UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2022


☐			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 ~~April 28,~~October 27, 2022 was ~~214,366,139.~~214,566,105.

CAESARS ENTERTAINMENT, INC.

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION		2
Item 1.	Unaudited Financial Statements	2
	Consolidated Condensed Balance Sheets	2
	Consolidated Condensed Statements of Operations	3
	Consolidated Condensed Statements of Comprehensive Income (Loss)	4
	Consolidated Condensed Statements of Stockholders’ Equity	5
	Consolidated Condensed Statements of Cash Flows	67
	Notes to Consolidated Condensed Financial Statements	78
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3336
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4853
Item 4.	Controls and Procedures	4954

PART II. OTHER INFORMATION		5055
Item 1.	Legal Proceedings	5055
Item 1A.	Risk Factors	5156
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5156
Item 3.	Defaults Upon Senior Securities	5156
Item 4.	Mine Safety Disclosures	5156
Item 5.	Other Information	5156
Item 6.	Exhibits	5257

Signatures		5358

PART I - FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)


(In millions)	(In millions)	March 31, 2022		December 31, 2021		(In millions)	September 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
CURRENT ASSETS:	CURRENT ASSETS:					CURRENT ASSETS:
Cash and cash equivalents	Cash and cash equivalents	$	814	$	1,070	Cash and cash equivalents	$	944	$	1,070
Restricted cash and investments	Restricted cash and investments	185		319		Restricted cash and investments	136		319
Accounts receivable, net	Accounts receivable, net	450		472		Accounts receivable, net	506		472

Inventories	Inventories	44		42		Inventories	46		42
Prepayments and other current assets	Prepayments and other current assets	313		290		Prepayments and other current assets	304		290
Assets held for sale	Assets held for sale	3,314		3,771		Assets held for sale	—		3,771
Total current assets	Total current assets	5,120		5,964		Total current assets	1,936		5,964
Investment in and advances to unconsolidated affiliates	Investment in and advances to unconsolidated affiliates	97		158		Investment in and advances to unconsolidated affiliates	96		158
Property and equipment, net	Property and equipment, net	14,637		14,601		Property and equipment, net	14,592		14,601
Gaming rights and other intangibles, net	Gaming rights and other intangibles, net	4,863		4,920		Gaming rights and other intangibles, net	4,779		4,920
Goodwill	Goodwill	11,082		11,076		Goodwill	11,082		11,076
Other assets, net	Other assets, net	1,274		1,312		Other assets, net	1,109		1,312
Total assets	Total assets	$	37,073	$	38,031	Total assets	$	33,594	$	38,031
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:	CURRENT LIABILITIES:					CURRENT LIABILITIES:
Accounts payable	Accounts payable	$	528	$	254	Accounts payable	$	300	$	254
Accrued interest	Accrued interest	235		320		Accrued interest	229		320
Accrued other liabilities	Accrued other liabilities	1,750		1,973		Accrued other liabilities	1,827		1,973
Current portion of long-term debt	Current portion of long-term debt	70		70		Current portion of long-term debt	70		70
Liabilities related to assets held for sale	Liabilities related to assets held for sale	2,562		2,680		Liabilities related to assets held for sale	—		2,680
Total current liabilities	Total current liabilities	5,145		5,297		Total current liabilities	2,426		5,297
Long-term financing obligation	Long-term financing obligation	12,483		12,424		Long-term financing obligation	12,565		12,424
Long-term debt	Long-term debt	13,741		13,722		Long-term debt	12,857		13,722
Deferred income taxes	Deferred income taxes	929		1,111		Deferred income taxes	982		1,111
Other long-term liabilities	Other long-term liabilities	929		936		Other long-term liabilities	872		936
Total liabilities	Total liabilities	33,227		33,490		Total liabilities	29,702		33,490
Commitments and contingencies (Note 8)	Commitments and contingencies (Note 8)			0		Commitments and contingencies (Note 8)
0STOCKHOLDERS’ EQUITY:
STOCKHOLDERS’ EQUITY:						STOCKHOLDERS’ EQUITY:
Caesars stockholders’ equity	Caesars stockholders’ equity	3,785		4,480		Caesars stockholders’ equity	3,838		4,480
Noncontrolling interests	Noncontrolling interests	61		61		Noncontrolling interests	54		61
Total stockholders’ equity	Total stockholders’ equity	3,846		4,541		Total stockholders’ equity	3,892		4,541
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	37,073	$	38,031	Total liabilities and stockholders’ equity	$	33,594	$	38,031

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

Table of Contents

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)


		Three Months Ended March 31,			Three Months Ended September 30,						Nine Months Ended September 30,
(In millions, except per share data)	(In millions, except per share data)		2022			2021		(In millions, except per share data)	2022		2021		2022		2021
REVENUES:	REVENUES:							REVENUES:
Casino and pari-mutuel commissions	Casino and pari-mutuel commissions		$	1,292		$	1,227	Casino and pari-mutuel commissions	$	1,605	$	1,510	$	4,446	$	4,308
Food and beverage	Food and beverage		339			169		Food and beverage	411		347		1,172		797
Hotel	Hotel		383			215		Hotel	544		511		1,446		1,122
Other	Other		278			181		Other	327		317		936		752

Net revenues	Net revenues		2,292			1,792		Net revenues	2,887		2,685		8,000		6,979
EXPENSES:	EXPENSES:							EXPENSES:
Casino and pari-mutuel commissions	Casino and pari-mutuel commissions		1,064			587		Casino and pari-mutuel commissions	838		830		2,727		2,111
Food and beverage	Food and beverage		202			108		Food and beverage	240		210		684		484
Hotel	Hotel		115			81		Hotel	142		130		391		317
Other	Other		88			69		Other	105		114		298		262
General and administrative	General and administrative		499			380		General and administrative	529		486		1,545		1,284

Corporate	Corporate		69			66		Corporate	63		86		208		228

Depreciation and amortization	Depreciation and amortization		300			265		Depreciation and amortization	304		276		910		842
Transaction and other operating costs, net	Transaction and other operating costs, net		(35)			20		Transaction and other operating costs, net	7		21		(14)		113
Total operating expenses	Total operating expenses		2,302			1,576		Total operating expenses	2,228		2,153		6,749		5,641
Operating income (loss)			(10)			216
Operating income								Operating income	659		532		1,251		1,338
OTHER EXPENSE:	OTHER EXPENSE:							OTHER EXPENSE:
Interest expense, net	Interest expense, net		(552)			(579)		Interest expense, net	(569)		(579)		(1,680)		(1,734)

Loss on extinguishment of debt								Loss on extinguishment of debt	(33)		(117)		(33)		(140)

Other income (loss)	Other income (loss)		4			(133)		Other income (loss)	4		(153)		53		(176)
Total other expense	Total other expense		(548)			(712)		Total other expense	(598)		(849)		(1,660)		(2,050)
Loss from continuing operations before income taxes			(558)			(496)
Benefit for income taxes			107			76
Net loss from continuing operations, net of income taxes			(451)			(420)
Income (loss) from continuing operations before income taxes								Income (loss) from continuing operations before income taxes	61		(317)		(409)		(712)
Benefit (provision) for income taxes								Benefit (provision) for income taxes	(8)		90		47		167
Net income (loss) from continuing operations, net of income taxes								Net income (loss) from continuing operations, net of income taxes	53		(227)		(362)		(545)
Discontinued operations, net of income taxes	Discontinued operations, net of income taxes		(229)			(4)		Discontinued operations, net of income taxes	—		(4)		(386)		(38)
Net loss			(680)			(424)
Net loss attributable to noncontrolling interests			—			1
Net loss attributable to Caesars			$	(680)		$	(423)
Net income (loss)								Net income (loss)	53		(231)		(748)		(583)
Net income attributable to noncontrolling interests								Net income attributable to noncontrolling interests	(1)		(2)		(3)		(2)
Net income (loss) attributable to Caesars								Net income (loss) attributable to Caesars	$	52	$	(233)	$	(751)	$	(585)

Net loss per share - basic and diluted:
Basic loss per share from continuing operations			$	(2.11)		$	(2.01)
Net income (loss) per share - basic and diluted:								Net income (loss) per share - basic and diluted:
Basic income (loss) per share from continuing operations								Basic income (loss) per share from continuing operations	$	0.24	$	(1.08)	$	(1.70)	$	(2.60)
Basic loss per share from discontinued operations	Basic loss per share from discontinued operations		(1.07)			(0.02)		Basic loss per share from discontinued operations	—		(0.02)		(1.80)		(0.18)
Basic loss per share			$	(3.18)		$	(2.03)
Diluted loss per share from continuing operations			$	(2.11)		$	(2.01)
Basic income (loss) per share								Basic income (loss) per share	$	0.24	$	(1.10)	$	(3.50)	$	(2.78)
Diluted income (loss) per share from continuing operations								Diluted income (loss) per share from continuing operations	$	0.24	$	(1.08)	$	(1.70)	$	(2.60)
Diluted loss per share from discontinued operations	Diluted loss per share from discontinued operations		(1.07)			(0.02)		Diluted loss per share from discontinued operations	—		(0.02)		(1.80)		(0.18)
Diluted loss per share			$	(3.18)		$	(2.03)
Diluted income (loss) per share								Diluted income (loss) per share	$	0.24	$	(1.10)	$	(3.50)	$	(2.78)
Weighted average basic shares outstanding	Weighted average basic shares outstanding		214			208		Weighted average basic shares outstanding	214		214		214		211
Weighted average diluted shares outstanding	Weighted average diluted shares outstanding		214			208		Weighted average diluted shares outstanding	215		214		214		211

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

Table of Contents

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2022		2021			(In millions)	2022		2021		2022		2021
Net loss		$	(680)	$	(424)
Net income (loss)							Net income (loss)	$	53	$	(231)	$	(748)	$	(583)
Foreign currency translation adjustments	Foreign currency translation adjustments	(33)		—			Foreign currency translation adjustments	110		(33)		33		(44)
Change in fair market value of interest rate swaps, net of tax	Change in fair market value of interest rate swaps, net of tax	13		12			Change in fair market value of interest rate swaps, net of tax	3		11		23		33
Other	Other	—		(1)			Other	—		(3)		1		(1)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(20)		11			Other comprehensive income (loss), net of tax	113		(25)		57		(12)
Comprehensive loss		(700)		(413)
Comprehensive loss attributable to noncontrolling interests		—		1
Comprehensive loss attributable to Caesars		$	(700)	$	(412)
Comprehensive income (loss)							Comprehensive income (loss)	166		(256)		(691)		(595)
Comprehensive income attributable to noncontrolling interests							Comprehensive income attributable to noncontrolling interests	(1)		(2)		(3)		(2)
Comprehensive income (loss) attributable to Caesars							Comprehensive income (loss) attributable to Caesars	$	165	$	(258)	$	(694)	$	(597)

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

Table of Contents

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

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, 2020 208 $ — $ 6,382 $ (1,391) $ 34 $ (9) $ 18 $ 5,034
Issuance of restricted stock units — — 23 — — — — 23
Net loss — — — (423) — — (1) (424)
Other comprehensive income, net of tax — — — — 11 — — 11
Shares withheld related to net share settlement of stock awards — — (14) — — — — (14)
Balance, March 31, 2021 208 $ — $ 6,391 $ (1,814) $ 45 $ (9) $ 17 $ 4,630
Balance, December 31, 2021 214 $ — $ 6,877 $ (2,410) $ 36 $ (23) $ 61 $ 4,541
Issuance of restricted stock units — — 25 — — — — 25
Net loss — — — (680) — — — (680)
Other comprehensive loss, net of tax — — — — (20) — — (20)
Shares withheld related to net share settlement of stock awards — — (20) — — — — (20)
Balance, March 31, 2022 214 $ — $ 6,882 $ (3,090) $ 16 $ (23) $ 61 $ 3,846

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


	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, 2020	208	$	—	$	6,382	$	(1,391)	$	34	$	(9)	$	18	$	5,034
Issuance of restricted stock units	—	—		23		—		—		—		—		23
Net loss	—	—		—		(423)		—		—		(1)		(424)
Other comprehensive income, net of tax	—	—		—		—		11		—		—		11
Shares withheld related to net share settlement of stock awards	—	—		(14)		—		—		—		—		(14)
Balance, March 31, 2021	208	—		6,391		(1,814)		45		(9)		17		4,630
Issuance of restricted stock units	—	—		21		—		—		—		—		21
Issuance of common stock, net	5	—		454		—		—		(14)		—		440
Net income	—	—		—		71		—		—		1		72
Other comprehensive income, net of tax	—	—		—		—		2		—		—		2
Shares withheld related to net share settlement of stock awards	—	—		(13)		—		—		—		—		(13)
Acquired noncontrolling interest	—	—		—		—		—		—		10		10
Balance, June 30, 2021	213	—		6,853		(1,743)		47		(23)		28		5,162
Issuance of restricted stock units	1	—		20		—		—		—		—		20
Net income (loss)	—	—		—		(233)		—		—		2		(231)
Other comprehensive loss, net of tax	—	—		—		—		(25)		—		—		(25)
Shares withheld related to net share settlement of stock awards	—	—		(6)		—		—		—		—		(6)
Acquired noncontrolling interests	—	—		—		—		—		—		33		33
Balance, September 30, 2021	214	$	—	$	6,867	$	(1,976)	$	22	$	(23)	$	63	$	4,953

Table of Contents

~~CAESARS ENTERTAINMENT, INC.~~

~~CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS~~

~~(UNAUDITED)~~

Three Months Ended March 31,
(In millions) 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities $ (246) $ 61
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (210) (65)
Acquisition of gaming rights and trademarks — (2)
Proceeds from sale of businesses, property and equipment, net of cash sold 3 4
Proceeds from the sale of investments 27 42
Proceeds from insurance related to property damage 27 26
Investments in unconsolidated affiliates — (30)
Other (6) —
Net cash used in investing activities (159) (25)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities 475 —
Repayments of long-term debt and revolving credit facilities (492) (16)
Taxes paid related to net share settlement of equity awards (20) (14)
Net cash used in financing activities (37) (30)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities (13) (4)
Cash flows from investing activities (39) —
Net cash from discontinued operations (52) (4)
Effect of foreign currency exchange rates on cash (9) 21
Increase (decrease) in cash, cash equivalents and restricted cash (503) 23
Cash, cash equivalents and restricted cash, beginning of period 2,021 4,280
Cash, cash equivalents and restricted cash, end of period $ 1,518 $ 4,303
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONSOLIDATED CONDENSED BALANCE SHEETS:
Cash and cash equivalents $ 814 $ 1,810
Restricted cash included in restricted cash and investments 185 2,050
Restricted and escrow cash included in other assets, net 266 410
Cash and cash equivalents and restricted cash held for sale - discontinued operations 253 33
Total cash, cash equivalents and restricted cash $ 1,518 $ 4,303
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 572 $ 490
Income taxes (refunded) paid, net 6 (1)
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Payables for capital expenditures 151 33
Land contributed to joint venture — 61


	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, 2021	214	$	—	$	6,877	$	(2,410)	$	36	$	(23)	$	61	$	4,541
Issuance of restricted stock units	—	—		25		—		—		—		—		25
Net loss	—	—		—		(680)		—		—		—		(680)
Other comprehensive loss, net of tax	—	—		—		—		(20)		—		—		(20)
Shares withheld related to net share settlement of stock awards	—	—		(20)		—		—		—		—		(20)
Balance, March 31, 2022	214	—		6,882		(3,090)		16		(23)		61		3,846
Issuance of restricted stock units	—	—		26		—		—		—		—		26
Net income (loss)	—	—		—		(123)		—		—		2		(121)
Other comprehensive loss, net of tax	—	—		—		—		(36)		—		—		(36)
Shares withheld related to net share settlement of stock awards	—	—		(3)		—		—		—		—		(3)
Transactions with noncontrolling interests	—	—		—		—		—		—		(1)		(1)
Balance, June 30, 2022	214	—		6,905		(3,213)		(20)		(23)		62		3,711
Issuance of restricted stock units	1	—		27		—		—		—		—		27
Net income	—	—		—		52		—		—		1		53
Other comprehensive income, net of tax	—	—		—		—		113		—		—		113
Shares withheld related to net share settlement of stock awards	—	—		(3)		—		—		—		—		(3)
Transactions with noncontrolling interests	—	—		—		—		—		—		(9)		(9)
Balance, September 30, 2022	215	$	—	$	6,929	$	(3,161)	$	93	$	(23)	$	54	$	3,892

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

Table of Contents

CAESARS ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine Months Ended September 30,
(In millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:




















Net cash provided by operating activities	$	469	$	974

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net	(717)		(313)
Acquisition of William Hill, net of cash acquired	—		(1,551)
Purchase of additional interest in Horseshoe Baltimore, net of cash consolidated	—		(5)
Acquisition of gaming rights and trademarks	(11)		(282)
Proceeds from sale of businesses, property and equipment, net of cash sold	21		709
Proceeds from the sale of investments	121		206
Proceeds from insurance related to property damage	36		44
Investments in unconsolidated affiliates	—		(39)

Net cash used in investing activities	(550)		(1,231)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities	750		1,308
Repayments of long-term debt and revolving credit facilities	(1,761)		(1,125)
Cash paid to settle convertible notes	—		(367)

Financing obligation payments	(1)		—
Debt issuance and extinguishment costs	—		(42)

Taxes paid related to net share settlement of equity awards	(26)		(33)

Net cash used in financing activities	(1,038)		(259)

CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities	(18)		(55)
Cash flows from investing activities	386		(1,453)
Cash flows from financing activities	—		591
Net cash from discontinued operations	368		(917)

Change in cash, cash equivalents and restricted cash classified as assets held for sale	—		10
Effect of foreign currency exchange rates on cash	(29)		31
Decrease in cash, cash equivalents and restricted cash	(780)		(1,392)
Cash, cash equivalents and restricted cash, beginning of period	2,021		4,280
Cash, cash equivalents and restricted cash, end of period	$	1,241	$	2,888

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO AMOUNTS REPORTED WITHIN THE CONSOLIDATED CONDENSED BALANCE SHEETS:
Cash and cash equivalents	$	944	$	1,072
Restricted cash included in restricted cash and investments	136		302
Restricted and escrow cash included in other assets, net	161		1,166
Cash and cash equivalents and restricted cash held for sale - discontinued operations	—		348
Total cash, cash equivalents and restricted cash	$	1,241	$	2,888
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	1,571	$	1,528
Income taxes (refunded) paid, net	18		(6)
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Payables for capital expenditures	118		72

Convertible notes settled with shares	—		440
Land contributed to joint venture	—		61

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)

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, 2021 ~~(“2021~~(the “2021 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2021 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 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. Beginning in 2005, the Company grew through a series of acquisitions, including the acquisition of MTR Gaming Group, Inc. in 2014, Isle of Capri Casinos, Inc. (“Isle” or “Isle of Capri”) in 2017 and Tropicana Entertainment, Inc. in 2018. On July 20, 2020, the Company completed ~~the~~a merger with Caesars Entertainment Corporation (“Former Caesars”) pursuant to which Former Caesars became a wholly-owned subsidiary of the Company (the “Merger”) and the Company changed the Company’s ticker symbol on the NASDAQ Stock Market from “ERI” to ~~“CZR”.~~

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

The Company owns, leases, brands or manages an aggregate of 5251 domestic properties in 16 states with approximately ~~54,300~~52,800 slot machines, video lottery terminals and e-tables, approximately ~~2,900~~2,800 table games and approximately ~~47,700~~47,500 hotel rooms as of ~~March 31,~~September 30, 2022. The Company operates and conducts sports wagering across ~~23 states and domestic~~26 jurisdictions 16in North America, 19 of which are mobile for sports betting, and operates regulated online real money gaming businesses in ~~5 states.~~six jurisdictions in North America. 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. The Company’s primary source of revenue is generated by its casino properties’ gaming operations, retail and online sports betting, as well as online gaming, and the Company utilizes its hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to its properties.

The Company’s operations for retail and mobile sports betting, online horse racing wagering, online casino, and online poker are included ~~under~~within the Caesars Digital segment. The Company has made significant investments into the interactive business with the completion of the Merger and the William Hill Acquisition. In addition, in connection with the launch and rebranding of the Caesars Sportsbook app, our Caesars Digital segment initiated a significant marketing campaign with distinguished actors, former athletes and other media personalities. As new states and jurisdictions have legalized sports betting, we have made significant upfront ~~investment~~investments which ~~has~~have been executed through marketing campaigns and promotional incentives to acquire new customers and establish ourselves as an industry leader. During ~~active~~significant promotional periods, such as entering new jurisdictions with our Caesars Sportsbook app, ~~such activity could result in negative net gaming revenue. The~~the Company intends to ~~limit the duration of active promotion periods~~be strategic and apply discretion to determine the duration and the level of investment for a particular jurisdiction. The Caesars Sportsbook app offers numerous pre-match and live markets, extensive odds and flexible limits, player props, and same-game parlays. Caesars Sportsbook has partnerships with the NFL, NBA, NHL and MLB and is the exclusive odds provider for ESPN and CBS Sports. The Company ~~also intends to continue to create new partnerships among collegiate and professional sports teams and~~ entered into ~~the~~an exclusive naming-rights partnership to rebrand the Superdome in New Orleans as the Caesars ~~Superdome.~~Superdome and intends to continue to create new partnerships among collegiate and professional sports teams. In addition to the Caesars Sportsbook app, the Company and NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., launched the Caesars Racebook app. The Caesars Racebook app provides access for wagers at over 300 racetracks around the world. Wagers placed can earn credits towards the Caesars Rewards program or points which can be redeemed for free wagering credits. The Company expects to continue to expand its operations in the Caesars Digital segment as new jurisdictions legalize retail and online sports ~~betting.~~betting and online horse racing wagering.

The Company has divested certain properties and 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.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

William Hill Acquisition

On September 30, 2020, the Company announced that it had reached an agreement with William Hill PLC on the terms of a recommended cash acquisition pursuant to which the Company would acquire the entire issued and to be issued share capital (other than shares owned by the Company or held in treasury) of William Hill PLC, in an all-cash transaction. On the acquisition date, the Company’s intent was to divest of William Hill PLC’s non-U.S. operations, which included the UK and international online divisions and the retail betting shops (collectively, “William Hill International”) was held for sale as of the date of the closing of the William Hill Acquisition with operations reflected within discontinued operations. See Note 3. On April 22, 2021, the Company completed the acquisition of William Hill PLC for £2.9 billion, or approximately $3.9 billion. See Note 2.

In connection with the William Hill Acquisition, on April 22, 2021, a newly formed subsidiary of the Company (the “Bridge Facility Borrower”) entered into a Credit Agreement (the “Bridge Credit Agreement”) with certain lenders party thereto and Deutsche Bank AG, London Branch, as administrative agent and collateral agent, pursuant to which the lenders party thereto provided the Debt Financing (as defined below). The Bridge Credit Agreement ~~provides~~provided for (a) a 540-day £1.0 billion asset sale bridge facility, (b) a 60-day £503 million cash confirmation bridge facility and (c) a 540-day £116 million revolving credit facility (collectively, the “Debt Financing”). The proceeds of the bridge loan facilities provided under the Bridge Credit Agreement were used (i) to pay a portion of the cash consideration for the acquisition and (ii) to pay fees and expenses related to the acquisition and related transactions. The ~~proceeds of the revolving credit facility under the Bridge Credit Agreement may be used for working capital and general corporate purposes. 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., and amended on December 11, 2020, was terminated upon the execution of the Bridge Credit Agreement. On May 12, 2021, wethe Company 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 as of the date of the closing of the William Hill Acquisition and are reflected within discontinued operations. See Note 3. 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. In order to manage the risk of changes in the GBP denominated sales price and expected proceeds, the Company entered into foreign exchange forward contracts. See Note 7. On April 7, 2022, the Company amended the agreement to sell ~~the non-US assets of~~ William Hill International to 888 Holdings Plc for a revised enterprise value of approximately £2.0 billion. The amended agreement ~~reflects~~reflected a £250 million reduction in consideration payable at closing and up to £100 million as deferred consideration to be paid to the Company, subject to 888 Holdings Plc meeting certain 2023 financial targets. ~~As a result of~~During the ~~reduction in sales price,~~nine months ended September 30, 2022, the Company recorded ~~an impairment~~impairments to assets held for sale of ~~$329~~$503 million within discontinued operations ~~during~~based on the ~~three months ended March 31, 2022.~~revised and final sales prices. ~~After repayment~~

On July 1, 2022, the Company completed the sale of ~~the~~William Hill International to 888 Holdings Plc. and outstanding ~~debt~~borrowings under the Bridge Credit Agreement ~~described above,~~were immediately repaid. After the repayment of the Bridge Credit Agreement, other permitted leakage, and the settlement of related forward contracts, Caesars received net proceeds of $730 million. Including open market repurchases and repayments, the Company ~~expects~~utilized all $730 million to ~~receive approximately £585 million, or $785 million, subject to any permitted leakage, which is customary for sale transactions in~~reduce the ~~UK.~~Company’s outstanding debt. See Note ~~2. In order to~~ ~~manage the risk of changes in the GBP denominated sales price and expected proceeds, the Company has entered into foreign exchange forward contracts. See~~ Note 7. The sale is subject to satisfaction of customary closing conditions, including receipt of the approval of shareholders of 888 Holdings Plc and regulatory approvals, and is expected to close in the second quarter of 2022.

~~Reclassifications~~

Certain reclassifications of prior year presentations have been made to conform to the current period presentation. 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, Horseshoe Hammond no longer met the held for sale criteria and the amounts previously presented in discontinued operations have been reclassified into continuing operations for all relevant periods presented.9.

Basis of Presentation

The accompanying unaudited Financial Statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited 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 presentation of financial information herein for the periods after the Company’s acquisition of 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 respective acquisitions. In addition, the presentation of financial information herein for the periods after the

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~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

Company’s sales of various properties is not fully comparable to the periods prior to their respective sale dates. See Note 2 for further discussion of the acquisitions and related transactions and Note 3 for properties recently ~~sold or currently held for sale.~~sold. Additionally, certain reclassifications of prior year presentations have been made to conform to the current period presentation.

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(UNAUDITED)

Consolidation of Subsidiaries and Variable Interest Entities

Our 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 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 investments for VIE consideration if a reconsideration event occurs to determine if the investment qualifies, or continues to qualify, as a VIE. If we determine an investment qualifies, or no longer qualifies, as a VIE, there may be a material effect to our Financial Statements.

Developments Related to COVID-19

In January 2020, an outbreak of a new strain of coronavirus (“COVID-19”) was identified and spread throughout much of the world, including the U.S. All of the Company’s casino properties were temporarily closed for the period from mid-March 2020 through mid-May 2020 due to orders issued by various government agencies and tribal bodies as part of certain precautionary measures intended to help slow the spread of COVID-19. The Company has resumed operations at all of its properties with the exception of Lake Charles which was severely damaged by Hurricane Laura. See Note 8. AlthoughDespite the resurgence of the COVID-19 Omicron variant ~~of COVID-19 continued to impact~~at the beginning of the ~~quarter, most~~year, operations at many of our properties experienced positive trends during much of the ~~three~~nine months ended ~~March 31,~~September 30, 2022, including higher hotel occupancy, particularly in Las Vegas, and increased gaming and food and beverage ~~volume as~~volumes. The reduction in mandates and restrictions, ~~on maximum capacities~~combined with pent up consumer demand and ~~amenities available were eased.~~supplemental discretionary spend from governmental stimulus, resulted in strong results across our properties during 2021. Future variants, mandates or restrictions imposed by various regulatory bodies are uncertain and could ~~once again,~~ have a significant impact on our future operations.

Recently Issued Accounting Pronouncements

Pronouncements Implemented in 2022

Effective January 1, 2022, we adopted Accounting Standards ~~Updates (“ASU”)~~Update 2020-04 (amended through January 2021), Reference Rate Reform. We will apply this guidance to applicable contracts and instruments if, and when, they are modified. Such application is not expected to have a material effect on our Financial Statements.

Note 2. Acquisitions and Purchase Price Accounting

Acquisition of William Hill

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

~~Prior to the acquisition,~~We acquired William Hill ~~PLC’s~~PLC and its 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~~to better position the Company to address the extensive usage of digital platforms, continued legalization in ~~8 states. Following~~additional states and jurisdictions, and growing bettor demand, which are driving the ~~William Hill Acquisition, we conduct~~market for online sports ~~wagering~~betting platforms in ~~23 states across~~ the U.S. ~~plus the District of Columbia. Additionally,~~In addition, 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~~services across these digital ~~platforms, continued legalization in additional states, and growing bettor demand are driving~~platforms. At the ~~market for online sports betting platforms in the U.S. and~~time that the William Hill Acquisition ~~positioned us~~was consummated, the Company’s intent was to ~~address this growing market.~~ divest William Hill International.

On September 8, 2021, the Company entered into an agreement to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion. On April 7, 2022, the Company amended the agreement to sell ~~the non-US assets of~~ William Hill International to 888 Holdings Plc for a revised enterprise value of approximately £2.0 billion. ~~The amended agreement reflects a £250 million reduction in consideration payable at closing and up to £100 million as deferred consideration to be paid to~~During the ~~Company, subject to 888 Holdings Plc meeting certain 2023 financial targets.~~nine months ended ~~As a result of the reduction to the sales price,~~September 30, 2022, the Company recorded ~~an impairment~~impairments to assets held for sale of ~~$329~~$503 million within discontinued operations ~~during~~based on the ~~three months ended March 31, 2022.~~revised and final sales prices. ~~The~~On July 1, 2022, the Company completed the sale is

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~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

~~subject~~William Hill International to ~~satisfaction of customary closing conditions, including receipt of the approval of shareholders of~~ 888 Holdings ~~Plc and regulatory approvals, and is expected to close in the second quarter of 2022.~~Plc.

The Company previously held an equity interest in William Hill PLC and William Hill US (see Note 4). Accordingly, the acquisition iswas accounted for as a business combination achieved in stages, or a “step acquisition.”

As mentioned above, the total purchase consideration for William Hill was approximately $3.9 billion. The estimated purchase consideration in the acquisition was determined with reference to its acquisition date fair value.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)


(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 of the acquisition date was paid at £2.72 per share, or approximately $3.77 per share using the GBP to USD exchange rate on the acquisition date.

~~Preliminary~~Final 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~~and were finalized over the one-year measurement period. The following table summarizes the ~~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 ~~March 31,~~September 30, 2022:


(In millions)	Fair Value
Other current assets	$	164
Assets held for sale	4,337
Property and equipment, net	55
Goodwill	1,154
Intangible assets (a)	565
Other noncurrent assets	317
Total assets	$	6,592

Other current liabilities	$	242
Liabilities related to assets held for sale (b)	2,142
Deferred income taxes	251
Other noncurrent liabilities	35
Total liabilities	2,670
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 the fair value of debt of $1.1 billion related to William Hill International at the acquisition date.

The preliminary purchase price allocation is subject to a measurement period and has since been revised. Assets and liabilities held for sale noted above are substantially all related to William Hill International. During the three months ended March 31, 2022, the Company revised the assumed deferred tax liabilities which resulted in an increase to goodwill of $6 million and an increase in deferred income taxes of $6 million. The effect of these revisions during the quarter did not have an impact on our Statements of Operations.

~~The~~ fair values of the assets acquired and liabilities assumed were determined using the market, income, and cost approaches, or a combination. Valuation methodologies under both a market and income approach used for the identifiable net assets

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~~(UNAUDITED)~~

acquired in the William Hill ~~acquisition~~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~~was 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.

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(UNAUDITED)

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.

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 and have included them within amortizing gaming rights.

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 ~~less than $1~~$2 million and $5 million ~~respectively,~~ for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and $10 million and $60 million for the nine months ended September 30, 2022 and 2021, respectively, excluding additional transaction costs associated with the sale of William Hill International. These costs were primarily associated with legal, ~~and~~ professional services and severance costs and were recorded in Transaction and other operating costs, net in our Statements of Operations.

For the period of January 1, 2022 through ~~March 31,~~September 30, 2022, the operations of William Hill resulted in ~~negative~~ net revenues of ~~$90~~$183 million, excluding discontinued operations (see Note 3), and a net loss of ~~$894 million. See Note~~$1.3 billion.

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, ~~for discussion~~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 ~~negative revenues.~~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. The unaudited pro forma financial information is not necessarily indicative of the financial position or 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. In addition, the unaudited pro forma financial information does not reflect the expected realization of any synergies or cost savings associated with the acquisition.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)


(In millions)	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Net revenues	$	2,685	$	7,106
Net loss	(155)		(427)
Net loss attributable to Caesars	(157)		(429)

Consolidation of Horseshoe Baltimore

On August 26, 2021 (the “Consolidation Date”), 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~~began to consolidate the operations of Horseshoe Baltimore.

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.


(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~~Final 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 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~~and were finalized 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~~the excess recorded as goodwill as of ~~March 31,~~September 30, 2022:


(In millions)	Fair Value
Current assets	$	60
Property and equipment, net	317
Goodwill	63
Intangible assets (a)	53
Other noncurrent assets	183
Total assets	$	676

Current liabilities	$	26
Long-term debt	272
Other long-term liabilities	182
Total liabilities	480
Noncontrolling interests	42
Net assets acquired	$	154

____________________

(a)Intangible assets consist of gaming rights valued at $43 million and customer relationships valued at $10 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~~of Horseshoe Baltimore ~~acquisition~~on the Consolidation Date 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 aton the ~~Horseshoe Baltimore acquisition date.~~ Consolidation Date.

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(UNAUDITED)

The fair value of the buildings and improvements were estimated via the income approach. The remaining estimated useful life of the buildings and improvements on the Consolidation Date is 40 years.

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 fair value and will be amortized over the estimated remaining useful life due to changes in the underlying fair value and estimated remaining useful life of the building and improvements. Renewal options are considered to be reasonably

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~~(UNAUDITED)~~

certain. The income approach was used to determine fair value, based on the estimated present value of the future lease payments over the lease term, including renewal options, using an incremental borrowing rate of approximately 7.6%.

Customer relationships are valued using an income approach, comparing the prospective cash flows with and without the customer relationships in place to estimate the fair value of the customer relationships, with the fair value assumed to be equal to the discounted cash flows of the business that would be lost if the customer relationships were not in place and needed to be replaced. We estimate the useful life of these customer relationships to be approximately seven ~~years.~~years from the Consolidation Date.

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 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 goodwill acquired will generate amortization deductions for income tax purposes.

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

For the period of January 1, 2022 through ~~March 31,~~September 30, 2022, the operations of Horseshoe Baltimore generated net revenues of ~~$58~~$175 million, and net income of $2$8 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.


(In millions)	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Net revenues	$	2,718	$	7,102
Net loss	(265)		(611)
Net loss attributable to Caesars	(268)		(617)

Note 3. Assets Held for Sale

The Company periodically divests assets ~~that it does not consider core to its business~~ to raise capital or, in ~~some~~previous cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities. The carrying value of the net assets held for sale are compared to the expected selling price and any expected losses are recorded immediately. Gains or losses associated with the disposal of assets held for sale are recorded within other operating costs, unless the assets represent a discontinued operation.

Held for sale - ~~Continuing operations~~Sold

Baton Rouge, MontBleu and Evansville Divestitures

On ~~December 1, 2020,~~May 5, 2022, the Company ~~entered into a definitive agreement with CQ Holding Company, Inc. to sell~~consummated the sale of the equity interests of Belle of Baton Rouge Casino & Hotel (“Baton Rouge”)~~. The transaction has received regulatory approvals and is expected~~ to ~~close in the second quarter of 2022,~~CQ Holding Company, Inc., subject to ~~other~~a customary ~~closing conditions.~~working capital adjustment, resulting in a loss of $3 million. Baton Rouge ~~met~~was within the ~~requirements for presentation as assets held for sale as of March 31, 2022.~~

~~The assets and liabilities held for sale within continuing operations, accounted for at carrying value unless fair value is lower, were as follows as of March 31, 2022 and December 31, 2021:~~

Baton Rouge
(In millions) March 31, 2022 December 31, 2021
Assets:
Cash $ 2 $ 3
Property and equipment, net 2 2
Other assets, net 1 1
Assets held for sale $ 5 $ 6
Liabilities:
Current liabilities $ 2 $ 3
Other long-term liabilities 1 1
Liabilities related to assets held for sale $ 3 $ 4
Regional segment.

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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 March 31,
(In millions) 2022 2021
Net revenues $ 4 $ 4
Net loss — (1)

~~Held for sale - Sold~~

~~MontBleu and Evansville Divestitures~~

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 Company received the payment in full on April 5, 2022. MontBleu was within the Regional segment.

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. (“GLPI”) 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 $12 million. Evansville was within the Regional segment.

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

Three Months Ended March 31, 2021
(In millions) MontBleu Evansville
Net revenues $ 11 $ 31
Net income 4 13


	Baton Rouge
(In millions)	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Net revenues	$	—		$	6
Net loss	—			(1)


	Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
(In millions)	Baton Rouge		MontBleu		Evansville		Baton Rouge		MontBleu		Evansville
Net revenues	$	4	$	—	$	—	$	13	$	11	$	58
Net income (loss)	(2)		—		—		(3)		4		26

The assets and liabilities held for sale were as follows as of December 31, 2021:


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





Cash	$	3
Property and equipment, net	2


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





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

Held for sale - Discontinued operations

On the closing date of the Merger, Harrah’s Louisiana Downs, Caesars Southern Indiana and Caesars UK Group, which includes Emerald Resorts & Casino ~~and Caesars Southern Indiana~~ met held for sale criteria. The operations of these properties, until their respective date of divestiture, have been presented within discontinued operations. Additionally, 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 these reporting units were classified as held for sale with operations presented within discontinued operations. See Note 1 and Note 2.

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.~~adjustment. On November 1, 2021, the sale of Harrah’s Louisiana Downs was ~~completed.~~completed and proceeds were split between the Company and VICI. The annual base rent payments under the Regional Master Lease between Caesars and VICI remained unchanged.

On December 24, 2020, the Company entered into an agreement to sell the equity interests of Caesars Southern Indiana to the Eastern Band of Cherokee Indians (“EBCI”) for $250 million, subject to customary purchase price adjustments. On September 3, 2021, the Company completed the sale of Caesars Southern Indiana, resulting in a gain of $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 entered into a 10-year brand license agreement for the continued use of the Caesars brand and Caesars Rewards loyalty program at Caesars Southern Indiana. The agreement contains cancellation rights in exchange for a termination fee at the buyer’s discretion following the fifth anniversary of the agreement.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 within discontinued operations.

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 ~~March 31,~~September 30, 2022 and 2021:

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~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~


	~~Three Months Ended March 31, 2022~~William Hill International
(In millions)	~~William Hill International~~Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Net revenues	$	~~419~~—	$	820
Net loss	~~(303)~~—		(448)


		Three Months Ended March 31, 2021						Three Months Ended September 30, 2021								Nine Months Ended September 30, 2021
(In millions)	(In millions)	Harrah’s Louisiana Downs		Caesars UK Group		Caesars Southern Indiana			(In millions)	Harrah’s Louisiana Downs		Caesars UK Group		Caesars Southern Indiana		William Hill International		Harrah’s Louisiana Downs		Caesars UK Group		Caesars Southern Indiana		William Hill International
Net revenues	Net revenues	$	13	$	10	$	49		Net revenues	$	13	$	—	$	41	$	454	$	42	$	30	$	155	$	797
Net income (loss)	Net income (loss)	4		(7)		—			Net income (loss)	3		(1)		18		(39)		12		(30)		27		(41)

Not included in ~~tables~~table above are assets and liabilities held for sale of ~~$3.3 billion and $2.6 billion, respectively, as of March 31, 2022 and~~ $3.8 billion and $2.7 billion, respectively, as of December 31, 2021, related to William Hill ~~International.~~International that were divested on July 1, 2022. Liabilities held for sale as of ~~March 31, 2022 and~~ December 31, 2021 ~~include $601 million and~~includes $617 million ~~respectively,~~ of debt related to the ~~asset sale bridge facility and the revolving credit facility,~~Bridge Credit Agreement, which ~~are expected to be~~was repaid upon the sale of William Hill International on July 1, 2022, as described in Note 1. The Bridge Credit Agreement ~~includes~~included a financial covenant ~~of which the Company was in compliance as of March 31, 2022,~~ 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~~were guaranteed by the Bridge Facility Borrower and its material wholly-owned subsidiaries (subject to exceptions), and ~~are~~were 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, ~~$918~~$850 million of debt iswas held for sale related to two trust deeds assumed in the William Hill Acquisition. One trust deed ~~relates~~related to £350 million aggregate principal amount of 4.750% Senior Notes due 2026, and the other trust deed ~~relates~~related to £350 million aggregate principal amount of 4.875% Senior Notes due 2023. Each of the trust deeds ~~contain~~contained 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 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 two trust deeds assumed in the William Hill Acquisition. The two trust deeds were included within liabilities held for sale, which were disposed of on July 1, 2022 with the completion of the sale of William Hill International.

Note 4. Investments in and Advances to Unconsolidated Affiliates

William Hill

The Company previously entered into a 25-year agreement which granted William Hill the right to conduct betting activities, including operating our sportsbooks, 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 its investment in William Hill PLC as an investment in equity securities and William Hill US as an equity method investment. See Note 2 for further detail on the consideration transferred and the allocation of the purchase price.

NeoGames

The acquired net assets of William Hill included an investment in publicly traded common stock of 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 8.4%. Additionally, on March 14, 2022 the Company sold its remaining 2 million shares at fair value for $26 million and recorded a loss on the change in fair value of $34 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2022, which is included within Other income (loss) on the Statements of Operations.

Pompano Joint Venture

In April 2018, the Company entered into a joint venture with Cordish Companies (“Cordish”) to plan and develop a mixed-use entertainment and hospitality destination expected to be located on unused land adjacent to the casino and racetrack at the Company’s Pompano property. As the managing member, Cordish will operate the business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation of the various phases of the project.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Additionally, Cordish will be responsible for the development of the master plan for the project with the Company’s input and will submit it for the Company’s review and approval. In June 2021, the joint venture issued a capital call and we contributed $3 ~~million. The Company has made cash contributions totaling~~million, for a total of $4 million ~~and has contributed land.~~in cash since inception of the joint venture. 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

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~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

contribute additional real estate or cash as of ~~March 31,~~September 30, 2022. 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 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 and other operating costs, net on the Statements of Operations.

As of ~~March 31,~~September 30, 2022 and December 31, 2021, the Company’s investment in the joint venture is recorded in Investment in and advances to unconsolidated affiliates on the Balance Sheets.

Note 5. Property and Equipment


(In millions)	(In millions)	March 31, 2022		December 31, 2021		(In millions)	September 30, 2022		December 31, 2021
Land	Land	$	2,093	$	2,125	Land	$	2,092	$	2,125
Buildings, riverboats, and leasehold and land improvements	Buildings, riverboats, and leasehold and land improvements	12,589		12,433		Buildings, riverboats, and leasehold and land improvements	12,827		12,433
Furniture, fixtures, and equipment	Furniture, fixtures, and equipment	1,715		1,650		Furniture, fixtures, and equipment	1,943		1,650
Construction in progress	Construction in progress	479		395		Construction in progress	470		395
Total property and equipment	Total property and equipment	16,876		16,603		Total property and equipment	17,332		16,603
Less: accumulated depreciation	Less: accumulated depreciation	(2,239)		(2,002)		Less: accumulated depreciation	(2,740)		(2,002)
Total property and equipment, net	Total property and equipment, net	$	14,637	$	14,601	Total property and equipment, net	$	14,592	$	14,601

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	Depreciation Expense						Depreciation Expense
		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2022		2021			(In millions)	2022		2021		2022		2021
Depreciation expense	Depreciation expense	$	243	$	245		Depreciation expense	$	260	$	237	$	758	$	746

Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the asset or the related lease.

Note 6. Goodwill and Intangible Assets, net

The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. The Company determines 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, 2021 $ 1,209 $ 11,076 $ 3,711
Amortization (57) — —
Other (a)
— 6 —
March 31, 2022 $ 1,152 $ 11,082 $ 3,711

~~____________________~~

~~(a)Purchase price adjustment related to William Hill Acquisition. See Note 2 for additional information.~~

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Gross Carrying Value and Accumulated Amortization of Intangible Assets Other Than Goodwill
March 31, 2022 December 31, 2021
(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 $ (210) $ 377 $ 587 $ (187) $ 400
Gaming rights and other 20 - 34 years 174 (8) 166 174 (7) 167
Trademarks 15 years 322 (46) 276 322 (21) 301
Reacquired rights 24 years 250 (10) 240 250 (7) 243
Technology 6 years 110 (17) 93 110 (12) 98
$ 1,443 $ (291) 1,152 $ 1,443 $ (234) 1,209
Non-amortizing intangible assets
Trademarks 1,998 1,998
Gaming rights 1,190 1,190
Caesars Rewards 523 523
3,711 3,711
Total amortizing and non-amortizing intangible assets, net $ 4,863 $ 4,920


Changes in Carrying Value of Goodwill and Other Intangible Assets
			Non-Amortizing Intangible Assets
(In millions)	Amortizing Intangible Assets		Goodwill		Other
December 31, 2021	$	1,209	$	11,076	$	3,711
Amortization	(152)		—		—

Acquisition of gaming rights	10		—		1
Other (a)	28		6		(28)
September 30, 2022	$	1,095	$	11,082	$	3,684

____________________

(a)Reclassification of gaming rights, with a value of $28 million, from non-amortizing to amortizing and a purchase price adjustment to Goodwill related to the William Hill Acquisition.


Gross Carrying Value and Accumulated Amortization of Intangible Assets Other Than Goodwill
	September 30, 2022							December 31, 2021
(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	$	(255)	$	332	$	587	$	(187)	$	400
Gaming rights and other	10 - 34 years	212		(14)		198		174		(7)		167
Trademarks	15 years	307		(62)		245		322		(21)		301
Reacquired rights	24 years	250		(15)		235		250		(7)		243
Technology	6 years	110		(25)		85		110		(12)		98
		$	1,466	$	(371)	1,095		$	1,443	$	(234)	1,209

Non-amortizing intangible assets
Trademarks						1,998						1,998
Gaming rights						1,163						1,190
Caesars Rewards						523						523

						3,684						3,711
Total amortizing and non-amortizing intangible assets, net						$	4,779					$	4,920

Amortization expense with respect to intangible assets for the three months ended ~~March 31,~~September 30, 2022 and 2021 totaled $44 million and $39 million, respectively, and for the nine months ended September 30, 2022 and 2021 totaled $57152 million and ~~$20~~$96 million, respectively, which is included in depreciation and amortization in the Statements of Operations.


Estimated Five-Year Amortization	Estimated Five-Year Amortization													Estimated Five-Year Amortization
		Remaining 2022		Years Ended December 31,											Remaining 2022		Years Ended December 31,
(In millions)	(In millions)			2023		2024		2025		2026		2027		(In millions)			2023		2024		2025		2026		2027
Estimated annual amortization expense	Estimated annual amortization expense	$	129	$	138	$	123	$	116	$	116	$	73	Estimated annual amortization expense	$	35	$	141	$	126	$	119	$	119	$	76

Note 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 March 31, 2022 and December 31, 2021:~~Sheets:


		March 31, 2022									September 30, 2022
(In millions)	(In millions)	Level 1		Level 2		Level 3		Total		(In millions)	Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:

Marketable securities	Marketable securities	$	9	$	8	$	—	$	17	Marketable securities	$	2	$	2	$	—	$	4
Derivative instruments - FX forward		—		12		—		12
Derivative instruments - interest rate swaps										Derivative instruments - interest rate swaps	—		3		—		3

Total assets at fair value	Total assets at fair value	$	9	$	20	$	—	$	29	Total assets at fair value	$	2	$	5	$	—	$	7
Liabilities:

Derivative instruments - interest rate swaps		$	—	$	11	$	—	$	11

Total liabilities at fair value		$	—	$	11	$	—	$	11

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)


	December 31, 2021
(In millions)	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash	$	1	$	1	$	—	$	2
Marketable securities	69		9		—		78
Derivative instruments - FX forward	—		1		—		1
Total assets at fair value	$	70	$	11	$	—	$	81
Liabilities:
Derivative instruments - interest rate swaps	$	—	$	28	$	—	$	28
Derivative instruments - FX forward	—		16		—		16
Total liabilities at fair value	$	—	$	44	$	—	$	44

Restricted Cash

The estimated fair values of the Company’s restricted cash 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. 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.

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.

Derivative Instruments

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

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 of the international operations.~~GBP. During the three months ended ~~March 31,~~September 30, 2021, the Company recorded a total gain of $16 million, and for the nine months ended September 30, 2022 and 2021 the Company recorded total gains of ~~$21~~$76 million and $1$26 million, respectively, related to ~~these~~ forward contracts, which ~~was~~have been recorded in the Other income (loss) on the Statements of Operations. All ~~The~~ forward ~~term~~contracts have been settled as of ~~these contracts ends in June~~July 1, 2022.

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 ~~March 31,~~September 30, 2022, we have 4four interest rate swap agreements to fix the interest rate on $1.3 billion of variable rate debt related to the ~~CRC~~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 ~~March 31,~~September 30, 2022 are as follows:


Effective Date	Effective Date	Notional Amount (In millions)	Fixed Rate Paid	Variable Rate Received as of March 31, 2022	Maturity Date	Effective Date	Notional Amount (In millions)	Fixed Rate Paid	Variable Rate Received as of September 30, 2022	Maturity Date

1/1/2019	1/1/2019	250	2.274%	0.2086%	12/31/2022	1/1/2019	250	2.274%	2.5239%	12/31/2022

1/1/2019	1/1/2019	200	2.828%	0.2086%	12/31/2022	1/1/2019	200	2.828%	2.5239%	12/31/2022
1/1/2019	1/1/2019	200	2.828%	0.2086%	12/31/2022	1/1/2019	200	2.828%	2.5239%	12/31/2022
1/1/2019	1/1/2019	600	2.739%	0.2086%	12/31/2022	1/1/2019	600	2.739%	2.5239%	12/31/2022

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 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 ~~$17~~$4 million and $15 million during the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and a gain of $31 million and $44 million during the nine months ended September 30, 2022 and 2021, respectively. AOCI reclassified to Interest expense on the Statements of Operations was $8$2 million and ~~$14~~$15 million for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and $16 million and $44 million for the nine months ended September 30, 2022 and 2021, respectively. As of ~~March 31,~~September 30, 2022, the interest rate swaps derivative asset of $3 million was recorded in Other assets, net, and as of December 31, 2021, the interest rate swaps derivative liability of ~~$11 million and~~ $28 million ~~respectively,~~ 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 $11~~$3 million.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Accumulated Other Comprehensive Income

The changes in AOCI by component, net of tax, for the periods through ~~March 31,~~September 30, 2022 and 2021 are shown below.

(In millions) Unrealized Net Gains on Derivative Instruments Foreign Currency Translation Adjustments Other Total
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
Balances as of December 31, 2021 $ 73 $ (36) $ (1) $ 36
Other comprehensive income (loss) before reclassifications 5 (33) — (28)
Amounts reclassified from accumulated other comprehensive income 8 — — 8
Total other comprehensive income (loss), net of tax 13 (33) — (20)
Balances as of March 31, 2022 $ 86 $ (69) $ (1) $ 16

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(In millions)	Unrealized Net Gains on Derivative Instruments		Foreign Currency Translation Adjustments		Other		Total






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

Balances as of December 31, 2021	$	73	$	(36)	$	(1)	$	36
Other comprehensive income (loss) before reclassifications	5		(33)		—		(28)
Amounts reclassified from accumulated other comprehensive income	8		—		—		8
Total other comprehensive income (loss), net of tax	13		(33)		—		(20)
Balances as of March 31, 2022	$	86	$	(69)	$	(1)	$	16
Other comprehensive income (loss) before reclassifications	1		(44)		1		(42)
Amounts reclassified from accumulated other comprehensive income	6		—		—		6
Total other comprehensive income (loss), net of tax	7		(44)		1		(36)
Balances as of June 30, 2022	$	93	$	(113)	$	—	$	(20)
Other comprehensive income before reclassifications	1		110		—		111
Amounts reclassified from accumulated other comprehensive income	2		—		—		2
Total other comprehensive income, net of tax	3		110		—		113
Balances as of September 30, 2022	$	96	$	(3)	$	—	$	93

~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

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 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.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 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”).~~Agreement. 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. The capital investment will include a renovation and full interior and exterior redesign, updated casino floor, new culinary experiences and a new 340 room hotel tower as ~~we are also in~~part of the ~~process of rebranding~~project to rebrand the property asto Caesars New Orleans. ~~Renovations are expected to be substantially complete during the second half~~As of ~~2024.~~September 30, 2022, total capital expenditures were $87 million.

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 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 ~~March 31,~~September 30, 2022 and December 31, 2021, our restricted cash balance in the escrow account was ~~$240~~$141 million and $297 million, respectively, 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 media companies 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. In connection with the launch of the Caesars Sportsbook app, we entered into a significant marketing campaign with distinguished actors, former athletes and other media personalities. As of ~~March 31,~~September 30, 2022 and December 31, 2021, obligations related to these agreements were ~~$978~~$925 million and $997 million, respectively, which include obligations assumed in the William Hill Acquisition, with contracts extending through 2040. These

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~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

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 received 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 ~~March 31,~~September 30, 2022 and December 31, 2021, was ~~$222~~$207 million and $221 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.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Contingencies

Weather disruption - Lake Charles

On August 27, 2020, Hurricane Laura made landfall on Lake Charles, Louisiana as a Category 4 storm severely damaging the Isle of Capri Casino Hotel Lake Charles. During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the Company reached a final settlement agreement with the insurance carriers for a total amount of $128 million, before our insurance deductible of $25 million. The Company has received ~~$94~~a total of $103 million related to damaged fixed assets, remediation costs and business interruption. ~~We expect to receive an additional $9 million in~~

No gain or loss was recorded during the ~~second quarter of 2022, which is included in Accounts receivable, net. During the~~ three months ended ~~March 31,~~September 30, 2022 and 2021, ~~the~~respectively. The Company ~~also~~ recorded gains of $38 million and $8$22 million during the nine months ended September 30, 2022 and 2021, respectively, which are included in Transaction and other operating costs, net in our Statements of Operations, 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 fourth quarter of 2022 when construction of a~~ new land-based casino, ~~is expected to be complete.~~Horseshoe Lake Charles, will open on December 12, 2022.

Note 9. Long-Term Debt


		March 31, 2022						December 31, 2021			September 30, 2022						December 31, 2021
(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 (a)										CRC Revolving Credit Facility (a)	2022	variable	$	—	$	—	$	—
Baltimore Revolving Credit Facility	Baltimore Revolving Credit Facility	2022	variable	$	—	$	—	$	—	Baltimore Revolving Credit Facility	2023	variable	—		—		—
CRC Revolving Credit Facility		2022	variable	—		—		—
Baltimore Term Loan	Baltimore Term Loan	2024	variable	282		275		275		Baltimore Term Loan	2024	variable	277		272		275
CRC Term Loan	CRC Term Loan	2024	variable	4,500		4,203		4,190		CRC Term Loan	2024	variable	4,377		4,136		4,190
CEI Revolving Credit Facility	CEI Revolving Credit Facility	2025	variable	—		—		—		CEI Revolving Credit Facility	2025	variable	—		—		—
CRC Incremental Term Loan	CRC Incremental Term Loan	2025	variable	1,773		1,705		1,705		CRC Incremental Term Loan	2025	variable	1,009		975		1,705
CRC Senior Secured Notes	CRC Senior Secured Notes	2025	5.75%	1,000		985		985		CRC Senior Secured Notes	2025	5.750%	989		977		985
CEI Senior Secured Notes	CEI Senior Secured Notes	2025	6.25%	3,400		3,349		3,346		CEI Senior Secured Notes	2025	6.250%	3,400		3,357		3,346
Convention Center Mortgage Loan	Convention Center Mortgage Loan	2025	7.85%	400		399		399		Convention Center Mortgage Loan	2025	8.011%	400		400		399
Unsecured Debt	Unsecured Debt									Unsecured Debt

CEI Senior Notes	CEI Senior Notes	2027	8.125%	1,700		1,674		1,673		CEI Senior Notes	2027	8.125%	1,611		1,588		1,673
Senior Notes	Senior Notes	2029	4.625%	1,200		1,184		1,183		Senior Notes	2029	4.625%	1,200		1,185		1,183
Special Improvement District Bonds	Special Improvement District Bonds	2037	4.30%	49		49		49		Special Improvement District Bonds	2037	4.300%	47		47		49
Long-term notes and other payables	Long-term notes and other payables			2		2		2		Long-term notes and other payables			2		2		2
Total debt	Total debt			14,306		13,825		13,807		Total debt			13,312		12,939		13,807
Current portion of long-term debt	Current portion of long-term debt			(70)		(70)		(70)		Current portion of long-term debt			(70)		(70)		(70)
Deferred finance charges associated with the CEI Revolving Credit Facility	Deferred finance charges associated with the CEI Revolving Credit Facility			—		(14)		(15)		Deferred finance charges associated with the CEI Revolving Credit Facility			—		(12)		(15)
Long-term debt	Long-term debt			$	14,236	$	13,741	$	13,722	Long-term debt			$	13,242	$	12,857	$	13,722

Unamortized premiums, discounts and deferred finance charges						$	495	$	531
Unamortized discounts and deferred finance charges										Unamortized discounts and deferred finance charges					$	385	$	531
Fair value	Fair value			$	14,472					Fair value			$	12,691

____________________

(a)On October 5, 2022, in connection with the amendment to the CEI Credit Agreement, the Company terminated the CRC Revolving Credit Facility. See “Subsequent Amendment to the CEI Credit Agreement” below.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)


Annual Estimated Debt Service Requirements as of March 31, 2022
Annual Estimated Debt Service Requirements as of September 30, 2022																Annual Estimated Debt Service Requirements as of September 30, 2022
		Remaining		Years Ended December 31,													Remaining		Years Ended December 31,
(In millions)	(In millions)	2022		2023		2024		2025		2026		Thereafter		Total		(In millions)	2022		2023		2024		2025		2026		Thereafter		Total
Annual maturities of long-term debt	Annual maturities of long-term debt	$	53	$	70	$	4,714	$	6,526	$	3	$	2,940	$	14,306	Annual maturities of long-term debt	$	18	$	70	$	4,611	$	5,760	$	3	$	2,850	$	13,312
Estimated interest payments	Estimated interest payments	540		880		860		550		200		320		3,350		Estimated interest payments	140		910		850		520		190		310		2,920
Total debt service obligation (a)	Total debt service obligation (a)	$	593	$	950	$	5,574	$	7,076	$	203	$	3,260	$	17,656	Total debt service obligation (a)	$	158	$	980	$	5,461	$	6,280	$	193	$	3,160	$	16,232

____________________

(a)Debt principal and interest payments are estimated amounts based on contractual maturity and scheduled repayment dates. Interest payments are estimated based on the forward-looking LIBOR curve, where applicable, and include the estimated impact of the 4four interest rate swap agreements related to our CRC Credit ~~Facility~~Agreement (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 ~~March 31,~~September 30, 2022 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.

Fair Value

The fair value of debt has been calculated primarily based on the borrowing rates available as of ~~March 31,~~September 30, 2022 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

Baltimore Term Loan and Baltimore Revolving Credit Facility

As a result of our increased ownership interest in Horseshoe Baltimore, we began to consolidate the aggregate principal amount of Horseshoe Baltimore’s senior secured term loan facility (the “Baltimore Term Loan”) and amount outstanding, if any, under Horseshoe Baltimore’s senior secured revolving credit facility (the “Baltimore Revolving Credit Facility”). The Baltimore Term Loan matures in July 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, ~~available and matures in 2022,~~ subject to a variable rate of interest calculated as ~~LIBOR~~Term SOFR plus ~~6.00%~~4.00% subject to one 0.25% step-down based on senior secured leverage ratio (“SSLR”), the ratio of first lien senior secured net debt to adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). On June 24, 2022, we entered into an amendment related to the Baltimore Revolving Credit Facility to extend the maturity date to July 7, 2023. As of ~~March 31,~~September 30, 2022, there was $10 million of available borrowing capacity under the Baltimore Revolving Credit Facility.

CRC Term Loans and CRC Revolving Credit Facility

CRC is party to a credit agreement, dated as of December 22, 2017 (as amended, the “CRC Credit Agreement”), which ~~included~~provided for 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”), which was increased by $1.8 billion pursuant to an incremental agreement executed in connection with the 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 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.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The CRC Revolving Credit Facility contained a maturity date in December 2022 and included a $400 million letter of credit sub-facility. As described below, the CRC Revolving Credit Facility was terminated on October 5, 2022, in connection with the amendment to the CEI Credit Agreement.

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

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~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

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%~~3.50% per annum in the case of any LIBOR loan or ~~3.50%~~2.50% 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.~~SSLR. The CRC 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. The CRC Term Loan and the CRC Incremental Term Loan are LIBOR based loans as of ~~March 31,~~September 30, 2022.

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.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the Company utilized and fully repaid on the CRC Revolving Credit Facility. Such activity is presented in the financing section in the Statements of Cash Flows. As of ~~March 31,~~September 30, 2022, the Company had ~~$960~~$966 million of available borrowing capacity, after consideration of ~~$65~~$59 million in outstanding letters of credit under the CRC Revolving Credit Facility.

Following the closing of the sale of William Hill International, the Company made partial prepayments totaling $755 million of the outstanding principal of the CRC Incremental Term Loan and recognized a $27 million loss on the early extinguishment of debt during the nine months ended September 30, 2022. Additionally, the Company made partial prepayments totaling $100 million of outstanding principal of the CRC Term Loan and recognized a $6 million loss on the early extinguishment of debt during the nine months ended September 30, 2022.

On October 5, 2022, in connection with the Third Amendment (as defined below) to the CEI Credit Agreement, the Company utilized the entire proceeds of a new $750 million CEI Term Loan A (as defined below) to make a partial prepayment of the outstanding principal of the CRC Term Loan, as well as terminate the CRC Revolving Credit Facility. As a result of the partial prepayment, the Company recognized a $41 million loss on the early extinguishment of debt. See “Subsequent Amendment to the CEI Credit Agreement” below.

CEI Revolving Credit Facility

OnCEI is party to a credit agreement, dated as of 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 (the “CEI Credit Agreement”), which ~~provide~~provided for a five-year CEI Revolving Credit Facility in an aggregate principal amount of $1.2 billion (the “CEI Revolving Credit Facility”). On November 10, 2021, the Company amended the CEI Revolving Credit Facility to establish reserves in the total amount of $190 million which are available only for certain permitted ~~use.~~uses. On May 23, 2022, pursuant to the amendment, the Company obtained approval for a reduction of $150 million in required reserves. The CEI Revolving Credit Facility matures in July 2025 and includes a letter of credit sub-facility of $250 million. On October 5, 2022, CEI amended the CEI Credit Agreement. See “Subsequent Amendment to the CEI Credit Agreement” section below.

~~The~~Prior to the Third Amendment (as defined below) of the CEI Credit Agreement on October 5, 2022, the interest rate per annum applicable under the CEI Revolving Credit Facility, at the Company’s option iswas 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.

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(UNAUDITED)

Additionally, prior to the Third Amendment (as defined below) of the CEI Credit Agreement, the Company iswas required to pay a commitment fee in respect of any unused commitments under the 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 iswas 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.

As of ~~March 31,~~September 30, 2022, the Company had ~~$922 million~~$1.1 billion of available borrowing capacity under the CEI Revolving Credit Facility, after consideration of ~~$25~~$23 million in outstanding letters of credit, ~~$48~~$48 million committed for regulatory purposes and the reserves described above.

Subsequent Amendment to the CEI Credit Agreement

On October 5, 2022, Caesars entered into a third amendment to the CEI Credit Agreement (the “Third Amendment”) pursuant to which the Company (a) incurred a senior secured term loan in an aggregate principal amount of $750 million (the “CEI Term Loan A”) as a new term loan under the credit agreement, (b) amended and extended the CEI Revolving Credit Facility under the CEI Credit Agreement (the CEI Revolving Credit Facility, as so amended, the “Amended CEI Revolving Credit Facility” and, together with the CEI Term Loan A, the “Senior Credit Facilities”), (c) increased the aggregate principal amount of the CEI Revolving Credit Facility to $2.25 billion, and (d) made certain other amendments to the CEI Credit Agreement. Both the Amended CEI Revolving Credit Facility and the new CEI Term Loan A mature on January 31, 2028, subject to a springing maturity in the event certain other long-term debt of Caesars is not extended or repaid. The Amended CEI Revolving Credit Facility includes a letter of credit sub-facility of $388 million. The CEI Term Loan A requires scheduled quarterly payments in amounts equal to 1.25% of the original aggregate principal amount of the CEI Term Loan A, with the balance payable at maturity. The Company may make voluntary prepayments of the CEI Term Loan A at any time prior to maturity at par.

Borrowings under the Senior Credit Facilities bear interest at a rate equal to, at the Company’s option, either (a) a forward-looking term rate based on the secured overnight financing rate (“SOFR”) for the applicable interest period plus an adjustment of 0.10% per annum (“Adjusted Term SOFR”), subject to a floor of 0% or (b) a base rate (the “Base Rate”) determined by reference to the highest of (i) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Adjusted Term SOFR plus 1.00% per annum, in each case, plus an applicable margin. Such applicable margin is 2.25% per annum in the case of any Adjusted Term SOFR loan and 1.25% per annum in the case of any Base Rate loan, subject to three 0.25% step-downs based on the Company’s net total leverage ratio. In addition, on a quarterly basis, the Company is required to pay each lender under the Amended CEI Revolving Credit Facility a commitment fee in respect of any unused commitments under the Amended CEI Revolving Credit Facility in the amount of 0.35% of the principal amount of the unused commitments of such lender, subject to three 0.05% step-downs based on the Company’s net total leverage ratio.

CRC Senior Secured Notes due 2025

On July 6, 2020, ~~the Company~~Colt Merger Sub, Inc. (the “Escrow Issuer”) issued $1.0 billion in aggregate principal amount of 5.75% Senior Secured Notes due 2025 pursuant to an indenture, dated July 6, 2020 (the “CRC Senior Secured Notes”), 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 under the CRC Senior Secured Notes and the indenture governing such notes. 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.

~~Table~~ During the nine months ended September 30, 2022, the Company purchased a total of ~~Contents~~

~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

$11 million in principal amount of the CRC Senior Secured Notes.

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 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.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 on the anniversary of the closing date to a maximum interest rate of 8.3% per annum. ~~Beginning October 1, 2021, the Mortgage Loan is subject to an interest rate of 7.854% for the next twelve months.~~

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. The CEI Senior 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. During the nine months ended September 30, 2022, the Company purchased a total of $89 million in aggregate principal amount of the CEI Senior Notes.

Senior Notes due 2029

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 Association, as Trustee. The Senior Notes will mature on October 15, 2029 with interest payable on April 15 and October 15 of each year, ~~commencing~~which began on April 15, 2022.

Debt Covenant Compliance

The CRC Credit Agreement, the CEI Revolving Credit Facility, the Baltimore Term Loan, the Baltimore Revolving Credit Facility, and the indentures governing the CEI Senior Secured Notes, the CEI Senior Notes, the CRC Senior Secured Notes and the Senior 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 CRC Revolving Credit Facility and the 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. As a result of the termination of the CRC Revolving Credit Facility on October 5, 2022, the associated financial covenant is no longer applicable. 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.

As of ~~March 31,~~September 30, 2022, the Company was in compliance with all of the applicable financial covenants described above.

Guarantees

The ~~CEI Revolving~~Senior Credit ~~Facility~~Facilities 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 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 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.

~~Table of Contents~~

~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

Note 10. Revenue Recognition

The Company’s Statements of Operations ~~presents~~present 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 William Hill Acquisition.~~ Refer to Note 15 for additional information on the Company’s reportable segments.

Three Months Ended March 31, 2022
(In millions) Las Vegas Regional
Caesars Digital *
Managed and Branded Corporate and Other Total
Casino and pari-mutuel commissions $ 291 $ 1,070 $ (69) $ — $ — $ 1,292
Food and beverage 220 119 — — — 339
Hotel 266 117 — — — 383
Other 137 57 16 66 2 278
Net revenues $ 914 $ 1,363 $ (53) $ 66 $ 2 $ 2,292

~~____________________~~

*~~See discussion~~Table of ~~negative revenues in Note 1.~~Contents

Three Months Ended March 31, 2021
(In millions) Las Vegas Regional Caesars Digital Managed and Branded Corporate and Other Total
Casino and pari-mutuel commissions $ 226 $ 967 $ 34 $ — $ — $ 1,227
Food and beverage 84 84 — 1 — 169
Hotel 115 100 — — — 215
Other 72 40 5 60 4 181
Net revenues $ 497 $ 1,191 $ 39 $ 61 $ 4 $ 1,792
27

CAESARS ENTERTAINMENT, INC.

Accounts Receivable, Net
(In millions) March 31, 2022 December 31, 2021
Casino and pari-mutuel commissions $ 141 $ 168
Food and beverage and hotel 110 100
Other 199 204
Accounts receivable, net $ 450 $ 472
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)


	Three Months Ended September 30, 2022
(In millions)	Las Vegas		Regional		Caesars Digital		Managed and Branded		Corporate and Other		Total
Casino and pari-mutuel commissions	$	323	$	1,096	$	187	$	—	$	(1)	$	1,605
Food and beverage	264		147		—		—		—		411
Hotel	335		209		—		—		—		544
Other	155		78		25		70		(1)		327


Net revenues	$	1,077	$	1,530	$	212	$	70	$	(2)	$	2,887


	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


	Nine Months Ended September 30, 2022
(In millions)	Las Vegas		Regional		Caesars Digital		Managed and Branded		Corporate and Other		Total
Casino and pari-mutuel commissions	$	929	$	3,264	$	255	$	—	$	(2)	$	4,446
Food and beverage	775		397		—		—		—		1,172
Hotel	959		487		—		—		—		1,446
Other	470		200		56		210		—		936


Net revenues	$	3,133	$	4,348	$	311	$	210	$	(2)	$	8,000


	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


Accounts Receivable, Net
(In millions)	September 30, 2022		December 31, 2021
Casino and pari-mutuel commissions	$	218	$	168
Food and beverage and hotel	136		100
Other	152		204
Accounts receivable, net	$	506	$	472

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) Caesars Rewards player loyalty program obligations, which represent the deferred allocation of revenue relating to reward credits granted to Caesars Rewards members based on ~~on-property spending,~~certain types of customer spend, including online and retail 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, unpaid wagers, iGaming deposits, or future sports bets). 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 summarizes the activity related to contract and contract-related liabilities:~~

Outstanding Chip Liability Caesars Rewards Customer Deposits and Other
Deferred Revenue
(In millions) 2022 2021 2022 2021 2022 2021
Balance at January 1 $ 48 $ 34 $ 91 $ 94 $ 560 $ 310
Balance at March 31 37 29 96 93 625 325
Increase / (decrease) $ (11) $ (5) $ 5 $ (1) $ 65 $ 15

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Liabilities expected to be recognized as revenue beyond one year of being purchased, earned, or deposited are recorded within other long-term liabilities on the Company’s Balance Sheets.

The ~~March 31, 2022~~following table summarizes the activity related to contract and contract-related liabilities:


	Outstanding Chip Liability				Caesars Rewards				Customer Deposits and Other Deferred Revenue
(In millions)	2022		2021		2022		2021		2022		2021
Balance at January 1	$	48	$	34	$	91	$	94	$	560	$	310
Balance at September 30	40		34		95		96		662		446
Increase / (decrease)	$	(8)	$	—	$	4	$	2	$	102	$	136

The balances above exclude contract liabilities related to ~~assets~~liabilities held for sale recorded in 2022 and ~~2021.~~2021, where applicable. See Note 3. The ~~significant~~ change in customer deposits and other deferred revenue during the period ended ~~March 31,~~September 30, 2022 was primarily due to expansion of the Caesars Digital segment from the legalization of retail and online sports betting in new ~~states.~~jurisdictions.

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 the predominant component in the arrangement. During the three months ended ~~March 31,~~September 30, 2022 and 2021, we recognized approximately ~~$383~~$544 million and ~~$215~~$511 million, respectively, and during the nine months ended September 30, 2022 and 2021, we recognized approximately $1.4 billion and $1.1 billion, respectively, which is included in Hotel revenues in the Statements of Operations.

Conventions

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. Revenue from conventions is included in Other revenue in the Statements of Operations and during both of the three months ended ~~March 31,~~September 30, 2022 and 2021, lease revenue related to conventions was approximately ~~$6 million. Lease~~$4 million and during the nine months ended September 30, 2022 and 2021, lease revenue related to conventions ~~for the three months ended March 31, 2021~~ was ~~not material.~~approximately $23 million and $4 million, respectively.

Real Estate Operating Leases

Real estate lease revenue is included in Other revenue in the Statements of Operations. During the three months ended ~~March 31,~~September 30, 2022 and 2021, we recognized approximately ~~$36~~$42 million and ~~$21~~$46 million, respectively, and during the nine months ended September 30, 2022 and 2021, we recognized approximately $125 million and $111 million, respectively, of real estate lease revenue.

Real estate lease revenue includes ~~$12~~$17 million and $7$16 million of variable rental income for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and $45 million and $35 million for the nine months ended September 30, 2022 and 2021, respectively.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Note 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 ~~March 31,~~September 30, 2022 and 2021:


		Three Months Ended March 31,			Three Months Ended September 30,						Nine Months Ended September 30,
(In millions, except per share data)	(In millions, except per share data)		2022			2021		(In millions, except per share data)	2022		2021		2022		2021
Net loss from continuing operations attributable to Caesars, net of income taxes			$	(451)		$	(419)
Net income (loss) from continuing operations attributable to Caesars, net of income taxes								Net income (loss) from continuing operations attributable to Caesars, net of income taxes	$	52	$	(229)	$	(365)	$	(547)
Discontinued operations, net of income taxes	Discontinued operations, net of income taxes		(229)			(4)		Discontinued operations, net of income taxes	—		(4)		(386)		(38)

Net loss attributable to Caesars			$	(680)		$	(423)
Net income (loss) attributable to Caesars								Net income (loss) attributable to Caesars	$	52	$	(233)	$	(751)	$	(585)
Shares outstanding:	Shares outstanding:							Shares outstanding:
Weighted average shares outstanding – basic	Weighted average shares outstanding – basic		214			208		Weighted average shares outstanding – basic	214		214		214		211
Effect of dilutive securities:								Effect of dilutive securities:

Stock-based compensation awards								Stock-based compensation awards	1		—		—		—

Weighted average shares outstanding – diluted	Weighted average shares outstanding – diluted		214			208		Weighted average shares outstanding – diluted	215		214		214		211

Basic loss per share from continuing operations			$	(2.11)		$	(2.01)
Basic income (loss) per share from continuing operations								Basic income (loss) per share from continuing operations	$	0.24	$	(1.08)	$	(1.70)	$	(2.60)
Basic loss per share from discontinued operations	Basic loss per share from discontinued operations		(1.07)			(0.02)		Basic loss per share from discontinued operations	—		(0.02)		(1.80)		(0.18)
Net loss per common share attributable to common stockholders – basic:			$	(3.18)		$	(2.03)
Net income (loss) per common share attributable to common stockholders – basic:								Net income (loss) per common share attributable to common stockholders – basic:	$	0.24	$	(1.10)	$	(3.50)	$	(2.78)

Diluted loss per share from continuing operations			$	(2.11)		$	(2.01)
Diluted income (loss) per share from continuing operations								Diluted income (loss) per share from continuing operations	$	0.24	$	(1.08)	$	(1.70)	$	(2.60)
Diluted loss per share from discontinued operations	Diluted loss per share from discontinued operations		(1.07)			(0.02)		Diluted loss per share from discontinued operations	—		(0.02)		(1.80)		(0.18)
Net loss per common share attributable to common stockholders – diluted:			$	(3.18)		$	(2.03)
Net income (loss) per common share attributable to common stockholders – diluted:								Net income (loss) per common share attributable to common stockholders – diluted:	$	0.24	$	(1.10)	$	(3.50)	$	(2.78)

For a period in which the Company generated a net loss from continuing operations, 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.

~~Table of Contents~~

~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~


Weighted-Average Number of Anti-Dilutive Shares Excluded from Calculation of EPS	Weighted-Average Number of Anti-Dilutive Shares Excluded from Calculation of EPS				Weighted-Average Number of Anti-Dilutive Shares Excluded from Calculation of EPS
		Three Months Ended March 31,		Three Months Ended September 30,			Nine Months Ended September 30,
(In millions)	(In millions)	2022	2021		(In millions)	2022	2021	2022	2021
Stock-based compensation awards	Stock-based compensation awards	3	4		Stock-based compensation awards	2	3	3	3
5% Convertible Notes		—	4

Total anti-dilutive common stock	Total anti-dilutive common stock	3	8		Total anti-dilutive common stock	2	3	3	3

Note 12. Stock-Based Compensation and Stockholders’ Equity

Stock-Based Awards

The Company 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 the Company or its subsidiaries, based on Company Common Stock, including ~~performance-based and incentive~~ stock options, restricted stock, restricted stock units (“RSUs”), performance stock units (“PSUs”), market-based performance stock units (“MSUs”), stock appreciation rights, and other stock-based awards or dividend equivalents. Forfeitures are recognized in the period in which they occur.

Total stock-based compensation expense in the accompanying Statements of Operations totaled ~~$25~~$26 million and ~~$23~~$21 million during the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and $77 million and $64 million during the nine months ended September 30, 2022 and 2021, respectively. These amounts are included in Corporate expense in the Company’s Statements of Operations.

2015 Equity Incentive Plan (“2015 Plan”)

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, as part of the annual incentive program, the Company granted ~~706~~746 thousand RSUs to employees of the Company with an aggregate fair value of ~~$52~~$55 million and a ratable vesting period of one to three years. Each RSU represents the right to receive payment in respect of 1one share of the Company’s Common Stock.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the Company also granted 8180 thousand PSUs that are scheduled to vest over a period of one to 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 $6$3 million as of ~~March 31,~~September 30, 2022.

In addition, during the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the Company granted 428 thousand MSUs that are scheduled to cliff vest over a period of one to 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 ~~three~~nine months ended ~~March 31,~~September 30, 2022 was $36 million. Included in the MSUs granted during the period is an award for the Company’s CEO in the amount of 225,000 MSUs, with a grant date fair value of $16 million which is eligible to be earned based on the achievement of certain stock prices over a three-year period. The stock-based compensation expense associated with this award is expected to be recognized over the derived service period ending December 31, 2022. These awards will be settled in February 2025.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, there were no grants of stock options and 1426 thousand stock options were exercised. In addition, during the ~~three~~nine months ended ~~March 31,~~September 30, 2022, ~~556~~790 thousand, ~~162~~191 thousand and 22117 thousand of RSUs, PSUs and MSUs, respectively, vested under the 2015 plan.

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~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

Outstanding at End of Period


		March 31, 2022			December 31, 2021				September 30, 2022			December 31, 2021
		Quantity	Wtd-Avg (a)		Quantity	Wtd-Avg (a)			Quantity	Wtd-Avg (a)		Quantity	Wtd-Avg (a)
Stock options	Stock options	30,280	$	17.81	43,905	$	20.69	Stock options	17,687	$	11.53	43,905	$	20.69
Restricted stock units	Restricted stock units	2,238,306	67.69		2,090,607	61.47		Restricted stock units	1,969,643	68.79		2,090,607	61.47
Performance stock units	Performance stock units	335,872	73.33		417,069	62.20		Performance stock units	383,539	48.05		417,069	62.20
Market-based stock units	Market-based stock units	788,085	81.44		381,923	77.09		Market-based stock units	742,910	83.25		381,923	77.09

____________________

(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 grant date fair value of the MSUs determined using the Monte-Carlo simulation model.

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 ~~March 31,~~September 30, 2022, 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 ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021.

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	Income Tax Allocation									Income Tax Allocation
		Three Months Ended March 31,				Three Months Ended September 30,								Nine Months Ended September 30,
(In millions)	(In millions)		2022				2021			(In millions)	2022			2021			2022			2021
Loss from continuing operations before income taxes			$	(558)			$	(496)
Benefit for income taxes			107				76
Income (loss) from continuing operations before income taxes										Income (loss) from continuing operations before income taxes	$	61		$	(317)		$	(409)		$	(712)
Benefit (provision) for income taxes										Benefit (provision) for income taxes	(8)			90			47			167
Effective tax rate	Effective tax rate		19.2		%		15.3		%	Effective tax rate	13.1		%	28.4		%	11.5		%	23.5		%

We classify accruals for uncertain tax positions within Other long-term liabilities on the Balance Sheets separate from any related income tax payable or ~~Deferred~~deferred income taxes. Reserve 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 William Hill Acquisition, the Company assumed $381 million of additional net deferred tax liabilities net of necessary valuation allowances, plus $34 million in additional accruals for uncertain tax positions. As of December 31, 2021 $132 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.~~sale as they relate to William Hill International. These liabilities were included in the sale to 888 Holdings Plc.

The income tax provision for the three months ended September 30, 2022 differed from the expected income tax provision based on the federal tax rate of 21% primarily due to a decrease in the state deferred tax liabilities as a result of a reduction in tax rates in Pennsylvania and Iowa. The income tax benefit for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to a true-up adjustment related to the tax impact of the settlement of preexisting relationships upon the William Hill Acquisition in 2021 and nondeductible ~~expenses and state income taxes.~~expenses.

~~Table~~5% Convertible Notes conversion. 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 ~~Contents~~

~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

21% primarily due to the reclassification of Horseshoe Hammond from held for sale and state taxes, offset by nondeductible expenses related to the 5% Convertible Notes conversion.

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 US federal or state and local tax assessments by tax authorities for years before 2018, 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 ~~March 31,~~September 30, 2022, Recreational Enterprises, Inc. (“REI”) owned approximately 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,~~Player Development, 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 ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021, there were no related party transactions between the Company and the Carano family other than compensation, including salary and equity incentives, and the CSY Lease listed below.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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. Annual rent pursuant to the CSY Lease is currently $0.6 million, paid quarterly. Annual rent is subject to periodic rent escalations through the term of the lease. As of ~~March 31,~~September 30, 2022 and December 31, 2021, there were no amounts due to or from CSY.

Transactions with Horseshoe Baltimore

The Company held an interest in Horseshoe Baltimore of approximately 44.3%, which was accounted for as an equity method investment, prior to our acquisition of an additional interest and subsequent consolidation on August 26, 2021. Related party transactions include items such as casino management fees, reimbursement of various costs incurred on behalf of Horseshoe Baltimore, and the allocation of other general corporate expenses. Following our consolidation of Horseshoe Baltimore, these transactions are eliminated.

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 William Hill Acquisition, our principal operating activities occurred in 3 regionally-focused reportable segments: Las Vegas, Regional, and Managed, International, CIE, in addition to Corporate and Other. Following the William Hill Acquisition, theThe Company’s principal operating activities occur in 4four 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 Caesars: (1) Las Vegas, (2) Regional, (3) Caesars Digital, and (4) Managed and Branded, in addition to Corporate and Other. See table below for a summary of these segments. Also, see Note 3 and Note 6 for a discussion of any impairment of intangibles or long-lived assets related to certain ~~segments.~~

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~~CAESARS ENTERTAINMENT, INC.~~

~~NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)~~

~~(UNAUDITED)~~

segments, when applicable.

The following table sets forth certain information regarding our properties (listed by segment in which each property is reported) as of ~~March 31,~~September 30, 2022:

Las Vegas

Regional

Managed and Branded

Bally’s Las Vegas

Caesars Atlantic City

Horseshoe Bossier City

Managed

Caesars Palace Las Vegas

Circus Circus Reno

Horseshoe Council Bluffs

Harrah’s Ak-Chin

The Cromwell

Eldorado Gaming Scioto Downs

Horseshoe Hammond

Harrah’s Cherokee

Flamingo Las Vegas

Eldorado Resort Casino Reno

Horseshoe Indianapolis

Harrah’s Cherokee Valley River

Harrah’s Las Vegas

Grand Victoria Casino

Horseshoe ~~Tunica~~St. Louis

Harrah’s Resort Southern California

The LINQ Hotel & Casino

Harrah’s Atlantic City

~~Isle Casino Bettendorf~~Horseshoe Tunica

Caesars Windsor

Paris Las Vegas

Harrah’s Council Bluffs

Isle ~~of Capri~~ Casino ~~Boonville~~Bettendorf

Caesars Dubai

Planet Hollywood Resort & Casino

Harrah’s Gulf Coast

Isle of Capri Casino ~~Hotel Lake Charles~~ Boonville~~(b)~~

Branded

Rio All-Suite Hotel & Casino

Harrah’s ~~Joliet~~Hoosier Park Racing & Casino

~~Isle of Capri Casino Lula~~Horseshoe Lake Charles (b)

Caesars Southern Indiana (c)

Harrah’s ~~Lake Tahoe~~Joliet

Isle of Capri Casino ~~Hotel - Blackhawk~~Lula

Harrah’s Northern California

Caesars Digital

Harrah’s ~~Laughlin~~Lake Tahoe

~~Isle Casino Racing Pompano Park~~Horseshoe Black Hawk

Caesars Digital

Harrah’s Laughlin

Isle Casino Pompano Park

Harrah’s Metropolis

Isle Casino Waterloo

Harrah’s New Orleans

Lady Luck Casino - Black Hawk

Harrah’s North Kansas City

~~Lumière Place~~Silver Legacy Resort Casino

Harrah’s Philadelphia

~~Silver Legacy Resort~~Trop Casino Greenville

Harveys Lake Tahoe

~~Trop Casino Greenville~~

~~Harrah’s Hoosier Park Racing & Casino~~

Tropicana Atlantic City

Horseshoe Baltimore (a)

Tropicana Laughlin Hotel & Casino

___________________

(a)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.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(b)Isle of Capri Casino Hotel Lake Charles has been temporarily closed since the end of August 2020 due to damage from Hurricane Laura and ~~will remain closed until~~ the ~~fourth quarter of 2022 when construction of a~~ new land-based casino, ~~is expected to be complete.~~Horseshoe Lake Charles, will open on December 12, 2022.

(c)The sale of Caesars Southern Indiana closed on September 3, 2021 and the Company entered into a license agreement with the Eastern Band of Cherokee Indians for the continued use of the Caesars brand and the 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.

The properties listed above exclude the discontinued operations, including previous international properties which have been ~~sold, or we have entered into agreements to sell.~~sold. 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 second quarter of~~closed on July 1, 2022.

Certain of our properties operate off-track betting locations, including Harrah’s Hoosier Park Racing & Casino, which operates Winner’s Circle Indianapolis and Winner’s Circle New Haven, and Horseshoe Indianapolis (formerly “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 The LINQ Hotel & Casino (the “LINQ”) that features the High Roller, a 550-foot observation wheel, and the Fly LINQ Zipline attraction. We also own the CAESARS FORUM conference center, which is a 550,000 square feet conference center with 300,000 square feet of flexible meeting space, 2two of the largest pillarless ballrooms in the world and direct access to the LINQ.

“Corporate and Other” includes certain unallocated corporate overhead costs and other adjustments, including eliminations of transactions among segments, to reconcile to the Company’s consolidated 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 4four 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 March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2022		2021		(In millions)	2022		2021		2022		2021

Las Vegas:	Las Vegas:					Las Vegas:
Net revenues	Net revenues	$	914	$	497	Net revenues	$	1,077	$	1,017	$	3,133	$	2,369

Adjusted EBITDA	Adjusted EBITDA	400		162		Adjusted EBITDA	480		500		1,427		1,085

Regional:	Regional:					Regional:
Net revenues	Net revenues	1,363		1,191		Net revenues	1,530		1,492		4,348		4,173

Adjusted EBITDA	Adjusted EBITDA	459		393		Adjusted EBITDA	570		554		1,542		1,549

Caesars Digital:	Caesars Digital:					Caesars Digital:
Net revenues	Net revenues	(53)		39		Net revenues	212		96		311		221
Adjusted EBITDA	Adjusted EBITDA	(554)		(2)		Adjusted EBITDA	(38)		(164)		(661)		(171)
Managed and Branded:	Managed and Branded:					Managed and Branded:
Net revenues	Net revenues	66		61		Net revenues	70		79		210		206

Adjusted EBITDA	Adjusted EBITDA	20		21		Adjusted EBITDA	22		22		64		69

Corporate and Other:	Corporate and Other:					Corporate and Other:
Net revenues	Net revenues	2		4		Net revenues	(2)		1		(2)		10

Adjusted EBITDA	Adjusted EBITDA	(29)		(39)		Adjusted EBITDA	(22)		(42)		(86)		(123)

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 certain operating expenses and is comprised of net income (loss) before (i) interest income and interest expense, net of interest capitalized, (ii) income tax (benefit) provision, (iii) depreciation and amortization, and (iv) certain items that we do not consider indicative of 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.

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CAESARS ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Adjusted EBITDA is a financial measure commonly used in our industry and should not be construed as an alternative to net 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 March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2022		2021		(In millions)	2022		2021		2022		2021
Adjusted EBITDA by Segment:	Adjusted EBITDA by Segment:					Adjusted EBITDA by Segment:
Las Vegas	Las Vegas	$	400	$	162	Las Vegas	$	480	$	500	$	1,427	$	1,085
Regional	Regional	459		393		Regional	570		554		1,542		1,549
Caesars Digital	Caesars Digital	(554)		(2)		Caesars Digital	(38)		(164)		(661)		(171)
Managed and Branded	Managed and Branded	20		21		Managed and Branded	22		22		64		69
Corporate and Other	Corporate and Other	(29)		(39)		Corporate and Other	(22)		(42)		(86)		(123)
		296		535			1,012		870		2,286		2,409
Reconciliation to net loss attributable to Caesars:
Net loss attributable to noncontrolling interests		—		1
Reconciliation to net income (loss) attributable to Caesars:						Reconciliation to net income (loss) attributable to Caesars:
Net income attributable to noncontrolling interests						Net income attributable to noncontrolling interests	(1)		(2)		(3)		(2)
Net loss from discontinued operations	Net loss from discontinued operations	(229)		(4)		Net loss from discontinued operations	—		(4)		(386)		(38)
Benefit for income taxes		107		76
Benefit (provision) for income taxes						Benefit (provision) for income taxes	(8)		90		47		167
Other income (loss) (a)	Other income (loss) (a)	4		(133)		Other income (loss) (a)	4		(153)		53		(176)

Loss on extinguishment of debt						Loss on extinguishment of debt	(33)		(117)		(33)		(140)
Interest expense, net	Interest expense, net	(552)		(579)		Interest expense, net	(569)		(579)		(1,680)		(1,734)
Depreciation and amortization	Depreciation and amortization	(300)		(265)		Depreciation and amortization	(304)		(276)		(910)		(842)

Transaction and other operating costs, net (b)	Transaction and other operating costs, net (b)	35		(20)		Transaction and other operating costs, net (b)	(7)		(21)		14		(113)
Stock-based compensation expense	Stock-based compensation expense	(25)		(23)		Stock-based compensation expense	(26)		(21)		(77)		(64)
Other items (c)	Other items (c)	(16)		(11)		Other items (c)	(16)		(20)		(62)		(52)
Net loss attributable to Caesars		$	(680)	$	(423)
Net income (loss) attributable to Caesars						Net income (loss) attributable to Caesars	$	52	$	(233)	$	(751)	$	(585)

____________________

(a)Other income (loss) for the three and nine months ended ~~March 31,~~September 30, 2022 primarily represents the net change in fair value of investments held by the Company, foreign exchange forward contracts, and the changes in the disputed claims liability related to Former Caesars’ ~~bankruptcy.~~bankruptcy prior to the Merger. Other ~~loss~~income (loss) for the three and nine months ended ~~March 31,~~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 the 5% Convertible ~~Notes offset by gains on foreign currency exchange and investments held by the Company.~~Notes.

(b)Transaction and other operating costs, net for the three and nine months ended ~~March 31,~~September 30, 2022 primarily represents a gain resulting from insurance proceeds received in excess of the respective carrying value of the assets damaged at Lake ~~Charles.~~Charles by Hurricane Laura partially offset by various contract or lease termination exit costs. Transaction and other operating costs, net for the three and nine months ended ~~March 31,~~September 30, 2021 primarily represents 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.

(c)Other items primarily represent certain consulting and legal fees, rent for non-operating assets, relocation expenses, retention bonuses and business optimization expenses.


Total Assets - By Segment	Total Assets - By Segment					Total Assets - By Segment
(In millions)	(In millions)	March 31, 2022		December 31, 2021		(In millions)	September 30, 2022		December 31, 2021
Las Vegas	Las Vegas	$	22,550	$	22,374	Las Vegas	$	23,164	$	22,374
Regional	Regional	14,592		14,419		Regional	14,912		14,419
Caesars Digital	Caesars Digital	1,458		1,878		Caesars Digital	1,236		1,878
Managed and Branded(a)	Managed and Branded(a)	3,088		3,527		Managed and Branded(a)	119		3,527
Corporate and Other ~~(a)~~(b)	Corporate and Other ~~(a)~~(b)	(4,615)		(4,167)		Corporate and Other ~~(a)~~(b)	(5,837)		(4,167)
Total	Total	$	37,073	$	38,031	Total	$	33,594	$	38,031

____________________

(a)Assets held for sale associated with William Hill International were divested on July 1, 2022.

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

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3235

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial position and operating results 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,” for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021 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, 2021 ~~(“2021~~(the “2021 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2021 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 (iv) our Consolidated Condensed Statements of Cash Flows as our “Statements of Cash Flows.” References to numbered “Notes” refer to ~~Notes~~“Notes to Consolidated Condensed Financial ~~Statements~~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”~~INFORMATION” 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 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 analyzed; and (iii) to 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. Beginning in 2005, we grew through a series of acquisitions, including the acquisition of MTR Gaming Group, Inc. in 2014, Isle of Capri Casinos, Inc. (“Isle” or “Isle of Capri”) in 2017 and Tropicana Entertainment, Inc. in 2018. On July 20, 2020, we completed ~~the~~a merger with Caesars Entertainment Corporation (“Former Caesars”) pursuant to which Former Caesars became our wholly-owned subsidiary (the “Merger”) and our ticker symbol on the NASDAQ Stock Market changed from “ERI” to ~~“CZR”. On~~“CZR.” In addition, on April 22, 2021, we completed the acquisition of William Hill PLC ~~for~~ ~~£2.9 billion, or approximately $3.9 billion~~ (the “William Hill Acquisition”).

We own, lease or manage an aggregate of 5251 domestic properties in 16 states with approximately ~~54,300~~52,800 slot machines, video lottery terminals and e-tables, approximately ~~2,900~~2,800 table games and approximately ~~47,700~~47,500 hotel rooms as of ~~March 31,~~September 30, 2022. 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. Our primary source of revenue is generated by our casino properties’ gaming operations, our retail and online sports betting, as well as our online gaming, and we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.

As of ~~March 31,~~September 30, 2022, we owned 20 of our casinos and leased 2625 casinos in the U.S. We lease 18 casinos from VICI Properties L.P., a Delaware limited partnership (“VICI”) pursuant to a regional lease, a Las Vegas lease and a Joliet lease. In addition, we lease ~~seven~~six casinos from GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. (“GLPI”) pursuant to a Master Lease (as amended, the “GLPI Master Lease”) and a Lumière lease (together with the GLPI Master Lease, the “GLPI Leases”)~~. Additionally, we~~ and lease the Rio All-Suite Hotel & Casino from a separate third party.

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We also operate and conduct sports wagering across ~~23 states and domestic~~26 jurisdictions 16in North America, 19 of which are mobile for sports betting, and operate regulated online real money gaming in ~~five states.~~six jurisdictions in North America. Our recently launched Caesars Sportsbook app operates on the Liberty platform, which we acquired in the William Hill Acquisition, along with other technology platforms that we

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intend to migrate to the Liberty platform in the future, subject to required approvals. The map below illustrates Caesars Digital’s presence as of ~~March 31,~~September 30, 2022:

~~Subsequent~~In addition to ~~March 31, 2022,~~the Caesars Sportsbook app, we partnered with NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., and launched ~~mobile sports betting and iGaming on~~the Caesars Racebook app within seven states as of September 30, 2022. The Caesars Racebook app provides access for wagers at over 300 race tracks around the world. Wagers placed can earn credits towards our ~~Liberty platform in Ontario, Canada on April 4, 2022.~~ Caesars Rewards program or points which can be redeemed for free wagering credits.

We are also in the process of expanding our Caesars Digital footprint into other states in the near ~~term.~~term with our Caesars Sportsbook and Caesars Racebook apps as jurisdictions legalize or provide necessary approvals.

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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 in connection with obtaining regulatory approvals related to the closing of the Merger. A summary of recently completed ~~and planned~~ divestitures of our properties as of ~~March 31,~~September 30, 2022 is as follows:

Segment

Property

Date Sold

Sales Price

Regional

MontBleu Casino Resort & Spa (“MontBleu”)

April 6, 2021

$15 million

Regional

Tropicana Evansville (“Evansville”)

June 3, 2021

$480 million

Regional

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

~~N/A~~May 5, 2022

Discontinued operations:

Regional

Harrah’s Louisiana Downs

November 1, 2021

$22 million (a)

Regional

Caesars Southern Indiana

September 3, 2021

$250 million

N/A

Emerald Resort & Casino

July 16, 2021

N/A

Caesars Entertainment UK

July 16, 2021

N/A

William Hill International

~~N/A~~July 1, 2022

£2.0 billion

___________________

*Not meaningful.

(a)The proceeds of this sale were split between the Company and VICI.

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Merger and Acquisitions Related Activities

~~Acquisition of~~ William Hill Acquisition

On September 30, 2020, we announced that we had reached an agreement with William Hill 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, in an all-cash transaction. On the acquisition date, our intent was to divest of William Hill PLC’s non-U.S. operations, which included the UK and international online divisions and the retail betting shops (collectively, “William Hill International”) was held for sale as of the date of the closing of the William Hill Acquisition with operations reflected within discontinued operations. On April 22, 2021, ~~the Company~~we completed the acquisition of William Hill PLC for ~~£2.9~~£2.9 billion,, or approximately ~~$3.9 billion~~.$3.9 billion.

In connection with the William Hill Acquisition, on April 22, 2021, a newly formed subsidiary of the Company (the “Bridge Facility Borrower”) entered into a Credit Agreement (the “Bridge Credit Agreement”) with certain lenders party thereto and Deutsche Bank AG, London Branch, as administrative agent and collateral agent, pursuant to which the lenders party thereto provided the Debt Financing (as defined below). The Bridge Credit Agreement ~~provides~~provided for (a) a 540-day £1.0 billion asset sale bridge facility, (b) a 60-day £503 million cash confirmation bridge facility and (c) a 540-day £116 million revolving credit facility (collectively, the “Debt Financing”). The proceeds of the bridge loan facilities provided under the Bridge Credit Agreement were used (i) to pay a portion of the cash consideration for the acquisition and (ii) to pay fees and expenses related to the acquisition and related transactions. The ~~proceeds of the revolving credit facility under the Bridge Credit Agreement may be used for working capital and general corporate purposes. The~~ £1.5 billion Interim Facilities Agreement ~~(“Interim~~(the “Interim Facilities Agreement”) entered into on October 6, 2020 with Deutsche Bank AG, London Branch and JPMorgan Chase Bank, N.A., and amended on December 11, 2020, was terminated upon the execution of the Bridge Credit Agreement. On May 12, 2021, ~~the Company~~we repaid the £503 million cash confirmation bridge facility. On June 14, 2021, ~~the Company~~we 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 reflected within discontinued operations. Certain investments acquired have been 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. In order to manage the risk of changes in the GBP denominated sales price and expected proceeds, we entered into foreign exchange forward contracts. On April 7, 2022, ~~the Company~~we amended the agreement to sell ~~the non-US assets of~~ William Hill International to 888 Holdings Plc for a revised enterprise value of approximately £2.0 billion. The amended agreement ~~reflects~~reflected a £250 million reduction in consideration payable at closing and up to £100 million as deferred consideration to be paid to ~~the Company,~~us, subject to 888 Holdings Plc meeting certain 2023 financial targets. ~~As a result of~~During the ~~revised sales agreement, the Company~~nine months ended September 30, 2022, we recorded ~~an impairment~~impairments to assets held for sale of ~~$329~~$503 million within discontinued operations ~~during~~based on the ~~three months ended March 31, 2022.~~ ~~After repayment~~revised and final sales prices.

On July 1, 2022, we completed the sale of ~~the~~William Hill International to 888 Holdings Plc. and outstanding ~~debt~~borrowings under the Bridge Credit Agreement ~~described above, and~~were immediately repaid. After the repayment of the Bridge Credit Agreement, other ~~working capital adjustments, the Company expects to receive approximately £585 million, or $785 million, subject to any~~ permitted leakage, ~~which is customary for sale transactions in~~and the ~~UK. In order~~settlement of related forward contracts, we received net proceeds of $730 million. Including open market repurchases and repayments, we utilized all $730 million to reduce our outstanding debt.

~~manage the risk~~Table of ~~changes in the GBP denominated sales price and expected proceeds, the Company has entered into foreign exchange forward contracts.~~ Contents

The sale is subject to satisfaction of customary closing conditions, including receipt of the approval of shareholders of 888 Holdings Plc and regulatory approvals, and is expected to close in the second quarter of 2022.

We recognized acquisition-related transaction costs of ~~less than $1~~$2 million and $5 million for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and $10 million and $60 million for the nine months ended September 30, 2022 and 2021, respectively, excluding additional transaction ~~cost~~costs associated with the sale of William Hill International. These costs were associated with legal, ~~and~~ professional services and severance costs and were recorded in Transaction and other operating costs, net in our Statements of Operations.

Consolidation of Horseshoe 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% for cash consideration of $55 million. WeSubsequent to the change in ownership, we were ~~subsequently~~ determined to have a controlling financial interest ~~in Horseshoe Baltimore~~ and ~~have consolidated~~began to consolidate the ~~results of~~ operations of ~~the property following our change in ownership.~~Horseshoe Baltimore.

Investments and Partnerships

NeoGames

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our remaining 2 million shares at fair value for $26 million and recorded a loss on the change in fair value of $34 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2022, which is included within Other income (loss) on ~~the~~our Statements of Operations.

Pompano Joint Venture

In April 2018, ~~the Company~~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 ~~the Company’s~~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 various phases of the project. Additionally, Cordish will be responsible for the development of the master plan for the project with ~~the Company’s~~our input and will submit it for ~~the Company’s~~our review and approval. In June 2021, the joint venture issued a capital call and we contributed $3 million, for a total of $4 million in cash since inception of the joint venture. On February 12, 2021, ~~the Company~~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 ~~the Company has~~we have no further obligation to contribute additional real estate or cash as of ~~March 31,~~September 30, 2022. 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 ~~the Company holds~~we hold a 50% variable interest in the joint venture, ~~it is~~we are not the primary beneficiary; as such the investment in the joint venture is accounted for using the equity method. ~~The Company participates~~We participate evenly with Cordish in the profits and losses of the joint venture, which are included in Transaction and other operating costs, net on ~~the~~our Statements of Operations. ~~Our~~As of September 30, 2022 and December 31, 2021, our investment in the joint venture is recorded in Investment in and advances to unconsolidated affiliates on the Balance Sheets.

Reportable Segments

Segment results in this MD&A are presented consistent with the way our management 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 William Hill Acquisition, our principal operating activities occurred in three regionally-focused reportable segments: Las Vegas, Regional, and 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”) expanded our access to conduct sports wagering and iGaming operations. As a result, the 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 Branded. Accordingly, ourOur principal operating activities occur in four reportable segments: (1) Las Vegas, (2) Regional, (3) Caesars Digital, and (4) Managed and Branded, in addition to Corporate and Other. ~~See Item 2. “Properties” for listing of properties by segment.~~

Presentation of Financial Information

The presentation of financial information included in this Item 2 for the periods after our acquisition of William Hill on April 22, 2021 and the ~~increase~~acquisition of an additional interest in ~~our ownership percentage and subsequent consolidation of~~ Horseshoe Baltimore on August 26, 2021, is not fully comparable to the periods prior to the respective acquisitions. In addition, the presentation of financial information herein for the periods after the ~~Company’s sales~~sale of various 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.~~

This MD&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 the

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factors described in the preceding paragraph and the changing competitive landscape in each of our markets, including changes in market and societal trends, as well as by factors discussed elsewhere herein. We recommend that you read this MD&A in conjunction with our unaudited Financial Statements and the notes to those statements included in this Quarterly Report on Form 10-Q.

~~Reclassifications~~

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of Indiana. As a result, Horseshoe Hammond no longer met the held for sale criteria and the amounts previously presented in discontinued operations have been reclassified into continuing operations for all relevant periods presented.

Key Performance Metrics

Our primary source of revenue is generated by our gaming operations, our retail and online sports betting, as well as our online gaming. Additionally we utilize our hotels, restaurants, bars, entertainment venues, retail shops, racing 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, or visiting, our properties and using our sports betting and iGaming applications.

Key performance metrics include volume indicators such as drop 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 11% 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 5% 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.

Significant Factors Impacting Financial Results

The following summary highlights the significant factors impacting our financial results for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.

~~Acquisitions~~Acquisition and Transaction Costs

•~~Acquisition of~~ William Hill Acquisition – On April 22, 2021, ~~the Company~~we consummated ~~its~~our previously announced acquisition of the entire issued and to be issued share capital (other than shares owned by ~~the Company~~us or held in treasury) of William Hill PLC, in an all-cash transaction of £2.9 billion, or approximately $3.9 billion. We recognized acquisition-related transaction costs of ~~less than $1~~$2 million and $5 million for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and $10 million and $60 million for the nine months ended September 30, 2022 and 2021, respectively, excluding additional transaction costs associated with the sale of William Hill International.

•Consolidation of Horseshoe Baltimore – On August 26, 2021, ~~the Company~~we increased ~~its~~our ownership interest in Horseshoe Baltimore to approximately 75.8%. Prior to the purchase, ~~the Company~~we held an interest in Horseshoe Baltimore of approximately 44.3% which was accounted for as an equity method investment. Subsequent to the change in ownership, ~~the Company was~~we determined tothat we have a controlling financial interest and ~~has begun to consolidate~~have consolidated the operations of Horseshoe Baltimore. As discussed in the section above, the operations post consolidation are not fully comparable to the prior ~~periods prior to the acquisition.~~periods.

Divestitures and Discontinued Operations

•Divestitures and Discontinued Operations – See “Overview” section above for detail on properties divested, ~~or held for sale,~~ including related discontinued operations.

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Other Significant Factors

•~~COVID-19 Public Health Emergency~~Economic Factors Impacting Discretionary Spending – ~~In January 2020, an outbreak of a new strain of coronavirus (“COVID-19”) was identified~~Gaming and ~~spread throughout much of the world, including the U.S. All of the Company’s casino properties were temporarily closed for the period from mid-March 2020 through mid-May 2020 due~~other leisure activities we offer represent discretionary expenditures which may be sensitive to ~~orders issued by various government agencies and tribal bodies as part of certain precautionary measures intended to help slow the spread of COVID-19.~~ economic downturns. The ~~Company has resumed operations at all of its properties with the exception of Lake Charles which was severely damaged by Hurricane Laura in August of 2020. Although the~~ resurgence of the Omicron variant of COVID-19 continued to impact the beginning of the ~~quarter, most~~year, however, many of our properties experienced positive trends during much of the ~~three~~nine months ended ~~March 31,~~September 30, 2022 including higher hotel occupancy and rates, particularly in Las Vegas, and increased gaming and food and beverage volumes ascoupled with improved product mix. During 2021, mandates and restrictions on maximum capacities and amenities available were ~~eased. Future variants, mandates~~eased, discretionary consumer spending was supplemented via governmental stimulus, and pent-up consumer demand from the prolonged impact of COVID-19 resulted in strong results across our properties.

In addition to the effects of the increase in consumer discretionary spend in the prior year primarily attributable to government stimulus programs, we are monitoring the trend in higher inflation in the current year and the possible implications on certain customers most affected by lower discretionary income. Although we have seen some reduced visitation from those customers, those not as affected by inflation remain steady or ~~restrictions imposed by various regulatory bodies are uncertain and could, once again,~~ have ~~a significant impact on our future operations.~~slightly improved.

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•~~Weather and~~ Construction Disruption – In late August 2020, our Regional segment was negatively impacted by Hurricane Laura, causing severe damage to Isle of Capri Casino Hotel Lake Charles, which ~~will remain~~has remained closed ~~until~~during the ~~fourth quarter of 2022 when~~ construction of aour new land-based casino, Horseshoe Lake Charles, which is expected to ~~be complete.~~open on December 12, 2022. During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, ~~the Company~~we reached a final settlement agreement with the insurance carriers for $128 million, before our insurance deductible of $25 million. ~~The Company has received $94 million related to damaged fixed assets, remediation costs and business interruption.~~ We ~~expect to receive an additional $9 million in the second quarter of 2022, which is included in Accounts receivable, net. During the~~ ~~three months ended March 31, 2022 and 2021, the Company also~~ recorded ~~gains~~a gain of $38 million and $8$22 million during the nine months ended September 30, 2022 and 2021, respectively, which are included in Transaction and other operating costs, net in our Statements of Operations, as proceeds received for the cost to replace damaged property were in excess of the respective carrying value of the assets. Construction disruption has also been experienced within our Regional segment as we are currently performing significant renovations, remodeling and rebranding of certain properties. See further discussion below within Liquidity and Capital Resources.

•Caesars Sportsbook ~~Launch~~ and ~~Rebranding~~Caesars Racebook – In connection with the launch and rebranding of the Caesars Sportsbook app, our Caesars Digital segment initiated a significant marketing campaign with distinguished actors, former athletes and other media personalities. As new states and jurisdictions have legalized sports betting, we have made significant upfront investments which have been executed through marketing campaigns and promotional incentives to acquire new customers and establish ourselves as an industry leader. For example, in connection with the launch of our Caesars Sportsbook app in the state of New York on January 8, 2022 and Louisiana on January 28, 2022, we experienced negative net revenue at the beginning of ~~the quarter~~2022 resulting from a substantial amount of bonus cash and matched deposits issued to customers as sign-on incentives, which exceeded our gaming win. Our level of investment and types of incentives provided are discretionary and ~~negative net revenues~~ are not expected to continue at elevated levels subsequent to the initial launch period. In addition, as our Caesars Racebook launches in new states and jurisdictions, we may offer deposit matching incentives to new users. A significant portion of our marketing and promotional costs are variable and we continue to monitor and adjust our level of investment based on jurisdiction specific conditions, customer behaviors, and results observed from prior state launches.

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Results of Operations

The following table highlights the results of our operations:


		Three Months Ended March 31,							Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2022			2021			(Dollars in millions)	2022			2021			2022			2021
Net revenues:	Net revenues:							Net revenues:
Las Vegas	Las Vegas	$	914		$	497		Las Vegas	$	1,077		$	1,017		$	3,133		$	2,369
Regional	Regional	1,363			1,191			Regional	1,530			1,492			4,348			4,173
Caesars Digital	Caesars Digital	(53)			39			Caesars Digital	212			96			311			221
Managed and Branded	Managed and Branded	66			61			Managed and Branded	70			79			210			206
Corporate and Other (a)	Corporate and Other (a)	2			4			Corporate and Other (a)	(2)			1			(2)			10
Total	Total	$	2,292		$	1,792		Total	$	2,887		$	2,685		$	8,000		$	6,979

Net loss		$	(680)		$	(424)

Net income (loss)								Net income (loss)	$	53		$	(231)		$	(748)		$	(583)

Adjusted EBITDA (b):	Adjusted EBITDA (b):							Adjusted EBITDA (b):
Las Vegas	Las Vegas	$	400		$	162		Las Vegas	$	480		$	500		$	1,427		$	1,085
Regional	Regional	459			393			Regional	570			554			1,542			1,549
Caesars Digital	Caesars Digital	(554)			(2)			Caesars Digital	(38)			(164)			(661)			(171)
Managed and Branded	Managed and Branded	20			21			Managed and Branded	22			22			64			69
Corporate and Other (a)	Corporate and Other (a)	(29)			(39)			Corporate and Other (a)	(22)			(42)			(86)			(123)
Total	Total	$	296		$	535		Total	$	1,012		$	870		$	2,286		$	2,409

Net loss margin		(29.7)		%	(23.7)		%
Net income (loss) margin								Net income (loss) margin	1.8		%	(8.6)		%	(9.4)		%	(8.4)		%
Adjusted EBITDA margin	Adjusted EBITDA margin	12.9		%	29.9		%	Adjusted EBITDA margin	35.1		%	32.4		%	28.6		%	34.5		%

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(a)Corporate and Other includes revenues related to certain licensing arrangements and various revenue sharing agreements. Corporate and Other Adjusted EBITDA includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees and other general and administrative expenses.

(b)See the “Supplemental Unaudited Presentation of Consolidated Adjusted Earnings 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) to Adjusted EBITDA.

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Consolidated comparison of the three and nine months ended ~~March 31,~~September 30, 2022 and 2021

Net Revenues

Net revenues were as follows:


		Three Months Ended March 31,						Percent Change			Three Months Ended September 30,						Percent Change				Nine Months Ended September 30,												Percent Change
(Dollars in millions)	(Dollars in millions)	2022		2021		Variance				(Dollars in millions)	2022		2021		Variance				2022				2021				Variance

Casino and pari-mutuel commissions	Casino and pari-mutuel commissions	$	1,292	$	1,227	$	65	5.3	%	Casino and pari-mutuel commissions	$	1,605	$	1,510	$	95			6.3	%			$	4,446			$	4,308			$	138			3.2	%
Food and beverage	Food and beverage	339		169		170		100.6	%	Food and beverage	411		347		64		18.4	%			1,172				797				375				47.1	%
Hotel	Hotel	383		215		168		78.1	%	Hotel	544		511		33		6.5	%			1,446				1,122				324				28.9	%
Other	Other	278		181		97		53.6	%	Other	327		317		10		3.2	%			936				752				184				24.5	%
Net Revenues	Net Revenues	$	2,292	$	1,792	$	500	27.9	%	Net Revenues	$	2,887	$	2,685	$	202	7.5	%			$	8,000			$	6,979			$	1,021			14.6	%

Despite the resurgence of the Omicron variant during the beginning of 2022, consolidated net revenues increased for the three and nine months ended ~~March 31,~~September 30, 2022 ~~primarily due to positive trends~~as compared to the ~~three months ended March 31, 2021 which was negatively impacted by the COVID-19 public health emergency.~~same prior year periods. The Company’s net revenues have benefited from ~~reduced restrictive mandates and guidelines which has allowed for~~steady gaming volumes at our properties, increased ~~gaming capacity and~~ hotel occupancy ~~as well as decreased limitations on the operation of~~and room rates, and improved food and beverage ~~outlets, live~~offerings. The Company continues to remain strategic with new food and beverage offerings with a focus on operating margins and product mix. Live entertainment events and ~~conventions. As of March 31, 2022, all of our properties have resumed operations with~~conventions continue to increase year over year following the ~~exception of Lake Charles which was severely damaged by Hurricane Laura.~~prolonged impacts from COVID-19. Additionally, the consolidation of Horseshoe Baltimore on August 26, 2021 contributed to the ~~increased~~increase in net revenues for the three and nine months ended ~~March 31,~~September 30, 2022. These increases were offset slightly by negative gaming revenue in our Caesars Digital ~~segment.~~segment in the first quarter of 2022 and the impact of our recent divestitures, described above.

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Operating Expenses

Operating expenses were as follows:


		Three Months Ended March 31,						Percent Change			Three Months Ended September 30,						Percent Change				Nine Months Ended September 30,												Percent Change
(Dollars in millions)	(Dollars in millions)	2022		2021		Variance				(Dollars in millions)	2022		2021		Variance				2022				2021				Variance

Casino and pari-mutuel commissions	Casino and pari-mutuel commissions	$	1,064	$	587	$	477	81.3	%	Casino and pari-mutuel commissions	$	838	$	830	$	8			1.0	%			$	2,727			$	2,111			$	616			29.2	%
Food and beverage	Food and beverage	202		108		94		87.0	%	Food and beverage	240		210		30		14.3	%			684				484				200				41.3	%
Hotel	Hotel	115		81		34		42.0	%	Hotel	142		130		12		9.2	%			391				317				74				23.3	%
Other	Other	88		69		19		27.5	%	Other	105		114		(9)		(7.9)	%			298				262				36				13.7	%
General and administrative	General and administrative	499		380		119		31.3	%	General and administrative	529		486		43		8.8	%			1,545				1,284				261				20.3	%

Corporate	Corporate	69		66		3		4.5	%	Corporate	63		86		(23)		(26.7)	%			208				228				(20)				(8.8)	%

Depreciation and amortization	Depreciation and amortization	300		265		35		13.2	%	Depreciation and amortization	304		276		28		10.1	%			910				842				68				8.1	%
Transaction and other operating costs, net	Transaction and other operating costs, net	(35)		20		(55)		*		Transaction and other operating costs, net	7		21		(14)		(66.7)	%			(14)				113				(127)				*
Total operating expenses	Total operating expenses	$	2,302	$	1,576	$	726	46.1	%	Total operating expenses	$	2,228	$	2,153	$	75	3.5	%			$	6,749			$	5,641			$	1,108			19.6	%

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* Not meaningful.

Casino and pari-mutuel expenses consist primarily of salaries and wages associated with our gaming operations, gaming taxes and marketing and promotions costs attributable to our Caesars Digital segment. Food and beverage expenses consist principally of salaries and wages and costs of goods sold associated with our food and beverage operations. Hotel ~~expense consists~~expenses consist principally of salaries, wages and supplies associated with our hotel operations. Other expenses consist principally of salaries and wages, costs of goods sold and professional talent fees associated with our retail, entertainment and other operations.

Casino, food and beverage, hotel, and other expenses for the three and nine months ended ~~March 31,~~September 30, 2022 increased year over year ~~partially~~ as a result of the William Hill Acquisition and the consolidation of Horseshoe Baltimore. ~~The reopening of substantially all of our properties and~~During the ~~associated growth in customer volume also drove the increase in expenses year over year. Higher~~nine months ended September 30, 2022, advertising costs consisting of television, radio and internet marketing campaigns directly attributable to ~~the launch and rebranding of~~ our Caesars Sportsbook app also contributed to the increase in Casino and pari-mutuel commissions, particularly during the ~~current period.~~launch of the app in New York and Louisiana during the first quarter. These increases were partially offset as we scaled back our advertising efforts subsequent to the ~~Company continues~~first quarter of 2022 and continue to identify more efficient methods to manage marketing and promotional spend and reduce gaming expenses within our Las Vegas and Regional ~~segments, as well as~~segments. We also continue to focus on labor ~~efficiencies.~~efficiencies to manage rising labor costs. Moreover, ~~the Company has~~we have managed recent increases in food costs by focusing on efficiencies within food and beverage venues and menu options.

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General and administrative expenses include items such as 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. General and administrative expenses also include other marketing expenses indirectly related to our gaming and non-gaming operations.

General and administrative expenses and depreciation and amortization expense increased for the three and nine months ended ~~March 31,~~September 30, 2022 ~~increased year over year~~ as ~~the result of the reopening of all of our properties combined with the aforementioned ease in mandates and restrictions, the William Hill Acquisition and the consolidation of Horseshoe Baltimore.~~

Corporate expenses include unallocated expenses such as payroll, annual bonus plans, stock-based compensation, professional fees, and other various expenses not directly related to the operations of our properties. For the three months ended March 31, 2022 compared to the same prior year period, ~~corporate expense increased primarily due to stock-based compensation and other indirect costs related to the William Hill Acquisition.~~

~~For the three months ended March 31, 2022 compared to the same prior year period, depreciation and amortization expense increased~~ mainly due to the William Hill Acquisition and the consolidation of Horseshoe ~~Baltimore.~~Baltimore as well as higher utility costs during the third quarter.

~~For~~Transaction and other operating costs decreased for the three and nine months ended ~~March 31,~~September 30, 2022 as compared to the same prior year period ~~transaction and other operating costs decreased as the Company recorded~~due a gain of approximately $38 million as proceeds received for the Isle of Capri Casino Hotel Lake Charles property damage were in excess of the respective carrying value of the assets. Additionally, no significant acquisition related transaction costs were incurred during the year as compared to the William Hill Acquisition in the prior year.

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Other income (expenses)

Other income (expenses) were as follows:


		Three Months Ended March 31,						Percent Change			Three Months Ended September 30,						Percent Change				Nine Months Ended September 30,									Percent Change
(Dollars in millions)	(Dollars in millions)	2022		2021		Variance				(Dollars in millions)	2022		2021		Variance				2022			2021			Variance

Interest expense, net	Interest expense, net	$	(552)	$	(579)	$	27	4.7	%	Interest expense, net	$	(569)	$	(579)	$	10			1.7	%		$	(1,680)		$	(1,734)		$	54			3.1	%

Loss on extinguishment of debt										Loss on extinguishment of debt	(33)		(117)		84		71.8	%			(33)			(140)			107			76.4	%

Other income (loss)	Other income (loss)	4		(133)		137		*		Other income (loss)	4		(153)		157		*				53			(176)			229			*
Benefit for income taxes		107		76		31		40.8	%
Benefit (provision) for income taxes										Benefit (provision) for income taxes	(8)		90		(98)		*				47			167			(120)			*

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* Not meaningful.

~~For the three months ended March 31, 2022, interest~~Interest expense, net decreased for the three and nine months ended September 30, 2022, as compared to the same prior year ~~over year as a result~~period due to the extinguishment of 5% Convertible Notes in June 2021, partial repurchase of the CEI Senior Notes completed in October 2021, ~~and~~ the repricing of ~~CRC~~the Caesars Resort Collection (“CRC”) Incremental Term Loan in September ~~2021.~~2021, the partial repurchases of the CEI Senior Notes and the CRC Senior Secured Notes, and the partial prepayments of the CRC Incremental Term Loan and the CRC Term Loan during the nine months ended September 30, 2022. Additionally, on September 24, 2021, the Company issued $1.2 billion in aggregate principal amount of ~~4.625%~~the Senior ~~Notes due 2029.~~Notes. Proceeds from the issuance of the Senior Notes, as well as cash on hand, ~~was~~were used to repay the $1.7 billion aggregate principal amount of ~~5.25%~~the CRC Notes. These decreases were offset slightly by the consolidation of debt held by Horseshoe Baltimore.

For the three and nine months ended ~~March 31,~~September 30, 2022, loss on extinguishment of debt was related to the early prepayments of the CRC Incremental Term Loan and the CRC Term Loan. The loss on extinguishment of debt for the three and nine months ended September 30, 2021 was primarily due to the early repayment of the CRC Notes and the 5% Convertible Notes.

For the three and nine months ended September 30, 2022, other income (loss) primarily consisted of a gain related to the resolution of a portion of disputed claims liability related to Former Caesars’ bankruptcy and a change in the fair value of foreign exchange forward contracts, offset by the change in fair value of investments. For the three and nine months ended ~~March 31,~~September 30, 2021, other income (loss) primarily consisted of a loss on the change in fair value of investments and a derivative liability, slightly offset by a foreign exchange transaction gain.

The income tax ~~benefit~~provision for the three months ended ~~March 31,~~September 30, 2022 differed from the expected income tax provision based on the federal tax rate of 21% primarily due to a decrease in the state deferred tax liabilities as a result of a reduction in tax rates in Pennsylvania and Iowa. The income tax benefit for the nine months ended September 30, 2022 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to a true-up adjustment related to the tax impact of the settlement of preexisting relationships upon the William Hill Acquisition in 2021 and nondeductible ~~expenses and state income taxes.~~expenses.

The income tax benefit for the three months ended ~~March 31,~~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 William Hill Acquisition, offset by nondeductible expenses related to the ~~convertible notes liability.~~5% Convertible Notes conversion 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 the reclassification of Horseshoe Hammond from held for sale and state taxes, offset by nondeductible expenses related to the 5% Convertible Notes conversion.

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4044

Segment comparison of the three and nine months ended ~~March 31,~~September 30, 2022 and 2021

Las Vegas Segment

Three Months Ended March 31, Percent Change
(Dollars in millions) 2022 2021 Variance
Revenues:
Casino and pari-mutuel commissions $ 291 $ 226 $ 65 28.8 %
Food and beverage 220 84 136 161.9 %
Hotel 266 115 151 131.3 %
Other 137 72 65 90.3 %
Net Revenues $ 914 $ 497 $ 417 83.9 %
Table game drop $ 801 $ 580 $ 221 38.1 %
Table game hold % 21.9 % 20.1 % 1.8 pts
Slot handle $ 2,488 $ 1,762 $ 726 41.2 %
Hotel occupancy 82.9 % 60.4 % 22.5 pts
Adjusted EBITDA $ 400 $ 162 $ 238 146.9 %
Adjusted EBITDA margin 43.8 % 32.6 % 11.2 pts
Net income (loss) attributable to Caesars $ 168 $ (67) $ 235 *

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* ~~Not meaningful.~~


	Three Months Ended September 30,								Percent Change		Nine Months Ended September 30,								Percent Change
(Dollars in millions)	2022			2021			Variance				2022			2021			Variance
Revenues:
Casino and pari-mutuel commissions	$	323		$	329		$	(6)	(1.8)	%	$	929		$	870		$	59	6.8	%
Food and beverage	264			221			43		19.5	%	775			476			299		62.8	%
Hotel	335			303			32		10.6	%	959			660			299		45.3	%
Other	155			164			(9)		(5.5)	%	470			363			107		29.5	%
Net Revenues	$	1,077		$	1,017		$	60	5.9	%	$	3,133		$	2,369		$	764	32.2	%

Table game drop	$	890		$	805		$	85	10.6	%	$	2,594		$	2,174		$	420	19.3	%

Table game hold %	22.2		%	22.6		%			(0.4) pts		21.6		%	20.0		%			1.6 pts
Slot handle	$	2,599		$	2,676		$	(77)	(2.9)	%	$	7,756		$	7,261		$	495	6.8	%



Hotel occupancy	93.6		%	89.6		%			4 pts		91.1		%	80.3		%			10.8 pts

Adjusted EBITDA	$	480		$	500		$	(20)	(4.0)	%	$	1,427		$	1,085		$	342	31.5	%
Adjusted EBITDA margin	44.6		%	49.2		%			(4.6) pts		45.5		%	45.8		%			(0.3) pts

Net income attributable to Caesars	$	245		$	272		$	(27)	(9.9)	%	$	726		$	389		$	337	86.6	%

For the three and nine months ended ~~March 31,~~September 30, 2022, the Las Vegas segment’s net revenues ~~and Adjusted EBITDA~~ increased ~~year over year~~ primarily due to ~~reduced mandates~~expanded food and ~~restrictions~~beverage offerings, including Bobby’s Burgers, Nobu, and The Bedford by Martha Stewart at our properties in accordance with easing of the governmental regulatory guidelines combined with pent up customer demand. Despite the negative impact of the resurgence of the Omicron variant of COVID-19 on the beginning of the quarter, including cancellationsParis, and ~~postponements of significant entertainment offerings, events and conventions, the Las Vegas segment experienced positive trends year over year including increases~~continued growth in hotel occupancy and ~~higher~~rates, offset by slower gaming ~~and food and beverage volumes.~~revenue growth during the three months ended September 30, 2022 due to gaming capacity disruption caused by the renovation to the front entrance area at Caesars Palace. For the three months ended ~~March 31,~~September 30, 2022, Adjusted EBITDA and Adjusted EBITDA margin in the Las Vegas segment were negatively impacted by higher utility costs experienced during the quarter.

For the three and nine months ended September 30, 2022, slot win percentage in the Las Vegas segment was within our typical range.

Regional Segment

Three Months Ended March 31, Percent Change
(Dollars in millions) 2022 2021 Variance
Revenues:
Casino and pari-mutuel commissions $ 1,070 $ 967 $ 103 10.7 %
Food and beverage 119 84 35 41.7 %
Hotel 117 100 17 17.0 %
Other 57 40 17 42.5 %
Net Revenues $ 1,363 $ 1,191 $ 172 14.4 %
Table game drop $ 1,057 $ 977 $ 80 8.2 %
Table game hold % 22.2 % 20.9 % 1.3 pts
Slot handle $ 10,411 $ 9,942 $ 469 4.7 %
Adjusted EBITDA $ 459 $ 393 $ 66 16.8 %
Adjusted EBITDA margin 33.7 % 33.0 % 0.7 pts
Net income attributable to Caesars $ 124 $ 65 $ 59 90.8 %

Regional segment’s net revenues, Adjusted EBITDA and margin increased for the three months ended March 31, 2022 compared to the same prior year period partially as a result of the consolidation of Horseshoe Baltimore. Although our Regional


	Three Months Ended September 30,								Percent Change		Nine Months Ended September 30,								Percent Change
(Dollars in millions)	2022			2021			Variance				2022			2021			Variance
Revenues:
Casino and pari-mutuel commissions	$	1,096		$	1,096		$	—	—	%	$	3,264		$	3,241		$	23	0.7	%
Food and beverage	147			125			22		17.6	%	397			318			79		24.8	%
Hotel	209			208			1		0.5	%	487			462			25		5.4	%
Other	78			63			15		23.8	%	200			152			48		31.6	%
Net Revenues	$	1,530		$	1,492		$	38	2.5	%	$	4,348		$	4,173		$	175	4.2	%

Table game drop	$	1,151		$	1,119		$	32	2.9	%	$	3,268		$	3,236		$	32	1.0	%
Table game hold %	21.0		%	20.4		%			0.6 pts		22.0		%	20.7		%			1.3 pts
Slot handle	$	11,280		$	11,228		$	52	0.5	%	$	32,621		$	33,360		$	(739)	(2.2)	%

Adjusted EBITDA	$	570		$	554		$	16	2.9	%	$	1,542		$	1,549		$	(7)	(0.5)	%
Adjusted EBITDA margin	37.3		%	37.1		%			0.2 pts		35.5		%	37.1		%			(1.6) pts

Net income attributable to Caesars	$	211		$	239		$	(28)	(11.7)	%	$	480		$	555		$	(75)	(13.5)	%

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4145

~~properties’ performance~~Regional segment’s Net Revenues, Adjusted EBITDA and Adjusted EBITDA margin for the three and nine months ended September 30, 2022 remained comparable to the same prior year period. Gaming volumes for the three and nine months ended September 30, 2022 also remain comparable as the reduction in mandates and restrictions, combined with pent up consumer demand and supplemental discretionary spend from governmental stimulus resulted in strong results during 2021. Performance among our Regional properties was affected by a resurgence of the Omicron variant of COVID-19 in the beginning of ~~the quarter,~~2022; however, the Regional segment subsequently experienced positive results due to ~~pent up demand combined with increased capacities and~~improved food and beverage offerings, increased entertainment revenues and an increase in banquets. The consolidation of Horseshoe Baltimore has also had a positive impact on our results. We continue to monitor trends observed during the current year of reduced visitation from certain customers most affected by the current inflationary pressures whereas those not as ~~restrictive mandates and guidelines were eased. As of March 31, 2022, all of~~affected by such pressures remain steady or have improved. We also continue to monitor our ~~properties in our Regional segment have reopened, with~~ competitive environment resulting from the ~~exception of Lake Charles which closed due to severe damage from Hurricane Laura in August 2020. Lake Charles will remain closed until the fourth quarter of 2022 when construction~~opening of a new ~~land-based~~ casino ~~is expected~~resort in Gary, Indiana. Further, renovations and capital projects at Harrah’s New Orleans and Atlantic City properties have led to ~~be completed.~~ slight disruptions in operations. Despite these headwinds, and the impact of our recent divestitures described above, our results of operations remain strong as compared to pre-pandemic years.

Table game hold percentage in the Regional segment for the three and nine months ended ~~March 31,~~September 30, 2022 was slightly higher than our typical range. Slot win percentage in the Regional segment for the three and nine months ended ~~March 31,~~September 30, 2022 was within our typical range.

Caesars Digital Segment


		Three Months Ended March 31,							Percent Change			Three Months Ended September 30,								Percent Change			Nine Months Ended September 30,										Percent Change
(Dollars in millions)	(Dollars in millions)	2022		2021			Variance				(Dollars in millions)	2022			2021			Variance				2022				2021				Variance
Revenues:	Revenues:										Revenues:
Casino and pari-mutuel commissions(a)	Casino and pari-mutuel commissions(a)	$	(69)	$	34		$	(103)	*		Casino and pari-mutuel commissions(a)	$	187		$	85		$	102	120.0	%		$	255			$	197			$	58	29.4	%

Other	Other	16		5			11		*		Other	25			11			14		127.3	%		56				24				32		133.3	%
Net Revenues	Net Revenues	$	(53)	$	39		$	(92)	*		Net Revenues	$	212		$	96		$	116	120.8	%		$	311			$	221			$	90	40.7	%

Sports betting handle (a)		$	4,690	$	13		$	4,677	*

Sports betting handle (b)											Sports betting handle (b)	$	2,029		$	1,528		$	501	32.8	%		$	9,350			$	2,442			$	6,908	*

Sports betting hold %											Sports betting hold %	7.9		%	5.0		%			2.9 pts			5.4		%		5.2		%				0.2 pts

iGaming handle	iGaming handle	$	2,177	$	1,069		$	1,108	103.6	%	iGaming handle	$	1,787		$	1,467		$	320	21.8	%		$	6,054			$	3,754			$	2,300	61.3	%

iGaming hold %											iGaming hold %	3.5		%	3.2		%			0.3 pts			3.3		%		3.3		%				(0) pts

Adjusted EBITDA	Adjusted EBITDA	$	(554)	$	(2)		$	(552)	*		Adjusted EBITDA	$	(38)		$	(164)		$	126	76.8	%		$	(661)			$	(171)			$	(490)	*
Adjusted EBITDA margin	Adjusted EBITDA margin	*		(5.1)		%			*		Adjusted EBITDA margin	(17.9)		%	(170.8)		%			152.9 pts			*				(77.4)		%				*

Net loss attributable to Caesars	Net loss attributable to Caesars	$	(576)	$	(8)		$	(568)	*		Net loss attributable to Caesars	$	(63)		$	(190)		$	127	66.8	%		$	(755)			$	(220)			$	(535)	*

___________________

* Not meaningful.

(a)Includes total promotional and complimentary incentives related to sports betting, iGaming, and poker of $48 million and $49 million for the three months ended September 30, 2022 and 2021, respectively, and $487 million and $79 million for the nine months ended September 30, 2022 and 2021, respectively. Promotional and complimentary incentives for poker were $5 million and $6 million for the three months ended September 30, 2022 and 2021, respectively, and $18 million and $11 million for the nine months ended September 30, 2022 and 2021, respectively.

(b)Caesars Digital generated an additional ~~$343~~$220 million and $196 million of sports betting handle, for the three months ended September 30, 2022 and 2021, respectively, and $824 million and $325 million for the nine months ended September 30, 2022 and 2021, respectively, which is not included in this table, ~~for the three months ended March 31, 2022~~ 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. Hold related to these operations was 14.0% and 11.5%, for the three months ended September 30, 2022 and 2021, respectively, and 10.1% and 10.5% for the nine months ended September 30, 2022 and 2021, respectively. Sports betting handle includes ~~$13~~$12 million and $14 million for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and $39 million and $26 million for the nine months ended September 30, 2022 and 2021, respectively, related to horse racing and pari-mutuel wagers.

Table of Contents

Caesars Digital includes Caesars’ operations for retail and mobile sports betting, online casino, poker, and ~~online poker, including operations acquired in the William Hill Acquisition.~~horse racing, which includes our Caesars Sportsbook and Caesars Racebook apps. Caesars Digital’s sports betting handle and iGaming handle increased significantly for the three and nine months ended ~~March 31,~~September 30, 2022 compared to the same prior year period due to the William Hill Acquisition, the launch of our new ~~sportsbook~~Caesars Sportsbook app in 2021, and the expansion of sports betting into additional states and jurisdictions subsequent to the acquisition. ~~However, net revenues for~~Net Revenues increased during the three months ended ~~March 31,~~September 30, 2022 due to higher handle and lower promotional and complimentary incentives as a percentage of Net Revenues during the period. Adjusted EBITDA loss during the three months ended September 30, 2022 decreased significantly due to higher Net Revenues and lower marketing expenses.

Sports betting and iGaming hold percentages in the Caesars Digital segment for the three and nine months ended September 30, 2022 were ~~negatively impacted by costs associated~~within our typical range.

We expect to continue to expand into new jurisdictions with ~~significant promotions offered with the launch of~~our apps, our Caesars ~~Sportsbook, particularly in New York~~branded retail sportsbooks, and ~~Louisiana, which included cash bonuses and matched deposits~~our iGaming applications, to ~~new customers as sign-on incentives.~~

the extent such jurisdictions allow. During significant promotional periods, such as entering these new jurisdictions, ~~with our Caesars branded retail sportsbooks, or our Caesars Sportsbook app and iGaming applications,~~ we may deploy a significant level of marketing spend to build brand awareness and acquire and retain customers.

As sports betting and online casinos expand through increased state legalization and customer adoption, ~~growth~~variations in hold percentages and increases in marketing and promotional costs in highly competitive markets may negatively impact Caesars ~~Digital~~Digital’s net revenues, Adjusted EBITDA and margin in comparison to prior periods. ~~Such activity could result in negative net gaming revenue as experienced for the three months ended March 31, 2022.~~ These periods are not expected to be long in duration as we use our discretion to determine the ongoing level of investment for a particular jurisdiction. ~~Sports betting and iGaming hold percentage for the three months ended March 31, 2022 was within our typical range.~~

~~Table of Contents~~

Managed and Branded Segment


		Three Months Ended March 31,								Percent Change			Three Months Ended September 30,								Percent Change			Nine Months Ended September 30,										Percent Change
(Dollars in millions)	(Dollars in millions)	2022			2021			Variance				(Dollars in millions)	2022			2021			Variance				2022				2021				Variance
Revenues:	Revenues:											Revenues:
Food and beverage	Food and beverage	$	—		$	1		$	(1)	(100.0)	%	Food and beverage	$	—		$	1		$	(1)	(100.0)	%		$	—			$	3			$	(3)	(100.0)	%
Other	Other	66			60			6		10.0	%	Other	70			78			(8)		(10.3)	%		210				203				7		3.4	%
Net Revenues	Net Revenues	$	66		$	61		$	5	8.2	%	Net Revenues	$	70		$	79		$	(9)	(11.4)	%		$	210			$	206			$	4	1.9	%

Adjusted EBITDA	Adjusted EBITDA	$	20		$	21		$	(1)	(4.8)	%	Adjusted EBITDA	$	22		$	22		$	—	—	%		$	64			$	69			$	(5)	(7.2)	%
Adjusted EBITDA margin	Adjusted EBITDA margin	30.3		%	34.4		%			(4.1) pts		Adjusted EBITDA margin	31.4		%	27.8		%			3.6 pts			30.5		%		33.5		%				(3) pts

Net income (loss) attributable to Caesars	Net income (loss) attributable to Caesars	$	(211)		$	15		$	(226)	*		Net income (loss) attributable to Caesars	$	22		$	38		$	(16)	(42.1)	%		$	(321)			$	40			$	(361)	*

___________________

* 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 agreements. The table below presents the amount included in net revenues and total operating expenses related to these reimbursable costs.


		Three Months Ended March 31,						Percent Change			Three Months Ended September 30,						Percent Change				Nine Months Ended September 30,									Percent Change
(Dollars in millions)	(Dollars in millions)	2022		2021		Variance				(Dollars in millions)	2022		2021		Variance				2022			2021			Variance
Reimbursable management revenue	Reimbursable management revenue	$	46	$	40	$	6	15.0	%	Reimbursable management revenue	$	48	$	57	$	(9)			(15.8)	%		$	146		$	137		$	9			6.6	%
Reimbursable management cost	Reimbursable management cost	46		40		6		15.0	%	Reimbursable management cost	48		57		(9)		(15.8)	%			146			137			9			6.6	%

Managed and Branded segment’s net revenues increased as properties were fully reopened for the three months ended March 31, 2022, except for temporary closure from January 5, 2022 through January 31, 2022 at Caesars Windsor, and experienced positive results from pent up demand. Additionally, inIn connection with the closing of the sale of Caesars Southern Indiana on September 3, 2021, the Company and the Eastern Band of Cherokee Indians ~~(“EBCI”)~~ extended their existing relationship by entering into a 10-year brand license 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, is reported within the Managed and Branded segment. The increase was slightly offset by the consolidation of Horseshoe Baltimore beginning in the third quarter of 2021. The operations of the property are included in the Regional segment and management revenue is eliminated upon consolidation.

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Corporate & Other


		Three Months Ended March 31,						Percent Change			Three Months Ended September 30,						Percent Change			Nine Months Ended September 30,								Percent Change
(Dollars in millions)	(Dollars in millions)	2022		2021		Variance				(Dollars in millions)	2022		2021		Variance				2022			2021			Variance
Revenues:	Revenues:									Revenues:

Casino and pari-mutuel commissions										Casino and pari-mutuel commissions	$	(1)	$	—	$	(1)	*			$	(2)		$	—		$	(2)	*

Other	Other	$	2	$	4	$	(2)	(50.0)	%	Other	(1)		1		(2)		*			—			10			(10)		(100.0)	%
Net Revenues	Net Revenues	$	2	$	4	$	(2)	(50.0)	%	Net Revenues	$	(2)	$	1	$	(3)	*			$	(2)		$	10		$	(12)	*

Adjusted EBITDA	Adjusted EBITDA	$	(29)	$	(39)	$	10	25.6	%	Adjusted EBITDA	$	(22)	$	(42)	$	20	47.6	%		$	(86)		$	(123)		$	37	30.1	%

___________________

* Not meaningful.

Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Three and Nine Months Ended ~~March 31,~~September 30, 2022 and 2021

Adjusted EBITDA (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 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, depreciation and amortization, (gain) loss on investments and marketable securities, ~~depreciation~~

~~Table of Contents~~

~~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, 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 accounting principles generally accepted in the United States (“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.~~VICI 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.

Table of Contents

The following ~~table summarizes~~tables summarize our Adjusted EBITDA for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021, respectively, in addition to reconciling net income (loss) to Adjusted EBITDA in accordance with GAAP (unaudited):

~~Three Months Ended March 31, 2022~~

~~(In millions)~~

~~CEI~~

~~Net loss attributable to Caesars~~

~~(680)~~

~~Discontinued operations, net of income taxes~~

~~229~~

~~Benefit for income taxes~~

~~(107)~~

~~Other income~~ ~~(a)~~

~~(4)~~

~~Interest expense, net~~

~~552~~

~~Depreciation and amortization~~

~~300~~

~~Transaction and other operating costs, net~~ ~~(b)~~

~~(35)~~

~~Stock-based compensation expense~~

~~Other items~~ ~~(c)~~

~~Adjusted EBITDA~~

~~296~~


	Three Months Ended September 30,
(In millions)	2022		2021
Net income (loss) attributable to Caesars	$	52	$	(233)
Net income attributable to noncontrolling interests	1		2
Discontinued operations, net of income taxes	—		4
(Benefit) provision for income taxes	8		(90)
Other (income) loss (a)	(4)		153
Loss on extinguishment of debt	33		117
Interest expense, net	569		579

Depreciation and amortization	304		276
Transaction and other operating costs, net (b)	7		21
Stock-based compensation expense	26		21
Other items (c)	16		20
Adjusted EBITDA	1,012		870
Pre-consolidation, pre-acquisition, and pre-disposition EBITDA, net (d)	—		10
Total Adjusted EBITDA	$	1,012	$	880


	Nine Months Ended September 30,
(In millions)	2022		2021
Net loss attributable to Caesars	$	(751)	$	(585)
Net income attributable to noncontrolling interests	3		2
Discontinued operations, net of income taxes	386		38
Benefit for income taxes	(47)		(167)
Other (income) loss (a)	(53)		176
Loss on extinguishment of debt	33		140
Interest expense, net	1,680		1,734

Depreciation and amortization	910		842
Transaction and other operating costs, net (b)	(14)		113
Stock-based compensation expense	77		64
Other items (c)	62		52
Adjusted EBITDA	2,286		2,409
Pre-consolidation, pre-acquisition, and pre-disposition EBITDA, net (d)	—		3
Total Adjusted EBITDA	$	2,286	$	2,412

____________________

Three Months Ended March 31, 2021
(In millions) CEI
Pre-Cons. Baltimore (d)
Pre-Acq. WH US (e)
Less: Divestitures (f)
Total (g)
Net income (loss) attributable to Caesars $ (423) $ 1 $ (11) $ (13) $ (446)
Net loss attributable to noncontrolling interests (1) — — — (1)
Discontinued operations, net of income taxes 4 — — (4) —
Benefit for income taxes (76) — (2) — (78)
Other loss (a)
133 — — — 133
Interest expense, net 579 3 — — 582
Depreciation and amortization 265 4 6 — 275
Transaction and other operating costs, net (b)
20 2 — — 22
Stock-based compensation expense 23 — — — 23
Other items (c)
11 — — — 11
Adjusted EBITDA $ 535 $ 10 $ (7) $ (17) $ 521

~~____________________~~

(a)Other income for the three and nine months ended ~~March 31,~~September 30, 2022 primarily represents the net changes in fair value of (i) investments held by the Company, (ii) foreign exchange forward contracts, and (iii) the disputed claims liability related to Former Caesars’ bankruptcy prior to the Merger. Other loss for the three and nine months ended September 30, 2021 primarily represents a loss on the change in fair value of investments held by the Company ~~foreign exchange forward contracts,~~ and ~~the changes in the disputed claims liability related to Former Caesars’ bankruptcy. Other loss for the three months ended March 31, 2021 primarily represents~~ a loss on the change in fair value of the derivative liability related to the 5% Convertible ~~Notes, slightly offset by gains on foreign currency exchange and investments held by the Company.~~Notes.

(b)Transaction and other operating costs, net for the three and nine months ended ~~March 31,~~September 30, 2022 primarily represents a gain resulting from insurance proceeds received in excess of the respective carrying value of the assets damaged at Lake ~~Charles.~~Charles by Hurricane Laura in Q1 2022 partially offset by various contract or license termination costs. Transaction and other operating costs, net for the three and nine months ended ~~March 31,~~September 30, 2021 primarily ~~represents~~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.

~~Table of Contents~~

(c)Other items primarily represent certain consulting and legal fees, rent for non-operating assets, relocation expenses, retention bonuses, and business optimization expenses.

(d)~~Represents results~~Results of operations for Horseshoe Baltimore for periods prior to the consolidation resulting from the Company’s increase in its ownership interest on August 26, ~~2021.~~2021 and William Hill prior to its acquisition on April 22, 2021 are added to Adjusted EBITDA. The results of operations for MontBleu, Evansville, and Belle of Baton Rouge prior to divestiture are subtracted from Adjusted EBITDA. 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.~~

~~(e)~~Pre-acquisition William Hill US represents results of operations for William Hill prior to the acquisition. 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.

~~(f)Divestitures~~ for the three months ended March 31, 2021 include results of operations for MontBleu and Tropicana Evansville and discontinued operations of the Harrah’s Louisiana Downs, 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.

~~(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, and William Hill US prior to the acquisition 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 thepresented. The additional financial information ~~will be helpful~~is included to ~~investors in comparing~~enable the comparison of 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~~

Table of ~~operations reported by the Company.~~Contents

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 flows from our subsidiaries and our ability to raise capital. Our primary sources of liquidity and capital resources are existing cash on hand, cash 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. Our cash requirements may fluctuate significantly depending on our decisions with respect to business acquisitions or divestitures and strategic capital and marketing investments.

As of ~~March 31,~~September 30, 2022, our cash on hand and revolving borrowing capacity was as follows:


(In millions)	~~March 31,~~September 30, 2022
Cash and cash equivalents	$	~~814~~944
Revolver capacity (a)	~~2,030~~2,180
Revolver capacity committed to letters of credit	~~(90)~~(82)
Available revolver capacity committed as regulatory requirement	(48)
Total	$	~~2,706~~2,994

___________________

(a)Revolver capacity includes ~~$995~~$1,145 million under our CEI Revolving Credit Facility, as amended, maturing in July 2025, $1,025 million under our CRC Revolving Credit Facility, maturing in December 2022, and $10 million under our Baltimore Revolving Credit Facility, as amended, maturing in July ~~2022.~~2023. On October 5, 2022, we amended the CEI Revolving Credit Facility to $2.25 billion maturing in January 2028 and terminated the CRC Revolving Credit Facility, as described below.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, our operating activities generated ~~operating~~ cash ~~outflows~~inflows of ~~$246~~$469 million, as compared to operating cash inflows of ~~$61~~$974 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 due to the results of operations described above. ~~In addition, as a result of our strengthened financial position and recent repayments of debt and reduction in our borrowing rates, our interest rate payments have been reduced.~~

On September 30, 2020, the Company announced that it had reached an agreement with William Hill PLC on the terms of a recommended cash acquisition pursuant to which the Company would acquire the entire issued and to be issued share capital (other than shares owned by the Company or held in treasury) of William Hill PLC, in an all-cash transaction. On the acquisition date, the Company’s intent was to divest of William Hill PLC’s non-U.S. operations, which included the UK and international online divisions and the retail betting shops (collectively, “William Hill International”) was held for sale as of the date of the closing of the William Hill Acquisition with operations reflected within discontinued operations. On April 22, 2021, the Company completed the acquisition of William Hill PLC for ~~£2.9~~£2.9 billion,, or approximately ~~$3.9 billion~~.$3.9 billion.

~~Table of Contents~~

Credit Agreement are expected to be repaid upon the sale of William Hill International, all of which are held for sale as of the date of the closing of the William Hill Acquisition and are reflected within discontinued operations. Certain investments acquired have been excluded from the held for sale asset group. 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~~In order to manage the risk of changes in the GBP denominated sales price and expected proceeds, the Company entered into foreign exchange forward contracts. On April 7, 2022, the Company amended the agreement to sell ~~the non-US assets of~~ William Hill International to 888 Holdings Plc for a revised enterprise value of approximately £2.0 billion. The amended agreement ~~reflects~~reflected a £250 million reduction in consideration payable at closing and up to £100 million as deferred consideration to be paid to the Company, subject to 888 Holdings Plc meeting certain 2023 financial targets. D~~As a result of~~uring the ~~amended sales agreement,~~nine months ended September 30, 2022, the Company recorded ~~an impairment~~impairments to assets held for sale of ~~$329~~$503 million within discontinued operations ~~during~~based on the ~~three months ended March 31, 2022.~~revised and final sales prices. ~~After repayment~~

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On July 1, 2022, the Company completed the sale of William Hill International to 888 Holdings Plc. and outstanding ~~debt~~borrowings under the Bridge Credit Agreement ~~described above,~~were immediately repaid. After the repayment of the Bridge Credit Agreement, other permitted leakage, and the settlement of related forward contracts, Caesars received net proceeds of $730 million. Including open market repurchases and repayments, the Company ~~expects~~utilized all $730 million to ~~receive approximately £585~~reduce the Company’s outstanding debt.

On October 5, 2022, CEI entered into a third amendment to the CEI Credit Agreement (the “Third Amendment”) which provided for an aggregate principal amount of $750 million ~~or $785 million,~~senior secured term loan (the “CEI Term Loan A” and together with the CEI Revolving Credit Facility, as so amended, the “Amended CEI Revolving Credit Facility,” the “Senior Credit Facilities”) as a new term loan under the credit agreement, increased the aggregate principal amount of the CEI Revolving Credit Facility to $2.25 billion and made certain other amendments to the credit agreement. Both the Amended CEI Revolving Credit Facility and the CEI Term Loan A mature on January 31, 2028, subject to ~~any permitted leakage, which is customary for sale transactions~~a springing maturity in the ~~UK. In order to~~ ~~manage~~event certain other long-term debt of Caesars is not extended or repaid. The Amended CEI Revolving Credit Facility includes a letter of credit sub-facility of $388 million. Concurrently with the ~~risk~~closing of ~~changes in~~ the ~~GBP denominated sales price and expected proceeds,~~Senior Credit Facilities, the Company ~~has entered into foreign exchange forward contracts. The sale is subject to satisfaction of customary closing conditions, including receipt~~terminated the CRC Revolving Credit Facility and utilized the entire proceeds of the ~~approval~~CEI Term Loan A of ~~shareholders~~$750 million to make a partial prepayment of ~~888 Holdings Plc and regulatory approvals, and is expected to close in~~ the ~~second quarter~~outstanding principal balance of ~~2022.~~the CRC Term Loan.

We expect that our primary capital requirements going forward will relate to the expansion and maintenance of our properties, taxes, servicing our outstanding indebtedness, and rent payments under our GLPI Master Lease, the VICI 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 the ~~remainder of~~ ~~2022~~ ~~are expected to increase compared to prior periods as a result of increased~~next year include expansion projects, the rebranding of certain properties, implementation and migration of our Caesars Sportsbook and iGaming applications in certain states to our Liberty platform, and continued investment into new markets with our Caesars Sportsbook and iGaming applications in our Caesars Digital segment. In addition, we may, from time to time, seek to repurchase our 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.

We continue to expand into new markets with projects such as our partnership with the Eastern Band of Cherokee Indians to build and develop Caesars Virginia which is ~~expected~~estimated to beopen in late 2024. The development has a ~~$500~~revised budget of $650 million and will include a premier destination resort ~~casino. The property plans to include~~casino along with a 500 room hotel and world-class casino floor including 1,300 slot machines, 85 live table games, 24 electronic table games, a WSOP Poker Room, a Caesars Sportsbook, a live entertainment theater and ~~Caesars Sportsbook.~~40,000 square feet of meeting and convention space. Additionally, Caesars announced the plans to expand into Nebraska with ~~a $75 million~~the development of a Harrah’s casino and racetrack. The approximately $75 million casino development is expected to feature a new one-mile horse racing surface, a 40,000-square-foot-casino and sportsbook with more than 400 slot machines and 20 table games, as well as a restaurant and retail space.

In 2020, we funded $400 million to escrow as of the closing of the Merger and have begun to utilize those funds in accordance with 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 ~~March 31,~~September 30, 2022, our restricted cash balance in the escrow account was ~~$240~~$141 million for future capital expenditures in New Jersey.

As a condition of the extension of the casino operating contract and ground lease for Harrah’s New Orleans, we are also required to make a capital investment of $325 million in Harrah’s New Orleans by July 15, 2024. The capital investment will include a renovation and full interior and exterior redesign, updated casino floor, new culinary experiences and a new 340 room hotel tower as we are also in the process of rebranding the property as Caesars New Orleans. ~~Renovations are expected~~We expect to ~~be substantially complete during~~meet our required investment as the ~~second half~~project has a current capital plan of ~~2024.~~approximately $430 million as of September 30, 2022. Total capital expenditures have been $87 million since the project began.

On August 27, 2020, Hurricane Laura made landfall on Lake ~~Charles~~Charles. Louisiana as a Category 4 storm severely damaging the Isle of Capri Casino Hotel Lake Charles. During the ~~three~~nine months ended ~~March, 31,~~September 30, 2022, the Company reached a final settlement agreement with the insurance ~~providers~~carriers for a total amount of $128 million, before our insurance deductible of $25 ~~million, of which $94 million has been~~million. During the nine months ended September 30, 2022, the Company received ~~by the Company~~a total of $103 million related to damaged fixed assets, remediation costs and ~~remediation costs. The remaining $9 million is included in Accounts receivable and is expected to be received in the second quarter of 2022. The property will remain closed until the fourth quarter of~~ ~~2022~~ w~~hen construction of a~~business interruption. Our new land-based casino, ~~is expected to be complete.~~Horseshoe Lake Charles, will open on December 12, 2022.

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Cash spent for capital expenditures totaled ~~$210~~$717 million and ~~$65~~$313 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021, respectively. The following table summarizes our capital expenditures for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, and an estimated range of capital expenditures for the remainder of 2022:


		Three Months Ended March 31, 2022		Estimate of Remaining Capital Expenditures for 2022					Nine Months Ended September 30, 2022		Estimate of Remaining Capital Expenditures for 2022
(In millions)	(In millions)	Actual		Low		High		(In millions)	Actual		Low		High
Atlantic City	Atlantic City	$	57	$	185	$	205	Atlantic City	$	156	$	40	$	60
Indiana racing operations	Indiana racing operations	2		—		5		Indiana racing operations	5		—		5
Total estimated capital expenditures from restricted cash	Total estimated capital expenditures from restricted cash	59		185		210		Total estimated capital expenditures from restricted cash	161		40		65
Growth and renovation projects	Growth and renovation projects	83		520		670		Growth and renovation projects	300		120		165
Caesars Digital	Caesars Digital	32		85		105		Caesars Digital	86		30		40
Maintenance projects	Maintenance projects	36		250		300		Maintenance projects	170		60		80
Total estimated capital expenditures from unrestricted cash and insurance proceeds	Total estimated capital expenditures from unrestricted cash and insurance proceeds	151		855		1,075		Total estimated capital expenditures from unrestricted cash and insurance proceeds	556		210		285
Total	Total	$	210	$	1,040	$	1,285	Total	$	717	$	250	$	350

A significant portion of our liquidity needs are for debt service and payments associated with our leases. Our estimated debt service (including principal and interest) is approximately ~~$593~~$158 million for the remainder of 2022. We also lease certain real property assets from third parties, including VICI and GLPI. Our leases with VICI are subject to annual escalations based on the Consumer Price Index (“CPI”) which has increased in 2022. These increases take effect in November 2022. We estimate our lease payments to VICI and GLPI to be approximately ~~$898~~$313 million for the remainder of 2022.

The Company has periodically ~~divests~~divested assets ~~that it does not consider core to its business~~ to raise capital or, in ~~some~~previous cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities.~~We expect~~

In addition to ~~divest~~the divestiture of William Hill International, ~~in the second quarter of~~described above, on May 5, 2022, ~~as described above.~~

~~On December 1, 2020,~~ the Company ~~entered into a definitive agreement to sell~~consummated the ~~operations~~sale of the equity interests of Baton Rouge to CQ Holding Company, Inc. ~~The transaction has received regulatory approvals and is expected to close in the second quarter of 2022,~~, subject to ~~other~~a customary ~~closing conditions.~~working capital adjustment.

If the agreed upon selling price for future divestitures does not exceed the carrying value of the assets, we may be required to record additional impairment charges in future periods which 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~~ 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 will not adversely affect our business, financial condition and results of operations or cause disruption in the financial markets that could adversely affect ability to access additional capital.

Debt and Master Lease Covenant Compliance

The CRC Credit Agreement, the CEI Revolving Credit Facility, the Baltimore Term Loan, the Baltimore Revolving Credit Facility and the indentures related to the CEI Senior Secured Notes, the CEI Senior Notes, the CRC Senior Secured Notes and the Senior 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 GLPI Leases and VICI Leases contain certain covenants requiring minimum capital expenditures based on a percentage of net revenues along with maintaining certain financial ratios.

The Bridge Credit Agreement associated with the planned divestiture of William Hill International, which is presented within liabilities held for sale, includes a financial covenant requiring the Bridge Facility Borrower to comply with a maximum total net leverage ratio of 10.50 to 1.00. The borrowingsoutstanding debt under the Bridge Credit Agreement ~~are guaranteed by~~was fully repaid upon closing of the sale of William Hill International on July 1, 2022. Accordingly, the Company is no longer subject to the financial covenant and guarantees associated with the Bridge ~~Facility Borrower and the Bridge Facility Borrower’s material wholly-owned subsidiaries (subject to exceptions), and are secured by a~~Credit Agreement.

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pledge of substantially all of the existing and future property and assets of the Bridge Facility Borrower and the guarantors (subject to exceptions). Additionally, no financial covenants are related to the $918 million of debt from the two trust deeds assumed in the William Hill Acquisition, which are also held for sale.

As of ~~March 31,~~September 30, 2022, we were in compliance with all of the applicable financial covenants described above.

Share Repurchase Program

In November 2018, our Board of Directors 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 ~~March 31,~~September 30, 2022, 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 ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021.

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 and 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 consolidation of Horseshoe Baltimore. See Note 8 for additional contractual obligations. There have been no other material changes during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 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, 2021. See Note 8 to our unaudited Financial Statements, which is included elsewhere in this report, for additional information regarding contractual obligations.

Other Liquidity Matters

We are faced with certain contingencies, from time to time, involving litigation, claims, assessments, environmental remediation or compliance. These commitments and contingencies are discussed in greater detail in “Part II, Item 1. Legal Proceedings” and Note 8 to our unaudited Financial Statements, both of which are included elsewhere in this report. In addition, new competition among retail and online operations 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 elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2021.

Critical Accounting Policies

Our critical accounting policies disclosures are included in our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes since December 31, 2021. 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 those described in our Annual Report on Form 10-K for the year ended December 31, 2021.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements.

Item 3. 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 variable rate long-term debt arrangements and foreign exchange risks associated with certain transactions.

As of ~~March 31,~~September 30, 2022, long-term variable-rate borrowings totaled ~~$6.6~~$5.7 billion under the CRC term loans and the Baltimore term loan, and no amounts were outstanding under the CEI Revolving Credit Facility, the CRC Revolving Credit Facility ~~and~~or the Baltimore Revolving Credit Facility. Long-term variable-rate borrowings under the CRC term loans and the Baltimore term loan represented approximately ~~46%~~43% of consolidated long-term debt as of ~~March 31,~~September 30, 2022. We have ~~entered into~~ four interest rate swap agreements to fix the interest rate on $1.3 billion of variable rate debt, and ~~$5.3~~$4.4 billion of debt remains subject to variable interest rates for the term of the agreements. ~~During the three months ended March 31,~~As of September 30, 2022, the weighted average interest rates on our variable and fixed rate debt were ~~3.22%~~6.06% and ~~6.42%~~6.41%, respectively.

~~Table of Contents~~

LIBOR ~~is expected to be~~was discontinued by lending institutions after December 31, 2021 for new debt agreements and after June 30, 2023, no additional LIBOR rates ~~will~~are expected to be available. We have variable rate debt instruments which are subject to LIBOR interest rates plus a margin or a base ~~rate.~~rate plus a margin. Our CRC ~~Credit Facility~~term loans and CEI Revolving Credit Facility contain ~~alternative rates~~LIBOR replacement provisions in the event that LIBOR is no longer available. ~~The Baltimore Term Loan has been amended and we~~We intend to 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. Our interest rate swaps mature on December 31, 2022.

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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 from the expected proceeds of the sale of William Hill International.~~GBP. During the three months ended ~~March 31, 2022 and~~ September 30, 2021, the Company recorded total gains of ~~$21~~$16 million and for the nine months ended September 30, 2022 and 2021, the Company recorded total gains of $76 million and $1$26 million, respectively, related to ~~these~~ forward contracts. All ~~The~~ forward ~~term~~contracts have been settled as of ~~these contracts ends in June~~July 1, 2022.

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 ~~three~~nine months ended ~~March 31,~~September 30, 2022.

Item 4. 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 principal executive officer and 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.

The Company is in the process of integrating William Hill ~~PLC~~US 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 William Hill Acquisition, there were no changes in our internal controls over financial reporting during the three months ended ~~March 31,~~September 30, 2022 that have materially affected, or are ~~reasonable~~reasonably likely to materially affect, our internal controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of our “Legal Proceedings,” refer to Note 8 to our Consolidated Condensed Financial Statements located elsewhere in this Quarterly Report on Form 10-Q and Note 11 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

Cautionary 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 economic trends, inflation and the COVID-19 public health emergency on our business and financial condition;

•projections of future results of operations or financial condition;

•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, including expansion of internet betting and gaming, 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 ability to consummate the announced disposition of William Hill International and the Belle of Baton Rouge;~~

•our intention to pursue development opportunities and additional acquisitions and divestitures;

•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; 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 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 extent and duration of the impact of COVID-19, inflation, increased fuel prices, supply chain ~~challenges~~shortages, labor shortages and ~~labor shortages~~other economic and market conditions, including changes in consumer discretionary spending resulting from such factors, on our business, financial results and liquidity; (b) ~~impacts of economic and market conditions; (c)~~ our ability to successfully operate our digital betting and iGaming platform and expand its user base; ~~(d)~~(c) risks associated with our leverage and our ability to reduce our ~~leverage, including with proceeds of the sale of William Hill International; (e)~~leverage; (d) the effects of competition, ~~and regulation~~including new competition in certain of our markets, on our business and results of operations; and ~~(f)~~(e) 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 and forward-looking statements should not be regarded as a representation by us or any other person that the forward-looking statements will be achieved.

In addition, these forward-looking statements speak only as of the date on which 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~~

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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 1A. 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, 2021. There have been no material changes to those risk factors during the ~~three~~nine months ended ~~March 31,~~September 30, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit

Number

Description of Exhibit

Method of Filing

3.1

Composite Certificate of Incorporation of Caesars Entertainment, Inc.

Previously filed on Form 10-Q filed on August 4, 2021.

3.2

Amended and Restated Bylaws of Caesars Entertainment, Inc.

Previously filed on Form 8-K filed on ~~July 21, 2020.~~August 1, 2022.

10.1

~~Second Amendment to Credit~~Amended and Restated Executive Employment Agreement, dated as of ~~January 26,~~August 10, 2022, by and between C ~~aesars Entertainment, Inc.~~Caesars Enterprise Services, LLC and ~~JPMorgan Chase~~ ~~Bank, N.A., as administrative agent.~~Thomas Reeg.

~~Previously filed on Form 8-K filed on January 27, 2022.~~Filed herewith.

~~10.2†~~10.2

~~Restricted Stock Unit Award~~Amended and Restated Executive Employment Agreement, dated as of August 10, 2022, by and between Caesars ~~Entertainment, Inc.~~ Enterprise Services, LLC and ~~Thomas R. Reeg, dated February 25, 2022.~~Anthony Carano.

~~Previously filed~~Filed herewith.

10.3

Amended and Restated Executive Employment Agreement, dated as of August 10, 2022, by and between Caesars Enterprise Services, LLC and Bret Yunker.

Filed herewith.

10.4

Amended and Restated Executive Employment Agreement, dated as of August 10, 2022, by and between Caesars Enterprise Services, LLC and Gary Carano.

Filed herewith.

10.5

Amended and Restated Executive Employment Agreement, dated as of August 10, 2022, by and between Caesars Enterprise Services, LLC and Edmund Quatmann.

Filed herewith.

10.6

Eleventh Amendment to Lease (Regional), dated as of August 25, 2022, by and among the entities listed on ~~Form 8-K filed on March 1, 2022.~~Schedules A and B thereto and Propco TRS LLC.

Filed herewith.

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 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.~~

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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: ~~May 3,~~November 1, 2022			/s/ Thomas R. Reeg
			Thomas R. Reeg Chief Executive Officer (Principal Executive Officer)

Date: ~~May 3,~~November 1, 2022			/s/ Bret Yunker
			Bret Yunker Chief Financial Officer (Principal Financial Officer)

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	Three Months Ended March 31, 2021
(In millions)	CEI		Pre-Cons. Baltimore (d)		Pre-Acq. WH US (e)		Less: Divestitures (f)		Total (g)
Net income (loss) attributable to Caesars	$	(423)	$	1	$	(11)	$	(13)	$	(446)
Net loss attributable to noncontrolling interests	(1)		—		—		—		(1)
Discontinued operations, net of income taxes	4		—		—		(4)		—
Benefit for income taxes	(76)		—		(2)		—		(78)
Other loss (a)	133		—		—		—		133

Interest expense, net	579		3		—		—		582
Depreciation and amortization	265		4		6		—		275

Transaction and other operating costs, net (b)	20		2		—		—		22
Stock-based compensation expense	23		—		—		—		23
Other items (c)	11		—		—		—		11
Adjusted EBITDA	$	535	$	10	$	(7)	$	(17)	$	521