. Upon the consolidation of ~~Former Caesars.~~Horseshoe Baltimore, the property was moved from the Managed and Branded segment to the Regional segment above. All of our managed and branded properties have reopened as of September 30, ~~2020 except for Caesars Windsor, which opened on October 8, 2020. Our CIE business was not closed at any point related to the COVID-19 public health emergency.~~

2021.

For the three and nine months ended September 30, ~~2020,~~2021, net revenues ~~for Managed, International~~ and CIE declined as compared to Former Caesars’ prior period related to reimbursed management costs related to Caesars Windsor remaining closed throughout the quarter. Excluding that, net revenues increased primarily related to increased revenue in our CIE business. Adjusted EBITDA for Managed ~~International~~ and ~~CIE~~Branded increased as compared to Former Caesars’ prior period.

Corporate & Other

Three Months Ended
September 30, Percent
Change Nine Months Ended
September 30, Percent
Change
(Dollars in millions) 2020 2019 Variance 2020 2019 Variance
Revenues:
Other $ 4 $ 2 $ 2 100.0 % $ 8 $ 6 $ 2 33.3 %
Net Revenues $ 4 $ 2 $ 2 100.0 % $ 8 $ 6 $ 2 33.3 %
Adjusted EBITDA $ (41) $ (8) $ (33) * $ (59) $ (27) $ (32) (118.5) %

~~___________________~~

* ~~Not meaningful.~~


	Three Months Ended September 30,						Percent Change		Nine Months Ended September 30,						Percent Change
(Dollars in millions)	2021		2020		Variance				2021		2020		Variance
Revenues:



Other	$	1	$	4	$	(3)	(75.0)	%	$	10	$	8	$	2	25.0	%
Net Revenues	$	1	$	4	$	(3)	(75.0)	%	$	10	$	8	$	2	25.0	%

Adjusted EBITDA	$	(42)	$	(41)	$	(1)	(2.4)	%	$	(123)	$	(59)	$	(64)	(108.5)	%

Supplemental Unaudited Presentation of Consolidated Adjusted Earnings ~~before~~Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) ~~and Adjusted EBITDA~~ for the Three and Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020

Adjusted EBITDA ~~(defined~~(described below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding our ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain

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recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents net income (loss) before interest income or interest expense, net of interest capitalized, (benefit) provision for income taxes, unrealized (gain) loss on investments and marketable securities, depreciation and amortization, stock-based compensation, impairment charges, transaction expenses, severance expense, selling costs associated with the divestitures of properties, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, (gain) loss related to divestitures, changes in the fair value of certain derivatives and certain non-recurring expenses such as sign-on and retention bonuses, business optimization expenses and transformation expenses, certain litigation awards and settlements, losses on inventory associated with properties temporarily closed as a result of the COVID-19 public health emergency, contract exit or termination costs, and certain regulatory settlements. Adjusted EBITDA also excludes the expense associated with certain of our leases as these transactions were accounted for as financing obligations and the associated expense is included in interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with ~~GAAP,~~GAAP. It is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under our leases with affiliates of GLPI and VICI Properties, Inc. and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.

The following table summarizes our Adjusted EBITDA for ~~our operating segments~~the three and nine months ended September 30, 2021 and 2020, respectively, in addition to reconciling net income (loss) to Adjusted EBITDA in accordance with GAAP (unaudited):


	Three Months Ended September 30, 2021
(In millions)	CEI		Pre-Cons. Baltimore (d)		Less: Divest. Add: Disc. Ops (e)(f)		Total (g)
Net loss attributable to Caesars	$	(233)	$	(38)	$	(7)	$	(278)
Net income attributable to noncontrolling interests	2		—		—		2
Discontinued operations, net of income taxes	4		—		9		13
(Benefit) provision for income taxes	(90)		—		1		(89)
Other loss (a)	153		40		—		193
Loss on extinguishment of debt	117		—		—		117
Interest expense, net	579		2		—		581

Depreciation and amortization	276		3		—		279
Transaction costs and other operating costs (b)	21		2		—		23
Stock-based compensation expense	21		—		—		21
Other items (c)	20		—		—		20
Adjusted EBITDA	$	870	$	9	$	3	$	882


	Three Months Ended September 30, 2020
(In millions)	CEI		Pre-Cons. Baltimore (d)		Pre-Acq. WH US (h)		Pre-Acq. CEC (i)		Less: Divest. Add: Disc. Ops (e)(f)		Total (j)
Net income (loss) attributable to Caesars	$	(926)	$	1	$	1	$	(173)	$	67	$	(1,030)
Net income (loss) attributable to noncontrolling interests	1		—		—		(62)		62		1
Discontinued operations, net of income taxes	7		—		—		—		(5)		2
(Benefit) provision for income taxes	138		—		(4)		(51)		(6)		77
Other (income) loss (a)	(9)		—		(2)		67		(6)		50
Loss on extinguishment of debt	173		—		—		—		—		173
Interest expense, net	485		4		—		72		(11)		550
Depreciation and amortization	225		4		6		53		(5)		283
Impairment charges	—		—		—		124		(124)		—
Transaction costs and other operating costs (b)	220		1		1		22		—		244
Stock-based compensation expense	45		—		—		3		—		48
Other items (c)	16		—		(1)		19		1		35
Adjusted EBITDA	$	375	$	10	$	1	$	74	$	(27)	$	433

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	Nine Months Ended September 30, 2021
(In millions)	CEI		Pre-Cons. Baltimore (d)		Pre-Acq. WH US (h)		Less: Divest. Add: Disc. Ops (e)(f)		Total (g)
Net income (loss) attributable to Caesars	$	(585)	$	(32)	$	(33)	$	2	$	(648)
Net income attributable to noncontrolling interests	2		—		—		—		2
Discontinued operations, net of income taxes	38		—		—		(23)		15
(Benefit) provision for income taxes	(167)		—		(2)		3		(166)
Other (income) loss (a)	176		40		(2)		—		214
Loss on extinguishment of debt	140		—		—		—		140
Interest expense, net	1,734		9		—		—		1,743

Depreciation and amortization	842		10		8		—		860
Transaction costs and other operating costs (b)	113		6		27		—		146
Stock-based compensation expense	64		—		—		—		64
Other items (c)	52		—		2		—		54
Adjusted EBITDA	$	2,409	$	33	$	—	$	(18)	$	2,424


	Nine Months Ended September 30, 2020
(In millions)	CEI		Pre-Cons. Baltimore (d)		Pre-Acq. WH US (h)		Pre-Acq. CEC (i)		Less: Divest. Add: Disc. Ops (e)(f)		Total (j)
Net income (loss) attributable to Caesars	$	(1,202)	$	(11)	$	(17)	$	(1,059)	$	260	$	(2,029)
Net income (loss) attributable to noncontrolling interests	1		—		—		(67)		63		(3)
Discontinued operations, net of income taxes	7		—		—		—		(5)		2
(Benefit) provision for income taxes	67		—		(17)		(224)		2		(172)
Other (income) loss (a)	1		(10)		(3)		(45)		(19)		(76)
Loss on extinguishment of debt	173		—		—		—		—		173
Interest expense, net	620		12		—		750		(67)		1,315
Depreciation and amortization	324		12		15		559		(42)		868
Impairment charges	161		—		—		189		(203)		147
Transaction costs and other operating costs (b)	243		1		24		71		(6)		333
Stock-based compensation expense	55		—		—		26		—		81
Other items (c)	15		—		—		54		(1)		68
Adjusted EBITDA	$	465	$	4	$	2	$	254	$	(18)	$	707

____________________

(a)Other (income) loss for the three and nine months ended September 30, ~~2020~~2021 primarily represents a loss on the change in fair value of investments held by the Company and ~~2019, respectively,~~a loss on the change in ~~addition~~fair value of the derivative liability related to ~~reconciling net (loss) income to Adjusted EBITDA in accordance with US GAAP (unaudited):~~

Three Months Ended September 30, 2020
(In millions) CEI
Add: Disc. Ops (d)
Pre-Acq. CEC (e)
Total (f)
Net (loss) income attributable to Caesars $ (926) $ — $ (173) $ (1,099)
Net income (loss) attributable to noncontrolling interests 1 — (62) (61)
Net loss from discontinued operations 1 2 — 3
Interest expense, net 473 26 72 571
Provision (benefit) for income taxes 135 4 (51) 88
Other loss (a) 164 — 67 231
Impairment charges — — 124 124
Depreciation and amortization 223 2 53 278
Stock-based compensation 45 1 3 49
Transaction costs and other operating costs (b) 219 3 22 244
Other items (c) 16 — 19 35
Adjusted EBITDA $ 351 $ 38 $ 74 $ 463

Three Months Ended September 30, 2019
(In millions) CEI
Less: Divestitures (g)
Pre-Acq. CEC (e)
Total (h)
Net income (loss) attributable to Caesars $ 37 $ 14 $ (359) $ (336)
Net loss attributable to noncontrolling interests — — (1) (1)
Provision (benefit) for income taxes 18 5 (22) (9)
Other income (a) (2) — (27) (29)
Interest expense, net 72 1 341 412
Depreciation and amortization 53 1 255 307
Impairment charges — — 380 380
Transaction costs and other operating costs (b) 14 — 33 47
Stock-based compensation expense 4 — 19 23
Other items (c) 1 1 16 16
Adjusted EBITDA $ 197 $ 22 $ 635 $ 810

Nine Months Ended September 30, 2020
(In millions) CEI
Less: Divest. Add: Disc. Ops (d) (g)
Pre-Acq. CEC (e)
Total (i)
Net loss attributable to Caesars $ (1,202) $ (11) $ (1,059) $ (2,250)
Net income (loss) attributable to noncontrolling interests 1 — (67) (66)
Net loss (income) from discontinued operations 1 (2) — 3
Interest expense, net 608 (23) 750 1,381
Provision (benefit) for income taxes 64 (4) (224) (156)
Other loss (income) (a) 174 — (45) 129
Impairment charges 161 — 189 350
Depreciation and amortization 322 — 559 881
Stock-based compensation 55 (1) 26 82
Transaction costs and other operating costs (b) 242 (1) 71 314
Other items (c) 15 1 54 68
Adjusted EBITDA $ 441 $ (41) $ 254 $ 736

Nine Months Ended September 30, 2019
(In millions) CEI
Less: Divestitures (g)
Pre-Acq. CEC (e)
Total (h)
Net income (loss) attributable to Caesars $ 94 $ 33 $ (891) $ (830)
Net loss attributable to noncontrolling interests — — (2) (2)
Provision (benefit) for income taxes 39 11 (111) (83)
Other loss (a) 1 — 412 413
Interest expense, net 217 2 1,033 1,248
Depreciation and amortization 167 13 743 897
Impairment charges 1 — 430 431
Transaction costs and other operating costs (b) 2 — 86 88
Stock-based compensation expense 16 — 62 78
Other items (c) 5 1 66 70
Adjusted EBITDA $ 542 $ 60 $ 1,828 $ 2,310

~~____________________~~

~~(a)~~the 5% Convertible Notes. Other (income) loss ~~(income)~~ for the three and nine months ended September 30, 2020 primarily ~~represent loss on early repayment of debt in connection with the consummation of the Merger and~~represents unrealized loss on the change in fair value of the derivative liability related to ~~CEC’s~~the 5% ~~convertible notes,~~Convertible Notes, slightly offset by ~~gain~~gains on ~~William Hill UK and Flutter stock~~investments held by the Company and realized ~~gain~~gains on conversion of ~~CEC’s~~the 5% convertible notes. Other loss (income) for the three and nine months ended September 30, 2019 primarily represent unrealized loss on the change in fair value of the derivative liability related to CEC’s 5% convertible notes.Convertible Notes.

(b)Transaction costs and other operating costs for the three and nine months ended September 30, 2021 and 2020 primarily represent costs related to the William Hill Acquisition and the Merger, ~~with Former Caesars,~~ various contract or license termination exit costs, professional services, other acquisition costs and severance costs.

(c)Other ~~represents internal labor charges related to~~items primarily represent certain ~~departed executives~~consulting and ~~contract labor.~~legal fees, rent for non-operating assets, relocation expenses, retention bonuses, and business optimization expenses.

(d)~~Discontinued operations include Horseshoe Hammond, Caesars Southern Indiana, Harrah’s Louisiana Downs, Caesars UK group including Emerald Resorts & Casino, and Bally’s Atlantic City.~~

~~(e)Pre-acquisition CEC represents~~Represents results of operations for ~~Former Caesars~~Horseshoe Baltimore for the period from July 1, 2020 and January 1, 2020 to July 20, 2020, the date on which the Merger was consummated, for the three and nine months ended September 30, 2020, respectively, and for the three and nine months ended September 30, 2019. Additionally, certain corporate overhead costs which were historically charged to properties within the segments have been reclassifiedperiods prior to the ~~Corporate and Other. These costs primarily include centralized marketing expenses, redundant executive and~~consolidation resulting from the Company’s increase in its ownership interest on August 26, 2021, excluding amounts associated with our management ~~payroll and benefits expenses, centralized contract labor expenses, and corporate rent expenses.~~of the property which eliminate on consolidation. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors and ~~for~~do not conform to GAAP.

(e)Discontinued operations include Harrah’s Louisiana Downs. Such figures are based on unaudited internal financial statements and have not been reviewed by the ~~2020 periods,~~Company’s auditors and do not conform to GAAP.

(f)~~2020 Total~~Divestitures for the three and nine months ended September 30, 2021 include results of operations for MontBleu and Evansville, and discontinued operations of Caesars Southern Indiana and Caesars UK Group. For the three and nine months ended September 30, 2020 include results of operations for Kansas City, Vicksburg, Eldorado Shreveport, MontBleu, Evansville and discontinued operations of the Korea JV, Harrah’s Reno, Bally’s Atlantic City, Caesars Southern Indiana and Caesars UK Group. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors and do not conform to GAAP.

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(g)Excludes results of operations from divestitures as detailed in (f) and includes results of operations of Horseshoe Baltimore for periods prior to the consolidation, William Hill US prior to the acquisition and from discontinued operations ~~and from Former Caesars prior to July 20, 2020,~~for the ~~date on which the Merger was consummated.~~periods presented. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.

~~(g)~~(h)~~Divestitures for the three and nine months ended September 30, 2019 include~~Pre-acquisition William Hill represents results of operations for ~~Mountaineer, Cape Girardeau, Caruthersville, Kansas City, and Vicksburg for~~William Hill prior to the three and nine months ended September 30, 2019. Divestitures for the nine months ended September 30, 2020 include results of operations for Kansas City and Vicksburg for the period beginning January 1, 2020 to July 1, 2020.acquisition. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors and, for the 2021 and 2020 periods, do not conform to GAAP.

~~(h)~~(i)~~2019 Total~~Pre-acquisition CEC represents results of operations for Former Caesars prior to the Merger. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors and, for the ~~three and nine months ended September 30, 2019 excludes~~2020 periods, do not conform to GAAP.

(j)Excludes results of operations from divestitures as detailed in ~~(g)~~(f) and includes results of operations of Horseshoe Baltimore for periods prior to the consolidation, William Hill US prior to the acquisition and of Former Caesars prior to the Merger, including discontinued operations, for the relevant period. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to our reported results of operations.

~~(i)~~2020 Total for the nine months ended September 30, 2020 excludes divestitures as detailed in (g) and includes results of operations from discontinued operations and from Former Caesars prior to July 20, 2020, the date on which the Merger was consummated. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to our reported results of operations.

Liquidity and Capital Resources

We are a holding company and our only significant assets are ownership interests in our subsidiaries. Our ability to fund our obligations depends on existing cash on hand, contracted asset sales, cash ~~flow~~flows from our subsidiaries and our ability to raise capital. Our primary sources of liquidity and capital resources ~~have been~~are existing cash on hand, cash ~~flow~~flows from operations, availability of borrowings under our revolving credit facilities, proceeds from the issuance of debt and equity securities and proceeds from completed asset ~~sales and lease transactions.~~

sales. Our cash requirements may fluctuate significantly depending on our decisions with respect to business acquisitions or divestitures and strategic capital ~~investments to maintain the quality of our properties. Beginning on May 18, 2020, we began reopening our properties~~ and ~~as of September 30, 2020 we have resumed operations at all of our properties, with the exception of The~~

Cromwell, Planet Hollywood, Rio, and Caesars Windsor. Planet Hollywood and Caesars Windsor reopened on October 8, 2020 and The Cromwell reopened on October 29, 2020. In an effort to mitigate the impacts of COVID-19 ~~public health emergency~~ on our business and maintain liquidity, we furloughed approximately 90% of our employees beginning on April 11, 2020. A portion of the workforce has returned to service as the properties have resumed with limited capacities and in compliance with operating restrictions in accordance with governmental orders, directives and guidelines. As a result of these payroll changes combined with other cost saving measures, our operating expenses were reduced significantly.

~~In an effort to maintain liquidity and provide financial flexibility as the effects of COVID-19~~ ~~public health emergency~~ continue to evolve and impact global financial markets, we borrowed $465 million under our revolving credit facility on March 16, 2020, which we repaid utilizing, in part, proceeds from the sale of our interests in Kansas City and Vicksburg.

On June 19, 2020, we completed a public offering of 20,700,000 shares of common stock, at a public offering price of $39.00 per share, with proceeds of $772 million, net of fees and estimated expenses of $35 million. On July 6, 2020, we issued $3.4 billion aggregate principal amount of 6.250% Senior Secured Notes due 2025 (the “CEI Senior Secured Notes”) and $1.8 billion aggregate principal amount of 8.125% Senior Notes due 2027 (the “CEI Senior Notes”). In addition, we issued $1.0 billion aggregate principal amount of 5.75% Senior Secured Notes due 2025 (the “CRC Senior Secured Notes”).

On July 1, 2020, we completed the sale of Kansas City and Vicksburg for $230 million and used a portion of the proceeds to repay the outstanding balance under our revolving credit facility. In addition, we closed the sale of Harrah’s Reno on September 30, 2020 which provided additional proceeds of $8 million, net of certain closing costs.

On July 20, 2020, in connection with the Merger, we consummated the sale leaseback transactions related to Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Resort Atlantic City, including the Harrah’s Atlantic City Waterfront Conference Center, for approximately $1.8 billion of net proceeds. Additionally, we received a one-time payment from VICI of approximately $1.4 billion for amendments to the VICI leases. Furthermore, we entered into an incremental agreement to the existing CRC credit agreement, for an incremental term loan in an aggregate principal amount of $1.8 billion.

In connection with the consummation of the Merger, on July 20, 2020, our current and future liquidity significantly changed. A portion of the proceeds from our newly issued debt and proceeds we received from VICI, as well as cash on hand generated from our sale of common stock, were used (a) to fund a portion of the cash consideration of the Merger, (b) to prepay in full the loans outstanding and terminate all commitments under our existing Credit Agreement, dated as of April 17, 2017, (c) to satisfy and discharge our Senior Notes, (d) to repay $975 million of the outstanding amount under the existing CRC revolving credit facility, (e) to repay in full the loans outstanding and terminate all commitments under the existing CEOC, LLC Credit Agreement, dated as of October 6, 2017, (f) to pay fees and expenses related to the financing arrangements, and (g) for general corporate use. Additionally, we entered into the CEI Revolving Credit Facility which provides for a five-year senior secured revolving credit facility in an aggregate principal amount of $1.2 billion.

On September 18, 2020, we entered into a $400 million Loan Agreement with a subsidiary of VICI for a term of five years, with such loan secured by, among other things, a first priority fee mortgage on the Caesars Forum Convention Center (the “Forum Convention Center Mortgage Loan”). The interest rate on the Forum Convention Center Mortgage Loan is initially ~~7.7%~~ ~~per annum, which escalates annually to a maximum interest rate of~~ ~~8.3%~~ ~~per annum. After the second anniversary of the closing of the loan, we have the option of prepaying the loan, which may include a premium.~~marketing investments.

As of September 30, ~~2020,~~2021, our cash on hand and revolving borrowing capacity was as follows:


(In millions)	September 30, ~~2020~~2021
Cash and cash equivalents	$	~~1,037~~1,072
Revolver capacity(a)	~~1,310~~2,220
Revolver capacity committed to letters of credit	~~(83)~~(92)
Available revolver capacity committed as regulatory requirement	(48)
Total	$	~~2,264~~3,152

___________________

(a)Revolver capacity includes $1.2 billion under our CEI Revolving Credit Facility, due July 2025, $1.0 billion under our CRC Revolving Credit Facility, due December 2022 and $10 million under our Baltimore Revolving Credit Facility, due July 2022.

During the nine months ended September 30, 2021, our operating activities generated operating cash inflows of $974 million, as compared to operating cash outflows of $203 million during the nine months ended September 30, 2020 due to the results of operations described above. In addition, we continue to improved our financial position and reduce our operating costs related to our debt through accelerated repayments, amendments to existing debt agreements and obtaining favorable rates on new borrowings.

On September 21, 2021, CRC entered into a second amendment related to the CRC Incremental Term Loan to reduce the interest rate margins to 3.50% per annum in the case of any London Inter-bank Offered Rate (“LIBOR”) loan or 2.50% per annum in the case of any base rate loan. The CRC Incremental Term Loan is a LIBOR based loan of which the amendment lowers our annual interest cost by reducing the applicable margin by 100 basis points from 4.50% to 3.50%.

On September 24, 2021, the Company repaid $889 million in aggregate principal amount of the $1.7 billion aggregate principal amount of 5.25% senior notes due 2025 (the “CRC Notes”). The Company recognized a total of $106 million of loss on extinguishment of debt. The remaining $811 million in aggregate principal amount of the CRC Notes was redeemed on October 15, 2021 and the Company recognized and additional loss on extinguishment of debt of approximately $93 million. The Company classified the cash used to repay the remaining aggregate principal balance as long-term restricted cash in Other assets, net as of September 30, 2021.

During the quarter ended September 30, 2021, the Company purchased $76 million of aggregate principal amount of the $1.8 billion 8.125% Senior Notes due 2027 (the “CEI Senior Notes”) and recognized $10 million of loss on extinguishment of debt. The Company purchased an additional $24 million in aggregate principal amount of the CEI Senior Notes subsequent to September 30, 2021. In October 2021, we cancelled a total of $100 million of aggregate principal, which we purchased.

On September 24, 2021, the Company issued $1.2 billion in aggregate principal amount of 4.625% Senior Notes due 2029 (the “Senior Notes”) pursuant to an indenture dated as of September 24, 2021 between the Company and U.S. Bank National

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Association, as Trustee. The proceeds, in addition to cash on hand, were used to repay the outstanding CRC Notes, as described above. The Senior Secured Notes will mature on October 15, 2029 with interest paid on April 15 and October 15 of each year, commencing April 15, 2022.

In connection with the increase of our interest, Horseshoe Baltimore’s outstanding indebtedness of $284 million in the aggregate principal amount of a senior secured term loan facility (the “Baltimore Term Loan”) and amounts outstanding, if any, under Horseshoe Baltimore’s senior secured revolving credit facility (the “Baltimore Revolving Credit Facility”) have been consolidated in the Company’s financial statements. The Baltimore Term Loan matures in 2024 and is subject to a variable rate of interest calculated as LIBOR plus 4.00%. The Baltimore Revolving Credit Facility has borrowing capacity of up to $10 million and matures in 2022, subject to a variable rate of interest calculated as LIBOR plus 6.00%. As of September 30, 2021, there was $10 million of available borrowing capacity under the Baltimore Revolving Credit Facility.

On September 30, 2020, wethe Company announced that weit had reached an agreement with William Hill PLC on the terms of a recommended cash acquisition pursuant to which the weCompany would acquire the entire issued and to be issued share capital (other than shares owned by usthe Company or held in treasury) of William Hill PLC, in an all-cash ~~transaction of approximately~~transaction. On April 20, 2021, a UK Court sanctioned the proposed acquisition and on April 22, 2021, the Company completed the William Hill Acquisition for £2.9 billion, or ~~$3.7~~approximately $3.9 billion. ~~The transaction is conditional on, among other things, the approval of William Hill shareholders and state and federal regulators.~~

~~On September 25, 2020,~~ ~~to provide liquidity to potentially fund a portion of the cash purchase price, as required by UK regulators,~~ ~~we borrowed $900 million on our CEI Revolving Credit Facility. On September 28, 2020, we deposited $2.1 billion, which included the proceeds from the revolver, into an escrow account related to~~In connection with the William Hill ~~offer. As~~Acquisition, on April 22, 2021, a newly formed subsidiary of ~~September 30,~~

~~2020 these funds in escrow were classified as restricted cash until we received certain regulatory approvals for financing described below.~~

~~On September 28, 2020, we~~the Company (the “Bridge Facility Borrower”) entered into a foreign exchange forward contract to hedge the risk of appreciation of the GBP denominated purchase price. Under the agreement, we would purchase £1.3 billion at a contracted exchange rate. An unrealized loss of $5 million related to the change in fair value during the period from September 28, 2020 and ~~September 30, 2020~~ ~~was recorded in the consolidated condensed statement of operations. On October 1, 2020 the contract was cancelled.~~

On October 1, 2020, we completed a public offering of 35,650,000 shares of our common stock at a public offering price of $56.00 per share. Net proceeds from the offering, after deducting the underwriting discounts and commissions and estimated expenses, was approximately $1.9 billion. We expect to use $1.7 billion of these proceeds for the acquisition of William Hill and, as such, we deposited that amount into a UK escrow account denominated in British Pounds.

~~Upon receipt of regulatory approval of our Interim Facilities~~Credit Agreement (described below), the restriction on the $2.1 billion funded as of September 30, 2020, was released and we transferred $1.4 billion of cash back into our operating accounts and the outstanding balance of our revolving credit facility was repaid in full. Approximately $598 million of cash remains in an unrestricted account.

On October 9, 2020, we entered into a foreign exchange forward contract to hedge the risk of appreciation of the GBP denominated purchase price for the William Hill acquisition. Under the agreement, we would purchase £536 million at a contracted exchange rate. The forward term of the contract ends on March 31, 2021.

~~On October 6, 2020, we entered into a £1.5 billion interim facilities agreement~~ (the ~~“Interim Facilities~~“Bridge Credit Agreement”) with certain lenders party thereto and Deutsche Bank AG, London Branch, as administrative agent and ~~JPMorgan Chase Bank, N.A. (the “Arrangers”). Pursuant~~collateral agent, pursuant to which the ~~Interim Facilities~~lenders party thereto provided the debt financing. The Bridge Credit Agreement ~~the Arrangers have made available to the Company:~~provides for (a) a 540-day £1.0 billion asset sale bridge facility, ~~and~~ (b) a 60-day ~~£503.0~~£503 million cash confirmation bridge facility ~~(collectively,~~and (c) a 540-day £116 million revolving credit facility. The proceeds of the ~~“Facility”). The Facility may be~~bridge loan facilities provided under the Bridge Credit Agreement were used (i) to ~~finance~~pay a portion of the cash consideration for the acquisition ~~refinance or otherwise discharge the indebtedness of William Hill~~ and ~~its subsidiaries,~~(ii) to pay ~~transaction~~ fees and expenses related to the ~~foregoing~~acquisition and related transactions. The proceeds of the revolving credit facility under the Bridge Credit Agreement may be used for working capital and general corporate ~~purposes, among~~purposes. The Interim Facilities Agreement entered into on October 6, 2020, and amended on December 11, 2020, was terminated upon the execution of the Bridge Credit Agreement. On May 12, 2021, we repaid the £503 million cash confirmation bridge facility. On June 14, 2021, the Company borrowed the full £116 million available under the revolving credit facility and the funds, in addition to excess Company cash, were used to make a partial repayment of the asset sale bridge facility in the amount of £700 million. In addition, $1.1 billion of debt, at book value which approximates fair value, is held for sale related to two trust deeds assumed in the William Hill Acquisition. One trust deed relates to £350 million aggregate principal amount of 4.750% Senior Notes due 2026, and the other ~~things.~~trust deed relates to £350 million aggregate principal amount of 4.875% Senior Notes due 2023. Each of the trust deeds contain a put option due to the change in control which allowed noteholders to require the Company to purchase the notes at 101% of the principal amount thereof together with interest accrued. The ~~availability~~put period expired on July 26, 2021, and approximately £1 million of ~~the~~debt was repurchased. Outstanding borrowings under the ~~Facility~~Bridge Credit Agreement are expected to be repaid upon the sale of William Hill International, all of which are held for sale and related activity is reflected within discontinued operations. On September 8, 2021, the Company entered into an agreement to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion. After repayment of the outstanding debt under the Bridge Credit Agreement, described above, and other working capital adjustments, the Company expects to receive approximately £835 million, or $1.2 billion. The sale is subject to ~~the~~ satisfaction of ~~certain~~ customary conditions. If drawn upon, outstanding borrowings under the Facility will bear interest at a rate equal to the London interbank offered rate plus 3.50% per annum. We entered into the Interim Facilities Agreement in connection with requirement under applicable United Kingdom law to demonstrate that we have “funds certain” to pay the entiretyconditions, including receipt of the ~~cash purchase price for~~approval of shareholders of 888 Holdings Plc and regulatory approvals, and is expected to close in the ~~acquisition~~first quarter of William Hill. We do not intend to borrow under the Interim Facilities Agreement. Instead, we intend to negotiate long-form financing documentation pursuant to which a subsidiary will incur the Debt Financing for the acquisition.2022.

~~In addition to the capital required to complete the proposed acquisition of William Hill, we~~We expect that our primary capital requirements going forward will relate to the operation and maintenance of our properties, taxes, servicing our outstanding indebtedness, and rent payments under our GLPI Master Lease, the VICI ~~Leases~~leases and other leases. We make capital expenditures and perform continuing refurbishment and maintenance at our properties to maintain our quality standards. Our capital expenditure requirements for ~~2020~~the remainder of 2021 and for 2022 are expected to ~~significantly~~ increase compared to prior periods as a result of the additional properties acquired in the ~~Merger.~~Merger, the William Hill Acquisition and new development projects including the ongoing launch of our Caesars branded sportsbook and iGaming applications in our Caesars Digital segment. In addition, we may, from time to time, seek to repurchase our ~~future~~outstanding indebtedness. Any such purchases may be funded by existing cash balances or the incurrence of debt. The amount and timing of any repurchase will be based on business and market conditions, capital ~~expenditures for the normal course of business,~~availability, compliance with debt covenants and other considerations.

In 2020, we funded $400 million to escrow as of the closing of the Merger and ~~will~~have begun to utilize those funds in accordance with a three year capital expenditure plan in the state of New Jersey. ~~We will~~This amount is currently included in restricted cash in Other assets, net. As of September 30, 2021, our restricted cash balance in the escrow account was $328 million for future capital expenditures in New Jersey.

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As a condition of the extension of the casino operating contract and ground lease for Harrah’s New Orleans, we are also be required to ~~fund~~make a ~~similar escrow account~~capital investment of $325 million in Harrah’s New Orleans by July 15, 2024. In connection with ~~$25 million for improvements at our racing properties within~~ the ~~state of Indiana. During the remainder of 2020,~~capital investment in Harrah’s New Orleans, we ~~plan to spend an estimated~~ ~~$50 million to~~ ~~$75 million on capital expenditures.~~ We expect to ~~use cash on hand and cash generated from operations to meet such obligations.~~rebrand the property as Caesars New Orleans.

On August 27, 2020, Hurricane Laura made landfall on Lake Charles as a Category 4 storm. The hurricane severely damaged ~~the Isle of Capri Casino~~ Lake Charles and the Company has ~~recorded in~~begun to receive insurance ~~receivable of $31 million, of which $15 million~~proceeds related to, ~~fixed asset impairments and $16 million related to remediation costs~~in part, estimated damages and repairs that have been incurred to the property. A portion of the proceeds received is expected to be utilized for the construction of a new land-based casino which is expected to be completed in the second half of 2022.

Cash spent for capital expenditures totaled $313 million and $95 million for the ~~three~~nine months ended September 30, 2021 and 2020, respectively. The following table summarizes our capital expenditures for the nine months ended September 30, ~~2020~~2021, and an estimated range of capital expenditures for the remainder of ~~. The property has remained closed.~~2021:


	Nine Months Ended September 30, 2021		Estimate of Remaining Capital Expenditures for 2021
(In millions)	Actual		Low		High
Atlantic City	$	74	$	65	$	85
Indiana racing operations	15		5		10
Total estimated capital expenditures from restricted cash	89		70		95
Lake Charles	33		15		20
New Orleans	19		25		35
Caesars Digital	43		25		35
Other growth and maintenance projects	129		100		125
Total estimated capital expenditures from unrestricted cash and insurance proceeds	224		165		215
Total	$	313	$	235	$	310

A significant portion of our liquidity needs are for debt service and payments associated with our leases. ~~In addition to our newly issued debt, our debt obligations increased as a result of outstanding debt of Former Caesars that remained outstanding following the consummation of the Merger.~~ Our estimated debt service (including principal and interest) is approximately ~~$165~~$108 million for the remainder of ~~2020.~~2021, excluding elective debt repayments such as the early extinguishment of the remaining CRC Notes. We also lease certain real property assets from third parties, including ~~GLPI~~VICI and ~~VICI.~~GLPI. We estimate our lease payments to VICI and GLPI to be approximately ~~$300~~$290 million for the remainder of ~~2020.~~2021.

~~The 5% Convertible Notes (defined below) remain outstanding following~~On June 21, 2021, the ~~consummation~~Company delivered a notice of mandatory conversion to the ~~Merger. As a result~~trustee of ~~the Merger,~~ the 5% Convertible Notes ~~are convertible~~to convert all outstanding notes on June 24, 2021. All outstanding notes, at the election of either the Company or the holder, were subject to conversion into ~~weighted average~~approximately 0.014 shares of the ~~number of shares of~~ Company’s Common Stock (“Company Common ~~Stock~~Stock”) and ~~amount~~approximately $1.17 of cash ~~actually received~~ per ~~share by holders of common stock of Former Caesars that made elections for~~

consideration in the Merger. The 5% Convertible Notes are convertible at any time at the option of the holders thereof and, beginning in October 2020, are convertible at the option of the Company if the last reported sale price of Company Common Stock equals or exceeds 140% of the conversion price for the 5% Convertible Notes in effect on each of at least 20 trading days during any 30 consecutive trading day period. As of September 30, 2020, we have paid approximately $574 million and issued approximately 6.8 million shares upon conversion of $487 million in aggregate$1.00 principal amount of the ~~convertible notes during 2020. Through November 2, 2020, we paid an additional $328 million and issued 3.9 million shares upon conversion of an additional $281 million in~~5% Convertible Notes. During the nine months ended September 30, 2021, the Company converted the remaining outstanding aggregate principal amount of the 5% Convertible ~~Notes. At such time as~~Notes, which resulted in cash payments of $367 million, net of amounts paid into our trust accounts and the ~~holders~~issuance of approximately 5 million shares of Company Common Stock.

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. In June 2021, the IGC amended its order that previously required the Company to sell a third casino asset in the state of Indiana. As a result, Caesars will not be required to sell Horseshoe Hammond. We have divested of several international properties including an interest in a Korea joint venture and the Caesars UK Group, which includes Emerald Resort & Casino. The sale of the ~~5% Convertible Notes elect~~Caesars UK Group closed on July 16, 2021, and the buyer assumed all liabilities associated with the Caesars UK Group. We also expect to ~~cause conversion, we estimate using cash~~divest of ~~$380 million and issuing 4.5 million shares to settle~~William Hill International in the ~~remaining outstanding 5% Convertible Notes.~~first quarter of 2022, as described above.

On April ~~24, 2020,~~6, 2021, the Company ~~entered into a definitive purchase agreement with~~ ~~Twin River~~ ~~and certain of its affiliates for~~consummated the sale of the equity interests of ~~Eldorado Resort Casino Shreveport Joint Venture and Columbia Properties Tahoe, LLC, the entities that hold Eldorado Shreveport and~~ MontBleu ~~respectively,~~ for ~~aggregate consideration of $155~~$15 million, subject to a customary working capital ~~adjustment.~~adjustment, resulting in a gain of less than $1 million. The ~~definitive agreement provides that~~purchase price is due no later than the ~~consummation~~first anniversary of the ~~sale is subject to satisfaction~~closing of ~~customary conditions, including receipt of required regulatory approvals and~~ the ~~sale of Eldorado Shreveport and MontBleu is expected to close in the first quarter of 2021.~~sale.

On September 3, 2020, the Company and VICI entered into an agreement to sell Harrah’s Louisiana Downs with Rubico Acquisition Corp. for $22 million, subject to a customary working capital adjustment, where the proceeds will be split between the Company and VICI. On November 1, 2021, the sale of Harrah’s Louisiana Downs was completed. The annual base rent payments under the Regional Master Lease between Caesars and VICI will remain unchanged.

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On June 3, 2021, the Company consummated the sale of the real property and equity interests of Evansville to GLPI and Bally’s Corporation, respectively, for $480 million in cash, subject to a customary working capital adjustment, resulting in a gain of approximately $12 million.

On December 1, 2020, the Company entered into a definitive agreement with CQ Holding Company, Inc. to sell the equity interests of 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 ~~first half~~fourth quarter of 2021.

~~We previously reached an agreement with VICI to sell Bally’s Atlantic City Hotel & Casino to Twin River for approximately $25 million. Caesars will receive approximately $6 million from~~On December 24, 2020, the ~~sale. In addition, on October 9, 2020, we reached~~Company entered into an agreement to sell the ~~Bally’s brand to Twin River Worldwide Holding, Inc. for $20 million, while retaining the right to use the brand within Bally’s Las Vegas into perpetuity.~~

~~In addition to the agreements above, we also expect to enter into additional agreements to divest~~equity interests of Caesars Southern Indiana ~~Horseshoe Hammond~~to the EBCI for $250 million, subject to a customary working capital adjustment. On September 3, 2021, the Company completed the sale of Caesars Southern Indiana and ~~Evansville prior~~recorded a gain of approximately $12 million. In connection with this transaction, Company’s annual base rent payments to ~~December 31, 2020, as~~VICI Properties under the Regional Master Lease were reduced by $33 million.

If the agreed upon selling price for future divestitures does not exceed the carrying value of the assets, we may be required ~~by the Indiana Gaming Commission. Further, we expect~~ to ~~enter into agreements to sell several other non-core properties including our international properties within our Caesars UK group,~~record additional impairment charges in future periods which ~~includes Emerald Resorts Casino. We expect these divestitures to close by mid-year 2021.~~may be material.

We expect that our current liquidity, cash flows from operations, availability of borrowings under committed credit facilities and proceeds from the announced asset sales ~~net of associated taxes,~~ will be sufficient to fund our operations, capital requirements and service our outstanding indebtedness for the next twelve months. However, we cannot be certain that the COVID-19 public health emergency ~~has had, and is expected to continue to have, an adverse effect on~~will not adversely affect our business, financial condition and results of operations ~~and has caused, and may continue to~~or cause disruption in the financial markets. While we have undertaken efforts to mitigate the impacts of COVID-19 on our business and maintain liquidity, the extent of the ongoing and future effects of the COVID-19 public health emergency on our business, results of operations and financial condition is uncertain and maymarkets that could adversely ~~impact our liquidity in the future. Our~~affect ability to access additional capital may be adversely affected by the disruption in the financial markets caused by the COVID-19 public health emergency, restrictions on incurring additional indebtedness contained in the agreements governing our indebtedness and the impact of the public health emergency on our business, results of operations and financial condition.capital.

Debt and Master Lease Covenant Compliance

The ~~CRC~~Caesars Resort Collection (“CRC”) Credit Agreement, the CEI Revolving Credit Facility, the Baltimore Term Loan and the ~~indenture~~indentures related to the CEI Senior Secured Notes, the CEI Senior Notes, the CRC Senior Secured Notes, Senior Notes and ~~CEI~~the CRC Notes contain covenants which are standard and customary for these types of agreements. These include negative covenants, which, subject to certain exceptions and baskets, limit our ability to (among other items) incur additional indebtedness, make investments, make restricted payments, including dividends, grant liens, sell assets and make acquisitions. ~~The indenture for the 5% Convertible Notes contained limited covenants as a result of amendments that became effective in connection with the consummation of the Merger.~~

The CRC Revolving Credit Facility and CEI Revolving Credit Facility include a maximum first-priority net senior secured leverage ratio financial covenant of 6.35:1, which is applicable solely to the extent that certain testing conditions are satisfied. The Baltimore Revolving Credit Facility includes a senior secured leverage ratio financial covenant of 5.0:1. Failure to comply with such covenants could result in an acceleration of the maturity of indebtedness outstanding under the relevant debt document.

The Company’s results of operations have been materially adversely affected by the impacts of the COVID-19 public health emergency. As a result, the current terms of the CRC Credit Agreement and the CEI Credit Agreement provide thatCompany is subject to the financial ~~covenant measurement period is not effective through~~covenants for quarters beginning after September 30, ~~2021 so long as the CRC and the Company,~~

~~respectively, comply with a minimum liquidity requirement, which includes any such availability under the applicable revolving credit facilities.~~2021.

The GLPI Master Lease ~~contains~~and VICI leases contain certain operating, capital expenditure and financial covenants, ~~thereunder,~~including minimum capital improvement expenditures and ~~our ability~~a rent coverage ratio.

Liabilities held for sale include $612 million of debt related to the asset sale bridge facility and the revolving credit facility. The Bridge Credit Agreement includes a financial covenant requiring the Bridge Facility Borrower to comply with ~~these covenants was negatively impacted~~a maximum total net leverage ratio of 10.50 to 1.00 beginning the fiscal quarter ending on September 30, 2021. The borrowings under the Bridge Credit Agreement are guaranteed by the ~~effects~~Bridge Facility Borrower and the Bridge Facility Borrower’s material wholly-owned subsidiaries (subject to exceptions), and are secured by a pledge of substantially all of the ~~COVID-19 public health emergency on our results~~existing and future property and assets of ~~operations. On June 15, 2020, we entered into an amendment to~~ the GLPI Master Lease which provides certain relief under these covenants in the event of facility closures due to public health emergencies, governmental restrictions and certain other instances of unavoidable delay. On July 17, 2020, the amendment to the GLPI Master Lease became effective as the Company obtained all necessary approvalsBridge Facility Borrower and the ~~applicable waiting period expired. Furthermore, the Company obtained waivers from VICI with relation~~guarantors (subject to ~~annual capital expenditure requirements~~exceptions). No financial covenants are related to the ~~leases with VICI, starting with~~$1.1 billion of debt from the ~~annual period ending December 31, 2020.~~two trust deeds assumed in the William Hill Acquisition.

As of September 30, ~~2020,~~2021, we were in compliance with all of the applicable financial covenants ~~under the CRC Credit Agreement, the CEI Credit Agreement, CEI Senior Secured Notes, CEI Senior Notes, CRC Secured Notes, 5% Convertible Notes, the GLPI Leases and VICI Leases.~~described above.

Share Repurchase Program

OnIn November 8, 2018, ~~we issued a press release announcing that its~~our Board of Directors ~~has~~ authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which we may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no minimum number of shares of common stock that we are required to repurchase under the Share Repurchase Program.

As of September 30, ~~2020,~~2021, we have acquired 223,823 shares of common stock under the program at an aggregate value of $9 million and an average of $40.80 per share. No shares were repurchased during the nine months ended September 30, ~~2020~~2021 and ~~2019.~~

~~Debt Obligations and Leases~~

~~New Debt Transactions~~

We were party to a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto dated as of April 17, 2017 (as amended, the “ERI Credit Facility”), consisting of a $1.5 billion term loan facility and a $500 million revolving credit facility.

In an effort to maintain liquidity and provide financial flexibility as the effects of COVID-19 continued to evolve and impact global financial markets, we borrowed $465 million under the ERI Credit Facility on March 16, 2020, which we repaid in July 2020 utilizing, in part, proceeds from the sale of our interests in Kansas City and Vicksburg.

On July 6, 2020, Colt Merger Sub, Inc., a wholly-owned subsidiary of the Company (“Escrow Issuer”) issued $3.4 billion aggregate principal amount of 6.250% Senior Secured Notes due 2025 (the “CEI Senior Secured Notes”), $1.8 billion aggregate principal amount of 8.125% Senior Notes due 2027 (the “CEI Senior Notes”) and $1.0 billion aggregate principal amount of 5.75% Senior Secured Notes due 2025 (the “CRC Senior Secured Notes”).

On July 20, 2020, in connection with the closing of the Merger, the Company entered into a new credit agreement (“CEI Credit Agreement”) which provides a five-year senior secured revolving credit facility for an aggregate principal amount of $1.2 billion (the “CEI Revolving Credit Facility”). In addition, Caesars Resort Collection, LLC, which became a wholly-owned subsidiary of the Company as a result of the Merger (“CRC”), entered into an incremental agreement to the CRC Credit Agreement (described below) for an aggregate principal amount of $1.8 billion.

The 6% Senior Notes due 2025 were redeemed at a redemption price of 105%, the 7% Senior Notes due 2023 were redeemed at a redemption price of 103.5%, and $210 million aggregate principal amount of the 6% Senior Notes due 2026 was redeemed at a redemption price of 106% with the remaining balance redeemed at a redemption price of 100% of the aggregate principal amount thereof plus the Applicable Premium, as defined in the indenture for the 6% Senior Notes due 2026. The redemption of these Notes resulted in a loss on extinguishment of debt of $132 million during the three and nine months ended September 30, 2020, which is recorded within other (loss) income on the Statement of Operations.2020.

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~~CEI Senior Secured Notes due 2025~~

On July 6, 2020, Escrow Issuer issued $3.4 billion in aggregate principal amount of 6.250% CEI Senior Secured Notes pursuant to an indenture dated July 6, 2020 (the “Senior Secured Notes Indenture”), by and among the Escrow Issuer, U.S. Bank National Association, as trustee, and U.S. Bank National Association, as collateral agent. In connection with the consummation of the Merger, we assumed the rights and obligations under the CEI Senior Secured Notes and the Senior Secured Notes Indenture on July 20, 2020.The CEI Senior Secured Notes will mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year, commencing January 1, 2021.

~~CEI Senior Notes due 2027~~

On July 6, 2020, Escrow Issuer issued $1.8 billion in aggregate principal amount of 8.125% Senior Notes due 2027 pursuant to an indenture, dated July 6, 2020 (the “Senior Notes Indenture”), by and between the Escrow Issuer and U.S. Bank National Association, as trustee. We assumed the rights and obligations under the CEI Senior Notes and the Senior Notes Indenture on July 20, 2020. The CEI Secured Notes will mature on July 1, 2027 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year, commencing January 1, 2021.

~~CRC Senior Secured Notes due 2025~~

On July 6, 2020, Escrow Issuer issued $1.0 billion in aggregate principal amount of 5.75% Senior Notes due 2025 pursuant to an indenture, dated July 6, 2020 (the “CRC Senior Secured Notes Indenture”), by and among the Escrow Issuer, U.S. Bank National Association, as trustee and Credit Suisse AG, Cayman Islands Branch, as collateral agent. CRC assumed the rights and obligations, jointly and severally, under the CRC Senior Secured Notes on July 20, 2020. The rights and obligations under the CRC Senior Secured Notes to be assumed jointly and severally by CRC. The CRC Senior Secured Notes will mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year, commencing January 1, 2021.

~~CEI Revolving Credit Facility~~

On July 20, 2020, we entered into a new credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as collateral agent, and certain banks and other financial institutions and lenders party thereto, as well as an incremental amendment thereto, which provide for a five-year CEI Revolving Credit Facility for an aggregate principal amount of $1.2 billion. The CEI Revolving Credit Facility matures in 2025 and includes a letter of credit sub-facility of $250 million.

Additionally, we are required to pay a commitment fee in respect of any unused commitments under CEI Revolving Credit Facility in the amount of 0.50% of principal amount of the commitments of all lenders, subject to a step-down to 0.375% based upon the Company’s total leverage ratio. We are also required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the daily stated amount of such letter of credit.

~~We had $266 million of available borrowing capacity, after consideration of $19 million in outstanding letters of credit under CEI Revolving Credit Facility, as of September 30, 2020.~~

~~Convention Center Mortgage Loan~~

On September 18, 2020, we entered into a loan agreement with VICI to borrow a 5-year, $400 million Forum Convention Center mortgage loan (the “Mortgage Loan”). The Mortgage Loan bears interest at a rate of, initially, 7.7% per annum, which escalates annually to a maximum interest rate of 8.3% per annum.

~~Assumed Debt Activity~~

~~Former Caesars and its subsidiaries incurred the following indebtedness that remained outstanding following the consummation of the Merger.~~

~~CRC Term Loans and CRC Revolving Credit Facility~~

In connection with the Merger, we assumed the CRC senior secured credit facility (the “CRC Senior Secured Credit Facilities”), which included a $1.0 billion five-year revolving credit facility (the “CRC Revolving Credit Facility”) and an initial $4.7 billion seven-year first lien term loan (the “CRC Term Loan”). The CRC Senior Secured Credit Facilities were funded pursuant to the Credit Agreement, dated as of December 22, 2017 (the “CRC Credit Agreement”). On July 20, 2020, in connection with the closing of the Merger, CRC entered into an incremental amendments to the CRC Credit Agreement, which provided a $1.8 billion incremental tern loan (“CRC Incremental Term Loan”).

The CRC Term Loan matures in 2024. The CRC Incremental Term Loan matures in 2025. The CRC Revolving Credit Facility matures in 2022 and includes a letter of credit sub-facility. Each of the CRC Term Loan requires scheduled quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount, with the balance due at maturity. The CRC Credit Agreement also includes customary voluntary and mandatory prepayment provisions, subject to certain exceptions. As of September 30, 2020, approximately $64 million was committed to outstanding letters of credit. As of September 30, 2020, there were no borrowings outstanding under the CRC Revolving Credit Facility.

In addition, CRC is required to pay a commitment fee in respect of any commitments under the CRC Revolving Credit Facility in the amount of 0.50% of the principal amount of the commitments, subject to step-downs to 0.375% and 0.25% based upon CRC’s SSLR. CRC is also required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the daily stated amount of such letter of credit.

~~Former Caesars 5% Convertible Notes~~

~~On October 6, 2017, Former Caesars issued $1.1 billion aggregate principal amount of 5.00% convertible senior notes maturing in 2024 (the “5% Convertible Notes”).~~

The 5% Convertible Notes are convertible into weighted average of the number of shares of Company Common Stock and amount of cash actually received per share by holders of common stock of Former Caesars that made elections for consideration in the Merger. As of September 30, 2020, we have paid approximately $574 million and issued approximately 6.8 million shares to settle $487 million of the convertible notes during 2020. In October 2020, we paid an additional $328 million and issued 3.9 million shares to settle an additional $281 million of the convertible notes.

The Company has determined that the 5% Convertible Notes contain derivative features that require bifurcation. The Company separately account for the liability component and equity conversion option of the Convertible Notes. The portion of the overall fair value allocated to the liability was calculated by using a market-based approach without the conversion features included. The difference between the overall instrument value and the value of the liability component was assumed to be the value of the equity component. See Note 11 for more information on the Convertible Notes’ fair value measurements.

~~VICI Leases~~

Upon consummation of the Merger, we assumed obligations of certain real property assets leased from VICI by Former Caesars under the following agreements: (i) for a portfolio of properties at various locations throughout the United States (the “Non-

CPLV lease”), (ii) for Caesars Palace Las Vegas (the “CPLV lease”), (iii) for Harrah’s Joliet Hotel & Casino (the “Joliet Lease”) and (iv) for Harrah’s Las Vegas (the “HLV Lease”). These lease agreements provided for annual fixed rent (subject to escalation) of $773 million during an initial period, then rent consisting of both base rent and variable rent elements. The lease agreements had a 15-year initial term and four five-year renewal options. The lease agreements included escalation provisions beginning in year two of the initial term and continuing through the renewal terms. The lease agreements also included provisions for variable rent payments calculated, in part, based on increases or decreases of net revenue of the underlying lease properties, commencing in year eight of the initial term and continuing through the renewal terms.

In connection with the closing of the Merger on July 20, 2020, we consummated a series of transactions with VICI and certain of its affiliates in accordance with the MTA entered on June 24, 2019 and certain purchase and sales agreement entered on September 26, 2019. We consummated sale leaseback transactions related to Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Resort Atlantic City, including the Harrah’s Atlantic City Waterfront Conference Center, for approximately $1.8 billion of net proceeds. The CPLV Lease with VICI was amended, among other things, (i) add Harrah’s Las Vegas (“HLV”) to the leased premises thereunder (and in connection therewith HLV Lease was terminated), (ii) add (subject to certain adjustments) the rent payable with respect to HLV under such terminated stand-alone lease to such lease and further increase the annual rent payable with respect to HLV by approximately $15 million, (iii) increase the annual rent with respect to CPLV by approximately $84 million and (iv) extend the term of such lease so that following the amendment of such lease there will be 15 years remaining until the expiration of the initial term. In addition, Harrah’s New Orleans, Harrah’s Laughlin, and Harrah’s Resort Atlantic City, including the Harrah’s Atlantic City Waterfront Conference Center, were added to the Regional Lease and such lease was further amended to increase the annual rent thereunder by $154 million in the aggregate related to such added properties and extend the term of such lease so that following the amendment of such lease there will be 15 years remaining until the expiration of the initial term. Furthermore, the Joliet Lease, as well as the term of the Golf Course Use Agreement, were extended such that there will be 15 years remaining until the expiration of the initial term. Our VICI lease is accounted for as a financing obligation and totaled $11 billion as of September 30, 2020. Furthermore, we obtained waivers from VICI with relation to annual capital expenditure requirements. This waiver is effective as of June 1, 2020 until December 31, 2020. See Note 9 to our Consolidated Condensed Financial Statements for additional information about our VICI Lease and related matters.

~~GLPI Leases~~

Our GLPI Master Lease is accounted for as a financing obligation and totaled $1.2 billion as of September 30, 2020. Additionally, our GLPI Master Lease contains certain operating, capital expenditure and financial covenants thereunder, and our ability to maintain compliance with these covenants was also negatively impacted. On June 15, 2020, we entered into an amendment to the GLPI Master Lease which, among other things, provides certain relief under these covenants in the event of facility closures due to pandemics, governmental restrictions and certain other instances of unavoidable delay. As of July 17, 2020, the amendment to the GLPI Master Lease became effective as we obtained all necessary approvals and the applicable waiting period expired. See Note 9 to our Consolidated Condensed Financial Statements for additional information about our GLPI Master Lease and related matters.

Contractual Obligations

The Company assumed various long-term debt arrangements, financing obligations and leases, previously described, associated with Former Caesars as result of the consummation of the ~~Merger.~~Merger, William Hill related to the William Hill Acquisition. We also consolidate additional debt related to Horseshoe Baltimore. See Note 2 for a description of the Merger, the William Hill Acquisition and the ~~related obligations assumed and~~consolidation of Horseshoe Baltimore. See Note 138 for additional contractual obligations. There have been no other material changes during the nine months ended September 30, ~~2020~~2021 to our contractual obligations as disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Other Liquidity Matters

We are faced with certain contingencies involving litigation and environmental remediation and compliance. These commitments and contingencies are discussed in “Part II, Item 1. Legal Proceedings” and Note 138 to our unaudited consolidated condensed financial statements, both of which are included elsewhere in this report. In addition, new competition may have a material adverse effect on our revenues, and could have a similar adverse effect on our liquidity. See “Part I, Item 1A. Risk Factors—Risks Related to Our Business” which is included in our Annual Report on Form 10-K for the year ended December 31, ~~2019 and “Part II, Item IA. Risk Factors” which is included in this Quarterly Report on Form 10-Q for the quarter ended September 30,~~ 2020.

Critical Accounting Policies

Our critical accounting policies disclosures are included in our Annual Report on Form 10-K for the year ended December 31, ~~2019. Except as described in Note 1 and Note 2, as it relates to the Merger with Former Caesars, to the accompanying notes of these consolidated condensed financial statements, we believe there~~2020. There have been no material changes since December 31, ~~2019.~~2020. We have not substantively changed the application of our policies and there have been no material changes in assumptions or estimation techniques used as compared to ~~prior periods.~~those described in our Annual Report on Form 10-K for the year ended December 31, 2020.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements.

~~ITEM~~Item 3. ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.~~Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. We are exposed to changes in interest rates primarily from long-term variable-rate debt arrangements. ~~As of September 30, 2020, interest on borrowings under our Credit Facility was subject to fluctuation based on changes in short-term interest rates.~~

As of September 30, ~~2020, our~~2021, long-term variable-rate borrowings totaled ~~$6.4~~$6.6 billion under the CRC ~~Term Loans~~term loans and ~~$900 million was~~the Baltimore term loan and no amounts were outstanding under the CEI Revolving Credit Facility, CRC Revolving Credit Facility and Baltimore Revolving Credit Facility. Long-term variable-rate borrowings under the CRC ~~Term Loans~~term loans and the ~~CEI Revolving Credit Facility~~Baltimore term loan represented approximately ~~45%~~43% of ~~our~~consolidated long-term debt as of September 30, ~~2020. Of our $16.2 billion face value of debt, as of September 30, 2020, we~~2021. We have entered into ~~ten~~seven interest rate swap agreements to fix the interest rate on ~~$3.0~~$2.3 billion of variable rate debt, and $4.3 billion of debt remains subject to variable interest rates for the term of the ~~agreement.~~agreements. During the nine months ended September 30, ~~2020,~~2021, the weighted average interest rates on our variable and fixed rate debt were ~~3.67%~~3.09% and ~~6.35%~~6.30%, respectively.

~~LIBOR~~The London Inter-bank Offered Rate (“LIBOR”) is expected to be discontinued after 2021. The interest rate per annum applicable to loans under our credit facilities is, at our option, either LIBOR plus a margin or a base rate plus a margin. We intend to continue monitoring the developments with respect to the potential phasing out of LIBOR after 2021 and work with our lenders to ensure any transition away from LIBOR will have minimal impact on our financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR.

The Company has entered into several foreign exchange forward contracts with third parties to hedge the risk of fluctuations in the foreign exchange rates between USD and GBP and to fix the exchange rate for a portion of the funds used in the William Hill Acquisition, repayment of related debt and expected proceeds of the sale of William Hill International. On ~~September 28, 2020, we~~April 23, 2021, the Company entered into a foreign exchange forward contract to ~~hedge~~purchase £237 million at a contracted exchange rate, which was settled on June 11, 2021. Similarly, the ~~risk of appreciation of the GBP denominated purchase price. Under the agreement, we would purchase £1.3 billion~~Company has entered into foreign exchange forward contracts to sell £717 million at a contracted exchange rate. ~~An unrealized loss~~The forward term of ~~$5 million related to~~ the ~~change in fair value during the period from September 28, 2020~~contracts ends on December 31, 2021 and ~~September 30, 2020~~ ~~was recorded in the consolidated condensed statement of operations. On October 1, 2020 the contract was cancelled.~~March 31, 2022. We may elect to enter into additional such agreements as we continue to ~~utilize similar contracts~~mitigate our exposure to changes in ~~the future to hedge the risk of appreciation of the GBP denominated purchase of our possible acquisition of William Hill.~~foreign currency exchange rates.

We evaluate our exposure to market risk by monitoring interest rates in the marketplace and have, on occasion, utilized derivative financial instruments to help manage this risk. We do not utilize derivative financial instruments for trading purposes. There were no other material quantitative changes in our market risk exposure, or how such risks are managed, for the nine months ended September 30, ~~2020.~~2021.

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~~ITEM~~Item 4. ~~CONTROLS AND PROCEDURES.~~Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures

We have established and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, evaluated and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our ~~Chief Executive Officer~~principal executive officer and ~~Chief Financial Officer,~~principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q are effective to ensure that the information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized, evaluated and reported within the time periods specified in SEC rules and forms and that such

information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

(b)Changes in Internal Controls

Except as noted below, there were no changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10‑Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On ~~July 20, 2020,~~April 22, 2021, we completed the ~~Merger with Former Caesars.~~acquisition of William Hill PLC. See ~~Part I,~~ Item 1, Notes to ~~Unaudited~~ Consolidated Condensed Financial Statements, Note ~~2: Acquisition of Former Caesars,~~2, “Acquisitions and Purchase Price Accounting” for a discussion of the acquisition and related financial data. The Company is in the process of integrating ~~Former Caesars and~~William Hill PLC into our internal controls over financial reporting. As a result of these integration activities, certain controls will be evaluated and may be changed.

Excluding the ~~Merger,~~William Hill Acquisition, there were no changes in our internal ~~control~~controls over financial reporting during the three months ended September 30, 2021 that have materially affected, or are reasonable likely to materially affect, our internal ~~control~~controls over financial reporting.

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PART II

- OTHER INFORMATION

~~ITEM~~Item 1. ~~LEGAL PROCEEDINGS~~Legal Proceedings

~~We are~~For a ~~party to various lawsuits, which have arisen in the normal course~~discussion of our business. Estimated losses are accrued for these lawsuits and claims when the loss is probable and can be estimated. The current liability for the estimated losses associated with those lawsuits is not material“Legal Proceedings,” refer to Note 8 to our consolidated condensed financial ~~condition and those estimated losses are not expected to have a material impact~~statements located elsewhere in this Quarterly Report on ~~our results of operations.~~

On July 14, 2020, the Company filed a lawsuit for damages and declaratory relief in state court in New York relating to a transfer fee of $50 million that was assessed by the Indiana Gaming Commission upon the Company’s purchase of Hoosier Park Racino and Casino in 2017 from Centaur Holdings, LLC. Contemporaneous with the filing of the lawsuit, the Company notified Centaur that it was withholding payment of $50 million from Centaur Holdings that was otherwise due as a portion of a deferred payment for the purchase from Centaur. In the lawsuit, the Company seeks a declaration from the Court that the Sellers are required to indemnify Caesars for its losses arising out of or relating to payment of the transfer fee and that the Company is entitled to offset the $50 million transfer fee against payments otherwise due to Centaur.

~~Legal matters are discussed in greater detail in “Part I, Item 3. Legal Proceedings”~~Form 10-Q and Note 1811 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Cautionary ~~Statement~~Statements Regarding Forward-Looking Information

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, as well as expectations, future operating results and other information that is not historical information. When used in this report, the terms or phrases such as “anticipates,” “believes,” “projects,” “plans,” “intends,” “expects,” “might,” “may,” “estimates,” “could,” “should,” “would,” “will likely continue,” and variations of such words or similar expressions are intended to identify forward-looking statements. Specifically, forward-looking statements may include, among others, statements concerning:

•the impact of the COVID-19 public health emergency on our business and financial condition;

•projections of future results of operations or financial condition;

•our ability to consummate the ~~acquisition of William Hill and the~~ disposition of ~~MontBleu, Eldorado Shreveport and~~ certain of our ~~other~~ properties, including ~~required divestitures~~the planned sale of ~~certain properties located in Indiana;~~William Hill’s non-U.S. operations;

•expectations regarding our business and results of operations of our existing casino properties and prospects for future development;

•expectations regarding trends that will affect our market and the gaming industry generally and the impact of those trends on our business and results of operations;

•our ability to comply with the covenants in the agreements governing our outstanding indebtedness and leases;

•our ability to meet our projected debt service obligations, operating expenses, and maintenance capital expenditures;

•expectations regarding availability of capital resources;

•our intention to pursue development opportunities, including the development of a mixed-use entertainment and hospitality destination expected to be located on unused land adjacent to the Pompano casino and racetrack, and additional acquisitions and divestitures;

•our ability to realize the anticipated benefits of the ~~acquisition of Former Caesars,~~Merger, William Hill Acquisition and future development and acquisition opportunities; ~~and~~

•the impact of regulation on our business and our ability to receive and maintain necessary approvals for our existing properties and future projects and operation of online sportsbook, poker and ~~gaming~~gaming; and

•

factors impacting our ability to successfully operate our digital betting and iGaming platform and expand its user base.

Any forward-looking statements are based upon underlying assumptions, including any assumptions mentioned with the specific statements ~~as of the date such statements were made. Such assumptions~~that are in turn based upon internal estimates and analyses of market conditions and trends, management plans and strategies, economic conditions and other factors. Such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control, and are subject to change. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend upon future circumstances that may not occur. These risks and uncertainties include: (a) the effects of the COVID-19 public health emergency on our results of operations and the duration of such impact; (b) impacts of economic and market conditions; (c) our ability to integrate the William Hill US business, successfully operate our digital betting and iGaming platform and expand its user base; (d) the possibility that the anticipated benefits of the Merger and the acquisition of William Hill, including cost savings and expected synergies, are not realized when expected or at all; (e) risks associated with our leverage and our ability to reduce our leverage, including with proceeds of expected sale transactions; (f) the effects of competition on our business and results of operations; and (g) additional factors discussed in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in this Quarterly Report on Form 10-Q and our most recent Annual Reports on Form 10-K as filed with the Securities and Exchange Commission. Actual results may differ materially from any future results, performance or achievements expressed or implied by such ~~statements. Forward-looking~~ statements ~~speak only as of the date they are made,~~ and ~~we assume no duty to update~~ forward-looking ~~statements. Forward-looking~~ statements should not be regarded as a representation by us or any other person that the forward-looking statements will be achieved. Undue reliance should not be placed on any forward-looking statements. Some of the contingencies and uncertainties to which any forward-looking statement contained herein are subject include, but are not limited to, the following:

•~~the extent and duration of the impact of the global COVID-19 public health emergency on the Company’s business, financial results and liquidity;~~

•~~the impact and cost of new operating procedures expected to be implemented upon re-opening of the Company’s casinos;~~

•the impact of actions we have undertaken to reduce costs and improve efficiencies to mitigate losses as a result of the COVID-19 public health emergency, which could negatively impact guest loyalty and our ability to attract and retain our employees;

•~~the impact of the COVID-19 public health emergency and resulting unemployment and changes in general economic conditions on discretionary consumer spending and customer demand;~~

•our substantial indebtedness and significant financial commitments, including our obligations under our lease arrangements, could adversely affect our results of operations and our ability to service such obligations, react to changes in our markets and pursue development and acquisition opportunities;

•~~restrictions and limitations in agreements governing our debt and leased properties could significantly affect our ability to operate our business and our liquidity;~~

•~~risks relating to payment of a significant portion of our cash flow as debt service and rent under the leases of our casino properties with VICI and GLPI;~~

•~~financial, operational, regulatory or other potential challenges that may arise as a result of leasing of a number of our properties;~~

•~~our facilities operate in very competitive environments and we face increasing competition including through legalization of online betting and gaming;~~

•uncertainty regarding legalization of betting and online gaming in the jurisdictions in which we operate and conditions applicable to obtaining the licenses required to enable our betting and online gaming partners to conduct betting and gaming activities;

•~~the ability to identify suitable acquisition opportunities and realize growth and cost synergies from any future acquisitions;~~

•~~future maintenance, development or expansion projects will be subject to significant development and construction risks;~~

•~~our gaming operations are highly regulated by governmental authorities and the cost of complying or the impact of failing to comply with such regulations;~~

•~~changes in gaming taxes and fees in jurisdictions in which we operate;~~

•~~risks relating to pending claims or future claims that may be brought against us;~~

•~~changes in interest rates and capital and credit markets;~~

•~~our ability to comply with certain covenants in our debt documents and lease arrangements;~~

•~~the effect of disruptions to our information technology and other systems and infrastructure;~~

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•~~our ability to attract and retain customers;~~

•~~weather or road conditions limiting access to our properties;~~

•~~the effect of war, terrorist activity, acts of violence, natural disasters, public health emergencies and other catastrophic events;~~

•~~the intense competition to attract and retain management and key employees in the gaming industry; and~~

•~~other factors described in Part II, Item 1A. “Risk Factors” contained herein and our reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission.~~

In addition, the acquisition of William Hill and the disposition of Eldorado Shreveport, MontBleu, Harrah’s Louisiana Downs and certain of our other properties, including required divestitures of certain properties located in Indiana, create additional risks, uncertainties and other important factors, including but not limited to:

•the possibility that the proposed transactions are not consummated when expected or at all because required regulatory or other approvals are not received or other conditions to the consummation thereof are not satisfied on a timely basis or at all;

•the possibility that one or more of such transactions do not close on the terms described herein or that we are required to modify aspects of one or more of such transactions to obtain, or otherwise take action to satisfy conditions imposed in connection with, required regulatory approvals;

•~~the possibility that the Company will be required to pay a break fee under certain circumstances if the proposed William Hill acquisition is not consummated;~~

•~~risks associated with increased leverage as a result of the proposed acquisition of William Hill;~~

•~~the possibility that the anticipated benefits of the proposed transactions are not realized when expected or at all;~~

•~~the incurrence of significant transaction and acquisition-related costs and the possibility that the transactions may be more expensive to complete than expected;~~

•~~competitive responses to the proposed transactions;~~

•~~legislative, regulatory and economic developments;~~

•~~the possibility that our business or William Hill’s business may suffer as a result of the announcement of the acquisition;~~

•~~the ability to retain certain of our key employees and William Hills’ key employees;~~

•~~the outcome of legal proceedings that may be instituted as a result of the proposed transactions;~~

•~~the impact of the proposed transactions, or the failure to consummate the proposed transactions, on our stock price;~~

•~~diversion of management’s attention from our ongoing operations; and~~

•~~the impact of the announcement or consummation of the proposed transactions on the Company’s relationships with third parties, which may make it more difficult to maintain business relationships.~~

~~In light of~~ these ~~and other risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur. These~~ forward-looking statements speak only as of the date on which ~~this~~the statement is made, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law.

You should also be aware that while we from time to time communicate with securities analysts, we do not disclose to them any material non-public information, internal forecasts or other confidential business information. Therefore, you should not assume that we agree with any statement or report issued by any analyst, irrespective of the content of the statement or report. To the extent that reports issued by securities analysts contain projections, forecasts or opinions, those reports are not our responsibility and are not endorsed by us.

~~ITEM~~Item 1A. ~~RISK FACTORS~~Risk Factors

A description of our risk factors can be found in “Part I, Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. There have been no material changes to those risk factors during the nine months ended September 30, ~~2020,~~2021, except for the following additional risk factors related to the ~~impact of COVID-19, the Merger~~William Hill Acquisition and the ~~recently announced~~operation of our digital business.

Our digital betting and gaming operations are especially reliant on information technology and other systems and services, and any failures, errors, defects or disruptions in our systems or services could adversely affect our operations.

Our technology infrastructure is critical to the performance of our digital betting and gaming operations and to user satisfaction. We devote significant resources to our technology infrastructure, but our systems may not be adequate to avoid performance delays or outages that could be harmful to our online business. In addition, we cannot assure you that the measures we take to prevent cyber-attacks and protect our systems, data and user information and to prevent outages, data or information loss, fraud and to prevent or detect security breaches will be sufficient to ensure uninterrupted operation of our digital platform and provide absolute security. William Hill ~~acquisition.~~

~~The outbreak~~has in the past experienced, and we may in the future experience, website disruptions, outages and other performance problems due to a variety of ~~COVID-19 has impacted~~factors, including infrastructure changes, human or software errors and capacity constraints. Disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties that provide support to our operations, ~~and caused an economic downturn, widespread unemployment and an adverse impact on consumer sentiment. Such~~could result in a wide range of negative ~~impacts~~outcomes, each of which could ~~continue for an extended period of time and may worsen.~~

~~On March 13, 2020, in response to~~materially adversely affect the coronavirus public health emergency the U.S. government declared a national state of emergency. In an effort to help control the spread of COVID-19, public health officials imposed or recommended various measures, including social distancing, quarantine and stay-at-home or shelter-in-place directives, limitations on the size of gatherings, closures of work facilities, schools, public buildings and businesses, and cancellation of events, including sporting events, concerts, conferences and meetings. As a result of orders issued by governmental authorities in the states in which our properties are located, alloperation of our ~~properties were closed beginning on March 18, 2020. While~~online business and our ~~properties have reopened,~~financial condition, results of operations and prospects.

Additionally, our online betting and gaming offerings may contain errors, bugs, flaws or corrupted data, and these defects may only become apparent after their launch. These types of issues could disrupt our operations ~~financial results~~or render a product unavailable when users attempt to access it or cause access to our offerings to be slower than our users expect. Inaccessibility or slow access to our products could make users less likely to return to our digital platform as often, if at all, or to recommend our offerings to other potential users, which could harm our brand perception, cause our users to stop utilizing our online offerings, divert our resources and ~~cash flows have been affected by social distancing measures, including reduced gaming operations arising from the reconfiguration~~delay market acceptance of our gaming floor, limitations on the number of customers present in our facilities, implementation of additional health and safety measures, restrictions on hotel, food and beverage outlets and limits on concerts, conventions or special events that would otherwise attract customers to our properties. online offerings.

We expect that ~~our operations~~we will continue to expand our online betting and gaming offerings as our user base grows and we enter into new markets, which will require an enhancement of our technical infrastructure, including network capacity and computing power, to support the growth of our digital business and to satisfy our users’ needs. Such infrastructure expansion may be ~~impacted by such restrictions for~~complex and costly, and unanticipated delays in completing these projects or availability of components may lead to increased project costs, operational inefficiencies, or interruptions in the ~~foreseeable future.~~delivery or degradation of the quality of our offerings. In addition, there may be issues related to our online infrastructure that are not identified during the testing phases of design and implementation and become evident after we have started to fully use the underlying equipment or software, which could impact the user experience or increase our costs. An inability to effectively scale our technical infrastructure to accommodate increased demands could adversely impact our ability to grow our digital betting and gaming business.

Our online business is dependent on the Internet and we rely on Amazon Web Services and other third-party technology, platforms and services to deliver our offerings to users.

A substantial portion of the infrastructure that is required to enable users to access our digital betting and gaming offerings is provided by third parties, including Internet service providers and other technology-based service providers. In particular, we currently host our online betting and gaming offerings and support our operations ~~financial results~~using Amazon Web Services (“AWS”) and ~~cash flows would be further adversely affected by the implementation~~other third-party technology, platforms and services. Our third-party providers may experience service interruptions, delays, outages or ~~extension~~damage, including due to capacity constraints, an event causing an unusually high volume of ~~new~~Internet use (such as a pandemic or existing restrictions, including reinstatement of shelter-in-place requirements or additional restrictions on travel and business operations. The implementation of stay-at-home or additional social distancing and mitigation measures in response to COVID-19 or other public health ~~emergencies could cause future closures~~emergency), infrastructure changes or upgrades (such as 5G or 6G services), human or software errors, website hosting disruptions, natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of ~~all or a portion~~misconduct. We exercise little control over our third-party providers and any difficulties that these providers experience,

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including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect our business. Because our ability to provide our users with continuing and uninterrupted access to our platform is critical to the success of our ~~properties, which would adversely affect~~digital business, we use our best efforts to ensure that our facilities and infrastructure and the facilities and infrastructure of our third-party providers support our current and expected operations ~~financial results~~ and ~~cash flows.~~

~~We may also face unforeseen liability or~~are designed to mitigate the impacts of system malfunctions. Nevertheless, there can be ~~subject~~no guarantee that such systems will be able to ~~additional obligations as a result~~meet the demand of our current and future digital business, the overall online betting and gaming industry and the growth of the ~~COVID-19 public health emergency, including as a result of claims alleging exposure to COVID-19 in connection~~Internet. Furthermore, if we do not maintain business relationships with our ~~operations~~third-party providers, and in particular, AWS, we may not be able to secure required third-party services on terms that are acceptable to us or ~~facilities or to the extent we are subject to a governmental enforcement action as a result~~on an acceptable time frame. Any of failing to comply with applicable health and safety regulations. COVID-19 has materially adversely affected the economy and financial markets of the United States and the world and has resulted in widespread unemployment in the United States. Consumer demand for casino hotel and racetrack properties such as ours is particularly sensitive to downturns in the economy, unemployment and the associated impact on discretionary spending on leisure activities which bring demand for casino hotel properties such as ours. Reduced customer demandthese risks could result in ~~lower occupancy rates, reduced visitation~~a loss of revenue and additional disruptions in our casino business. The extent of changes in customer demand resulting from the economic downturn, widespread unemployment, reduced consumer confidence and consumer fears on our properties cannot reasonably be determined, but the impact of such factors maycause us to incur unexpected costs that could be significant, ~~and protracted.~~

~~As a result of the foregoing, we cannot predict the ultimate scope, duration and impact of the COVID-19 public health emergency, but we expect that it will continue to~~which could have a material ~~impact~~adverse effect on our online business, financial condition, ~~liquidity,~~ results of operations ~~(including revenues~~ and profitability) and stock price for an extended period of time. The impact of the COVID-19 public health emergency may also have the effect of exacerbating many of the other risks described in our Annual Report on Form 10-K for the year ended December 31, 2019.prospects.

We ~~have undertaken aggressive actions~~rely on third parties to ~~reduce costs~~provide services that are essential to the operation of our online betting and ~~improve efficiencies~~gaming business, including geolocation and identity verification, payment processing and sports data.

We rely on third parties to ~~mitigate losses as a result~~provide services that are essential to the operation of ~~the COVID-19 public health emergency,~~our online betting and gaming business, including geolocation and identity verification systems to ensure we comply with laws and regulations, processing deposits and withdrawals made by our online users and providing information regarding schedules, results, performance and outcomes of sporting events to determine when and how bets are settled. The software, systems and services provided by our third-party providers may not meet our expectations, contain errors or weaknesses, be compromised or experience outages. A failure of such third-party systems to perform effectively, or any service interruption to those systems, could adversely affect our business by preventing users from accessing our online platform, delaying payment or resulting in errors in settling bets, which could ~~negatively impact guest loyalty~~give rise to regulatory issues relating to the operation of our business. By way of example, incorrect or misleading geolocation and identity verification data with respect to current or potential users received from third-party service providers may result in us inadvertently allowing access to our offerings to individuals who are not permitted to access them or otherwise inadvertently denying access to individuals who are permitted to access them, and errors or failures by our payment processors and sports data providers could result in a failure in timely and accurately process payments to and from users or errors in settling bets. Any such errors or failures could result in violations of applicable regulatory requirements and adversely affect our reputation and our ability to attract and retain ~~employees.~~our online users. Furthermore, negative publicity related to any of our third-party partners could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure.

AsIn addition, if any of our third-party services providers terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would have to find alternate service providers. We cannot be certain that we would be able to secure favorable terms from alternative service providers that are critical to the operation of our business or enter into alternative arrangements in a ~~result~~timely manner. Our digital business, results of operations and prospects would be adversely impacted by our inability or delay in securing replacement services that are sufficient to support our online business or on comparable terms.

Our growth will depend, in part, on the success of our strategic relationships with third parties.

We rely on relationships with sports leagues and teams, professional athletes and athlete organizations, advertisers and other third parties in order to attract users to our offerings. In 2019 we entered into an exclusive sports entertainment partnership with the NFL, making us the first ever “Official Casino Sponsor” in the history of the ~~previous closure~~league, in 2020, we partnered with ESPN to integrate their digital platforms with our sportsbooks and in 2021 we made a strategic investment in SuperDraft, Inc., a daily fantasy sports platform. These relationships, along with providers of ~~all of~~online services, search engines, social media, directories and other websites and e-commerce businesses direct consumers to our ~~properties~~offerings. While we believe there are other third parties that could drive users to our online offerings, adding or transitioning to them may disrupt our business and ~~the continued uncertainty regarding the duration and severity of this public health emergency, we have taken steps to reduce operating~~increase our costs, and ~~improve efficiencies, including furloughing approximately 90%~~may require us to modify, limit or discontinue certain offerings. Furthermore, sports leagues, teams and venues may enter into exclusive partnerships with our ~~employees while our casinos were closed. Such steps, and further changes we may make in the future to reduce costs, may negatively impact guest loyalty or~~competitors which could adversely affect our ability to ~~attract and retain employees, and our reputation may suffer as a result. While a significant number~~offer certain types of wagers. In the event that any of our ~~employees returned~~existing relationships or our future relationships fail to ~~work once~~provide services to us in accordance with the terms of our ~~casinos reopened, our operations continue~~arrangement, or at all, and we are not able to ~~be affected by COVID-19 and our full work force has not returned. If our furloughed employees do not return to work with us when the COVID-19 public health emergency subsides, including because they~~ find ~~new employment during the furlough, we may experience operational challenges that may~~suitable alternatives, this could impact our ability to ~~resume~~cost effectively attract consumers and harm our online betting and gaming business, financial condition, results of operations and prospects.

The growth of our digital business will require investments in ~~full. We~~our online offerings, technology and strategic marketing initiatives, which could be costly and negatively impact the economics of our online business.

The online betting and gaming industry is subject to rapid and frequent changes in standards, technologies, products and service offerings, as well as in customer demands and preferences and regulations, which will require us to continually introduce and successfully implement new and innovative technologies, marketing strategies, product offerings and enhancements to remain competitive and effectively stimulate customer demand, acceptance and engagement. The process of developing new online

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offerings and systems is inherently complex and uncertain, and new offerings may not be well received by users, even if they are well-reviewed and of high quality. Developing new offerings and marketing strategies can also ~~face demands or requests~~divert our management’s attention from ~~labor unions~~other business issues and opportunities. New online offerings that ~~represent our employees, whether~~attain market acceptance and aggressive marketing strategies implemented in the ~~course~~competitive online market environment could impact the mix of our ~~periodic renegotiation~~existing business, including our casino business, or the share of our ~~collective bargaining agreements~~patron’s wallets in a manner that could negatively impact our results of operations. In addition, online betting and gaming operates in a competitive environment that requires significant investment in marketing initiatives, including free play and use of a variety of free and paid marketing channels, including television, radio, social media platforms, such as Facebook, Instagram and Twitter, and other digital channels. We cannot be sure that our investments in technology, products, service offerings and marketing initiatives will be successful or ~~otherwise,~~generate the return on investment that we expect. If new or existing competitors offer more attractive offerings or engage in marketing initiatives that are better received by customers, we may lose users or users may decrease their spending on our offerings. Further, new customer demands, superior competitive offerings, new industry standards or changes in the regulatory environment could render our offerings unattractive, unmarketable or obsolete and require us to make substantial unanticipated changes to our technology or business model. Failure to adapt to a rapidly changing market or evolving customer demands, and costs required to be incurred to react to dynamic market conditions, could harm our business, financial condition, results of operations and prospects.

The growth of our online betting and gaming business will depend on expansion of online betting and gaming into new jurisdictions and our ability to obtain required licenses.

Our ability to achieve growth in our online betting and gaming business will depend, in large part, upon expansion of online betting and gaming into new jurisdictions, the terms of regulations relating to online betting and gaming and our ability to obtain required licenses. Following the 2018 decision of the U.S. Supreme Court to overturn the federal ban on sports betting, a number of jurisdictions have legalized sports betting and online gaming and we expect that additional jurisdictions may do so in the future. Our ability to further expand our sports betting and online operations is dependent on the adoption of regulations permitting such activities. However, the expansion of betting and online gaming in new jurisdictions is dependent on a number of factors that are beyond our control and there can be no assurances of when, or if, such regulations will be adopted or the terms of such regulations, including restrictions, tax rates and license fees and availability of such licenses to casino owners exclusively or at all.

Our online business model depends upon the continued compatibility between our apps and the major mobile operating systems and upon third-party platforms for ~~additional health~~the distribution of our product offerings, which depend on factors beyond our control such as the design of third-party operating systems and ~~safety measures, compensation, healthcare benefits~~continued access to our apps on third-party distribution platforms like the Apple App Store.

We are dependent on the interoperability of our technology with popular mobile operating systems, technologies, networks and standards as our users access our online betting and gaming product offerings primarily on mobile devices, and we believe that this will continue to be increasingly important to our long-term success. As a result, our business model depends upon the continued compatibility between our app and the major mobile operating systems, such as the Android and iOS operating systems, and we rely upon third-party platforms for distribution of our product offerings. We do not have formal or informal relationships with parties that control design of mobile devices and operating systems and there is no guarantee that popular mobile devices will start or continue to support or feature our product offerings. Any changes, bugs, technical or regulatory issues in such operating systems, our relationships with mobile manufacturers and carriers, or in their terms of service or policies that degrade our offerings’ functionality, reduce or eliminate our ability to distribute our offerings, give preferential treatment to competitive products, limit our ability to deliver high quality offerings, or impose fees or other charges related to delivering our offerings, could adversely affect our product usage and monetization on mobile devices. In addition, if any of the third-party platforms used for distribution of our product offerings were to limit or disable the availability of our app or advertising on their platforms, our ability to generate revenue could be harmed. These changes could materially impact the way we do business, and if we are unable to adjust to those changes quickly and effectively, there could be an adverse effect on our business, financial condition, results of operations and prospects.

Our technology contains third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to provide our offerings.

Our technology contains software modules licensed to us by third-party authors under “open source” licenses. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code. In addition, the public availability of such software may make it easier for others to compromise our technology.

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Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use, or grant other licenses to our intellectual property. If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar offerings with lower development effort and time and ultimately could result in a loss of our competitive advantages. Alternatively, to avoid the public release of the affected portions of our source code, we could be required to expend substantial time and resources to re-engineer some or all of our software.

In addition, time to time there have been claims challenging the ownership of open source software against companies that incorporate open source software into their solutions. As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software or be required to seek costly licenses from third parties to continue providing our products on terms that are not economically feasible, to re-engineer our technology, to discontinue or delay the provision of our offerings, any of which could adversely affect our business, financial condition, results of operations and prospects.

Participation in the sports betting industry exposes us to trading, liability management and pricing risks. We may experience lower than expected profitability and potentially significant losses as a result of ~~COVID-19 that could increase costs, and we could experience labor disputes or disruptions as we continue~~a failure to ~~implement our COVID-19 mitigation plans.~~accurately determine odds.

Our ~~ability to remain in compliance with our covenants contained in~~fixed-odds betting products involve betting where winnings are paid on the ~~agreements governing our indebtedness~~basis of the amounts wagered and ~~lease obligations, and our liquidity, may be negatively impacted by~~ the ~~COVID-19 public health emergency, measures implemented to curtail its spread, and changes in the economy, discretionary spending and consumer confidence.~~

~~Our casino operations~~odds quoted. Odds are a primary source of income and operating cash flows which we rely upon to remain in compliance with covenants contained in the agreements governing our outstanding indebtedness and lease obligations. On September 25, 2020, we drew $900 million under one of our revolving credit facilities and, as a result, as of September 30, 2020, we had an aggregate of $900 million of borrowings outstanding under our credit facilities and $3.5 billion in outstanding principal amount of senior notes, $4.4 billion in outstanding principal amount of senior secured notes, $6.4 billion principal amount outstanding under our Term Loan B, $597 million principal amount outstanding of 5.00% Senior Convertible Notes due 2024 and $400 million in aggregate principal amount of outstanding mortgage debt. On September 28, 2020, the Company deposited ~~$2.1 billion~~, which included the proceeds from the revolving credit facilities, into an escrow account. As of September 30, 2020, these funds in escrow were classified as restricted cash until certain regulatory approvals were received. While we were in compliancedetermined with the ~~covenants under our lease obligations and the agreements governing our outstanding indebtedness as~~objective of September 30, 2020, our ability to remain in compliance with the quarterly maintenance covenants contained in such agreements would be negatively impacted by a prolonged period of closure of our properties or if the COVID-19 public health emergency, measures implemented to curtail its spread or changes in the economy, discretionary spending and consumer confidence have a protracted negative effect on our business. Failure to satisfy such quarterly maintenance covenants would require us to seek waivers or amendments of such covenants. If we are unable to obtain such waivers or amendments, our creditors and the lessor under some of our lease obligations would be entitled to exercise remedies under the documents governing such obligations, including acceleration of the outstanding principal amount of such indebtedness or termination of our lease arrangements. In addition, while we believe that our cash on hand will be sufficient to provide liquidity to meet our obligations during the period that our properties remain closed, a protracted period of closure of our casinos could impact our ability to make required payments under our outstanding indebtedness, lease obligations or other obligations. Our ability to raise additional financing may be restricted by the covenants and restrictions contained in the agreements governing our indebtedness and could be adversely affected by disruptions in the financing markets and changesproviding an average return to the ~~economy caused by the COVID-19 public health emergency.~~

~~On October 6, 2020, the Company entered into~~bookmaker over a ~~£1.5 billion~~ ~~interim facilities agreement. Upon receipt of regulatory approval of our interim facilities agreement, the Company transferred~~ ~~$1.4 billion~~ ~~of cash back into the operating accounts and the outstanding balance of our revolving credit facilities was repaid in full. Approximately~~ ~~$598 million~~ ~~of cash remains in~~ ~~an unrestricted account~~.

~~The COVID-19 public health emergency may exacerbate the risks associated with the Acquisition and the ongoing integration with Former Caesars.~~

As a result of the COVID-19 public health emergency, all of our properties were temporarily closed, and a significant majority of our employees were furloughed. The COVID-19 public health emergency has had an adverse impact on our businesses and results of operations. We cannot predict the scope, duration and impact of the COVID-19 public health emergency on our and William Hill’s businesses or on our ability to recognize the potential benefits of the Acquisition or integration with Former Caesars. We expect that the COVID-19 public health emergency may have the effect of exacerbating many of the risks related to the Merger and integration of Former Caesars’ with the Company as described in its Annual Report on Form 10-K for the year ended December 31, 2019 and the risks related to the Acquisition as described below. See “—We may fail to consummate the Acquisition or may not consummate it on the terms described herein.” The integration of two independent businesses is a complex, costly and time-consuming process and we expect that the impact of the COVID-19 public health emergency will make such integrations, both the Acquisition and the integration of Former Caesars with the Company, more challenging. Further, the Company and its subsidiaries have a significant amount of additional indebtedness outstanding following the consummation of the Merger and will have a significant amount of additional indebtedness outstanding following the consummation of the Acquisition. The Company and its subsidiaries expect to satisfy such obligations with cash flows from operations, which may be adversely impacted by the COVID-19 public health emergency, cash on hand, borrowings under committed credit facilities, additional financing and proceeds from asset sales.

~~We may fail to consummate the Acquisition or may not consummate it on the terms described herein.~~

~~On September 30, 2020, we agreed to acquire William Hill plc for a cash purchase price of approximately~~ ~~£2.9 billion, or~~ ~~$3.7 billion~~ ~~(the “Acquisition”). We intend to consummate the Acquisition in the second half of 2021. The acquisition must be accepted by a requisite~~large number of ~~William Hill shareholders~~events. However, there can be significant variation in gross win percentage event-by-event and day-by-day. We have systems and controls that seek to reduce the ~~closing~~risk of ~~such transaction is subject to the receipt of~~

~~regulatory approvals and other customary closing conditions. As~~daily losses occurring on a ~~result, the possible timing and likelihood of the completion of the Acquisition are uncertain, and, accordingly,~~gross-win basis, but there can be no assurance that ~~such acquisition~~these will be ~~completed on the expected terms, anticipated schedule or at all.~~

~~We may not consummate the Acquisition or realize the expected benefits therefrom if we do. In the event that we fail~~effective in reducing our exposure to consummate the Acquisition, we will have issued a significant number of additional shares of common stock and we will not have acquired the revenue generating assets that will be required to produce the earnings and cash flow we anticipated.this risk. As a result ~~failure~~we may experience (and we have from time to ~~consummate the Acquisition would adversely affect our earnings per share and our ability~~time experienced) significant losses with respect to ~~make distributions to stockholders. If the Acquisition is not consummated, we could be subject to~~individual events or betting outcomes, in particular if large individual bets are placed on an event or betting outcome or series of events or betting outcomes. Any significant losses on a ~~number of risks that may adversely affect our business and the market price of our common stock, including:~~

•~~we will be required to pay costs relating to the Acquisition, such as legal, accounting, financial advisory and printing fees, whether or not the Acquisition is consummated;~~

•~~time and resources committed by our management to matters relating to the Acquisition could otherwise have been devoted to pursuing other beneficial opportunities;~~

•~~the market price of our common stock could decline to the extent that the current market price reflects a market assumption that the Acquisition will be consummated; and~~

•~~we would not realize the benefits we expect to realize from consummating the Acquisition.~~

We cannot provide any assurance that the Acquisition will be consummated or that there will not be a delay in the consummation of the Acquisition. Any increased costs associated with the delay or abandonment of the Acquisition, in addition to the impact of the COVID-19 public health emergency, may adversely impact our ability to remain in compliance with our covenants contained in the agreements governing our indebtedness and lease obligations, and our liquidity. See “—The COVID-19 public health emergency may exacerbate the risks associated with the Acquisition and the ongoing integration with Former Caesars.”

~~If the Acquisition is not consummated, our reputation in our industry and in the investment community could be damaged, and the market price of our common stock could decline.~~

~~The Acquisition is subject to the receipt of governmental approvals that may impose conditions that~~gross-win basis could have ~~an adverse effect on us or, if not obtained, could prevent consummation of the Acquisition.~~

Consummation of the Acquisition is conditioned upon the receipt of governmental approvals, including, without limitation, antitrust and gaming regulatory approvals, including, among others, the Danish Gaming Authority, the Gambling Commissioner of Gibraltar, the Gaming Board For the Bahamas, Colorado Division of Gaming, Washington D.C. Office of Lottery and Charitable Games, Delaware Lottery, Florida Division of Pari-mutuel Wagering, Illinois Gaming Board, Indiana Gaming Commission, Iowa Racing and Gaming Commission, Michigan Gaming Control Board, Mississippi Gaming Commission, Nevada Gaming Control Board and Gaming Commission, New Jersey Division of Gaming Enforcement, Mescalero Apache Tribal Gaming Commission, Rhode Island Lottery, West Virginia Lottery and the National Indian Gaming Commission. There can be no assurance that these approvals will be obtained and that the other conditions to consummating the Acquisition will be satisfied. In addition, the governmental authorities from which the regulatory approvals are required may impose conditions on the consummation of the Acquisition or require changes to the terms of the Acquisition or agreements to be entered into in connection with the Acquisition. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying or impeding consummation of the Acquisition or of imposing additional costs or limitations on us following consummation of the Acquisition, any of which might have ana material adverse effect on our business, financial condition and results of operations.

~~Governmental gaming regulatory requirements~~In addition, the odds that we offer in our sportsbook operations may ~~delay~~occasionally contain an obvious error. Examples of such errors are inverted lines between teams, or odds that are significantly different from the ~~timing~~true odds of the ~~approvals~~outcome in a way that all reasonable persons would agree is an error. If regulatory restrictions do not permit us to void or re-setting odds to correct odds on bets associated with large obvious errors in odds making, we could be subject to covering significant liabilities.

We rely on licenses to use the intellectual property rights of third parties which are incorporated into our products and services. Failure to renew or expand existing licenses may require us to modify, limit or discontinue certain offerings.

We rely on products, technologies and intellectual property that we license from third parties, for ~~or completion~~use in our business-to-business and business-to-consumers offerings. Certain of ~~the Acquisition.~~

~~The gaming~~our offerings and ~~racing industries are highly regulated,~~services use intellectual property licensed from third parties and we ~~must maintain~~expect that our ~~licenses and pay gaming taxes to continue our operations. We are subject to extensive regulation under laws, rules and supervisory procedures primarily in~~future products will require the ~~jurisdictions where our facilities are located or docked. These laws, rules and regulations generally concern the responsibility, financial stability and characters~~use of ~~the owners, managers, and persons with financial interests in the gaming operations. Some jurisdictions require applications for findings of suitability, licensing or other approvals for owners~~third-party intellectual property. The future success of our ~~stock exceeding certain thresholds.~~business may depend, in part, on our ability to obtain, retain and/or expand licenses for popular technologies and games in a competitive market. We cannot assure that third-party licenses that may be necessary or desirable for the operation of our products, or support for such licensed products and technologies, will be available to us on commercially reasonable terms, if at all. If ~~a person purchases stock in us in an amount that results in such person attaining~~ we are unable to renew and/or ~~exceeding thresholds of ownership requiring regulatory approvals from one or more gaming jurisdictions, the regulators could take the position that such person must make the requisite filings~~expand existing licenses or obtain ~~the requisite approvals from the regulator prior~~new licenses, including as a result of reluctance of third parties to ~~receiving~~subject themselves to regulatory

approval for or completing the Acquisition. If such a position were taken, this could result in a delay in the timing of the approvals for or the consummation of the Acquisition. We cannot predict whether a gaming regulator may take such a position.

~~Antitrust approvals~~ review that would be required to consummate the Acquisition may not be received, may take longer than expected or may impose conditions, including the requirement to divest assets, that could have an adverse effect on us following the Acquisition.

~~In order to consummate the Acquisition, we and William Hill~~ may be required to comply with divestitures, including selling properties, conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities, and such conditions, terms, obligations or restrictions may have the effect of delaying consummation of the Acquisition, imposing additional material costs on or materially limitingoperate as our revenue after the consummation of the Acquisition, or otherwise reducing the anticipated benefits to us of the Acquisition. Such conditions, terms, obligations or restrictions may result in the delay or abandonment of the Acquisition. Wesupplier, we may be required to ~~comply with divestitures, including selling properties, conditions, terms, obligations~~discontinue or ~~restrictions imposed by antitrust, gaming and other regulatory entities, and such conditions, terms, obligations or restrictions may have the effect of delaying the consummation~~limit our use of the ~~Acquisition, imposing additional material costs on~~products that include or ~~materially limiting~~incorporate the licensed intellectual property, which could adversely impact our ~~revenue after the consummation~~business, results of ~~the Acquisition, or otherwise reducing the anticipated benefits to us of the Acquisition. Such conditions, terms, obligations or restrictions may result in the delay or abandonment of the Acquisition.~~ operations and prospects.

We cannot ~~assure you~~be sure that we ~~or William Hill~~ will be able to ~~sell these required properties in order to be in compliance with such antitrust, gaming and other regulatory entities, within~~dispose of the ~~time frame required. In addition, to the extent we and/or~~ William Hill ~~are able to sell any such properties, we cannot assure you that we or they will be able to sell such properties at a fair market price or upon~~non-US operations on terms and conditions that are ~~beneficial or considered reasonably~~ satisfactory byto us or at all.

We previously announced our intention to sell the William Hill non-U.S. operations, which have been classified in our financial statements as ~~applicable. As a result,~~assets held for sale, and to apply the proceeds of such sale to repay amounts outstanding under the Bridge Credit Agreement. We cannot be certain that we ~~and William Hill may not~~will be able to ~~realize any expected benefits from~~enter into agreements to sell such ~~asset dispositions,~~assets and ~~may not receive adequate consideration in connection therewith.~~operations on terms that are satisfactory to us, or at all.

~~ITEM~~Item 2. ~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~Unregistered Sales of Equity Securities and Use of Proceeds

During the quarter ended September 30, 2020, we issued 6,839,299 shares of unregistered Company Common Stock to holders of 5% Convertible Notes due 2024 upon conversion of $487 million in aggregate principal amount of such notes.~~For further information regarding such transactions, see Note 11, Fair Value Measurements, of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.The shares of common stock were issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.~~None.

~~ITEM~~Item 3. ~~DEFAULTS UPON SENIOR SECURITIES.~~Defaults Upon Senior Securities

None.

Table of Contents

~~ITEM~~Item 4. ~~MINE SAFETY DISCLOSURES.~~Mine Safety Disclosures

Not applicable.

~~ITEM~~Item 5. ~~OTHER INFORMATION.~~Other Information

None.

Table of Contents

~~ITEM~~Item 6. ~~EXHIBITS.~~Exhibits

Exhibit

Number

Description of Exhibit

Method of Filing

3.1

Composite Certificate of Incorporation of Caesars Entertainment, Inc.

Previously filed on Form ~~8-K~~10-Q filed on ~~July 21, 2020.~~August 4, 2021.

3.2

Certificate of Amendment of Certificate of Incorporation of the Company.

Previously filed on Form 8-K filed on June 18, 2021.

3.3

Bylaws of Caesars Entertainment, Inc.

Previously filed on Form 8-K filed on July 21, 2020.

4.1

Indenture ~~(6.25% CEI Senior Secured Notes due 2025)~~ dated as of ~~July 6, 2020,~~September 24, 2021, by and between ~~Colt Merger Sub, Inc. and U.S. Bank National Association.~~

~~Previously filed on Form 8-K filed on July 7, 2020.~~

~~4.2~~

~~Supplemental Indenture, dated as of July 20, 2020, to Indenture (6.25% CEI Senior Secured Notes due 2025), dated as of July 6, 2020, by and among Colt Merger Sub, Inc., Eldorado Resorts, Inc.~~Caesars Entertainment., the ~~subsidiary~~ guarantors party thereto and U.S. Bank National Association.

Previously filed on Form 8-K filed on ~~July 21, 2020.~~

~~Exhibit~~

~~Number~~

~~Description of Exhibit~~

~~Method of Filing~~

~~4.3~~

~~Indenture (8.125% CEI Senior Notes due 2027) dated as of July 6, 2020, by and between Colt Merger Sub, Inc. and U.S. Bank National Association.~~

~~Previously filed on Form 8-K filed on July 7, 2020.~~September 27, 2021.

~~4.4~~4.2

Second Supplemental Indenture, dated as of ~~July 20, 2020, to Indenture (8.125% CEI Senior Notes due 2027), dated as of July~~August 6, ~~2020, by and~~2021, among ~~Colt Merger Sub,~~Caesars Entertainment, Inc., ~~Eldorado Resorts,~~CRC Finco, Inc., ~~the subsidiary guarantors party thereto~~Caesars Resort Collection, LLC and U.S. Bank National ~~Association.~~Association, as trustee and collateral agent.

Previously filed on Form 8-K filed on ~~July 21, 2020.~~August 10, 2021.

~~4.5~~4.3

Fourth Supplemental Indenture, ~~(5.75% CRC Secured Notes due 2025)~~ dated as of ~~July~~August 6, ~~2020, by~~2021, among Caesars Inc., CRC Finco, Inc. Caesars Resort Collection, LLC and ~~between Colt Merger Sub, Inc. and U.S.~~Deutsche Bank ~~National Association.~~Trust Company Americas, as trustee.

Previously filed on Form 8-K filed on ~~July 7, 2020.~~August 10, 2021.

~~4.6~~

Supplemental Indenture, dated as of July 20, 2020, to Indenture (5.75% CRC Secured Notes due 2025), dated as of July 6, 2020, by and among Colt Merger Sub, Inc., CRC Finco, Inc., Caesars Resort Collection, LLC, the subsidiary guarantors party thereto, U.S. Bank National Association and Credit Suisse AG, Cayman Islands Branch.

~~Previously filed on Form 8-K filed on July 21, 2020.~~

~~4.7~~

~~Indenture (5.00% CEC Convertible Notes due 2024), dated as of October 6, 2017, between Caesars Entertainment Corporation and Delaware Trust Company, as trustee.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 13, 2017.~~

~~4.8~~

~~First Supplemental Indenture (5.00% CEC Convertible Notes due 2024), dated November 27, 2019 between Caesars Entertainment Corporation and Delaware Trust Company, as trustee.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on November 29, 2019.~~

~~4.9~~

~~Second Supplemental Indenture (5.00% CEC Convertible Notes due 2024), dated as of July 20, 2020, by and among Caesars Entertainment Corporation, Eldorado Resorts, Inc. and Delaware Trust Company.~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

~~4.10~~

~~Indenture (5.25% CRC Notes due 2025), dated October 16, 2017, by and among CRC Escrow Issuer, LLC, CRC Finco, Inc. and Deutsche Bank Trust Company Americas, as trustee.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 16, 2017.~~

~~4.11~~

Supplemental Indenture (5.25% CRC Notes due 2025), dated December 22, 2017, by and among Caesars Resort Collection, LLC, the subsidiary guarantors party thereto, CRC Finco, Inc. and Deutsche Bank Trust Company Americas, as trustee.

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on December 22, 2017.~~

10.1

~~CPLV Lease (conformed through the Second Amendment),~~S econd Ame ndment to Credit Agre ement, dated ~~as of July 20, 2020, by and among CPLV Property Owner LLC, Desert Palace LLC and CEOC, LLC.~~September 21, 2021.

Previously filed on Form 8-K filed on ~~July 21, 2020.~~September 27, 2021.

10.2

~~Third~~Fifth Amendment to ~~CPLV~~ Lease (Las Vegas) dated as of September ~~30, 2020,~~3, 2021, by and among CPLV Property Owner LLC, Claudine Propco LLC, Desert Palace LLC and CEOC, LLC.

Filed herewith.

10.3

~~Guaranty of Lease, dated as of July 20, 2020, by and among Eldorado Resorts, Inc., CPLV Property Owner LLC and Claudine Propco LLC (CPLV).~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

10.4**

~~Non-CPLV Lease (conformed through the~~ Fifth ~~Amendment), dated as of July 20, 2020, by and among the entities listed on Schedules A and B thereto and CEOC, LLC.~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

10.5**

~~Sixth Amendment to Non-CPLV Lease, dated as of September 30, 2020, by and among the entities listed on Schedules A and B thereto and CEOC, LLC.~~

~~Filed herewith.~~

~~10.6~~

~~Guaranty of Lease, dated as of July 20, 2020, by and among Eldorado Resorts, Inc. and the entities listed on Schedule A thereto (Non-CPLV).~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

10.7**

~~Second Amendment, dated as of July 20, 2020, to Lease (Joliet), dated as of October 7, 2017, by and between Harrah’s Joliet Landco LLC and Des Plaines Development Limited Partnership.~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

10.8**

~~Third~~ Amendment to Lease (Joliet), dated as of September ~~30, 2020, to Lease (Joliet), dated as of October 7, 2017,~~3, 2021, by and between Harrah’s Joliet Landco LLC and Des Plaines Development Limited Partnership.

Filed herewith.

~~10.9~~10.4

~~Guaranty of~~Eighth Amendment to Lease (Regional), dated as of ~~July 20, 2020, by and between Eldorado Resorts, Inc. and Harrah’s Joliet Landco LLC (Joliet).~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

~~Exhibit~~

~~Number~~

~~Description of Exhibit~~

~~Method of Filing~~

10.10*

~~Right of First Refusal Agreement, dated as of July 20, 2020, by and between Eldorado Resorts, Inc. and VICI Properties L.P. (Las Vegas Strip).~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

10.11*

~~Right of First Refusal Agreement, dated as of July 20, 2020, by and between Eldorado Resorts, Inc. and VICI Properties L.P. (Horseshoe Baltimore).~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

~~10.12~~

~~Second Amended and Restated Lease Agreement, dated April~~September 3, ~~2020,~~2021, by and among ~~Jazz Casino Company, L.L.C., New Orleans Building Corporation,~~the entities listed on Schedule A and ~~the City of New Orleans.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on April 6, 2020.~~

~~10.13~~

~~Letter agreement, dated April 3, 2020, by and among Jazz Casino Company, L.L.C., New Orleans Building Corporation and the City of New Orleans.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on April 6, 2020.~~

~~10.14~~

Second Amendment, dated as of July 20, 2020, to Golf Course Use Agreement, dated as of October 6, 2017, by and among Rio Secco LLC, Cascata LLC, Chariot Run LLC, Grand Bear LLC, Caesars Enterprise Services, LLC, CEOC, LLC and, solely for purposes of Section 2.1(c) thereof, Caesars License Company, LLC.

~~Previously filed on Form 8-K filed on July 21, 2020.~~

10.15*

~~Amended and Restated Put-Call Right Agreement, dated as of July 20, 2020, by and among Claudine Propco, LLC and Eastside Convention Center, LLC.~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

10.16*

~~Second Amended and Restated Put-Call Right Agreement entered into as of September 18, 2020 by and among Claudine Propco LLC and Caesars Convention Center Owner, LLC.~~

~~Previously filed on Form 8-K filed on September 18, 2020.~~

10.17*

~~Put-Call Right Agreement entered into as of July 20, 2020 by and between Centaur Propco LLC and Caesars Resort Collection, LLC.~~

~~Previously filed on Form 8-K filed on July 21, 2020.~~

~~10.18~~

First Amendment to Third Amended and Restated Omnibus License and Enterprise Services Agreement, dated as of July 20, 2020, by and among Caesars Enterprise Services, LLC, CEOC, LLC, Caesars Resort Collection LLC, Caesars License Company, LLC and Caesars World LLC (including as Exhibit A thereto a conformed copy of the Third Amended and Restated Omnibus License and Enterprise Services Agreement, dated as of December 26, 2018, as amended).

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on July 21, 2020.~~

~~10.19~~

Credit Agreement, dated as of July 20, 2020, by and among Eldorado Resorts, Inc., the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent, and U.S. Bank National Association, as collateral agent.

~~Previously filed on Form 8-K filed on July 21, 2020.~~

~~10.20~~

Incremental Assumption Agreement No. 1, dated as of July 20, 2020, by and among Eldorado Resorts, Inc., the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.

~~Previously filed on Form 8-K filed on July 21, 2020.~~

~~10.21~~

Credit Agreement, dated as of December 22, 2017, by and among Caesars Resort Collection, LLC, the other borrowers from time to time party thereto, the lenders party thereto, and Credit Suisse, AG, Cayman Islands Branch, as administrative agent.

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on December 22, 2017.~~

~~10.22~~

First Amendment to Credit Agreement, dated as of June 15, 2020, by and among Caesars Resort Collection, LLC, the subsidiary loan parties party thereto, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent.

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on June 12, 2020.~~

~~10.23~~

Incremental Assumption Agreement No. 1, dated as of July 20, 2020, by and among Caesars Resort Collection, LLC, the subsidiary guarantors party thereto, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent.

~~Previously filed on Form 8-K filed on July 21, 2020.~~

~~10.24~~

Incremental Assumption Agreement No. 2, dated as of July 20, 2020, by and among Caesars Resort Collection, LLC, the subsidiary guarantors party thereto, the lender party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent.

~~Previously filed on Form 8-K filed on July 21, 2020.~~

~~10.25~~

~~Caesars Entertainment Corporation Amended and Restated Escrow Agreement, dated as of December 12, 2016, between Caesars Entertainment Corporation and Wells Fargo Bank, N.A.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 13, 2017.~~

~~Exhibit~~

~~Number~~

~~Description of Exhibit~~

~~Method of Filing~~

~~10.26†~~

~~Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Deferred Compensation Plan, effective August 3, 2007.~~

~~Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 9, 2007.~~

~~10.27†~~

~~Amendment and Restatement of Park Place Entertainment Corporation Executive Deferred Compensation Plan, effective as of August 3, 2007.~~

~~Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 9, 2007.~~

~~10.28†~~

~~Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan, effective as of August 3, 2007.~~

~~Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 9, 2007.~~

~~10.29†~~

~~Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II, effective as of August 3, 2007.~~

~~Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 9, 2007.~~

~~10.30†~~

~~First Amendment to the Amendment and Restatement of Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II, effective as of February 9, 2009.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on February 13, 2009.~~

~~10.31†~~

Second Amendment to the Amendment and Restatement of the Caesars Entertainment Corporation Executive Supplemental Savings Plan II (fka Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II), effective as of November 5, 2014.

~~Previously filed on Form 10-K filed by Caesars Holdings, Inc. on March 16, 2015.~~

~~10.32†~~

Caesars Entertainment Corporation Second Amended and Restated Executive Deferred Compensation Trust Agreement, dated as of December 12, 2016, between Caesars Entertainment Corporation and Wells Fargo Bank, N.A.

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 13, 2017.~~

~~10.33~~

~~Trademark License Agreement, dated as of October 6, 2017, between Caesars License Company, LLC and Desert Palace LLC.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on October 13, 2017.~~

~~10.34~~

~~Amended and Restated Casino Operating Contract, dated April 1, 2020, by and between Jazz Casino Company, L.L.C. and the State of Louisiana, by and through the Louisiana Gaming Control Board.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on April 6, 2020.~~

~~10.35~~

First Amendment to the Amended and Restated Casino Operating Contract, made and entered into as of April 9, 2020, and made effective as of April 1, 2020, by and between Jazz Casino Company, L.L.C. and the State of Louisiana, by and through the Louisiana Gaming Control Board.

~~Previously filed on Form 8-K/A filed by Caesars Holdings, Inc. on April 14, 2020.~~

~~10.36†~~

~~Caesars Entertainment Corporation 2012 Performance Incentive Plan.~~

~~Previously filed on Form S-1/A filed by Caesars Holdings, Inc. on February 2, 2012.~~

~~10.37†~~

~~Amendment No. 1 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on July 25, 2012.~~

~~10.38†~~

~~Amendment No. 2 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on May 20, 2015.~~

~~10.39†~~

~~Amendment No. 3 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on May 20, 2016.~~

~~10.40†~~

~~Amendment No. 4 to the Caesars Entertainment Corporation 2012 Performance Incentive Plan.~~

~~Previously filed on Form 10-Q filed by Caesars Holdings, Inc. on August 2, 2016.~~

~~Exhibit~~

~~Number~~

~~Description of Exhibit~~

~~Method of Filing~~

~~10.41†~~

~~Caesars Entertainment Corporation 2017 Performance Incentive Plan.~~

~~Previously filed on Form S-8 filed by Caesars Holdings, Inc. on October 6, 2017.~~

~~10.42†~~

~~Amendment No. 1 to Caesars Entertainment Corporation 2017 Performance Incentive Plan.~~

~~Previously filed on Form 8-K filed by Caesars Holdings, Inc. on April 6, 2018.~~

~~10.43†~~

~~Caesars Entertainment Corporation Executive Supplemental Savings Plan III.~~

~~Previously filed on Form S-8 filed by Caesars Holdings, Inc. on December 13, 2018.~~

~~10.44†~~

~~Caesars Entertainment Corporation Outside Director Deferred Compensation Plan.~~

~~Previously filed on Form S-8 filed by Caesars Holdings, Inc. on December 13, 2018.~~

~~10.45†~~

~~Caesars Acquisition Company 2014 Performance Incentive Plan.~~

~~Previously filed on Form 8-K filed by Caesars Acquisition Company on April 16, 2014.~~

~~10.46†~~

~~Form of Director Indemnification Agreement.~~B thereto.

Filed herewith.

~~10.47~~10.5

~~Amended and Restated Omnibus Amendment to Leases,~~Guarantee Agreement, dated as of ~~October 27, 2020,~~August 6, 2021, by and among the entities listed on schedule A thereto, CPLV Property Owner LLC, Claudine Propco LLC, Harrah’s Joliet Landco LLC, CEOC, LLC, the entities listed on schedule B thereto, Desert Palace LLC, Harrah’s Las Vegas, LLC and Des Plaines Development Limited Partnership.Caesars Entertainment, Inc. in favor of U.S. Bank National Association, as collateral agent.

~~Filed herewith.~~Previously filed on Form 8-K filed on August 10, 2021.

31.1

Certification of Thomas R. Reeg pursuant to Rule 13a-14a and Rule 15d-14(a)

Filed herewith.

31.2

Certification of Bret Yunker pursuant to Rule 13a-14a and Rule 15d-14(a)

Filed herewith.

32.1

Certification of Thomas R. Reeg in accordance with 18 U.S.C. Section 1350

Filed herewith.

32.2

Certification of Bret Yunker in accordance with 18 U.S.C. Section 1350

Filed herewith.

99.1

Financial Information of Caesars ~~Resorts~~Resort Collection, LLC

Filed herewith.

101.1

Inline XBRL Instance Document

Filed herewith.

101.2

Inline XBRL Taxonomy Extension Schema Document

Filed herewith.

101.3

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith.

101.4

Inline XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith.

101.5

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed herewith.

101.6

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Filed herewith.


†						~~Denotes a management contract or compensatory plan or arrangement.~~
*						Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally copies of omitted schedules and exhibits to the U.S. Securities and Exchange Commission upon its request.
**						Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because such information is (i) not material and (ii) could be competitively harmful if publicly disclosed. The Company will furnish supplementally an unredacted copy of such exhibit to the U.S. Securities and Exchange Commission upon its request.

77Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			CAESARS ENTERTAINMENT, INC.

Date: November ~~9, 2020~~4, 2021			/s/ Thomas R. Reeg
			Thomas R. Reeg Chief Executive Officer (Principal Executive Officer)

Date: November ~~9, 2020~~4, 2021			/s/ Bret Yunker
			Bret Yunker Chief Financial Officer (Principal Financial Officer)

78Table of Contents


	September 30, 2020		December 31, 2019
(Dollars in millions)	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($8 and $0 attributable to our VIEs)	$	1,037	$	206
Restricted cash and investments	2,259		4

Accounts receivable, net	385		54
Due from affiliates	37		4
Inventories	49		18
Prepayments and other current assets ($5 and $0 attributable to our VIEs)	265		66
Assets held for sale	2,266		253
Total current assets	6,298		605
Investment in and advances to unconsolidated affiliates	170		136
Property and equipment, net ($84 and $0 attributable to our VIEs)	14,630		2,615
Gaming licenses and other intangibles, net	4,466		1,111
Goodwill	9,450		910

Other assets, net ($25 and $0 attributable to our VIEs)	1,224		264
Deferred income taxes	1		0
Total assets	$	36,239	$	5,641
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	67	$	246
Accounts payable ($98 and $0 attributable to our VIEs)	274		62


Accrued interest	241		36



Accrued other liabilities ($2 and $0 attributable to our VIEs)	1,371		307
Liabilities related to assets held for sale	517		37
Total current liabilities	2,470		688
Long-term financing obligation	12,547		971
Long-term debt, less current portion	15,203		2,325
Deferred income taxes	1,081		197

Other long-term liabilities ($19 and $0 attributable to our VIEs)	1,549		343
Total liabilities	32,850		4,524
Commitments and contingencies (Note 13)
STOCKHOLDERS' EQUITY:





Caesars stockholders’ equity	3,370		1,117
Noncontrolling interests	19		0
Total stockholders’ equity	3,389		1,117
Total liabilities and stockholders’ equity	$	36,239	$	5,641


	Three Months Ended September 30, 2019
(In millions)	Las Vegas		Regional		Managed, International & CIE		Corporate and Other		Total
Casino and pari-mutuel commissions	$	0	$	458	$	0	$	0	$	458
Food and beverage	0		78		0		0		78
Hotel	0		94		0		0		94
Other	0		31		0		2		33
Net revenues	$	0	$	661	$	0	$	2	$	663


	Nine Months Ended September 30, 2019
(In millions)	Las Vegas		Regional		Managed, International & CIE		Corporate and Other		Total
Casino and pari-mutuel commissions	$	0	$	1,386	$	0	$	0	$	1,386
Food and beverage	0		229		0		0		229
Hotel	0		237		0		0		237
Other	0		78		0		6		84
Net revenues	$	0	$	1,930	$	0	$	6	$	1,936


	September 30, 2020
(In millions)	Shreveport		MontBleu		Evansville
Assets:






Property and equipment, net	$	85	$	37	$	302
Goodwill	0		0		9
Gaming licenses and other intangibles, net	21		0		138
Other assets, net	15		32		48
Assets held for sale	$	121	$	69	$	497

Current liabilities	$	21	$	72	$	36






Liabilities related to assets held for sale	$	21	$	72	$	36


	Three Months Ended September 30, 2019
(In millions)	Mountaineer		Cape Girardeau		Caruthersville		Kansas City		Vicksburg		Presque		Nemacolin
Net revenues	$	33	$	14	$	9	$	15	$	6	$	0	$	0
Net income	3		2		1		1		0		0		0


	Units	Weighted- Average Grant Date Fair Value (a)
Unvested outstanding as of December 31, 2019	1,246,641	$	35.56
Granted (b)	1,222,736	48.17
Acquired (c)	1,876,969	38.24
Vested	(1,068,509)	33.22
Forfeited	(22,912)	41.89
Unvested outstanding as of September 30, 2020	3,254,925	42.56


	Units	Weighted- Average Fair Value (a)
Unvested outstanding as of December 31, 2019	0	$	0
Granted	185,639	70.26
Acquired (b)	124,984	63.36
Vested	(61,322)	63.36
Forfeited	0	0
Unvested outstanding as of September 30, 2020	249,301	68.50


(In millions)	GLPI Leases		VICI Leases
2020 (excluding the nine months ended September 30, 2020)	$	27	$	268
2021	109		1,079
2022	109		1,097
2023	111		1,119
2024	112		1,139
Thereafter	4,880		46,737
Total future payments	5,348		51,439
Less: Amounts representing interest	(4,522)		(41,020)
Plus: Residual values	399		906
Financing obligation	$	1,225	$	11,325


	GLPI Leases (a)								VICI Leases
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2020		2019		2020		2019		2020		2019		2020		2019
Cash paid for principal	$	22	$	22	$	66	$	66	$	49	$	0	$	49	$	0
Cash paid for interest	24		25		74		74		128		0		128		0


(In millions)	Level 3 Investments		Level 3 Other Liabilities
Fair value of investment and liabilities at December 31, 2019	$	29	$	0
Value of additional investment received	5		2
Unrealized gain	16		2
Fair value at September 30, 2020	$	50	$	4


	Three Months Ended September 30, 2020
(In millions)	CEI		Add: Disc. Ops (d)		Pre-Acq. CEC (e)		Total (f)
Net (loss) income attributable to Caesars	$	(926)	$	—	$	(173)	$	(1,099)
Net income (loss) attributable to noncontrolling interests	1		—		(62)		(61)
Net loss from discontinued operations	1		2		—		3
Interest expense, net	473		26		72		571
Provision (benefit) for income taxes	135		4		(51)		88
Other loss (a)	164		—		67		231
Impairment charges	—		—		124		124
Depreciation and amortization	223		2		53		278
Stock-based compensation	45		1		3		49
Transaction costs and other operating costs (b)	219		3		22		244
Other items (c)	16		—		19		35
Adjusted EBITDA	$	351	$	38	$	74	$	463


	Three Months Ended September 30, 2019
(In millions)	CEI		Less: Divestitures (g)		Pre-Acq. CEC (e)		Total (h)
Net income (loss) attributable to Caesars	$	37	$	14	$	(359)	$	(336)
Net loss attributable to noncontrolling interests	—		—		(1)		(1)
Provision (benefit) for income taxes	18		5		(22)		(9)
Other income (a)	(2)		—		(27)		(29)
Interest expense, net	72		1		341		412
Depreciation and amortization	53		1		255		307
Impairment charges	—		—		380		380
Transaction costs and other operating costs (b)	14		—		33		47
Stock-based compensation expense	4		—		19		23
Other items (c)	1		1		16		16
Adjusted EBITDA	$	197	$	22	$	635	$	810


	Nine Months Ended September 30, 2020
(In millions)	CEI		Less: Divest. Add: Disc. Ops (d) (g)		Pre-Acq. CEC (e)		Total (i)
Net loss attributable to Caesars	$	(1,202)	$	(11)	$	(1,059)	$	(2,250)
Net income (loss) attributable to noncontrolling interests	1		—		(67)		(66)
Net loss (income) from discontinued operations	1		(2)		—		3
Interest expense, net	608		(23)		750		1,381
Provision (benefit) for income taxes	64		(4)		(224)		(156)
Other loss (income) (a)	174		—		(45)		129
Impairment charges	161		—		189		350
Depreciation and amortization	322		—		559		881
Stock-based compensation	55		(1)		26		82
Transaction costs and other operating costs (b)	242		(1)		71		314
Other items (c)	15		1		54		68
Adjusted EBITDA	$	441	$	(41)	$	254	$	736